Exhibit 99.3
| THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION |
If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your shares in MINISO Group Holding Limited, you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
MINISO Group Holding Limited
名 創 優 品 集 團 控 股 有 限 公 司
(A company incorporated in the Cayman Islands with limited liability)
(NYSE: MNSO; HKEX: 9896)
VERY SUBSTANTIAL ACQUISITION
IN RELATION TO
THE ACQUISITION OF THE SHARES IN THE TARGET COMPANY
LISTED ON THE SHANGHAI STOCK EXCHANGE
AND
NOTICE OF EXTRAORDINARY GENERAL MEETING
A notice convening the extraordinary general meeting of MINISO Group Holding Limited (the “EGM”) to be held at Flats B-D, 35/F, Plaza 88, 88 Yeung Uk Road, Tsuen Wan, the New Territories, Hong Kong on January 17, 2025 at 11:00 a.m. is set out on pages 853 to 854 of this circular. A form of proxy for use at the EGM is also enclosed with this circular. Such form of proxy is also published on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (https://ir.miniso.com).
Holders of record of the Shares on the Company’s register of members as of the close of business on the Share Record Date (Hong Kong Time) are cordially invited to attend the EGM in person. Holders of the Company’s ADSs as of the close of business on the ADS Record Date (New York Time) are cordially invited to submit your voting instructions to The Bank of New York Mellon if ADSs are held directly by holders on the books and records of The Bank of New York Mellon or to a holder’s bank, brokerage or other securities intermediary if ADSs are held by any of them on behalf of holders. Whether or not you propose to attend and vote at the said meeting, please complete, sign, date, and return the accompanying proxy form to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited (for holders of the Shares) or your voting instructions to The Bank of New York Mellon if you hold your ADSs directly on the books and records of The Bank of New York Mellon or to your bank, brokerage, or other securities intermediary if you hold your ADSs indirectly through any of them, as the case may be (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise your voting rights. The proxy form must be completed, signed and deposited at Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time for holding the meeting (i.e. before 11:00 a.m. on January 15, 2025) to ensure your representation at the EGM; and The Bank of New York Mellon must receive your voting instructions by the time and date specified in the ADS voting instruction card to enable the votes attaching to the Shares represented by your ADSs to be cast at the EGM. For the avoidance of doubt, holders of treasury Shares of the Company, if any, shall abstain from voting at the Company’s general meeting.
This circular is in English and Chinese. In case of any inconsistency, the English version shall prevail.
November 22, 2024
Page
| DEFINITIONS | | 1 |
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| LETTER FROM THE BOARD | 5 |
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| APPENDIX I | FINANCIAL INFORMATION OF THE GROUP | 16 |
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| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP | 18 |
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| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP | 727 |
| | | |
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP | 739 |
| | | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP | 767 |
| | | |
| APPENDIX VI | GENERAL INFORMATION | 843 |
| | | |
| NOTICE OF EXTRAORDINARY GENERAL MEETING | 848 |
In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:
| “2020 Share Incentive Plan” | the share incentive plan our Company adopted in September 2020, as amended from time to time |
| | |
| “A Shares” | ordinary shares of the Target Company which are listed on the SSE and traded in Renminbi |
| | |
| “Acquisition” | the acquisition by the Purchaser of the Target Shares on the terms and subject to the conditions set out in the Share Purchase Agreements |
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| “ADS(s)” | American Depositary Share(s), each of which represents four Shares |
| | |
| “ADS Record Date” | December 6, 2024 (New York Time) |
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| “Board” | the board of Directors of the Company |
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| “CASBE” | China Accounting Standards for Business Enterprise (中國企業會計準則) |
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| “Company”, “we”, “us”, or “our” | MINISO Group Holding Limited (名創優品集團控股有限公司), a company with limited liability incorporated in the Cayman Islands on January 7, 2020 |
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| “Completion” | the completion of the Acquisition in accordance with the terms and condition set out in the Share Purchase Agreements |
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| “Conditions Precedent” | conditions precedent to the Completion as set out under the paragraph headed “Conditions Precedent of the Share Purchase Agreements” |
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| “Consideration” | the consideration for the Acquisition |
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| “Controlling Shareholder(s)” | has the meaning ascribed to it under the Listing Rules and unless the context otherwise requires, refers to Mr. Ye, his spouse and the intermediary companies through which Mr. Ye and his spouse have an interest in the Company |
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| “Dairy Farm” | THE DAIRY FARM COMPANY, LIMITED (牛奶有限公司), a limited liability company incorporated under the laws of Hong Kong |
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| “Dairy Farm Share Purchase Agreement” | the conditional share purchase agreement entered into by the Purchaser and Dairy Farm, pursuant to which, the Purchaser has conditionally agreed to acquire and Dairy Farm has conditionally agreed to sell the Target Shares |
| | |
| “Director(s)” | the director(s) of the Company |
| “EGM” | the extraordinary general meeting of the Company to be convened and held for the Shareholders to consider and, if thought fit, pass ordinary resolution(s) to approve, among other things, the Acquisition and the Share Purchase Agreements |
| | |
| “EY” | Ernst & Young Hua Ming LLP (Special General Partnership)* (安永華明會計師事務所(特殊普通合夥)) |
| | |
| “GMV” | the total value of all merchandises sold by us and our retail partners and distributors to end-customers, before deducting sales rebates and including the value-added taxes and sales taxes collected from consumers, as applicable, regardless of whether the merchandises are returned |
| | |
“Group”, “our Group”, “the
Group”, “we”, “us”, or “our” | the Company and its subsidiaries from time to time, and where the context requires, in respect of the period prior to our Company becoming the holding company of its present subsidiaries, such subsidiaries as if they were subsidiaries of our Company at the relevant time |
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| “HK$” | Hong Kong dollars, the lawful currency of Hong Kong |
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| “Hong Kong” | the Hong Kong Special Administrative Region of the PRC |
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“Hong Kong Stock Exchange”
or “HKEX” | The Stock Exchange of Hong Kong Limited |
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| “IFRS” | the IFRS Accounting Standards |
| | |
“Jingdong Share Purchase
Agreement” | the conditional share purchase agreement entered into by the Purchaser, Jingdong Shimao and Suqian Hanbang, pursuant to which, the Purchaser has conditionally agreed to acquire and Jingdong Shimao and Suqian Hanbang has conditionally agreed to sell the Target Shares |
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| “Jingdong Shimao” | Beijing Jingdong Century Trade Co., Ltd.* (北京京東世紀貿易有限公司), a limited liability company incorporated under the laws of the PRC |
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| “Latest Practicable Date” | November 8, 2024, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular |
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| “Listing Rules” | the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise modified from time to time |
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| “Mr. Ye” | Mr. Ye Guofu, the chairman of the Board, an executive Director, the chief executive officer and a controlling Shareholder of the Company |
| “Ms. Yang” | Ms. Yang Yunyun, spouse of Mr. Ye and a controlling Shareholder of our Company |
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| “NASDAQ” | the Nasdaq Stock Market in the United States |
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| “NYSE” | the New York Stock Exchange |
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| “PRC” | the People’s Republic of China, and for the purpose of this circular, excluding Hong Kong, Macau Special Administrative Region and Taiwan |
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| “Prospectus” | the prospectus of the Company dated June 30, 2022 for its listing on the Hong Kong Stock Exchange |
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| “Purchaser” | Guangdong Juncai International Trading Co., Ltd.* (廣東駿才國際商貿有限公司), a company incorporated in the PRC with limited liability and an indirectly wholly-owned subsidiary of the Company |
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| “RMB” | Renminbi, the lawful currency of the PRC |
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| “RSUs” | restricted Shares units |
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| “Sellers” | Dairy Farm, Jingdong Shimao and Suqian Hanbang |
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| “SFO” | Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time |
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| “Share(s)” | the ordinary shares of US$0.00001 each in the share capital of the Company |
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| “Shareholder(s)” | holder(s) of our Share(s) |
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| “Share Purchase Agreement(s)” | the Dairy Farm Share Purchase Agreement and the Beijing Jingdong Share Purchase Agreement |
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| “Share Record Date” | December 6, 2024 (Hong Kong time) |
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| “SSE” | the Shanghai Stock Exchange |
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| “Suqian Hanbang” | Suqian Hanbang Investment Management Co., Ltd.* (宿遷涵邦投資管理有限公司), a limited liability company incorporated under the laws of the PRC |
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| “Target Company” | Yonghui Superstores Co., Ltd* (永輝超市股份有限公司), a joint stock company incorporated in the PRC with limited liability, the shares of which are listed on the SSE (stock code: 601933) |
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| “Target Group” | the Target Company and its subsidiaries |
| “Target Shares” | ordinary share(s) in the share capital of the Target Company, with a nominal value of RMB1 for each A Shares |
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| “Trading Day” | a day (i)on which the SSE is open for business and (ii)not a Saturday, a Sunday or a public holiday in Hong Kong or the PRC |
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| “US$” | U.S. dollars, the lawful currency of the United States |
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| “United States” or “U.S.” | United States of America, its territories, its possessions and all areas subject to its jurisdiction |
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| “%” | per cent |
| * | English names of the PRC-established companies/entities in this circular are translations of their official Chinese names for reference only. |
MINISO Group Holding Limited
名 創 優 品 集 團 控 股 有 限 公 司
(A company incorporated in the Cayman Islands with limited liability)
(NYSE: MNSO; HKEX: 9896)
Executive Director:
Mr. YE Guofu (葉國富)
(Chairman and Chief Executive Officer) | Registered Office:
Maples Corporate Service Limited
PO Box 309, Ugland House
Grand Cayman, KY1-1104 |
| Independent non-executive Directors: | Cayman Islands |
| Ms. XU Lili (徐黎黎) | |
Mr. ZHU Yonghua (朱擁華)
Mr. WANG Yongping (王永平) | Headquarters and principal place of business in China:
8F, M Plaza
No. 109, Pazhou Avenue
Haizhu District, Guangzhou 510000
Guangdong Province
China |
| | |
| | Principal place of business in Hong Kong: |
| | Flats B-D, 35/F, Plaza 88
88 Yeung Uk Road
Tsuen Wan, the New Territories
Hong Kong |
November 22, 2024
To the Shareholders
Dear Sir or Madam,
VERY SUBSTANTIAL ACQUISITION
IN RELATION TO
THE ACQUISITION OF THE SHARES IN THE TARGET COMPANY
LISTED ON THE SHANGHAI STOCK EXCHANGE
AND
NOTICE OF EXTRAORDINARY GENERAL MEETING
INTRODUCTION
Reference is made to the announcement of the Company dated September 23, 2024 in relation to, among others, the Acquisition.
The purpose of this circular is to provide the Shareholders with, among others, (i) further details of the Share Purchase Agreements and the Acquisition contemplated thereunder; (ii) the financial information of the Group and the Target Group; (iii) the unaudited pro forma financial information of the Group; and (iv) the notice of the EGM.
THE ACQUISITION
On September 23, 2024 (Hong Kong time), the Purchaser (a wholly-owned subsidiary of the Company) entered into the Share Purchase Agreements with the Sellers, pursuant to which, the Purchaser has conditionally agreed to acquire and the Sellers have conditionally agreed to sell the 2,668,135,376 Target Shares (representing approximately 29.4% of the entire issued share capital of the Target Company), at the Consideration in the amount of RMB6,270,118,134 (equivalent to approximately HK$6,916,461,457). The Consideration shall be satisfied by cash and funded by the internal financial resources of the Group and by external financing. Unless otherwise specified, the exchange rate used for illustrative purpose in this circular shall be RMB0.90655 to HK$1.0000.
THE SHARE PURCHASE AGREEMENTS
The principal terms of the Share Purchase Agreements are set out as follows:
Date
September 23, 2024
Parties to the Share Purchase Agreements
Dairy Farm Share Purchase Agreement
(a) The Purchaser; and
(b) Dairy Farm
Jingdong Share Purchase Agreement
(a) The Purchaser;
(b) Jingdong Shimao; and
(c) Suqian Hanbang
To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Sellers and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined under the Listing Rules) as at the Latest Practicable Date.
Subject Matter of the Acquisition
Pursuant to the terms of the Share Purchase Agreements, the Purchaser has conditionally agreed to acquire, and the Sellers have conditionally agreed to sell 2,668,135,376 Target Shares (representing approximately 29.4% of the entire issued share capital of the Target Company) at the Consideration in the amount of RMB6,270,118,134 (equivalent to approximately HK$6,916,461,457), which comprise (i) 1,913,135,376 Target Shares (representing approximately 21.1% of the entire issued share capital of the Target Company) to be sold by Dairy Farm to the Purchaser pursuant to the Dairy Farm Share Purchase Agreement at the Consideration in the amount of RMB4,495,868,134 (equivalent to approximately HK$4,959,316,236); (ii) 367,227,196 Target Shares (representing approximately 4.0% of the entire issued share capital of the Target Company) to be sold by Jingdong Shimao to the Purchaser pursuant to the Jingdong Share Purchase Agreement at the Consideration in the amount of RMB862,983,911 (equivalent to approximately HK$951,942,982); and (iii) 387,772,804 Target Shares (representing approximately 4.3% of the entire issued share capital of the Target Company) to be sold by Suqian Hanbang to the Purchaser pursuant to the Jingdong Share Purchase Agreement at the Consideration in the amount of RMB911,266,089 (equivalent to approximately HK$1,005,202,239).
Conditions Precedent of the Share Purchase Agreements
The Acquisition is conditional upon the following conditions, as applicable, being fulfilled:
| (a) | the relevant Seller having completed the registration procedures with the People’s Bank of China and the State Administration of Foreign Exchange for the opening of a designated RMB account for receipt of proceeds from sale of A shares; |
| (b) | the SSE having issued a confirmation form (《上海證券交易所上市公司股份協議轉 讓確認表》) with respect to the sale and purchase of the Target Shares, and such confirmation form remaining in full force and effect; |
| (c) | the Company having obtained the Hong Kong Stock Exchange’s confirmation on no further comments on the circular in respect of the purchase of the Target Shares; |
| (d) | the State Administration for Market Regulation of the PRC having issued a decision not to conduct further review, prohibit, or approve with conditions, with respect to the notification of concentration of undertakings with respect to the sale and purchase of Target Shares; and |
| (e) | the Company having obtained the necessary Shareholders’ approval for the purchase of the Target Shares. |
If any of the Conditions Precedent is not fulfilled within six months from the date of the Share Purchase Agreements (i.e. on or before March 23, 2025, being the long stop date contemplated under the Share Purchase Agreements for the fulfillment of the above conditions for the Acquisition), which may be extended for another two months in the case where any of the Conditions Precedent contemplated under (a) to (e) above is not fulfilled for reasons attributable to the Hong Kong Stock Exchange, the SSE or the relevant authority; or such later date as the parties to the Share Purchase Agreements may agree in writing, the Share Purchase Agreements may be terminated by either party by written notice to the other party at any time thereafter.
As of the date of this circular, the conditions precedent as set out in (c) has been fulfilled or waived (as applicable).
Guarantee
The Company, which indirectly holds 100% of the shares of the Purchaser, has provided a guarantee to each of the Sellers on the due performance of the Purchaser in respect of its obligation under the respective Share Purchase Agreements.
CONSIDERATION FOR THE ACQUISITION
With respect to the Acquisition, the Consideration is in the amount of RMB6,270,118,134 (equivalent to approximately HK$6,916,461,457), representing (i) RMB4,495,868,134 (equivalent to approximately HK$4,959,316,236) to be paid to Dairy Farm; (ii) RMB862,983,911 (equivalent to approximately HK$951,942,982) to be paid to Jingdong Shimao; and (iii) RMB911,266,089 (equivalent to approximately HK$1,005,202,239) to be paid to Suqian Hanbang. The Consideration shall be satisfied by cash and funded by the internal financial resources of the Group and by external financing.
Basis of the Consideration
The Consideration was arrived at based on normal commercial terms after arm’s length negotiation among the parties to the Share Purchase Agreements after taking into account, among others, the following:
Historical Trading Price of the Target Shares and its Trend
In determining the Consideration, the Directors have considered the historical market price of the Target Shares traded on the SSE as a benchmark to reflect the prevailing market conditions and recent market sentiment.
Based on the Consideration in the amount of RMB6,270,118,134 for the Target Shares, the price per Target Share, RMB2.35, represents:
| (a) | a premium of 3.5% to RMB2.27, being the volume-weighted average price of the Target Shares on the 20 Trading Days during the period commencing from August 22, 2024 to September 20, 2024; and |
| (b) | a premium of 3.1% to RMB2.28, being the closing price of the Target Shares on September 20, 2024, being the Trading Day immediately preceding the date of the Share Purchase Agreements. |
The price per Target Share shall not be and is not lower than 90% of the closing price of the Target Shares on September 20, 2024, being the Trading Day immediately preceding the date of the Share Purchase Agreements.
The Acquisition represents a valuable opportunity for the Company to gain access to investment asset with high return and growth potential at an attractive pricing for the following reasons, among others:
| (a) | as a leading offline retail enterprise in the PRC, the valuation index (such as price-to-sales ratio and price-to-book ratio) of the Target Company is lower than that of the world’s leading offline retail enterprises with global operations, which demonstrates a higher investment value for the Target Company; and |
| (b) | on the Trading Day before the signing of the Share Purchase Agreements, the A-share Shanghai Composite Index closed at 2,736.81 points, close to the lowest level in the past five years. The overall valuation of the A-share market was relatively depressed when the pricing of the Acquisition was determined, which contributed to the high return and growth potential of the Acquisition. Since the signing of the Share Purchase Agreements in late September 2024, the A-share market has begun to recover and the closing price of the Target Shares was RMB5.14, representing a premium of 118.7% to the price per share of RMB2.35 (being the Consideration of the Acquisition), as of the Latest Practicable Date. |
Other than the above numeric evaluation over the Target Shares and the Consideration contemplated under the Acquisition, the Consideration is also arrived at with reference to (i) the well-established businesses and operations of the Target Group; (ii) the financial performance and prospects of the businesses operated by the Target Group as stated under the paragraph headed “FINANCIAL AND TRADING PROSPECT OF THE GROUP” in Appendix I to this circular; and (iii) the reasons and benefits of the Acquisition as stated under the paragraph headed “REASONS FOR AND BENEFITS OF THE ACQUISITION” in this circular.
Completion
Completion for the Acquisition shall take place on the second Trading Day following the satisfaction of the Conditions Precedent (or waived, as the case may be), or on such other date as may be agreed between the parties to the Share Purchase Agreements. Upon Completion, the financial results of the Target Group will not be consolidated into the financial statements of the Company, and the financial results of the Target Group will be accounted for as investment in associates in the financial statements of the Group.
For the avoidance of doubt, completion of the Acquisition pursuant to the Dairy Farm Share Purchase Agreement is not interconditional upon the completion of the Acquisition pursuant to the Jingdong Share Purchase Agreement, and vice versa.
Undertakings
The Purchaser undertakes to comply with the sell-down restrictions under the applicable laws with respect to the Target Shares following the Completion, including a six-month lock-up requirement from the date of the Completion and other relevant sell-down restrictions that are generally applicable to the major shareholders of the companies listed on the SSE (including shareholders that hold 5% or more interest in the company, and the controlling shareholder and the actual controller of the company) in accordance with the Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies (《上市公司 股東減持股份管理暫行辦法》) promulgated by the China Securities Regulatory Commission.
Each Seller undertakes that, from the execution of the respective Share Purchase Agreement until immediately before the Purchaser is registered as the owner of the Target Shares, if any proposal is considered at a shareholders’ meeting or board meeting of the Target Company that would result in a reduction in the number of voting shares of the Target Company (being any proposal for a reduction in the registered capital of the Target Company or any new share buyback by the Target Company), each Seller shall, or shall procure the relevant Seller-nominated director(s) of the Target Company to, to the extent permitted by applicable laws, vote against such proposal at the relevant shareholders’ meeting or board meeting.
INFORMATION OF THE COMPANY AND THE GROUP
The Company was incorporated in the Cayman Islands on January 7, 2020, as an exempted company with limited liability under the Companies Law of the Cayman Islands. The principal activity of the Company is investment holding. The principal businesses of the Group are the retail and wholesale of lifestyle and pop toy products across the PRC, other parts of Asia, Americas, Europe and certain other countries.
INFORMATION OF THE PURCHASER
Guangdong Juncai International Trading Co., Ltd.* (廣東駿才國際商貿有限公司) is a limited liability company established under the laws of the PRC on April 12, 2016. It is an indirectly wholly-owned subsidiary of the Company and is principally engaged in wholesale and retail.
INFORMATION OF THE SELLERS
THE DAIRY FARM COMPANY, LIMITED (牛奶有限公司), a limited liability company incorporated under the laws of Hong Kong, is an indirectly wholly-owned subsidiary of DFI Retail Group Holdings Limited. DFI Retail Group Holdings Limited is incorporated in Bermuda and has a primary listing in the standard segment of the London Stock Exchange (ticker: DF1B), with secondary listings in Bermuda Stock Exchange (ticker: D01) and Singapore (ticker: D01).
Beijing Jingdong Century Trade Co., Ltd. (北京京東世紀貿易有限公司) and Suqian Hanbang Investment Management Co., Ltd.* (宿遷涵邦投資管理有限公司), both of which are limited liability companies incorporated under the laws of the PRC, are indirectly wholly-owned subsidiaries of JD.com, Inc., an exempted company incorporated in the Cayman Islands with limited liability and the American depositary shares of which have been listed on the Nasdaq Global Select Market under the symbol of “JD” and the ordinary shares have been listed on the main board of HKEX under the stock codes “9618 (HKD counter)” and “89618 (RMB counter)”.
INFORMATION OF THE TARGET COMPANY AND THE TARGET GROUP
Yonghui Superstores Co., Ltd* (永輝超市股份有限公司), a joint stock company incorporated in the PRC with limited liability, the shares of which are listed on the SSE (stock code: 601933), is a retail chain operator featuring fresh produce management, mainly operates hypermarkets, supermarkets and community supermarkets and has approximately 800 outlets spanning across more than 25 provinces and municipalities across the PRC.
Financial Information of the Target Group
Set out below is the audited consolidated financial information prepared in accordance with CASBE of the Target Company and its subsidiaries for the years ended December 31, 2022 and December 31, 2023, and the unaudited consolidated financial information prepared in accordance with CASBE of the Target Company and its subsidiaries for the six months ended June 30, 2024, respectively:
| | | | | | | | | For the | |
| | | For the | | | For the | | | six months | |
| | | year ended | | | year ended | | | ended | |
| | | December 31, | | | December 31, | | | June 30, | |
| | | 2022 | | | 2023 | | | 2024 | |
| | | (audited) | | | (audited) | | | (unaudited) | |
| | | | (RMB million) | | | | (RMB million) | | | | (RMB million) | |
| Revenue | | | 90,090.82 | | | | 78,642.17 | | | | 37,779.19 | |
| Net profit/(loss) before tax | | | (3,218.48 | ) | | | (1,361.42 | ) | | | 323.78 | |
| Net profit/(loss) after tax | | | (2,999.67 | ) | | | (1,464.73 | ) | | | 210.83 | |
| | | As at | | | As at | | | As at | |
| | | December 31, | | | December 31, | | | June 30, | |
| | | 2022 | | | 2023 | | | 2024 | |
| | | (audited) | | | (audited) | | | (unaudited) | |
| | | | (RMB million) | | | | (RMB million) | | | | (RMB million) | |
| Net assets | | | 7,465.57 | | | | 5,939.07 | | | | 6,153.39 | |
REASONS FOR AND BENEFITS OF THE ACQUISITION
The Target Group is a successful supermarket chain operator in the PRC, primarily engaging in selling selected products through offline stores and online channels, covering consumers of all ages. As at the Latest Practicable Date, it operates approximately 800 stores, covering more than 25 provinces and municipalities across the PRC. The Target Group is one of the first distribution enterprises in the PRC to introduce fresh produce into modern supermarkets. In terms of sales scale, it has consistently ranked second among the top 100 supermarkets in the PRC in recent years.
In recent years, the Target Group has made rapid progress in supply chain construction to enhance the operational efficiency at each stage. It has been continuously optimizing the product structure, deepening the source procurement and enhancing the product power, especially by vigorously promoting the development of its self-brands. In the first half of 2024, its self-brands achieved sales of RMB1.28 billion, accounting for 3.4% of its revenue. In 2023, its self-brands realized sales of RMB3.54 billion, accounting for 4.5% of its revenue.
Since 2024, the Target Group has continued to accelerate its transformation, actively learning from its one outstanding peer, deeply engaging in the reform of the supply chain, and pragmatically building a platform-type enterprise for the food supply chain that adapts to current development.
The Group continues to be optimistic about the development of the offline retail industry in the PRC. This Acquisition is in line with the Company’s overall strategy and is beneficial to the Shareholders as a whole. Given that the Target Group is one of the leading supermarket chain operators in the PRC with a high-quality store network, well-established logistics infrastructure, loyal customer base and strong digital system capabilities, the Group believes that:
| (i) | the Target Group’s ongoing adjustment and reform in its stores is a revolutionary attempt to return to the essence of retail business. The adjustment and reform focused on (i) the optimization of the commodity structure and procurement mode with the strategy of bare price and backstage control, so as to fully grasp a competitive advantage in product selection and pricing; (ii) improving customer experience and satisfaction by creating more sentimental value, in turn enhancing customer retention; and (iii) reforming the corporate culture and thus to enhance employees’ satisfaction, which ultimately contributes to customers’ satisfaction. This is an inevitable trend in the development of the supermarket industry in the PRC, which will provide consumers with a positive shopping experience and create a fulfilling working environment for employees. As a result, it will help the Target Group gain favorable brand image and reputation, ultimately creating significant commercial and social value. This cultural orientation highly aligns with the Group’s corporate mission of “Life is for fun”; |
| (ii) | the Group possesses unique capabilities and experience in developing its self-brands, designs and IP products. After the Acquisition, the Group can support the Target Group through business collaboration, allowing the Target Group to leverage the Group’s strengths to develop higher quality self-branded products at lower costs. This is expected to enhance the Target Group’s differentiated competitive ability. The Target Group operates approximately 800 retail supermarkets across over 25 provinces and municipalities and has established a vast store network and supply chain in the PRC. The Group and the Target Group can share resources through business cooperations to further enhance economies of scale, optimize the cost structure and create more value for consumers, which will thereby enhance the Group’s return on investment; and |
| (iii) | the Acquisition will expand the Group’s investment and operational channels in the daily necessities retail business, enabling the Group to diversify its cyclical business risks, which is of significant strategic importance to the Group. |
For the foregoing reasons, the Directors are of the view that the Acquisition and the Share Purchase Agreements are on normal commercial terms agreed upon after arm’s length negotiations between the parties with reference to the prevailing market conditions and are fair and reasonable, and are in the interests of the Group and the Shareholders as a whole.
None of the Directors has any material interest in the Acquisition and the Share Purchase Agreements and is required to abstain from voting on the Board resolutions approving the Acquisition and the Share Purchase Agreements.
The Company confirms that it will continue to operate and expand the existing business of the Group. As a global value retailer offering a variety of trendy lifestyle products featuring IP design, the Company remains optimistic and will further invest and develop its existing business strategically.
Further, the Company does not have any current intention or plan to further invest in the Target Company other than the Acquisition as detailed in this circular. Notwithstanding the above, in the case where there is any change of intention or circumstances, the Company shall ensure compliance with all the applicable Listing Rules.
LISTING RULES IMPLICATIONS
Chapter 14 of the Listing Rules
As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the Acquisition exceeds 100% on an aggregated basis pursuant to Rule 14.22 of the Listing Rules, the Acquisition constitutes a very substantial acquisition under Chapter 14 of the Listing Rules and is therefore subject to the notification, announcement, circular and shareholder’s approval requirements under Chapter 14 of the Listing Rules.
WAIVERS FROM STRICT COMPLIANCE WITH REQUIREMENTS UNDER THE LISTING RULES
Rule 14.69(4)(a)(i) of the Listing Rules requires this circular to contain, among others, an accountants’ report (the “Target Accountants’ Report”) on the Target Company in accordance with Chapter 4 of the Listing Rules.
Further, pursuant to Rule 14.69(7) of the Listing Rules, the Company is required to include in this circular a discussion and analysis of results of the Target Company covering all those matters set out in paragraph 32 of Appendix D2 to the Listing Rules for the period reported in the Target Accountants’ Report.
The Company has applied to the Hong Kong Stock Exchange and the Hong Kong Stock Exchange has granted waiver from strict compliance with Rules 14.69(4)(a)(i) and 14.69(7) of the Listing Rules on the following grounds:
| 1. | The Company’s financial statements are prepared in accordance with the IFRS, whereas the published audited annual financial statements and unaudited interim financial statements of the Target Company are prepared in accordance with CASBE, and under Rule 4.11(c) of the Listing Rules, CASBE is one of the accounting standards permitted for a PRC issuer for the preparation of its annual financial statements. |
| 2. | The Acquisition is a transaction solely between the Purchaser and the Sellers, which is governed by the Share Purchase Agreements to each of which only the Purchaser and the respective Sellers are privy. The Target Company is not a party to the relevant agreements and therefore not contractually obliged to grant access to the Target Company’s books and records for the purpose of preparing the Target Accountants’ Report. Further, after due enquiry, the Company was informed that it will be hugely time and cost consuming for the Target Company to assign the required resources and manpower to make available the vast amount of documents to the Company to enable its reporting accountant to conduct the required audit, in light of the significant size of the Target Group, especially when the Company is not yet a registered shareholder of the Target Company prior to the Completion. |
| 3. | Further, the Target Company is a joint stock company incorporated in the PRC with limited liability, the shares of which have been listed on the SSE (stock code: 601933) since 2010. The Target Company is required to publish its audited annual financial results and unaudited interim results on the website of the SSE (www.sse.com.cn) and the Target Company (www.yonghui.com.cn) and such information is therefore publicly available. Disclosure of the Target Group’s financial information is subject to supervision by the SSE and shall comply with the Rules Governing the Listing of Stocks on Shanghai Stock Exchange (《上海證券交 易所股票上市規則》). |
| 4. | The audited consolidated financial statements of the Target Group for the three years ended December 31, 2021, 2022 and 2023 respectively and the unaudited consolidated financial statements of the Target Group for the six months ended June 30, 2024 have been published in the manner described in sub-paragraph (3) above. The said audited consolidated financial statements were audited by EY and all the said consolidated financial statements (whether audited or unaudited) were prepared in accordance with CASBE, which are expressly recognised by the Listing Rules in the case of a PRC issuer under Rule 4.11(c) of the Listing Rules. CASBE is substantially consistent with IFRS, the accounting policies adopted by the Company and the consolidated financial statements of the Target Group under CASBE are sufficient for investors to make a fully informed investment decision, in particular with the support of the Reconciliation (as defined below). EY is a firm with an international name and reputation, registered with the Chinese Institute of Certified Public Accountants and is subject to the oversight of China Securities Regulatory Commission. |
| | 5. | Furthermore, the management of the Company will otherwise have to prepare the Target Group’s financial information for the three years ended December 31, 2021, 2022 and 2023 respectively and the six months ended June 30, 2023 and 2024 respectively in accordance with IFRS, being the accounting standards adopted by the Company, and the reporting accountants will then conduct work on such financial information for the three years ended December 31, 2021, 2022 and 2023 respectively and the six months ended June 30, 2024 in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical Financial Information in Investment Circulars” and a review on financial information for the six months ended June 30, 2023 in accordance with “Hong Kong Standard on Review Engagements 2410”. It would therefore be unduly burdensome for the Company to prepare the financial information of the Target Group based on IFRS (if at all feasible) and for the reporting accountants to audit or review (as the case may be) the same for the following reasons, among others: |
| (a) | In terms of resources and costs: the Company expects that it would incur substantial costs to prepare the Target Group’s accountants’ report for the three years ended December 31, 2021, 2022 and 2023 respectively and the six months ended June 30, 2023 and 2024 respectively in accordance with IFRS, with reference to the audit fee of the Target Group for the financial year ended December 31, 2023, which was approximately RMB5.3 million, for just one financial year. |
| (b) | In terms of the time involved in preparing such accountants’ report: the Company expects that the preparation of Target Group’s accountants’ report in compliance with Rule 14.69(4)(a)(i) of the Listing Rules would take at least 3 months to complete, given that the size of the Target Group and that it has over 100 subsidiaries. |
| | 6. | Given that the EGM is scheduled to take place in January 2025 and the Completion as soon as practicable thereafter, based on the foregoing reasons, the preparation of the accountants’ report for the Target Group in compliance with Rule 14.69(4)(a)(i) of the Listing Rules is likely to cause undue delay to the proposed timeline of the Acquisition. Further, converting the financial information of the Target Group from CASBE to IFRS may not provide any additional material information when compared to the publicly published financial statements of the Target Group based on CASBE. |
| | 7. | As an alternative, the management of the Company will prepare an explanation of the differences between the accounting policies of the Target Group under CASBE and the Company’s accounting policies under IFRS and a line-by-line reconciliation of the Target Group’s consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position for the three years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 respectively, and KPMG, the Company’s reporting accountant will then conduct work on such reconciliation in accordance with the Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information”. For further details, please refer to the section headed “Alternative disclosures” below. |
For the foregoing reasons, strict compliance by the Company with the requirements under Rule 14.69(4)(a)(i) of the Listing Rules to prepare the Target Accountants’ Report will be unduly burdensome to the Company.
Further, given the reasons stated above, it will not be meaningful for the Company to prepare the discussion and analysis of results of the Target Company as required under Rule 14.69(7) of the Listing Rules based solely on the publicly disclosed financial information of the Target Group. In addition, the Company is not in a position to express any view as to the truth, accuracy or completeness on the discussion and analysis of the results of the Target Company as set out in its publicly published information. The Company also notes that such published discussion and analysis of the results of the Target Company does not fully comply with all the content requirements as set out under paragraph 32 of Appendix D2 to the Listing Rules.
Alternative disclosures
To facilitate the Shareholders and potential investors of the Company to evaluate the Acquisition and to assess the Target Group’s activities and financial position, the Company has included in this circular the following:
| (a) | an English translation of the audited consolidated financial statements of the Target Group for the three years ended December 31, 2021, 2022 and 2023 respectively prepared in accordance with CASBE and the unmodified auditor reports thereon, both as extracted from the publicly published documents of the Target Group, as set out in Appendix II to this circular; |
| (b) | an English translation of the unaudited consolidated financial statements of the Target Group for the six months ended June 30, 2024 prepared in accordance with CASBE as extracted from the publicly published documents of the Target Company, as set out in Appendix II to this circular; |
| (c) | additional information which is required for an accountants’ report under the Listing Rules but not disclosed in the Target Group’s publicly published financial statements, as set out in Appendix II to this circular; |
| (d) | an explanation of the differences between the accounting policies of the Target Group under CASBE and the Company’s accounting policies under IFRS and a line-by-line reconciliation of the Target Group’s consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position (the “Reconciliation”). The Company’s reporting accountant reported on the Reconciliation in arriving at the financial information under IFRS under the Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information”. As the Company’s interest in the Target Company will be accounted for as investment in associates using the equity method in the Group’s consolidated financial statements upon Completion, the statement of cash flows and the statement of change of equity of the Target Group will have no impact on the Group’s statement of cash flows and the statement of change of equity. Further, there is no material difference between IFRS and CASBE in terms of the classification of the activities in the cash flow statement and the statement of change of equity, and it is adequate and customary for the Reconciliation involving IFRS and CASBE to only cover the Target Group’s consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position; and |
| (e) | an English translation of the discussion and analysis of the results of the Target Company for the Relevant Periods as extracted from the publicly published documents of the Target Company, as set out in Appendix V to this circular. |
Based on the information provided by the Company and the alternative disclosures mentioned above, the Hong Kong Stock Exchange has granted the waiver from strict compliance with Rules 14.69(4)(a)(i) and 14.69(7) of the Listing Rules.
EGM
The EGM will be convened and held for the Shareholders to consider and, if thought fit, pass ordinary resolution(s) to approve, among other things, the Acquisition and the Share Purchase Agreements. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder has a material interest in the Acquisition and is required to abstain from voting on the resolution(s) approving the Acquisition and the Share Purchase Agreements at the EGM.
Whether or not you propose to attend and vote at the said meeting, please complete, sign, date, and return the accompanying proxy form to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited (for holders of the Shares) or your voting instructions to The Bank of New York Mellon if you hold your ADSs directly on the books and records of The Bank of New York Mellon or to your bank, brokerage, or other securities intermediary if you hold your ADSs indirectly through any of them, as the case may be (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise your voting rights. The proxy form must be completed, signed and deposited at Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time for holding the meeting (i.e. before 11:00 a.m. on January 15, 2025) to ensure your representation at the EGM; and The Bank of New York Mellon must receive your voting instructions by the time and date specified in the ADS voting instruction card to enable the votes attaching to the Shares represented by your ADSs to be cast at the EGM.
RECOMMENDATION
The Directors are of the view that the Acquisition and the Share Purchase Agreements are on normal commercial terms agreed upon after arm’s length negotiations between the parties with reference to the prevailing market conditions and are fair and reasonable, and are in the interests of the Group and the Shareholders as a whole. Accordingly, the Board would recommend the Shareholders to vote in favour of the resolution to approve the Acquisition and the Share Purchase Agreements at the EGM.
Further, Mr. Ye, the chairman of the Board, an executive Director, the chief executive officer and a controlling Shareholder of the Company, has given an irrevocable undertaking to each of the Sellers, to procure the Controlling Shareholders to vote in favour of any resolution approving the Acquisition at the EGM. As of the Latest Practicable Date, the Controlling Shareholders are interested in approximately 62.8% of the issued share capital of the Company. Save for the 1.1% Shares which are currently subject to a credit support arrangement for which the corresponding voting rights will not be exercised, the Controlling Shareholders are entitled to exercise control over their voting rights of the remaining 61.7% Shares held by them.
FURTHER INFORMATION
Your attention is also drawn to the additional information set out in the appendices to this circular.
As the Completion is subject to the satisfaction or waiver (where applicable) of the Conditions Precedent, the Acquisition may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.
| | By Order of the Board |
| | MINISO Group Holding Limited |
| | Mr. YE Guofu |
| | Executive Director and Chairman |
| APPENDIX I | FINANCIAL INFORMATION OF THE GROUP |
1. FINANCIAL INFORMATION OF THE GROUP
Details of the financial information of the Group for the years ended June 30, 2022 and 2023 and for the six months ended December 31, 2023 and June 30, 2024 have been disclosed in the following documents which have been published on the websites of the Hong Kong Stock Exchange (http://www.hkexnews.hk) and the Company (https://ir.miniso.com). Web links to the annual reports and interim report of the Company are set out below:
Annual report of the Company for the year ended June 30, 2022 (pages 52-159):
https://www1.hkexnews.hk/listedco/listconews/sehk/2022/1019/2022101900684.pdf
Annual report of the Company for the year ended June 30, 2023 (pages 86-238):
https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1019/2023101900256.pdf
Annual report of the Company for the six months ended December 31, 2023 (pages 88-242):
https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0416/2024041600632.pdf
Interim report of the Company for the six months ended June 30, 2024 (pages 42-90):
https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0926/2024092601081.pdf
2. INDEBTEDNESS STATEMENT
As at September 30, 2024, the Group had total indebtedness of RMB2,097,511,000 comprising loans and borrowings of RMB6,650,000 and lease liabilities of RMB2,090,861,000, all of which are unsecured and unguaranteed.
Save as aforesaid, and apart from intra-group liabilities, at the close of business on September 30, 2024, the Group did not have any debt securities issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, hire purchases commitments, guarantees or other material contingent liabilities.
3. WORKING CAPITAL SUFFICIENCY OF THE GROUP
The Directors are of the opinion that, taking into account (i) the Acquisition, (ii) the present internal financial resources of the Group, and (iii) the external financing facilities presently available, the Group has sufficient working capital for its requirements for at least 12 months from the date of this circular, in the absence of unforeseen circumstances.
4. FINANCIAL AND TRADING PROSPECT OF THE GROUP
As a global leading value retailer offering a variety of trendy lifestyle products featuring IP design, the Company remains optimistic and will further invest and develop its existing business strategically. The Group will remain focused on its long-term strategic goals: delivering on its globalization strategy, expanding global supply chains, bolstering the strength of its product offerings and further optimizing its store network. Engaged in global competition, the Group will take cost advantages and product differentiation as key points. While sticking to value-for-money proposition, the Company will continue to strengthen quality IP cooperation and offer high-quality products featuring IP design to make lifestyle products more fashionable and trendy.
In the first half of 2024, the Company recorded revenue of RMB7.76 billion and net profit of RMB1.18 billion, representing an increase of 25.0% and 15.7% respectively year over year. Among them, the revenue generated from overseas business exceeded RMB2.73 billion, representing an increase of 42.6% year over year. The Company has been working towards its goal to: (i) increase the number of stores globally; (ii) strengthen the sales contribution from IP products; and (iii) achieve high compound revenue growth rate.
| APPENDIX I | FINANCIAL INFORMATION OF THE GROUP |
In the meanwhile, as mentioned under the paragraph headed “Letter from the Board – Reasons for and benefits of entering into the Agreement” in this circular, the Directors continues to be optimistic about the development of the offline retail industry in the PRC. After the Acquisition, the Group and the Target Group are expected to achieve synergies in sales channels, supply chain and other aspects through close business cooperations. The Group can leverage on its strengths in developing self-brands, designs and IP products to provide support to the Target Group in developing higher quality self-branded products at lower costs. This is expected to enhance the Target Group’s differentiated competitive ability. The Group and the Target Group can share resources through business cooperations to further enhance economies of scale, optimize the cost structure and create more value for consumers, which will thereby enhance the Group’s return on investment. Furthermore, the Acquisition is expected to expand the Group’s investment and operational channels in the daily necessities retail business, enabling the Group to diversify its cyclical business risks, which is of significant strategic importance to the Group.
| 5. | MATERIAL ADVERSE CHANGE |
As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since December 31, 2023, being the date to which the latest published audited consolidated financial statements of the Company were made up.
| 6. | EFFECTS OF THE ACQUISITION ON THE EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP |
Following Completion, the Company will own 29.4% equity interest in the Target Company. The Company’s interest in the Target Company will be accounted for as investment in associates using the equity method in the Group’s consolidated financial statements upon Completion.
As referred to in the unaudited pro forma financial information of the Group as set out in Appendix III to this circular, on the basis of the notes set out therein for the purposes of illustrating the effects of the Acquisition, the financial effects of the Acquisition on the Group as if the Acquisition had taken place and had been completed on June 30, 2024 and January 1, 2024 respectively, would be as follows:
| (a) | As for assets and liabilities of the Group, there is no change in total assets and total liabilities while cash and cash equivalent would decrease by approximately RMB6,270 million upon the completion of the Acquisition. |
| (b) | It is expected that, subject to audit, there would be no financial effect to the revenue of the Group after Completion as the financial results of the Target Group would not be consolidated into that of the Group. The financial results of the Target Group would be reflected as share of profit of associates in the consolidated statement of profit and loss of the Group. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| A. | FINANCIAL INFORMATION OF THE TARGET GROUP FOR EACH OF THE THREE YEARS ENDED DECEMBER 31, 2021, 2022 AND 2023 AND THE SIX MONTHS ENDED JUNE 30, 2024 |
For the purpose of this section only, unless the context requires otherwise, references to the “Company” are to the Target Company and references to the “Group” are to the Target Group, and references to “we”, “us” and “our” shall be construed accordingly.
The Target Group’s audited consolidated financial statements for the years ended December 31, 2021, 2022 and 2023 and the unaudited consolidated financial statements for the six months ended June 30, 2024 were prepared in accordance with CASBE and set out in the respective annual reports/interim report of the Target Group for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024. These financial statements were issued in Chinese. The following is an English translation of these financial statements and provided for information purposes only. In case of discrepancies between the two versions, the Chinese version shall prevail.
The annual reports/interim report of the Target Group for the three years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 are available at the website of the Shanghai Stock Exchange (www.sse.com.cn).
The Directors wish to emphasise that the extracts reproduced below are not prepared for incorporation into this circular and the Company has not participated in their preparation. As such, the Directors do not express any view as to their truth, accuracy or completeness, and the shareholders and investors should exercise caution and should not place undue reliance on such information.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
1. For the year ended December 31, 2021
Section X Financial Reports
I. Audit Report
| | √ | Applicable | ¨ | Not applicable |
Audit Report
AYHM (2022) SZi No. 60922355_B01
Yonghui Superstores Co., Ltd.
All Shareholders of Yonghui Superstores Co., Ltd.:
I. Audit Opinions
We have audited the financial statements of Yonghui Superstores Co., Ltd., which comprise of the consolidated and the company’s balance sheet as of December 31, 2021, the consolidated and the company’s income statement, statement of changes in equity, and cash flow statement for the year then ended, and the notes to the relevant financial statements.
We think that the accompanying financial statements of Yonghui Superstores Co., Ltd. have been prepared in accordance with the CASBE and fairly present the consolidated and corporate financial position of Yonghui Superstores Co., Ltd. as of December 31, 2021, and the consolidated and the company’s financial performance and cash flows for the year then ended.
II. Basis for Formation of Audit Opinions
We have conducted our audit in accordance with the Auditing Standards for CPAs in China. In the “Responsibilities of CPAs for Auditing Financial Statements” of this report, our responsibilities under these standards are further elaborated. In accordance with China Certified Public Accountant Auditing Standards, we are independent of the Yonghui Superstores Co., Ltd. and have performed other duties about occupational ethics. We believe that the audit evidence we obtained is sufficient and appropriate, which provides a reasonable basis for our audit opinions.
III. Key Audit Matters
Key matters are the matters that we believe are the most significant to the audit of the financial statements for the current period based on our professional judgment. These matters were addressed in the context of the audit of the financial statements as a whole and the formation of our audit opinions, and we do not give separate opinions on these matters. We have described in how we addressed each of the following matters in the audit, as a background to this description.
We have fulfilled our responsibilities as described in the section “CPAs’ responsibilities for the audit of financial statements” of this report, including those responsibilities related to the key audit matters. Accordingly, our audit work includes performing audit procedures designed to respond to the assessed risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the following key audit matters, provide a basis for our audit opinion on the financial statements as a whole.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Key audit matters: | | How the matter was addressed in our audit: |
Recognition of supplier income
Yonghui Superstores Co., Ltd. reported RMB6,104,066 thousand of other operating revenue for the year 2021, mainly obtained from suppliers. Yonghui Superstores Co., Ltd. recognizes income from suppliers based on the contractual or supplementary agreement amounts when providing the corresponding services and obtaining the right to collect payments. These arrangements vary in nature and scale, including storage service fees charged to suppliers, display-related service fees, and various service-related fees associated with assisting suppliers in conducting marketing activities.
Due to the significant contribution of supplier income to Yonghui Superstores Co., Ltd.’s profits and the increasing frequency and complexity of transactions with suppliers, there is inherent risk of inaccurate recognition of income or improper allocation to accounting periods. Therefore, we have determined the recognition of supplier income as a key audit matter.
Relevant information is disclosed in Note III, 23 “Revenue from contracts with customers”, Note III, 31 “Significant accounting judgments and estimates”, and Note V, 43 “Operating revenue and costs” of the financial statements.
Our audit procedures include:
| (1) | Understanding management’s accounting policies and key internal control measures related to the recognition of supplier income, and testing and evaluating the effectiveness of relevant internal control design and operation; |
| | |
| (2) | Testing general controls and key application controls of the information system with the assistance of internal information technology experts, including evaluating whether the information technology system operates as designed and the integrity and accuracy of the data transfer between information technology systems; |
| | |
| (3) | Examining the terms and conditions stipulated in the various types of standard contract agreements signed with suppliers to assess the appropriateness of the accounting treatment for the recognition of supplier income; |
| | |
| (4) | Selecting samples to perform detailed testing of various types of supplier income recognized by the Company, including verifying the supporting documents such as supplier contracts, invoices, supplier statements, and financial vouchers for the recognition of supplier income; |
| | |
| (5) | Performing the external confirmation procedure, comparing the results with the amounts recorded in the Company’s books, and performing alternative procedures for suppliers giving no response. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Key audit matters: | | How the matter was addressed in our audit: |
Provision for impairment loss on long-term equity investments
As of December 31, 2021, Yonghui Superstores Co., Ltd. had a carrying amount of RMB4,773,553 thousand for long-term equity investments, with an impairment provision of RMB724,437 thousand. This provision is made for long-term equity investments where the recoverable amount is lower than their carrying amount.
Due to the significance of long-term equity investments to the financial statements as a whole, and the management’s significant judgments and estimates involved in the provision for impairment loss on long-term equity investments. Therefore, we have identified the provision for impairment loss on long-term equity investments made by Yonghui Superstores Co., Ltd. as a key audit matter.
Relevant information is disclosed in Note III, 9 “Long-term equity investments”, Note III, 17 “Impairment of assets”, Note III, 31 “Significant accounting judgments and estimates”, and Note V, 12 “Long-term equity investments” of the financial statements.
Our audit procedures include:
| (1) | Understanding and assessing the design and effectiveness of internal controls related to the impairment testing of long-term equity investments; |
| | |
| (2) | Conducting interviews with the Management of Yonghui Superstores Co., Ltd. to understand their investment intentions, the implementation of strategic cooperation, and the expectations of the cooperation, and viewing documents such as board resolutions related to the investment; |
| | |
| (3) | Discussing with management the basis for assessing indicators of impairment of long-term equity investments, obtaining financial statements of the investee companies, analyzing their financial information, and evaluating the reasonableness of management’s judgments regarding indicators of impairment of long-term equity investments; |
| | |
| (4) | Evaluating the independence, professional competence, and objectivity of external valuation experts hired by management, communicating with management, external valuation experts and internal valuation experts to assess key valuation parameters, with the assistance of internal valuation experts, evaluating the reasonableness of the methods, assumptions, and estimates used in the discounting of projected future cash flows of the assets based on the requirements of the CASBE; |
| | |
| (5) | Evaluating the disclosure of impairment provisions for long-term equity investments in the financial statements to determine compliance with the requirements of the CASBE. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Key audit matters: | | How the matter was addressed in our audit: |
Provision for impairment loss on store asset groups
The store asset groups primarily include long-term assets, such as fixed assets, long-term prepaid expenses, and right-of-use assets. As of December 31, 2021, the carrying amount of these assets has totaled RMB26,858,232 thousand, with impairment provision totaled RMB579,336 thousand. This provision is made for store asset groups where the recoverable amount is lower than their carrying amount. Due to the significance of store asset groups to the financial statements as a whole, and the management’s significant judgments and estimates involved in the provision for impairment loss on store asset groups, therefore, we have identified the provision for impairment loss on store asset groups made by Yonghui Superstores Co., Ltd. as a key audit matter.
Relevant information is disclosed in Note III, 11 “Fixed assets”, Note III, 15 “Right-of-use assets”, Note III, 17 “Impairment of assets”, Note III, 18 (“Long-term prepaid expenses”), Note III, 31 (“Significant accounting judgments and estimates”, Note V, 15 “Fixed assets”, Note V, 18 “Right-of-use assets”, and Note V, 21 “Long-term prepaid expenses” of the financial statements.
Our audit procedures include:
| (1) | Understanding and assessing the design and effectiveness of internal controls related to impairment testing of store assets; |
| | |
| (2) | Discussing with management the basis for judging the indicators of impairment of the store asset groups and evaluate whether management’s judgment on the indicators of impairment of the store asset groups is reasonable; |
| | |
| (3) | Communicating with management and internal valuation experts to evaluate key parameters of valuation; with assistance from internal valuation experts, assessing the appropriateness of the methods, assumptions, and estimates used to discount the projected future cash flows of asset groups based on the requirements of the CASBE; |
| | |
| (4) | Evaluating whether the disclosures related to impairment of store asset groups in the financial statements comply with the requirements of the CASBE. |
IV. Other Information
The Management of Yonghui Superstores Co., Ltd. is responsible for other information. Other information includes information covered in the annual report, but not financial statements and our audit reports.
Our audit opinions on the financial statements exclude other information and we do not publish any form of verification conclusions on other information.
In combination with our audit of financial statements, it is our responsibility to read other information, and in this process, consider whether other information to the financial statements or the situation we learned in the process of auditing is materially inconsistent or seems to have material misstatement.
Based on the work we have done, we should report the fact if we are certain that other information is materially misreported. In this respect, we have nothing to report.
V. Responsibilities of the Management and the Governance for Financial Statements
The Management is responsible for preparing financial statements in accordance with the CASBE and fairly presenting the financial statements, as well as designing, implementing, and maintaining a system of internal control necessary to make sure the financial statements are free from material misstatement, whether due to fraud or error.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
During the preparation of the financial statements, the management is responsible for assessing the ability of Yonghui Superstores Co., Ltd. to continue as a going concern, disclosing any relevant matters related to going concern (if applicable), and applying the going concern assumption, unless it intends to liquidate, cease operations, or has no other realistic option.
The governance level is responsible for overseeing the financial reporting process of Yonghui Superstores Co., Ltd.
VI. Responsibilities of CPAs for Auditing Financial Statements
Our objective is to obtain reasonable assurance for that the financial statements are free of material misstatements due to fraud or errors and to issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that audits conducted according to audit standards will always identify a material misstatement that exists. A misstatement may be caused by fraud or errors and it is usually considered “material” when it is reasonably expected that the misstatement would, either individually or aggregately, affect the user’s economic decisions based on the financial statements.
In the process of auditing according to the auditing standards, we have applied our professional judgment and maintained professional skepticism. Meanwhile, we have also carried out the following work:
| (1) | Identifying and assessing risks of material misstatement of financial statements due to fraud or errors; designing and implementing audit procedures to address these risks; obtaining adequate and appropriate audit evidence as a basis for issuing audit opinions. As fraud may involve collusion, forgery, willful omission, false statements, or overriding internal control, the risk of failing to identify material misstatements due to fraud is higher than that due to errors. |
| (2) | Understanding the internal control relevant to the audit in order to design audit procedures that are appropriate. |
| (3) | Evaluating the appropriateness of accounting policies adopted by the Management and the reasonableness of accounting estimates and related disclosures. |
| (4) | Reaching a conclusion on the appropriateness of the Management’s use of continuing operation assumption. Meanwhile, based on the audit evidence obtained, a conclusion may be obtained on whether there may be major uncertainties in matters or circumstances leading to major doubts about the continuing operation ability of the Yonghui Superstores Co., Ltd. If we conclude a significant uncertainty, we shall, as required by the auditing standards, draw the attention of users of the financial statements to the relevant disclosures in the audit report; if the disclosure is insufficient, we shall give a modified opinion. Our conclusions are based on information available as of the audit report date. However, future matters or conditions may lead to an inability of Yonghui Superstores Co., Ltd. to continue as a going concern. |
| (5) | Evaluating the overall presentation, structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
| (6) | Obtaining sufficient and appropriate audit evidence regarding the financial information of entities or business activities within Yonghui Superstores Co., Ltd. in order to express an audit opinion on the financial statements. We are responsible for guiding, supervising, and executing the Group’s audit, and bearing all liabilities for our audit opinions. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
We communicated with the Governance on planned audit coverage, scheduling, and major audit findings, including the internal control defects deserving attention which were identified in the audit.
We also provided a statement to the Governance on compliance with ethical requirements related to independence and discussed with them all relationships and other matters that may reasonably be considered to affect our independence, as well as associated preventive actions (where applicable).
From the matters that we communicated with the Governance, we decided which were the most important to the audit of the current financial statements and therefore constituted key audit matters. We shall describe these matters in the audit report, unless the public disclosure of these matters is prohibited by laws and regulations, or in rare cases, if reasonably expected, the negative consequences of communicating a matter in an audit report outweigh the benefits in the public interest, we shall determine that the matter should not be communicated in the audit report.
AYHM (2022) SZi No.60922355_B01
Yonghui Superstores Co., Ltd.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
II. Financial Statements
Consolidated Balance Sheet
December 31, 2021
Prepared by: Yonghui Superstores Co., Ltd.
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Items | | Notes | | | December 31,
2021 | | | | December 31,
2020 | |
| Current assets: | | | | | | | | | | |
| Monetary funds | | | | | 9,163,127,740.22 | | | | 12,005,455,154.69 | |
| Loans and advances (short-term) | | | | | 568,806,255.36 | | | | 1,393,758,718.35 | |
| Trading financial assets | | | | | 1,560,917,920.71 | | | | 241,410,438.34 | |
| Notes receivable | | | | | | | | | | |
| Factoring receivable | | | | | 1,411,455,365.03 | | | | 2,710,166,360.05 | |
| Account receivable | | | | | 477,000,229.84 | | | | 447,397,868.68 | |
| Receivables financing | | | | | | | | | | |
| Advance payments | | | | | 1,972,320,710.23 | | | | 2,467,802,583.53 | |
| Other receivables | | | | | 742,369,328.43 | | | | 938,269,620.40 | |
| Including: interests receivable | | | | | 201,536.05 | | | | 211,245.24 | |
| Dividends receivable | | | | | | | | | | |
| Inventories | | | | | 10,791,491,206.86 | | | | 10,881,679,092.38 | |
| Assets held for sale | | | | | | | | | | |
| Non-current assets due within one year | | | | | 41,563,339.26 | | | | | |
| Other current assets | | | | | 1,985,431,196.03 | | | | 2,092,549,539.13 | |
| Total current assets | | | | | 28,714,483,291.97 | | | | 33,178,489,375.55 | |
| Non-current assets: | | | | | | | | | | |
| Loans and advances | | | | | 245,810,924.79 | | | | 201,557,024.80 | |
| Debt investment | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | |
| Long-term receivables | | | | | 73,044,056.84 | | | | | |
| Long-term equity investment | | | | | 4,773,553,407.12 | | | | 5,409,972,860.53 | |
| Investment in other equity instruments | | | | | | | | | | |
| Other non-current financial assets | | | | | 4,100,000,000.00 | | | | 5,618,159,570.30 | |
| Investment properties | | | | | 321,941,383.78 | | | | 332,748,387.92 | |
| Fixed assets | | | | | 4,646,074,375.37 | | | | 5,310,424,471.89 | |
| Construction in progress | | | | | 410,335,149.87 | | | | 194,264,567.11 | |
| Productive biological assets | | | | | 11,627,554.75 | | | | | |
| Oil and gas assets | | | | | | | | | | |
| Right-of-use assets | | | | | 21,967,161,359.54 | | | | | |
| Intangible assets | | | | | 1,525,435,308.65 | | | | 1,616,982,112.68 | |
| Development expenses | | | | | | | | | | |
| Goodwill | | | | | 3,661,378.25 | | | | 121,331,244.79 | |
| Long-term deferred expenses | | | | | 3,482,489,035.42 | | | | 3,701,445,094.02 | |
| Deferred tax asset | | | | | 1,036,025,168.71 | | | | 472,606,455.22 | |
| Other non-current assets | | | | | | | | | | |
| Total non-current assets | | | | | 42,597,159,103.09 | | | | 22,979,491,789.26 | |
| Total assets | | | | | 71,311,642,395.06 | | | | 56,157,981,164.81 | |
| Current liabilities: | | | | | | | | | | |
| Short-term loans | | | | | 10,947,557,472.21 | | | | 13,889,997,357.11 | |
| Borrowings from central bank | | | | | | | | | | |
| Borrowing funds | | | | | | | | | | |
| Trading financial liabilities | | | | | | | | | | |
| Derivative financial liabilities | | | | | | | | | | |
| Notes payable | | | | | 33,000,000.00 | | | | | |
| Accounts payable | | | | | 12,518,578,825.59 | | | | 12,513,674,031.70 | |
| Accounts collected in advance | | | | | 199,815,968.65 | | | | 197,284,021.08 | |
| Contract liabilities | | | | | 4,303,074,375.86 | | | | 3,472,076,794.19 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | December 31,
2021 | | | December 31,
2020 | |
| Financial assets sold for repurchase | | | | | | | | | | |
| Deposits from customers and interbank | | | | | | | | | | |
| Acting trading securities | | | | | | | | | | |
| Acting underwriting securities | | | | | | | | | | |
| Payroll payable | | | | | 665,285,751.18 | | | | 721,581,678.15 | |
| Taxes payable | | | | | 202,850,017.46 | | | | 266,452,210.54 | |
| Other payables | | | | | 2,761,266,270.83 | | | | 3,510,335,991.72 | |
| Including: interests payable | | | | | | | | | | |
| Dividends payable | | | | | 12,000,000.00 | | | | 11,528,208.00 | |
| Handling charges and commissions payable | | | | | | | | | | |
| Reinsurance accounts payable | | | | | | | | | | |
| Liabilities held for sale | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | 2,069,851,210.42 | | | | | |
| Other current liabilities | | | | | 390,433,950.39 | | | | 321,886,940.98 | |
| Total current liabilities | | | | | 34,091,713,842.59 | | | | 34,893,289,025.47 | |
| Non-current liabilities: | | | | | | | | | | |
| Provision for insurance contracts | | | | | | | | | | |
| Long-term borrowings | | | | | 1,021,069,722.22 | | | | | |
| Bonds payable | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Lease liabilities | | | | | 24,826,561,091.82 | | | | | |
| Long-term accounts payable | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | |
| Estimated liabilities | | | | | 3,628,259.35 | | | | 123,670,630.29 | |
| Deferred income | | | | | 118,370,289.79 | | | | 130,947,523.55 | |
| Deferred tax liabilities | | | | | 172,894,859.29 | | | | 616,873,988.17 | |
| Other non-current liabilities | | | | | | | | | | |
| Total non-current liabilities | | | | | 26,142,524,222.47 | | | | 871,492,142.01 | |
| Total liabilities | | | | | 60,234,238,065.06 | | | | 35,764,781,167.48 | |
| Equity (or shareholders’ equity): | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | 9,075,036,993.00 | | | | 9,516,285,608.00 | |
| Other equity instruments | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Capital reserves | | | | | 4,276,144,811.80 | | | | 6,926,920,343.78 | |
| Less: Treasury shares | | | | | | | | | 2,009,067,652.38 | |
| Other comprehensive income | | | | | 1,494,334.19 | | | | -584,134.06 | |
| Special reserves | | | | | | | | | | |
| Surplus reserves | | | | | 1,103,806,707.15 | | | | 1,030,866,477.21 | |
| Undistributed profits | | | | | -3,797,684,715.49 | | | | 3,886,681,562.18 | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | | | 10,658,798,130.65 | | | | 19,351,102,204.73 | |
| Minority interests | | | | | 418,606,199.35 | | | | 1,042,097,792.60 | |
| Total equity (or shareholders’ equity) | | | | | 11,077,404,330.00 | | | | 20,393,199,997.33 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | 71,311,642,395.06 | | | | 56,157,981,164.81 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Balance Sheet of the Parent Company
December 31, 2021
Prepared by: Yonghui Superstores Co., Ltd.
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Items | | Notes | | | December 31,
2021 | | | | December 31,
2020 | |
| Current assets: | | | | | | | | | | |
| Monetary funds | | | | | 3,842,006,361.29 | | | | 6,910,650,846.27 | |
| Trading financial assets | | | | | 543,039,966.58 | | | | 50,719,741.48 | |
| Derivative financial assets | | | | | | | | | | |
| Notes receivable | | | | | | | | | | |
| Account receivable | | | | | 36,908,913.98 | | | | 60,915,137.48 | |
| Receivables financing | | | | | | | | | | |
| Advance payments | | | | | 107,686,813.66 | | | | 137,433,276.57 | |
| Other receivables | | | | | 43,481,029,538.77 | | | | 24,906,579,097.05 | |
| Including: interests receivable | | | | | | | | | | |
| Dividends receivable | | | | | 18,000,000.00 | | | | | |
| Inventories | | | | | 381,558,282.19 | | | | 473,979,768.06 | |
| Contract assets | | | | | | | | | | |
| Assets held for sale | | | | | | | | | | |
| Non-current assets due within one year | | | | | 7,503,976.35 | | | | | |
| Other current assets | | | | | 123,273,153.05 | | | | 164,936,487.28 | |
| Total current assets | | | | | 48,523,007,005.87 | | | | 32,705,214,354.19 | |
| Non-current assets: | | | | | | | | | | |
| Debt investment | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | |
| Long-term receivables | | | | | 7,345,349.21 | | | | | |
| Long-term equity investment | | | | | 12,122,911,290.72 | | | | 11,453,358,655.85 | |
| Investment in other equity instruments | | | | | | | | | | |
| Other non-current financial assets | | | | | 4,100,000,000.00 | | | | 4,458,278,378.94 | |
| Investment properties | | | | | | | | | | |
| Fixed assets | | | | | 446,381,583.68 | | | | 478,837,682.00 | |
| Construction in progress | | | | | 13,427,506.63 | | | | 32,888,275.21 | |
| Productive biological assets | | | | | | | | | | |
| Oil and gas assets | | | | | | | | | | |
| Right-of-use assets | | | | | 617,260,980.28 | | | | | |
| Intangible assets | | | | | 249,134,183.06 | | | | 211,227,926.32 | |
| Development expenses | | | | | | | | | | |
| Goodwill | | | | | | | | | | |
| Long-term deferred expenses | | | | | 69,977,631.10 | | | | 89,764,211.59 | |
| Deferred tax asset | | | | | 31,228,402.46 | | | | 189,913,289.70 | |
| Other non-current assets | | | | | | | | | | |
| Total non-current assets | | | | | 17,657,666,927.14 | | | | 16,914,268,419.61 | |
| Total assets | | | | | 66,180,673,933.01 | | | | 49,619,482,773.80 | |
| Current liabilities: | | | | | | | | | | |
| Short-term loans | | | | | 7,645,637,472.21 | | | | 10,808,265,416.68 | |
| Trading financial liabilities | | | | | | | | | | |
| Derivative financial liabilities | | | | | | | | | | |
| Notes payable | | | | | 1,833,000,000.00 | | | | 1,380,000,000.00 | |
| Accounts payable | | | | | 943,391,714.96 | | | | 677,988,956.10 | |
| Accounts collected in advance | | | | | 12,301,803.89 | | | | 15,075,140.35 | |
| Contract liabilities | | | | | 722,349,016.49 | | | | 233,649,565.20 | |
| Payroll payable | | | | | 36,188,048.25 | | | | 63,342,110.44 | |
| Taxes payable | | | | | 10,523,947.10 | | | | 8,667,008.99 | |
| Other payables | | | | | 36,043,303,593.22 | | | | 18,623,630,326.09 | |
| Including: interests payable | | | | | | | | | | |
| Dividends payable | | | | | | | | | 11,528,208.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | December 31,
2021 | | | | December 31,
2020 | |
| Liabilities held for sale | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | 109,141,831.96 | | | | | |
| Other current liabilities | | | | | 65,707,109.62 | | | | 21,698,155.17 | |
| Total current liabilities | | | | | 47,421,544,537.70 | | | | 31,832,316,679.02 | |
| Non-current liabilities: | | | | | | | | | | |
| Long-term borrowings | | | | | 1,021,069,722.22 | | | | | |
| Bonds payable | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Lease liabilities | | | | | 654,634,402.00 | | | | | |
| Long-term accounts payable | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | |
| Estimated liabilities | | | | | | | | | 1,286,000.00 | |
| Deferred income | | | | | 5,333,333.40 | | | | 6,933,333.36 | |
| Deferred tax liabilities | | | | | | | | | 197,810,762.52 | |
| Other non-current liabilities | | | | | | | | | | |
| Total non-current liabilities | | | | | 1,681,037,457.62 | | | | 206,030,095.88 | |
| Total liabilities | | | | | 49,102,581,995.32 | | | | 32,038,346,774.90 | |
| Equity (or shareholders’ equity): | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | 9,075,036,993.00 | | | | 9,516,285,608.00 | |
| Other equity instruments | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Capital reserves | | | | | 4,135,238,517.71 | | | | 6,764,350,200.40 | |
| Less: Treasury shares | | | | | | | | | 2,009,067,652.38 | |
| Other comprehensive income | | | | | 1,652,642.73 | | | | -796,187.66 | |
| Special reserves | | | | | | | | | | |
| Surplus reserves | | | | | 1,103,806,707.15 | | | | 1,030,866,477.21 | |
| Undistributed profits | | | | | 2,762,357,077.10 | | | | 2,279,497,553.33 | |
| Total equity (or shareholders’ equity) | | | | | 17,078,091,937.69 | | | | 17,581,135,998.90 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | 66,180,673,933.01 | | | | 49,619,482,773.80 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Income Statement
January — December, 2021
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Items | | Notes | | | Year 2021 | | | | Year 2020 | |
| I. Total operating income | | | | | 91,061,894,312.13 | | | | 93,199,107,664.03 | |
| Including: operating income | | | | | 91,061,894,312.13 | | | | 93,199,107,664.03 | |
| Interest income | | | | | | | | | | |
| Earned premium | | | | | | | | | | |
| Fee and commission income | | | | | | | | | | |
| II. Total operating cost | | | | | 95,004,917,681.58 | | | | 91,455,482,429.43 | |
| Including: operating cost | | | | | 74,027,212,258.30 | | | | 73,280,513,427.89 | |
| Taxes and surcharges | | | | | 212,940,218.11 | | | | 219,749,875.50 | |
| Selling expenses | | | | | 16,629,508,068.60 | | | | 15,438,729,869.72 | |
| Administrative expenses | | | | | 2,155,455,991.88 | | | | 2,293,027,943.94 | |
| Research and development expenses | | | | | 428,107,468.21 | | | | | |
| Financial expenses | | | | | 1,551,693,676.48 | | | | 223,461,312.38 | |
| Including: interest expenses | | | | | 1,677,039,950.99 | | | | 314,446,061.01 | |
| Interest income | | | | | 292,633,975.09 | | | | 251,939,362.97 | |
| Plus: other income | | | | | 183,457,683.83 | | | | 316,486,618.58 | |
| Investment income (loss is indicated by ‘-’) | | | | | 192,012,753.98 | | | | -142,942,629.21 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | -49,185,860.49 | | | | -273,205,995.95 | |
| Gains from derecognition of financial assets measured at amortized cost | | | | | | | | | | |
| Exchange earning (loss is indicated by “-”) | | | | | | | | | | |
| Net exposure hedging income (loss is indicated by “-”) | | | | | | | | | | |
| Income from fair value variation (loss filled with “-”) | | | | | -378,526,760.32 | | | | 1,151,555,962.89 | |
| Credit impairment losses (loss is indicated by “-”) | | | | | -157,429,853.92 | | | | -83,365,539.13 | |
| Assets impairment losses (loss is indicated by “-”) | | | | | -777,436,356.28 | | | | -692,443,925.90 | |
| Gains from disposal of assets (loss is indicated by “-”) | | | | | 53,364,075.49 | | | | -8,159,225.80 | |
| III. Operating profits (loss is indicated by “-”) | | | | | -4,827,581,826.67 | | | | 2,284,756,496.03 | |
| Plus: non-operating income | | | | | 343,946,144.11 | | | | 290,389,354.49 | |
| Less: Non-operating expenses | | | | | 238,437,045.90 | | | | 400,965,801.23 | |
| IV. Total profit (total loss is indicated by “-”) | | | | | -4,722,072,728.46 | | | | 2,174,180,049.29 | |
| Less: income tax expense | | | | | -227,494,019.44 | | | | 520,991,471.77 | |
| V. Net profit (net loss is indicated by “-”) | | | | | -4,494,578,709.02 | | | | 1,653,188,577.52 | |
| (I) Classified by business continuity | | | | | | | | | | |
| 1. Net profit from continuous operation (net loss is indicated by “-”) | | | | | -4,494,578,709.02 | | | | 1,653,188,577.52 | |
| 2. Net profit from discontinued operation (net loss is indicated by “-”) | | | | | | | | | | |
| (II) Classified by ownership | | | | | | | | | | |
| 1. Net profit attributable to the owners of the Parent Company (net loss is indicated by “-”) | | | | | -3,943,871,849.80 | | | | 1,794,470,167.16 | |
| 2. Minority interest income (net loss is indicated by “-”) | | | | | -550,706,859.22 | | | | -141,281,589.64 | |
| VI. After-tax Net Amount of Other Comprehensive Income | | | | | 2,078,468.25 | | | | -2,086,197.59 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2021 | | | Year 2020 | |
| (I) Net amount of other comprehensive income after tax attributable to the owners of the parent company | | | | | | | 2,078,468.25 | | | | -2,086,197.59 | |
| 1. Other comprehensive income that cannot be reclassified into profit and loss | | | | | | | | | | | | |
| (1) Changes caused by re-measurement and re-definition of benefit plan | | | | | | | | | | | | |
| (2) Other comprehensive income that cannot be converted into profits or losses under the equity method | | | | | | | | | | | | |
| (3) Fair value changes of other equity instrument investment | | | | | | | | | | | | |
| (4) Fair value changes of enterprise own credit risk | | | | | | | | | | | | |
| 2. Other comprehensive income to be re-classified into profit and loss | | | | | | | 2,078,468.25 | | | | -2,086,197.59 | |
| (1) Other comprehensive income that can be converted into losses and profits under the equity method | | | | | | | 2,448,830.39 | | | | -2,132,477.55 | |
| (2) Fair value changes of other creditor investments | | | | | | | | | | | | |
| (3) Amount of financial assets re-classified and included in other comprehensive income | | | | | | | | | | | | |
| (4) Provision for credit depreciation of other creditor investments | | | | | | | | | | | | |
| (5) Cash flow hedging reserves | | | | | | | | | | | | |
| (6) Balance arising from the translation of foreign currency financial statements | | | | | | | -370,362.14 | | | | 46,279.96 | |
| (7) Others | | | | | | | | | | | | |
| (II) After-tax net amount of other comprehensive income attributable to minority shareholders | | | | | | | | | | | | |
| VII. Total comprehensive income | | | | | | | -4,492,500,240.77 | | | | 1,651,102,379.93 | |
| (I) Total comprehensive income attributable to the owners of the Parent Company | | | | | | | -3,941,793,381.55 | | | | 1,792,383,969.57 | |
| (II) Total comprehensive income attributable to minority shareholders | | | | | | | -550,706,859.22 | | | | -141,281,589.64 | |
| VIII. Earnings per share: | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | -0.43 | | | | 0.19 | |
| (II) Diluted EPS (RMB/share) | | | | | | | -0.43 | | | | 0.19 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Income Statement of the Parent Company
January — December, 2021
Unit: Yuan Currency: RMB
| Items | | Notes | | | | Year 2021 | | | | Year 2020 | |
| I. Operation Revenue | | | | | | | 7,941,631,838.96 | | | | 7,875,327,537.91 | |
| Less: operating cost | | | | | | | 6,842,205,689.85 | | | | 6,499,212,131.10 | |
| Taxes and surcharges | | | | | | | 16,978,178.50 | | | | 23,926,133.79 | |
| Selling expenses | | | | | | | 828,235,306.14 | | | | 828,985,836.77 | |
| Administrative expenses | | | | | | | 351,831,395.07 | | | | 614,180,158.73 | |
| Research and development expenses | | | | | | | 52,851,538.02 | | | | | |
| Financial expenses | | | | | | | 144,191,955.91 | | | | 40,898,745.85 | |
| Including: interest expenses | | | | | | | 391,875,730.93 | | | | 241,368,558.16 | |
| Interest income | | | | | | | 266,765,444.08 | | | | 214,808,632.26 | |
| Plus: other income | | | | | | | 5,957,911.59 | | | | 73,061,222.80 | |
| Investment income (loss is indicated by ’-’) | | | | | | | 1,017,139,509.70 | | | | 1,878,979,185.59 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | | | -23,048,225.04 | | | | -285,682,412.24 | |
| Gains from derecognition of financial assets measured at amortized cost | | | | | | | | | | | | |
| Net exposure hedging income (loss is indicated by “-”) | | | | | | | | | | | | |
| Income from fair value variation (loss filled with “-”) | | | | | | | 131,041,846.16 | | | | 592,837,153.12 | |
| Credit impairment losses (loss is indicated by “-”) | | | | | | | -1,987,493.44 | | | | -785,634.47 | |
| Assets impairment losses (loss is indicated by “-”) | | | | | | | -53,532,530.48 | | | | -192,378,050.34 | |
| Gains from disposal of assets (loss is indicated by “-”) | | | | | | | 1,379,773.07 | | | | -927,680.57 | |
| II. Operating profit (loss is indicated by “-”) | | | | | | | 805,336,792.07 | | | | 2,218,910,727.80 | |
| Plus: non-operating income | | | | | | | 22,866,752.75 | | | | 11,127,543.57 | |
| Less: Non-operating expenses | | | | | | | 13,230,952.86 | | | | 5,480,501.14 | |
| III. Total profit (total loss is indicated by “-”) | | | | | | | 814,972,591.96 | | | | 2,224,557,770.23 | |
| Less: income tax expense | | | | | | | -13,448,925.09 | | | | 134,982,144.39 | |
| IV. Net profit (net loss is indicated by “-”) | | | | | | | 828,421,517.05 | | | | 2,089,575,625.84 | |
| (I) Net profit from continuous operation (net loss is indicated by “-”) | | | | | | | 828,421,517.05 | | | | 2,089,575,625.84 | |
| (II) Net profit from discontinued operation (net loss is indicated by “-”) | | | | | | | | | | | | |
| V. After-tax net amount of other comprehensive income | | | | | | | 2,448,830.39 | | | | -2,132,477.55 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | | | | | | | | | | | | |
| 1. Changes caused by re-measurement of defined benefit plan | | | | | | | | | | | | |
| 2. Other comprehensive income using the equity method that will not be reclassified to profit or loss | | | | | | | | | | | | |
| 3. Changes in fair value of other equity instrument investments | | | | | | | | | | | | |
| 4. Changes in fair value of enterprise’s own credit risk | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2021 | | | Year 2020 | |
| (II) Other comprehensive income to be reclassified to profit or loss | | | | | | | 2,448,830.39 | | | | -2,132,477.55 | |
| 1. Other comprehensive income that can be reclassified to profit or loss in equity method | | | | | | | 2,448,830.39 | | | | -2,132,477.55 | |
| 2. Changes in fair value of other creditor investments | | | | | | | | | | | | |
| 3. Amount of financial assets re-classified and included in other comprehensive income | | | | | | | | | | | | |
| 4. Provision for credit impairment of other creditor investments | | | | | | | | | | | | |
| 5. Cash flow hedging reserve | | | | | | | | | | | | |
| 6. Balance arising from the translation of foreign currency financial statements | | | | | | | | | | | | |
| 7. Others | | | | | | | | | | | | |
| VI. Total comprehensive income | | | | | | | 830,870,347.44 | | | | 2,087,443,148.29 | |
| VII. Earnings per share (EPS): | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | | | | | | |
| (II) Diluted EPS (RMB/share) | | | | | | | | | | | | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Cash Flow Statement
January — December, 2021
Unit: Yuan Currency: RMB
| Items | | Notes | | | Year 2021 | | | Year 2020 | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 100,284,205,560.45 | | | | 107,922,209,607.29 | |
| Tax refunds received | | | | | | | | | | | | |
| Other cash received relating to operating activities | | | | | | | 3,020,586,574.65 | | | | 880,432,402.09 | |
| Subtotal of cash inflows from operating activities | | | | | | | 103,304,792,135.10 | | | | 108,802,642,009.38 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 80,837,588,736.76 | | | | 84,806,526,394.32 | |
| Cash paid to and on behalf of employees | | | | | | | 8,702,715,416.83 | | | | 7,483,709,291.53 | |
| Cash paid for taxes | | | | | | | 1,037,017,460.13 | | | | 1,615,975,562.07 | |
| Other cash paid relating to operating activities | | | | | | | 6,900,549,592.13 | | | | 8,756,720,879.32 | |
| Subtotal of cash outflows from operating activities | | | | | | | 97,477,871,205.85 | | | | 102,662,932,127.24 | |
| Net cash flow from operating activities | | | | | | | 5,826,920,929.25 | | | | 6,139,709,882.14 | |
| II. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 681,186,560.54 | | | | 121,828,381.49 | |
| Cash received from investment income | | | | | | | 57,672,406.30 | | | | 92,953,747.32 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 6,648,320.55 | | | | 6,019,931.99 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash received relating to investment activities | | | | | | | 2,475,657,999.00 | | | | 5,826,511,631.94 | |
| Subtotal of cash inflows from investment activities | | | | | | | 3,221,165,286.39 | | | | 6,047,313,692.74 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 2,010,217,133.88 | | | | 2,086,507,106.23 | |
| Cash paid for investment | | | | | | | 159,799,999.46 | | | | 745,006,998.05 | |
| Net cash paid for the acquisition of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash paid relating to investment activities | | | | | | | 1,966,236,083.15 | | | | 5,387,235,544.57 | |
| Subtotal of cash outflows from investment activities | | | | | | | 4,136,253,216.49 | | | | 8,218,749,648.85 | |
| Net cash flow from investment activities | | | | | | | -915,087,930.10 | | | | -2,171,435,956.11 | |
| III. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors | | | | | | | 50,450,000.00 | | | | 354,057,473.88 | |
| Including: cash received by subsidiaries from absorbing minority shareholder’s investment | | | | | | | 50,450,000.00 | | | | 354,057,473.88 | |
| Cash received from borrowings | | | | | | | 15,520,000,000.00 | | | | 15,630,840,273.76 | |
| Other cash received relating to financing activities | | | | | | | 39,947,401.43 | | | | | |
| Subtotal of cash inflows from financing activities | | | | | | | 15,610,397,401.43 | | | | 15,984,897,747.64 | |
| Cash paid for debt repayment | | | | | | | 17,430,840,273.76 | | | | 12,546,526,073.72 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2021 | | | Year 2020 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 555,415,007.07 | | | | 1,562,195,662.61 | |
| Including: dividend and profit paid by subsidiaries to minority shareholders | | | | | | | 12,000,000.00 | | | | 12,000,000.00 | |
| Other cash paid relating to financing activities | | | | | | | 4,480,050,083.91 | | | | 1,769,956,756.86 | |
| Subtotal of cash outflows from financing activities | | | | | | | 22,466,305,364.74 | | | | 15,878,678,493.19 | |
| Net cash flow from financing activities | | | | | | | -6,855,907,963.31 | | | | 106,219,254.45 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | -242,700.09 | | | | -1,095,099.15 | |
| V. Net increase in cash and cash equivalents | | | | | | | -1,944,317,664.25 | | | | 4,073,398,081.33 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 10,587,979,162.31 | | | | 6,514,581,080.98 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 8,643,661,498.06 | | | | 10,587,979,162.31 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Cash Flow Statement of the Parent Company
January — December, 2021
Unit: Yuan Currency: RMB
| Items | | Notes | | | Year 2021 | | | Year 2020 | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 9,112,576,497.00 | | | | 9,142,918,733.40 | |
| Tax refunds received | | | | | | | | | | | | |
| Other cash received relating to operating activities | | | | | | | 325,497,331.89 | | | | 236,274,938.26 | |
| Subtotal of cash inflows from operating activities | | | | | | | 9,438,073,828.89 | | | | 9,379,193,671.66 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 6,571,173,336.26 | | | | 7,147,243,295.43 | |
| Cash paid to and on behalf of employees | | | | | | | 519,263,297.75 | | | | 492,460,496.77 | |
| Cash paid for taxes | | | | | | | 17,866,877.16 | | | | 88,256,250.95 | |
| Other cash paid relating to operating activities | | | | | | | 423,944,760.19 | | | | 684,367,564.17 | |
| Subtotal of cash outflows from operating activities | | | | | | | 7,532,248,271.36 | | | | 8,412,327,607.32 | |
| Net cash flow from operating activities | | | | | | | 1,905,825,557.53 | | | | 966,866,064.34 | |
| II. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 392,237,024.23 | | | | 621,763,174.28 | |
| Cash received from investment income | | | | | | | 1,025,737,568.50 | | | | 2,038,798,695.52 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 431,393.19 | | | | 3,487,892.32 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash received relating to investment activities | | | | | | | 685,906,973.39 | | | | 5,278,507,405.68 | |
| Subtotal of cash inflows from investment activities | | | | | | | 2,104,312,959.31 | | | | 7,942,557,167.80 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 194,711,725.94 | | | | 90,220,667.88 | |
| Cash paid for investment | | | | | | | 1,041,000,000.00 | | | | 1,779,842,157.75 | |
| Net cash paid for the acquisition of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash paid relating to investment activities | | | | | | | 696,580,376.07 | | | | 3,398,949,842.30 | |
| Subtotal of cash outflows from investment activities | | | | | | | 1,932,292,102.01 | | | | 5,269,012,667.93 | |
| Net cash flow from investment activities | | | | | | | 172,020,857.30 | | | | 2,673,544,499.87 | |
| III. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors | | | | | | | | | | | | |
| Cash received from borrowings | | | | | | | 10,020,000,000.00 | | | | 12,050,000,000.00 | |
| Other cash received relating to financing activities | | | | | | | 6,866,258.70 | | | | | |
| Subtotal of cash inflows from financing activities | | | | | | | 10,026,866,258.70 | | | | 12,050,000,000.00 | |
| Cash paid for debt repayment | | | | | | | 12,150,000,000.00 | | | | 9,645,840,000.00 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 521,141,531.76 | | | | 1,481,529,260.16 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2021 | | | Year 2020 | |
| Other cash paid relating to financing activities | | | | | | | 1,546,620,002.23 | | | | 1,769,956,756.86 | |
| Subtotal of cash outflows from financing activities | | | | | | | 14,217,761,533.99 | | | | 12,897,326,017.02 | |
| Net cash flow from financing activities | | | | | | | -4,190,895,275.29 | | | | -847,326,017.02 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | | | | | | |
| V. Net increase in cash and cash equivalents | | | | | | | -2,113,048,860.46 | | | | 2,793,084,547.19 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 5,531,786,671.34 | | | | 2,738,702,124.15 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 3,418,737,810.88 | | | | 5,531,786,671.34 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Statement of Changes in Equity
January – December, 2021
Unit: Yuan Currency: RMB
| | | Year 2021 | |
| | | | | | | | | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Other equity instruments | | | | | | | | | Others | | | | | | | | | General | | | | | | | | | | | | | | | | |
| | | Paid-in capital | | | Preferred | | | Perpetual | | | | | | | | | Less: Treasury | | | comprehensive | | | Special | | | | | | risk | | | Undistributed | | | | | | | | | Minority | | | | |
| Items | | (or capital stock) | | | stock | | | bonds | | | Others | | | Capital reserves | | | shares | | | income | | | reserves | | | Surplus reserves | | | reserves | | | profits | | | Others | | | Subtotal | | | interests | | | Total equity | |
| I. Closing balance of last year | | | 9,516,285,608.00 | | | | | | | | | | | | | | | | 6,926,920,343.78 | | | | 2,009,067,652.38 | | | | -584,134.06 | | | | | | | | 1,030,866,477.21 | | | | | | | | 3,886,681,562.18 | | | | | | | | 19,351,102,204.73 | | | | 1,042,097,792.60 | | | | 20,393,199,997.33 | |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -9,901,921.77 | | | | | | | | -3,484,049,730.53 | | | | | | | | -3,493,951,652.30 | | | | -111,234,734.03 | | | | -3,605,186,386.33 | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Business combination under same control | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | | 9,516,285,608.00 | | | | | | | | | | | | | | | | 6,926,920,343.78 | | | | 2,009,067,652.38 | | | | -584,134.06 | | | | | | | | 1,020,964,555.44 | | | | | | | | 402,631,831.65 | | | | | | | | 15,857,150,552.43 | | | | 930,863,058.57 | | | | 16,788,013,611.00 | |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | -441,248,615.00 | | | | | | | | | | | | | | | | -2,650,775,531.98 | | | | -2,009,067,652.38 | | | | 2,078,468.25 | | | | | | | | 82,842,151.71 | | | | | | | | -4,200,316,547.14 | | | | | | | | -5,198,352,421.78 | | | | -512,256,859.22 | | | | -5,710,609,281.00 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,078,468.25 | | | | | | | | | | | | | | | | -3,943,871,849.80 | | | | | | | | -3,941,793,381.55 | | | | -550,706,859.22 | | | | -4,492,500,240.77 | |
| (II) Capital paid in and reduced by owners | | | -441,248,615.00 | | | | | | | | | | | | | | | | -2,650,775,531.98 | | | | -2,009,067,652.38 | | | | | | | | | | | | | | | | | | | | | | | | | | | | -1,082,956,494.60 | | | | 50,450,000.00 | | | | -1,032,506,494.60 | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,450,000.00 | | | | 50,450,000.00 | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | | | -4,483,811.25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -4,483,811.25 | | | | -4,483,811.25 | | | | | |
| 4. Others | | | -441,248,615.00 | | | | | | | | | | | | | | | | -2,646,291,720.73 | | | | -2,009,067,652.38 | | | | | | | | | | | | | | | | | | | | | | | | | | | | -1,078,472,683.35 | | | | -1,078,472,683.35 | | | | | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 82,842,151.71 | | | | | | | | -256,444,697.34 | | | | | | | | -173,602,545.63 | | | | -12,000,000.00 | | | | -185,602,545.63 | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 82,842,151.71 | | | | | | | | -82,842,151.71 | | | | | | | | | | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to the owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -173,602,545.63 | | | | | | | | -173,602,545.63 | | | | -12,000,000.00 | | | | -185,602,545.63 | |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Year 2021 | |
| | | | | | | | | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Other equity instruments | | | | | | | | | Others | | | | | | | | | General | | | | | | | | | | | | | | | | |
| | | Paid-in capital | | | Preferred | | | Perpetual | | | | | | | | | Less: Treasury | | | comprehensive | | | Special | | | | | | risk | | | Undistributed | | | | | | | | | Minority | | | | |
| Items | | (or capital stock) | | | stock | | | bonds | | | Others | | | Capital reserves | | | shares | | | income | | | reserves | | | Surplus reserves | | | reserves | | | profits | | | Others | | | Subtotal | | | interests | | | Total equity | |
| 4. Changes in the defined benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | | 9,075,036,993.00 | | | | | | | | | | | | | | | | 4,276,144,811.80 | | | | | | | | 1,494,334.19 | | | | | | | | 1,103,806,707.15 | | | | | | | | -3,797,684,715.49 | | | | | | | | 10,658,798,130.65 | | | | 418,606,199.35 | | | | 11,077,404,330.00 | |
| | | Year 2020 | |
| | | | | | | | | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Other equity instruments | | | | | | | | | Others | | | | | | | | | General | | | | | | | | | | | | | | | | |
| | | Paid-in capital | | | Preferred | | | Perpetual | | | | | | | | | Less: Treasury | | | comprehensive | | | Special | | | | | | risk | | | Undistributed | | | | | | | | | Minority | | | | |
| Items | | (or capital stock) | | | stock | | | bonds | | | Others | | | Capital reserves | | | shares | | | income | | | reserves | | | Surplus reserves | | | reserves | | | profits | | | Others | | | Subtotal | | | interests | | | Total equity | |
| I. Closing balance of last year | | | 9,570,462,108.00 | | | | | | | | | | | | | | | | 7,177,945,678.08 | | | | 998,200,375.60 | | | | 1,502,063.53 | | | | | | | | 821,908,914.63 | | | | | | | | 3,532,326,671.64 | | | | | | | | 20,105,945,060.28 | | | | 348,475,202.70 | | | | 20,454,420,262.98 | |
| Plus: Changes in accounting policies Correction of previous errors Business combination under same control | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | | 9,570,462,108.00 | | | | | | | | | | | | | | | | 7,177,945,678.08 | | | | 998,200,375.60 | | | | 1,502,063.53 | | | | | | | | 821,908,914.63 | | | | | | | | 3,532,326,671.64 | | | | | | | | 20,105,945,060.28 | | | | 348,475,202.70 | | | | 20,454,420,262.98 | |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | -54,176,500.00 | | | | | | | | | | | | | | | | -251,025,334.30 | | | | 1,010,867,276.78 | | | | -2,086,197.59 | | | | | | | | 208,957,562.58 | | | | | | | | 354,354,890.54 | | | | | | | | -754,842,855.55 | | | | 693,622,589.90 | | | | -61,220,265.65 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | | | | | | | | | | | | | | -2,086,197.59 | | | | | | | | | | | | | | | | 1,794,470,167.16 | | | | | | | | 1,792,383,969.57 | | | | -141,281,589.64 | | | | 1,651,102,379.93 | |
| (II) Capital paid in and reduced by owners | | | -54,176,500.00 | | | | | | | | | | | | | | | | -251,025,334.30 | | | | 1,010,867,276.78 | | | | | | | | | | | | | | | | | | | | | | | | | | | | -1,316,069,111.08 | | | | 354,057,473.88 | | | | -962,011,637.20 | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 352,940,000.00 | | | | 352,940,000.00 | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | | | 92,387,678.15 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 92,387,678.15 | | | | | | | | 92,387,678.15 | |
| 4. Others | | | -54,176,500.00 | | | | | | | | | | | | | | | | -343,413,012.45 | | | | 1,010,867,276.78 | | | | | | | | | | | | | | | | | | | | | | | | | | | | -1,408,456,789.23 | | | | 1,117,473.88 | | | | -1,407,339,315.35 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Year 2020 | |
| | | | | | | | | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Other equity instruments | | | | | | | | | Others | | | | | | | | | General | | | | | | | | | | | | | | | | |
| | | Paid-in capital | | | Preferred | | | Perpetual | | | | | | | | | Less: Treasury | | | comprehensive | | | Special | | | | | | risk | | | Undistributed | | | | | | | | | Minority | | | | |
| Items | | (or capital stock) | | | stock | | | bonds | | | Others | | | Capital reserves | | | shares | | | income | | | reserves | | | Surplus reserves | | | reserves | | | profits | | | Others | | | Subtotal | | | interests | | | Total equity | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 208,957,562.58 | | | | | | | | -1,440,115,276.62 | | | | | | | | -1,231,157,714.04 | | | | -12,000,000.00 | | | | -1,243,157,714.04 | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 208,957,562.58 | | | | | | | | -208,957,562.58 | | | | | | | | | | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to the owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -1,231,157,714.04 | | | | | | | | -1,231,157,714.04 | | | | -12,000,000.00 | | | | -1,243,157,714.04 | |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in the defined benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 492,846,705.66 | | | | 492,846,705.66 | |
| IV. Closing balance of current period | | | 9,516,285,608.00 | | | | | | | | | | | | | | | | 6,926,920,343.78 | | | | 2,009,067,652.38 | | | | -584,134.06 | | | | | | | | 1,030,866,477.21 | | | | | | | | 3,886,681,562.18 | | | | | | | | 19,351,102,204.73 | | | | 1,042,097,792.60 | | | | 20,393,199,997.33 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Statement of Changes in Equity of the Parent Company
January – December, 2021
Unit: Yuan Currency: RMB
| | | Year 2021 | |
| | | Paid-in capital | | Other equity instruments | | | | | | Other | | | | | | | | | | | | | |
| | | (or capital | | | Preferred | | | Perpetual | | | | | | | | | Less: Treasury | | | comprehensive | | | Special | | | | | | Undistributed | | | | |
| Items | | stock) | | | stock | | | bonds | | | Others | | | Capital reserves | | | shares | | | income | | | reserves | | | Surplus reserves | | | profits | | | Total equity | |
| I. Closing balance of last year | | | 9,516,285,608.00 | | | | | | | | | | | | | | | | 6,764,350,200.40 | | | | 2,009,067,652.38 | | | | -796,187.66 | | | | | | | | 1,030,866,477.21 | | | | 2,279,497,553.33 | | | | 17,581,135,998.90 | |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -9,901,921.77 | | | | -89,117,295.94 | | | | -99,019,217.71 | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | | 9,516,285,608.00 | | | | | | | | | | | | | | | | 6,764,350,200.40 | | | | 2,009,067,652.38 | | | | -796,187.66 | | | | | | | | 1,020,964,555.44 | | | | 2,190,380,257.39 | | | | 17,482,116,781.19 | |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | -441,248,615.00 | | | | | | | | | | | | | | | | -2,629,111,682.69 | | | | -2,009,067,652.38 | | | | 2,448,830.39 | | | | | | | | 82,842,151.71 | | | | 571,976,819.71 | | | | -404,024,843.50 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,448,830.39 | | | | | | | | | | | | 828,421,517.05 | | | | 830,870,347.44 | |
| (II) Capital paid in and reduced by owners | | | -441,248,615.00 | | | | | | | | | | | | | | | | -2,629,111,682.69 | | | | -2,009,067,652.38 | | | | | | | | | | | | | | | | | | | | -1,061,292,645.31 | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | | | -4,483,811.25 | | | | | | | | | | | | | | | | | | | | | | | | -4,483,811.25 | |
| 4. Others | | | -441,248,615.00 | | | | | | | | | | | | | | | | -2,624,627,871.44 | | | | -2,009,067,652.38 | | | | | | | | | | | | | | | | | | | | -1,056,808,834.06 | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 82,842,151.71 | | | | -256,444,697.34 | | | | -173,602,545.63 | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 82,842,151.71 | | | | -82,842,151.71 | | | | | |
| 2. Distributions to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -173,602,545.63 | | | | -173,602,545.63 | |
| 3. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Year 2021 | |
| | | Paid-in capital | | Other equity instruments | | | | | | Other | | | | | | | | | | | | | |
| | | (or capital | | | Preferred | | | Perpetual | | | | | | | | | Less: Treasury | | | comprehensive | | | Special | | | | | | Undistributed | | | | |
| Items | | stock) | | | stock | | | bonds | | | Others | | | Capital reserves | | | shares | | | income | | | reserves | | | Surplus reserves | | | profits | | | Total equity | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in the defined benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | | 9,075,036,993.00 | | | | | | | | | | | | | | | | 4,135,238,517.71 | | | | | | | | 1,652,642.73 | | | | | | | | 1,103,806,707.15 | | | | 2,762,357,077.10 | | | | 17,078,091,937.69 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | Year 2020 | |
| | | | | | Other equity instruments | | | | | | | | | | | | | | | | | | | | | | |
| Items | | Paid-in capital
(or capital
stock) | | | Preferred
stock | | Perpetual
bonds | | | Others | | | Capital reserves | | |
Less: Treasury
shares | | | Other
comprehensive
income | | | Special
reserves | | | Surplus
reserves | | | Undistributed
profits | | | Total equity | |
| I. Closing balance of last year | | | 9,570,462,108.00 | | | | | | | | | | | | | | 7,013,536,898.00 | | | | 998,200,375.60 | | | | 1,336,289.89 | | | | | | | | 821,908,914.63 | | | | 1,630,037,204.11 | | | | 18,039,081,039.03 | |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | | 9,570,462,108.00 | | | | | | | | | | | | | | 7,013,536,898.00 | | | | 998,200,375.60 | | | | 1,336,289.89 | | | | | | | | 821,908,914.63 | | | | 1,630,037,204.11 | | | | 18,039,081,039.03 | |
| III. Increase and decrease of current period (decrease is indicated by "-") | | | -54,176,500.00 | | | | | | | | | | | | | | -249,186,697.60 | | | | 1,010,867,276.78 | | | | -2,132,477.55 | | | | | | | | 208,957,562.58 | | | | 649,460,349.22 | | | | -457,945,040.13 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | | | | | | | | | | | | -2,132,477.55 | | | | | | | | | | | | 2,089,575,625.84 | | | | 2,087,443,148.29 | |
| (II) Capital paid in and reduced by owners | | | -54,176,500.00 | | | | | | | | | | | | | | -249,186,697.60 | | | | 1,010,867,276.78 | | | | | | | | | | | | | | | | | | | | -1,314,230,474.38 | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | 92,387,678.15 | | | | | | | | | | | | | | | | | | | | | | | | 92,387,678.15 | |
| 4. Others | | | -54,176,500.00 | | | | | | | | | | | | | | -341,574,375.75 | | | | 1,010,867,276.78 | | | | | | | | | | | | | | | | | | | | -1,406,618,152.53 | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 208,957,562.58 | | | | -1,440,115,276.62 | | | | -1,231,157,714.04 | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 208,957,562.58 | | | | | | | | -208,957,562.58 | |
| 2. Distributions to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | -1,231,157,714.04 | | | | -1,231,157,714.04 | |
| 3. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | Year 2020 | |
| | | | | | | Other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Items | | | Paid-in capital
(or capital
stock) | | | Preferred
stock | | | Perpetual
bond | | | | Others | | | | Capital reserves | | | | Less: Treasury
shares | | | | Other
comprehensive
income | | | | Special
reserves | | | | Surplus reserves | | | | Undistributed
profits | | | | Total equity | |
| 4. Changes in the defined benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | | 9,516,285,608.00 | | | | | | | | | | | | | | 6,764,350,200.40 | | | | 2,009,067,652.38 | | | | -796,187.66 | | | | | | | | 1,030,866,477.21 | | | | 2,279,497,553.33 | | | | 17,581,135,998.90 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
III. Company Profile
1. Company Overview
| | √ | Applicable | ¨ | Not applicable |
Yonghui Superstores Co., Ltd. ("the Company"), established on August 13, 2009, is a limited liability company registered in Fujian Province, People's Republic of China, with a long-term operating period. The Company's issued common shares, denominated in RMB, are listed on the Shanghai Stock Exchange. The Company is headquartered at No. 436 West 2nd Ring Middle Road, Fuzhou City, Fujian Province.
The main business activities of the Company and its subsidiaries (the "Group") include the sale of fresh products, food supplies, clothing, and related promotional services, logistics distribution, real estate property acquisition, construction and leasing, etc.
The financial statements were approved by the Company's Board of Directors on April 28, 2022. According to Articles of Association of the Company, the financial statements would be submitted to the shareholders' meeting for review.
The consolidation scope of the consolidated financial statements is determined based on control. For changes in the current year, please refer to Section VIII, Change of Consolidation Scope and Section IX, Equity in Other Entities.
2. Scope of Consolidated Financial Statements
| | √ | Applicable | ¨ | Not applicable |
As of December 31, 2021, the Company had owned 131 subsidiary companies, with an increase of 8 compared to the previous year in the number of entities included in the consolidation scope. Among them, the increase in the consolidation scope is due to the addition of 15 newly established companies, while the decrease is due to the cancellation of 7 companies.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The financial statements were prepared in accordance with the CASBE: Basic Standards promulgated by the Ministry of Finance and the specific accounting standards, application guidelines, explanations and other regulations (collectively referred to as "Accounting Standards for Business Enterprises") issued and revised thereafter.
2. Going concern
| | √ | Applicable | ¨ | Not applicable |
The financial statements were listed on a going concern basis.
V. Significant Accounting Policy and Estimate
Specific accounting policies and accounting estimates presentation:
| | √ | Applicable | ¨ | Not applicable |
The Group has formulated specific accounting policies and estimates based on its actual production and operational characteristics, mainly reflected in the provision for bad debts of receivables, inventory valuation methods, depreciation of fixed assets, amortization of intangible assets, capitalization criteria for research and development expenses, amortization of long-term prepaid expenses, recognition of deferred tax assets, provision for impairment of long-term assets, and revenue recognition and measurement, as described below.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
1. Statement on Compliance with CASBE
The financial statements comply with the requirements of the CASBE, providing a true and complete reflection of the financial position of the Company and the Group as of December 31, 2021, as well as their operating performance and cash flows for the year 2021.
2. Accounting period
The fiscal year of the Group adopts the Gregorian calendar year, that is, every year from January 1 to December 31.
3. Operating cycle
| | √ | Applicable | ¨ | Not applicable |
Business cycle of the Group is 12 months.
4. Recording currency
The recording currency adopted by the Company and its domestic subsidiaries and currency used for preparing the financial statements are RMB. The overseas subsidiary companies of the Company determine their functional currency based on the primary economic environment in which they operate and convert it to RMB when preparing financial statements. Unless otherwise specified, the monetary unit in the financial statements is RMB.
5. Accounting method for business combination under and not under the same control
| | √ | Applicable | ¨ | Not applicable |
Business combination is divided into business combination under and not under same control.
Business combination under same control
For the business combination under same control, the assets and liabilities that the combing party obtains from the combined party, except from the adjustments made due to difference of accounting policies, shall be measured on the basis of the book value of the combined party in the consolidated financial statement of the final controller on the combination date. The difference between the book value of consideration paid and the book value of net assets acquired in a business combination is adjusted to capital reserves. If the capital reserves are insufficient, it is adjusted against retained earnings.
Business combination under same control that is realized by several transactions
In some financial statements, the book value shares of the net assets of the combined party in the consolidated financial statement of the final controller calculated based on the shareholding ratio on the combination date shall be deemed as the initial investment costs of the investment. For the balance between the initial investment costs, the book value of the investment held before the combination plus the book value of the consideration newly paid before the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted.
In consolidated financial statements, for the assets and liabilities of the acquiree obtained by the acquirer in the acquisition, in addition to the adjustment made due to difference of accounting policy, they shall be measured at the book value on the acquisition date in the consolidated financial statement of the final controller. For the balance between the sum of the book value of the investment held before the combination and the book value of the consideration newly paid on the combination date and the book value of net assets obtained in the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted. For the long-term equity investment held by the combining party before it obtained the control over the combined party, changes in relevant profits and losses, other comprehensive incomes and other owner's equities recognized from the later one of the date when the original equity is obtained and the date when the combining party and the combined party are under the final control of the same party to the combination date shall respectively be used to offset the retained income at the beginning period of the comparative statement or profits and losses of current period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Business combination not under the same control
Business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination. In a business combination not under the same control, the party which obtains the control on other combining enterprise(s) on the acquisition date is the acquirer, and other combining enterprise(s) is(are) the acquiree. Acquisition date refers to the date on which the acquirer actually obtains the control on the acquiree.
Under the non-common control condition, acquiree's identifiable assets, liability and contingent liabilities acquired from the business combination shall be measured at fair value on the acquisition date.
If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is greater than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference is recognized as goodwill and subsequently measured at cost less accumulated impairment losses. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the identifiable assets, liabilities, the fair value of and contingent liabilities, the fair value of merger consideration paid (or the fair value of equity securities issued), and the fair value of equity held by the acquiree before the acquisition date shall be rechecked at first. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is still less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference shall be included in the current profits and losses.
In cases of step-by-step acquisition of businesses under common control, for long-term equity investments held by the acquiring party before the acquisition date, they are remeasured at fair value on the acquisition date. The difference between fair value and the book value is recognized in the current period's income statement. For the other comprehensive income of the acquired party's long-term equity investments held before the acquisition date accounted for under the equity method, the accounting treatment is based on the same basis as the direct disposal of the relevant assets or liabilities of the invested entity. Other changes in equity, other than net income, other comprehensive income, and profit distribution, are treated as income in the period to which the acquisition date belongs.
6. Preparation method of consolidated financial statements
| | √ | Applicable | ¨ | Not applicable |
The combination scope of the consolidated financial statements is determined on the basis of control, including the financial statements Company and all of its subsidiaries. Subsidiaries refer to the entities controlled by the Company (including the detachable parts of the Company and the invested companies, the structured entities controlled by the Company, and so on).
When preparing consolidated financial statements, subsidiary companies adopt the same accounting year and accounting policies as the Company. Assets, liabilities, equity, income, expenses and cash flows generated by all transactions between subsidiaries of the Group are fully offset at the time of the merger.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Where the loss shared by minority shareholders in a subsidiary exceeds the share enjoyed by minority shareholders in the subsidiary's shareholder's equity at the beginning of the period, the balance shall be written down with the minority shareholders' equity.
For subsidiaries acquired through business combination not under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement from the date when the Group acquires the control right to the date when it terminates the control right. In the process of preparing consolidated financial statements, the financial statements of the subsidiary company shall be adjusted on the basis of the fair values of the identifiable assets, liabilities and contingent liabilities determined on the acquisition date.
For subsidiaries acquired through business combination under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement at the beginning of combination. During the preparation of consolidated financial statement, relevant items of financial statement of last year shall be adjusted and they will be regarded as reporting entities for consolidated statement and always exist since the control of final controller.
Where changes in relevant facts and circumstances result in changes to one or more of the control elements, the Group will reassess whether or not to control the investee.
In cases of step-by-step disposal of equity investments in subsidiary companies until control is lost, if it constitutes a transaction package, each transaction is accounted for as a disposal of subsidiary and loss of control transaction. However, the difference between the disposal proceeds and the share of net assets held in the subsidiary before loss of control is recognized as other comprehensive income in the consolidated financial statements and is transferred to the income statement of the period when control is lost. In cases of step-by-step disposal of equity investments in subsidiary companies until control is lost, if it does not constitute a transaction package, each transaction is accounted for separately to determine whether control is lost. In the circumstance of not losing the control, changes in minority shareholders' equity are taken as an equity transaction. If losing the control, the remaining equity is remeasured at its fair value as of the date control is lost. The difference between the consideration received for the disposal of equity and the sum of the fair value of the remaining equity, minus the proportionate share of net assets that would have been attributed to the original subsidiary from the acquisition date, is recognized as a loss in the current period. If there is goodwill associated with the subsidiary, the amount of goodwill is deducted when calculating the gain or loss on disposal of the subsidiary. Other comprehensive income related to the equity investment in the original subsidiary is accounted for based on the same basis as the direct disposal of assets or liabilities when control is lost. Other equity changes related to the original subsidiary's equity investment, excluding net income, other comprehensive income, and profit distribution, are transferred to the current period's income statement when control is lost.
7. Accounting method for joint venture arrangement and joint operation
| | √ | Applicable | ¨ | Not applicable |
Joint arrangement refers to the arrangement jointly controlled by two or more participants. The Group's joint arrangements are classified as Cooperative Enterprises.
Joint venture refers to the Group only enjoying the right of joint venturing arrangement over the net assets.
The Group shall carry out accounting treatment for the investment of joint ventures in accordance with the provisions on the equity method of accounting for long-term equity investment.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 8. | Determination of cash and cash equivalents |
Cash refers to the Group's cash on hand and deposits that can be used for payment at any time; cash equivalents refer to the cash held by the Group with short maturity, strong liquidity, and easy conversion to a known amount and the investment of low value changing risks.
| 9. | Foreign currency business and the translation of foreign currency financial statement |
| | √ | Applicable | ¨ | Not applicable |
The Group shall translate the amount of a foreign currency transaction into its functional currency.
For foreign currency transactions, the foreign currency amount is initially recognized by using the spot exchange rate as of the transaction date to translate it into the functional currency amount. The foreign currency monetary items on the balance sheet date shall be translated at the spot exchange rate on the balance sheet date. The resulting converted difference between the settlement and monetary items shall be treated as profit or loss in the current period, except for the difference arising from the special borrowings of foreign currency relating to the acquisition and construction of assets eligible for capitalization is disposed as per the principle of borrowing costs capitalization. The foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be changed. Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rate on the date when the fair value is determined. The resulting difference shall be recognized in the current profit or loss or other comprehensive income based on the nature of the non-monetary items.
For overseas operations, the Group translates the financial statements from their functional currency to RMB: for assets and liabilities in the balance sheet, the spot exchange rate as of the balance sheet date is used, while for equity items other than "undistributed profit", the exchange rate as of the transaction date is used. For income and expense items in the income statement, the average exchange rate during the period is used for translation (unless the exchange rate fluctuations make it inappropriate, in which case the spot exchange rate as of the transaction date is used). The translation differences in the foreign currency financial statements obtained with the above-mentioned conversion method are recognized as other comprehensive income. In disposing of overseas operations, other comprehensive income related to the overseas operations shall be transferred to the disposal of current profits and losses, the partial disposal shall be calculated based on the disposal proportion.
The foreign currency cash flow and cash flow of overseas subsidiary shall be translated at the spot exchange rate on the date when the cash flow occurs. The influence of exchange rate fluctuation on cash shall be separately presented as an adjustment item in the cash flow statement.
| | √ | Applicable | ¨ | Not applicable |
Financial instruments refer to the contracts under which the financial assets of an enterprise are formed and the financial liability or right instruments of any other entity are formed.
Recognition and derecognition of financial instruments
A financial asset or financial liability shall be recognized when the Group becomes a party of financial instrument contract.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
A financial asset (or part of it, or a portion of a group of similar financial assets) is derecognized when the following conditions are met, that is, it is written off from its account and balance sheet:
| (1) | The right to collect the cash flow of financial assets expires; |
| (2) | The right to receive cash flows from financial assets is transferred, or the obligation to pay the full amount of cash flows to third parties in time under the "pass-through agreement" is assumed; and (a) almost all the risks and rewards of financial assets ownership are substantially transferred, or (b) the control over the financial assets is abandoned, although all the risks and rewards are not substantially transferred or retained. |
Where the responsibility for a financial liability has been fulfilled, revoked or expired, the financial liability will be derecognized. Where the current financial liability is replaced by another financial liability of the same creditor on virtually different terms, or the terms of the current liability are substantially modified, such replacement or modification shall be disposed for derecognition of the original liability and recognition of new liabilities, and the difference shall be included in the current profit and loss.
Financial asset bought and sold by regular means shall be recognized and derecognized in accordance with accounting at the transaction date. Regular way of buying or selling financial assets refers to the collection or delivery of financial assets within the time limit stipulated by regulations or common practices in accordance with the terms of the contract. The trading day is the date on which the Group promises to buy or sell financial assets.
Classification and measurement of financial assets
At the time of initial recognition, the financial assets of the Group are classified as follows according to the Group's business model of managing financial assets and contractual cash flow characteristics of financial assets: financial assets measured at fair value with changes included in current profits and losses, financial assets measured at amortized cost.
In initial recognition, financial assets shall be measured at fair value, but the accounts receivable arising from the sale of goods or provision of services exclude significant financing elements or do not take into account the financing elements of less than one year, and the initial measurement shall be carried out according to the transaction price.
For the financial assets measured at fair value with changes included in the current profits and losses, the transaction expenses thereof are directly recorded into the profits and losses of the current period; for other categories of financial assets, the transaction expenses thereof are included into the initially recognized amount.
Subsequent measurement of financial assets depends on their classification:
Financial assets measured at amortized costs
Financial assets that meet the following conditions simultaneously and are classified as financial assets measured at amortized cost: the business mode for managing the financial assets is to collect the contractual cash flows; as stipulated in the contract terms of the financial assets, the cash flow generated on a specific date is only the payment for principal and interest based on the amount of outstanding principal. Actual interest method is adopted for determining interest income of such financial assets, the profits and losses that arise when such financial assets are terminated, amortized or depreciated, shall be recorded into the profits and losses of the current period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Financial assets measured at fair value with changes included in current profits and losses
The Company classifies the financial assets above other than those measured at amortized cost as financial assets measured at fair value with changes included in current profits and losses. For such financial assets, the fair value is used for subsequent measurement, with all changes in fair value included in the current profits and losses.
Classification and measurement of financial liabilities
The Group's financial liabilities are classified as other financial liabilities when initially recognized, and the related transaction costs of other financial liabilities are included in the initial recognized amount.
Subsequent measurement of financial liabilities depends on their classification:
Other financial liabilities
These financial liabilities are calculated with the actual interest rate method with reference to the amortized cost for subsequent measurement.
Impairment of financial instruments
The group recognizes impairment losses and establishes provisions for expected credit losses on financial assets measured at amortized cost and lease receivables.
For accounts receivable without significant financing components, the Group measures the loss provision based on the expected credit loss amount within the whole duration by using the simplified measurement method.
For lease receivables, the Group chooses to apply a simplified measurement approach, measuring the loss provision based on the expected credit loss amount equivalent to the entire lease term.
For financial assets other than those using simplified measurement method, the Group assesses whether the credit risk has increased significantly since the initial recognition on each balance sheet date. If the credit risk does not increase significantly after initial recognition and is in the first stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the next 12 months, and calculates the interest income according to the book balance and the actual interest rate; if the credit risk has increased significantly since the initial recognition, but the credit depreciation has not occurred and the credit risk is in the second stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the book balance and the actual interest rate; if credit depreciation occurs after initial recognition and the credit risk is in the third stage, the Group measures the loss reserves according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the amortization cost and the actual interest rate. For financial instruments with low credit risk on the balance sheet date, the Group assumes that its credit risk has not increased significantly since initial recognition.
The Group assesses the expected credit loss of financial instruments based on individual and collective assessments. Considering the credit risk characteristics of different customers, the Group assesses the expected credit loss of receivables on the basis of aging combination.
For disclosures regarding the criteria for determining a significant increase in credit risk, definition of incurred credit-impaired assets, and assumptions for measuring expected credit losses, please refer to Note X, 2.
If the Group no longer reasonably expects the cash flow of the financial asset contract to be recovered in whole or in part, the book balance of the financial asset shall be directly written down.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Transfer of financial assets
In the event that the Group has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. In case it has retained nearly all of the risks and rewards associated with the ownership of the financial asset, the financial asset shall not be derecognized.
In the event the Group has neither transferred nor retained almost all the risks and rewards of ownership of financial assets, the following cases shall be considered: if the control of the financial assets is abandoned, the financial assets are derecognized and the assets and liabilities are recognized; if the financial assets are controlled, the relevant financial assets are recognized according to the extent to which they continue to be involved in the transferred financial assets, and the related liabilities are recognized accordingly.
In case it continues to be involved by transferring the financial assets and providing financial guarantee, the assets resulted in are recognized according to any one of the book value of the financial assets and the financial guarantee amount, whichever is lower. The amount of financial guarantee refers to the highest amount of repayment to be demanded among the considerations received.
11. Notes receivable
Recognition method and accounting treatment method for expected credit loss of notes receivable
| | ¨ | Applicable | √ | Not applicable |
12. Accounts receivables
Recognition method and accounting treatment method for expected credit loss of accounts receivable.
| | √ | Applicable | ¨ | Not applicable |
For accounts receivable, regardless of whether there is a significant financing component, the Group always measures its loss provision based on the amount equivalent to the expected credit loss during the entire duration.
When individual financial assets cannot be assessed for expected credit losses on a reasonable cost basis, the Group classifies receivables into various portfolios based on their credit risk characteristics. Expected credit losses are then calculated on a portfolio basis, and the determination of the portfolio is based on the following criteria:
Accounts receivable portfolio 1: Receivables for sales proceeds, supplier service fees, rent, project payments, and other amounts.
Accounts receivable portfolio 2: Receivables from related parties. Accounts receivable portfolio 3: Intra-group receivables.
For accounts receivable divided into the portfolio, the Group prepares a comparison table between the aging/days overdue of accounts receivable and the expected credit loss rate in the whole duration to calculate the expected credit loss by referring to the experience of historical credit loss and combining the current situation and the forecast of future economic situation.
13. Receivables financing
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
14. Other receivables
Recognition method and accounting treatment method of expected credit loss of other receivables
| | √ | Applicable | ¨ | Not applicable |
Other receivables are segmented into several portfolios based on their credit risk characteristics. The determination of portfolio composition for other receivables is as follows:
Other receivables portfolio 1: Receivables for various types of deposits, guarantees, purchases, and store reserve funds.
Other receivables portfolio 2: Receivables from related parties.
Other receivables portfolio 3: Other receivables.
Other receivables portfolio 4: Intra-group receivables.
For other receivables, factored receivables, loans granted, and advances that are grouped together, the Group calculates the expected credit losses based on default risk exposure and the expected credit loss rate over the next 12 months or the entire lease term.
15. Inventories
| | √ | Applicable | ¨ | Not applicable |
The inventories include raw materials, finished goods, and low-value consumables.
The initial measurement of inventory shall be made at its cost. The costs of the inventory include purchasing cost, processing cost and other costs. For outgoing inventory, the actual cost of raw materials, food supplies, clothing, and perishable goods is determined using the moving weighted average method; while the actual cost of processed inventory is determined using the moving weighted average method. Amortization method is adopted for the amortization of low priced and easily worn articles and packing materials.
The perpetual inventory system is used as the inventory taking method.
The cost or the net realizable value, whichever is lower, is calculated on the balance sheet date. When the inventory cost is higher than its NRV, inventory reserves shall be made, and shall be included in the current profits and losses. If the influencing factors of the inventory falling price reserves have been eliminated, and the net realizable value of the inventories is higher than the book value of the inventories, the amount of the previously written down amount will be recovered in the amount of the provision for the depreciation of the insured inventory. The amount reversed is included in the current profit and loss.
The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. When providing for inventory write-down, it is done based on the category of inventory.
16. Contract assets
(1). Recognition methods and standards for contract assets
| | ¨ | Applicable | √ | Not applicable |
(2). Recognition method and accounting treatment method of expected credit loss of contract assets
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
17. Assets held for sale
| | √ | Applicable | ¨ | Not applicable |
Classification and measurement of non-current assets or disposal groups held for sale
The Group mainly classifies it into the held-for-sale category by selling (including non-monetary assets exchange with commercial substance, the same below) instead of continuing to use a non-current asset or disposal group to recover its book value.
The aforementioned non current assets do not include investment properties which are subsequently measured by fair value model, biological assets which are measured by net amount of fair value minus selling expenses, assets formed by employee compensation, financial assets, deferred income tax assets and rights arising from insurance contracts.
Disposal group refers to a group of assets that are disposed together through sale or other means in a transaction, and the liabilities directly related to these assets transferred in the transaction. The disposal group includes goodwill acquired in business combination under specific circumstances.
The Company divides the non-current assets or disposal groups meeting the following conditions into held-for-sale types: the non-current assets or disposal groups can be sold immediately in current circumstances according to the rules of selling this kind of assets in similar transactions or conventions of disposal group; highly possible to be sold, that is, resolution has been made for one sales plan and certain purchase commitment has been obtained and sales is anticipated to be completed within one year. If the Group loses control over its subsidiaries due to the sale of the investment in these subsidiaries, whether or not it retains part of the equity investment after the sale, the investment in subsidiaries to be sold satisfies the conditions for held-for-sale type. In some financial statements, the investment is divided into held-for-sale types, and all assets and liabilities of its subsidiaries are classified into held-for-sale types in the consolidated financial statements.
In the initial measurement or re-measurement of the non-current assets or disposal groups held for sale on the balance sheet date, the difference between the book value and the net value after the sales amount are deducted from the fair value (the book value is higher than the net value) is recognised as asset impairment loss. For the amount of the asset impairment loss recognized by the disposal group held for sale, the goodwill book value of disposal group shall be deducted first, then book value of disposal group shall be deducted according to the proportion of the book values of various non-current assets measured in the disposal group.
If the fair value of non-current assets or disposal groups held for sale on the balance sheet date is less than the net value of the sale expenses, the amount of previous write-down shall be restored and transferred back within the impairment loss of assets recognized after being classified as held for sale. The amount transferred shall be included in the current profits or losses. The book value of goodwill that has been deducted cannot be reversed.
Non-current assets held for sale and the non-current assets in the disposal group held for sale are not subject to depreciation or amortization. Interests and other expenses of liabilities in the disposal group held for sale continue to be recognized. As for all or part of the investment of the associate or joint venture classified as held for sale, the part classified as held for sale shall be accounted with the equity method, and the retained part (not classified as held for sale) shall continue to be accounted with the equity method; the equity method shall be stopped if the Group loses a significant impact on associates and joint ventures due to a sale.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
When a non-current asset or disposal group is classified as held for sale, but later no longer meets the conditions for classification of held-for-sale types, the Group will stop classifying it as held for sale and measure it subject to the lower of the following two amounts:
|  | The book value of the said asset or disposal group is deemed as the amount adjusted as per the depreciation, amortization or impairment that needs to be recognized on the assumption that it is not classified as held for sale; |
|  | Recoverable amount. |
18. Debt investment
The determination method and accounting treatment for expected credit losses on debt investments
| | √ | Applicable | ¨ | Not applicable |
The Group calculates expected credit losses based on default risk exposure and the expected credit loss rate over the next 12 months or the entire lease term, depending on the nature of the investment, counterparty, and various types of risk exposures.
19. Other creditor investments
The determination method and accounting treatment for expected credit losses on other debt investments
| | ¨ | Applicable | √ | Not applicable |
20. Long-term receivables
The determination method and accounting treatment for expected credit losses on long-term receivables
| | √ | Applicable | ¨ | Not applicable |
For lease receivables within long-term receivables, regardless of whether they contain significant financing components, the Group measures the provision for credit losses based on the expected credit loss amount equivalent to the entire lease term. Any increase or reversal in the provision for credit losses formed as a result is recognized as impairment loss or gain in the current period's income statement.
21. Long-term equity investment
| | √ | Applicable | ¨ | Not applicable |
Long-term equity investment includes equity investment in subsidiaries, cooperative enterprises and joint ventures.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Long-term equity investment shall be initially measured as the initial investment cost when it is obtained. For the long-term equity investment obtained through business combination under the same control, the share of the book value of the equity of the merged party in the final controlling party's consolidated financial statements obtained on the combination date shall be taken as the initial investment cost; the difference between the initial investment cost and the book value of the combination consideration shall be adjusted to the capital reserve (if it is insufficient to offset, the retained earnings shall be offset). Other comprehensive income before the merger date shall be accounted for on the same basis as the investee's direct disposal of related assets or liabilities when disposing of the investment. Shareholders' equity recognized due to changes in Shareholders' equity other than net profit and loss, other comprehensive income and profit distribution of the investee shall be transferred to the current profit and loss when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. For long-term equity investment obtained through a business combination not under the same control, the merger cost shall be used as the initial investment cost (if a business combination not under the same control is realized step by step through multiple transactions, the book value of the equity investment of the acquiree held before the purchase date shall be used. The sum of the new investment cost on the purchase date shall be the initial investment cost). Combination costs include the sum of the assets paid by the purchaser, the liabilities incurred or assumed, and the fair value of the equity securities issued. The other comprehensive income recognized by the equity method that is held before the purchase date is accounted for on the same basis as the investee's direct disposal of related assets or liabilities when disposing of the investment, as the investee removes net gains and losses, Shareholders' equity confirmed by changes in other Shareholders' equity other than other comprehensive income and profit distribution shall be transferred to the current profits and losses when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. The accumulated fair value changes of equity investments held prior to the date of acquisition, accounted for as financial instruments and recorded in other comprehensive income, are fully transferred to retained earnings upon adoption of the cost method for accounting. For long-term equity investments acquired through means other than business combinations, the initial investment cost is determined as follows: for investments acquired by paying cash, the actual purchase price, along with directly related expenses, taxes, and other necessary expenditures, are considered as the initial investment cost; for investments acquired through the issuance of equity securities, the fair value of the equity securities at the time of issuance is considered as the initial investment cost.
In the event the Company can exert significant influence over the investee, the cost method shall be employed in some financial statements of the Company. Control refers to the control power over the investors. Through the control, the investor can obtain variable returns by participating in relevant activities of the investor and can wield influence upon the return amount by using the control power to the investor.
The price of a long-term equity investment measured by employing the cost method shall be included at its initial investment cost. If there are additional investments or disinvestments, the long-term equity investment cost shall be adjusted. The dividends or profits declared to be distributed by the investee shall be recognized as the current investment income.
For investees over which the Group has joint control or significant influence, long-term equity investments are accounted for using the equity method. Joint control refers to the control of a specific arrangement, whose activities have to be decided with the consensus by all participants sharing control rights, according to related agreements. Significant influence refers to the investor's right of participation in the decisions of financial and operational policies of the investee, not including the right to control, or jointly control with other participants.
Where the initial cost of a long-term equity investment calculated with the equity method is more than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, it is included in the initial cost of the long-term equity investment. Where the initial cost of a long term equity investment is less than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When the equity method is applied, after the investor obtains a long-term equity investment, it shall, in accordance with the attributable share of the net profits or losses and other comprehensive income proportions of the investee, recognize the investment profits or losses and other comprehensive income and adjust the book value of the long-term equity investment. Confirming the share of the net profit or loss of the investee is based on the fair value of the investee's identifiable assets at the time of obtaining the investment. In accordance with the Group's accounting policies and accounting periods and after the internal transaction gains and losses that occur between the joint ventures and affiliated businesses, the proportion that should be enjoyed by the investor shall be measured (but if the internal transaction losses are the asset impairment losses, the amount shall be fully confirmed), and recognized after the net profit of the investee is adjusted, except for the assets that are invested or sold to constitute businesses. The investing enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall share, and shall reduce the book value of the long-term equity investment correspondingly. The Group recognizes the net losses incurred by the investee, limiting the recognition to the carrying amount of the long-term equity investment and any other long-term equity interests that essentially represent a net investment in the investee. However, the Group is not limited to the extent of the loss to the carrying amount of the investment if it has an additional obligation to cover the losses. Where any change is made to the shareholder's equity other than the net profits and losses, other comprehensive income, and profit distribution of the investee, the book value of the long-term equity investment shall be adjusted and included in the shareholder's equity.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
When disposing a long-term equity investment, the balance between its book value and the actual purchase price shall be included in the current profits and losses. For the long-term equity investment accounted for using the equity method, if the equity method is terminated, the related comprehensive income calculated by the original equity method is calculated with the same accounting method the investee uses to directly dispose its related assets or liabilities. The Shareholder' equity recognized due to the changes in other Shareholder's equity of the investee is fully transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution; if the equity method is still adopted, the related comprehensive income calculated by the original equity method is put under accounting treatment on the same basis the investee disposing related assets or liabilities, and transferred to the current profit and loss in proportion. The Shareholder' equity recognized due to the changes in other Shareholder's equity of the investee is transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution.
22. Investment properties
(1). In case cost calculation model is adopted:
Depreciation or amortization method
The investment properties refer to the properties held for earning the rent or capital appreciation or for both of them, including the leased buildings.
The initial measurement of the investment properties shall be made at its cost. Subsequent expenditures relating to investment properties are included in the cost of the investment properties in the event that the economic benefits associated with the asset are likely to flow in and the cost can be reliably measured. Otherwise, it shall be included in the current profit and loss when actually incurred.
The Group takes the cost model for subsequent measurement of investment properties and provides depreciation or amortization using the depreciation methods applied to buildings and structures within fixed assets.
23. Fixed assets
(1). Recognition conditions
| | √ | Applicable | ¨ | Not applicable |
Fixed assets shall be recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. Subsequent expenditure regarding the fixed assets, if it meets the recognition conditions, is included in the cost of the fixed assets, and the carrying amount of the replaced portion is derecognized; otherwise, it is included in the current profit or loss.
The initial measurement of fixed assets shall be made at their cost. The costs for the acquisition of fixed assets include the buying price, relevant expenses of taxation, other expenses that may be directly assigned to such assets before making the fixed assets reach expected use conditions.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | Annual | |
| | | Depreciation | | Depreciation | | Residual | | | depreciation | |
| Category | | method | | period | | value rate | | | rate | |
| | | | | (year) | | | | | | |
| Houses and buildings | | Straight-line
method | | 20-35 | | 5 | % | | 2.71-4.75% | |
| Machinery and equipment | | Straight-line
method | | 5-10 | | 5 | % | | 9.5-19% | |
| Transportation equipment | | Straight-line
method | | 5-10 | | 5 | % | | 9.5-19% | |
| Electronic equipment and tool appliances | | Straight-line
method | | 5 | | 5 | % | | 19% | |
The Group shall, at least at the end of each year, take a check on the useful life, expected net salvage value, and the depreciation method of the fixed assets, and adjust them when necessary.
| (3). | Recognition basis of fixed assets acquired under financial lease, valuation and depreciation methods |
| | ¨ | Applicable | √ | Not applicable |
| 24. | Construction in progress |
| | √ | Applicable | ¨ | Not applicable |
The cost of work in progress is determined based on the actual construction expenses incurred, including necessary construction expenses and other related costs incurred during the construction period.
When work in progress reaches the predetermined usable state, it is transferred to fixed assets, intangible assets, and deferred expenses.
| | √ | Applicable | ¨ | Not applicable |
Borrowing cost refers to interest and other related costs incurred by the Group as a result of borrowings, including interest on borrowings, amortization of discounts or premiums, ancillary expenses, and exchange differences arising from foreign currency borrowings. Borrowing costs are recognized in the current period's income statement.
| | √ | Applicable | ¨ | Not applicable |
The productive biological assets refer to biological assets held for the purpose of producing agricultural products, rendering services, or leasing, including economic forests. The initial measurement shall be made to the productive biological assets at its cost For self-generated productive biological assets, the cost includes necessary expenditures such as fertilizer costs, labor expenses, and allocated indirect costs incurred before reaching the predetermined production and operational objectives.
Productive biological assets are depreciated with the straight-line depreciation method over their useful lives from the date when they reach their intended production and operation purposes.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The service life, estimated residual value rate, and annual depreciation rate for different types of productive biological assets are as follows:
| | | | | Estimated | | | | |
| | | Estimated | | net residual | | | Annual | |
| Category | | service life | | value rate | | | depreciation | |
| Mature persimmon trees | | 20 years | | | 5 | % | | | 4.75 | % |
The service life and estimated residual value of productive biological assets are determined based on historical experience. The Group is required to recheck the service life, expected net residual value, and depreciation method of productive biological assets at the end of the year, and any change of them will be treated as accounting estimate. Disposal consideration amount from sale, inventory loss, death or damage of productive biological assets shall be included in current profits and losses after deducting the book value and related taxes.
Impairment
The Group shall inspect productive biological assets at least at the end of each annual period. If there is conclusive evidence that due to natural disasters, pests, animal diseases, or changes in market demand, the recoverable amount of the productive biological assets is lower than their carrying amount, the difference between the recoverable amount and the carrying amount is recognized as a provision for impairment of biological assets and recorded as a current period loss.
Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
27. Oil and gas assets
| | ¨ | Applicable | √ | Not applicable |
28. Right-of-use assets
| | √ | Applicable | ¨ | Not applicable |
The Group's right-of-use assets primarily include buildings and structures.
On the lease commencement date, the Group will recognize its right to use lease assets, including the initial measurement amount of lease liabilities, lease payments made on or before the lease commencement date (adjusted for any lease incentives already enjoyed), initial direct costs incurred by the lessee, and the estimated costs of dismantling, removing, or restoring the leased assets and the leased premises to their original condition, as specified in the lease agreement. The Group uses the straight-line method to depreciate the right-of-use assets subsequently. Where it is reasonably certain that ownership of the leased assets will be obtained at the end of the lease term, the Group depreciates the leased assets over their remaining useful lives. If the ownership of the leased asset can not be reasonably confirmed on the lease term expiry, the accrual depreciation of the Group shall be conducted within the shorter of two periods, namely the lease term and the remaining service life of lease asset.
The Group shall re-measure lease liabilities according to the present value of the changed lease payments and adjust the book value of the right-of-use assets accordingly. However, if the carrying amount of the right-of-use assets is reduced to zero, yet there is still a further reduction in the measurement of the lease liabilities, the Group recognizes any remaining amount of the remeasurement in profit or loss for the period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
29. Intangible assets
(1). Valuation method, service life and impairment test
| | √ | Applicable | ¨ | Not applicable |
Intangible assets are recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. The cost is used for initial measurement. However, if the fair value of the intangible assets acquired through business combination not under the same control can be reliably measured, such asses are individually recognized as intangible assets and measured at fair value.
The useful life of intangible assets is determined according to the period in which they can bring economic benefits to the Group. If it is impossible to foresee whether the period in which economic benefits can be brought to the Group, such assets are deemed as intangible assets.
The service lives of various intangible assets are as follows:
| Category | | Service life | | Amortization method |
| Land use right | | 40 years | | Straight -Line method of amortization |
| Software | | 5 years | | Straight -Line method of amortization |
| Patent right and non-patent technology | | 10 years | | Straight -Line method of amortization |
| Sales network | | 10 years | | Straight -Line method of amortization |
The acquired land use rights obtained by the Group are usually accounted for as intangible assets. With respect to the buildings and structures that are self-developed and self-constructed, the related land use rights and the buildings are accounted for as intangible assets and fixed assets, respectively. In the case of purchased land and buildings, the paid prices are distributed between the land use rights and the buildings. Where it is difficult to allocate reasonably, all of such costs are disposed as fixed assets.
Intangible assets with limited service life shall be amortized using straight-line method in service life. At the end of each year, the Group shall verify the estimated service lives and amortization methods of the intangible assets with limited service life and make adjustment when needed.
(2). Accounting policy for expenditures of internal research and development
| | √ | Applicable | ¨ | Not applicable |
The expenditures for internal research and development projects of the Group are classified into research expenditures and development expenditures. The expenditure occurred during the research stage shall be included in the profits/losses of current period when it occurs. The expenditure at the stage of development shall be capitalized only if the following conditions are met simultaneously: technically feasible to complete the intangible assets so that they can be used or sold; having the intention to use and sell the intangible assets; the ways for economic benefits of intangible assets, including proving that the market exists for the products manufactured by such intangible assets, or that the intangible assets have own market, and proving that the serviceability of intangible assets if they are used internally; having sufficient technical and financial resources and other resource supports to complete the development of such intangible assets and having the ability to use or sell such intangible asset; the expenditure attributable to the development stage of such intangible asset can be measured reliably. The development expenditure not meeting the conditions above is included in the current profits and losses when it occurs.
30. Impairment of long-term assets
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
For impairment of assets other than inventory, deferred taxes, and financial assets, the Group determines the impairment with the following methods:
The Group judges whether there is any indication that the assets may be impaired on the balance sheet date. If there is any indication of impairment, the Group will estimate the recoverable amount and conduct impairment test. No matter whether there is any sign of possible assets impairment, the goodwill formed by the merger of enterprises shall be subject to impairment test at the end of each year. The intangible assets that are not yet ready for use are also put under annual impairment test.
The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of the assets minus the disposal expenses and the present value of the expected future cash flow of the assets. Generally, the Group estimates the recoverable amount based on single assets. Where it is not possible to estimate the recoverable amount of single assets, the recoverable amount of the asset group to which the asset belongs is recognized. The recognition of an asset group is based on whether the major cash inflow generated by the asset group is independent of the cash inflows of other assets or asset groups.
When the recoverable amount of an asset or asset group is lower than its carrying amount, the Group reduces its carrying amount to the recoverable amount, include the write-down amount in the current profit and loss, and make the corresponding provision for asset impairment.
The Group shall, at the end of each year, examine the consumptive biological assets and productive biological assets. If any well established evidence indicates that the realizable net value of any consumptive biological asset or the recoverable amount of any productive biological asset is lower than its book value as a result of natural disaster, plant diseases and insect pests, animal disease or change of market demand, the enterprise shall, based on the difference between the realizable net value or the recoverable amount and the relevant book value, make provision for the loss on decline in value of or for the impairment of the biological asset and shall recognize it as current losses.
If the factors affecting the impairment of the expendable biological asset have disappeared, the amount of the written-down shall be restored and reversed within the amount of the original provision for the decline in value, and the reversed amount is recognized in the current profits and losses. Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
For the test of goodwill impairment, it shall, as of the purchasing day, apportion the carrying value of the business reputation formed by business combination to the relevant asset groups by a reasonable method. Where it is difficult to do so, it shall be apportioned to the relevant combinations of asset groups. The related asset group or combination of asset groups shall be the asset group or combination of asset groups that can benefit from the synergy effect of enterprise merger, and shall be no greater than the reporting segments determined by the Group.
When making an impairment test on the relevant asset groups or combination of asset groups containing goodwill, if any evidence shows that the impairment of asset groups or combinations of asset groups is possible, the Company shall first make an impairment test on the asset groups or combinations of asset groups not containing business reputation, calculate the recoverable amount, and recognize the corresponding impairment loss. Then perform impairment tests on the related asset group or portfolio of asset groups containing goodwill and compare its book value with the recoverable amount. If the recoverable amount is lower than the book value, the amount of impairment loss shall be apportioned to the book value of goodwill of the corresponding asset groups or portfolio of asset groups in the first place. Then according to the proportion of the book value of other assets, excluding the goodwill, with respect to the corresponding asset groups or portfolio of asset groups, the book value of the said assets shall be deducted.
Once the assets impairment loss above is confirmed, it shall not be reversed in the future accounting periods.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
31. Long-term deferred expenses
| | √ | Applicable | ¨ | Not applicable |
The store decoration and improvement expenses can be divided into two categories: the first category includes expenses for the decoration and improvement of operating and office premises before opening a new store, and the second category includes expenses for secondary (or subsequent) decoration and improvement of already opened stores. The expenses for the decoration and improvement of a new store are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (10 years) and the lease term. The expenses for secondary (or over) decoration and improvement of already opened stores are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (5 years) and the remaining lease term. At the end of each year, the remaining service life of deferred expenses is reviewed. If a deferred expense item no longer provides future benefits in subsequent accounting periods, the remaining unamortized balance of that item is recognized as a current period loss.
32. Contract liabilities
(1). Recognition method for contract liabilities
| | √ | Applicable | ¨ | Not applicable |
The Group shall list the contract liabilities in the balance sheet according to the relationship between performance obligations and customer payment.
The contract liabilities refer to obligations to transfer goods or services to customers for which consideration has been received or is receivable from the customer before transferring the promised goods or services.
33. Employee Compensation
Employee salary refers to the remuneration or compensation, except for share payment, offered by the Group for the purpose of acquiring the services provided by the employees or terminating employment relationships. Employee remuneration mainly includes short-term salaries, post-employment welfare, dismission welfare and other long-term employee welfare. Welfare provided by the Group for employees' spouses, children and dependents, family members of deceased employees and other beneficiaries is also part of employee salaries.
(1). Accounting methods for short-term compensation
| | √ | Applicable | ¨ | Not applicable |
The Company confirms the actually occurred short-term salaries as liabilities during the accounting period that the staff provides service for the Company, and accounts them into profits and losses of the current period or relevant asset costs.
(2). Accounting method for post-employment welfare
| | √ | Applicable | ¨ | Not applicable |
Post-employment welfare (defined contribution plans)
The Group's employees participate in pension insurance and unemployment insurance managed by the local government. The corresponding expenses are recognized as relevant asset costs or current-period expenses when they are incurred.
(3). Accounting method for dismission welfare
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Severance benefits
When providing dismissal welfare to employees, the Group shall early confirm the employee salaries generated from dismiss welfare as liability and include it into current profits and losses under the following two situations: the enterprise cannot withdraw the dismissal welfare generated from plan for termination of labor relationship or layoff proposal; the enterprise confirms relevant cost and expense related to the recombination of dismiss welfare payment.
| (4). | Other accounting method for long-term employee welfare |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
On the lease commencement date, the present value of lease payments not yet paid is recognized as lease liability, except for short-term leases and leases of low-value assets. When calculating the present value of lease payments, the Group uses the implicit interest rate of the lease as the discount rate; if the implicit interest rate of the lease cannot be determined, the Lessee's incremental borrowing rate shall be used as the discount rate. The Group calculates the interest expense of the lease liabilities in each period of the lease term based on the fixed periodic interest rate and includes it into the current profits and losses, unless otherwise stipulated to be included in the cost of related assets. Variable lease payments that are not included in the measurement of lease liabilities are included in the current profits and losses when they are actually incurred, unless otherwise stipulated to be included in the cost of related assets.
After the commencement date of the lease term, when there is a change in the substantial fixed payment amount, a change in the estimated amount payable of the guaranteed residual value, a change in the index or ratio used to determine the lease payment amount, or a change in the evaluation result or actual exercise of the purchase option, renewal option or termination option, the Group re-measures the lease liabilities based on the present value of the changed lease payments.
| | √ | Applicable | ¨ | Not applicable |
Except for contingent consideration and contingent liabilities assumed in a business combination under common control, when the obligations related to contingent matters meet the following conditions, they are recognized as estimated liabilities by the Group:
| (1) | This obligation is the current obligation of the Group; |
| (2) | It is likely to cause any economic benefit to flow out of the Group as a result of performance of the obligation; |
| (3) | The amount of the obligation can be measured reliably. |
Estimated liabilities are initially measured in accordance with the best estimate of the expenditure required to perform the relevant current obligations, taking into account factors such as risks, uncertainties and time value of money associated with contingent events. The Company shall check the book value of the estimated debts on each balance sheet date. Where there is any exact evidence indicating that the book value cannot really reflect the current best estimate, the Company shall adjust the book value in accordance with the current best estimate.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment. Equity-settled share-based payment refers to a transaction settled by the Group with shares or other equity instruments as the consideration for obtaining services.
Equity-settled share-based payment in exchange for services provided by employees is calculated at the fair value of the equity instruments granted to employees. For equity instrument that are exercisable immediately after being granted, the relevant costs or expenses are recognized based on fair value on the grant date, increasing the capital surplus. For equity instrument that can only be exercised after a specified service period or upon achievement of specified performance conditions, during the service period, for each balance sheet date within the waiting period, the services acquired during the period are recognized as related costs or expenses, increasing the capital surplus, based on the best estimation of the number of equity instruments expected to be exercised, using the fair value on the grant date. The fair value of equity instruments is determined based on the ex-right closing price on the grant date.
Share-based payments that are not ultimately exercised due to non-satisfaction of non-market conditions and/or service period conditions are not recognized as costs or expenses. If market conditions or non-exercisable conditions are specified in the share-based payment agreement, the share-based payment is considered to be exercisable as long as all other performance conditions and/or service period conditions are met, regardless of whether the market conditions or non-exercisable conditions are satisfied.
If the terms of equity-settled share-based payments are modified, at least the obtained services are recognized as if the terms were not modified. In addition, any modification that increases the fair value of the granted equity instrument, or a change in favor of the employee on the modification date, recognizes an increase in the acquisition of services.
If the terms of equity-settled share-based payments are canceled, it will be treated as an accelerated exercise on the cancellation date and the unconfirmed amount will be immediately recognized. If the employees or other parties are to meet non-vesting conditions but they do not meet the conditions in vesting period, the Company will cancel the equity-settled share-based payment as the treatment. However, if a new equity instrument is granted to an employee, and on the granting date, it is determined that the new equity instrument granted is used to replace the canceled equity instrument, the granted replacement equity instrument shall be treated in the same way as the modifications of the original equity instrument terms and conditions are treated.
| 37. | Preference shares, perpetual capital securities and other financial instruments |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Accounting policy for income recognition and measurement |
| | √ | Applicable | ¨ | Not applicable |
Revenues from contracts with customers
The Group confirms the incomes while performing the obligations in the contract, namely obtaining control right of relevant commodities or services from customers. Obtaining control of the related goods or services refers to one can direct the use of the goods or provision of services and obtain almost all economic benefits from the goods.
Sales contract
The sales contract between the Group and the client generally includes only the performance obligations of goods transfer. The Group, under normal conditions, recognizes revenue at the point in time when the customer obtains control of the related goods, which is usually the point of delivery as specified in contract. This recognition is based on the comprehensive consideration of the following factors: the present right to receive payment for the goods, the transfer of the primary risks and rewards associated with ownership of the goods, the transfer of legal ownership of the goods, the physical transfer of the goods, and the customer's acceptance of the goods.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of service contract
In the service contracts between the Group and its customers, which usually include provisions for display services, warehousing services, maintenance, and other performance obligations, the Group recognizes revenue based on the progress of performance during a specific period. This is because the customer simultaneously receives and consumes the economic benefits from the Group's performance, and the Group has the right to invoice for the cumulative amount of completed performance during the entire contract period, treating it as a performance obligation fulfilled during a certain period. Revenue is recognized based on the progress of performance, except where the progress of performance cannot be reasonably determined. The Group determines the progress of performance for providing services based on the time schedule. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
Construction contract
The construction contracts between the Group and customers usually include obligations for construction and decoration works. As the customers have control over the construction assets during the performance period, the Group recognizes revenue based on the progress of performance, except when the progress cannot be reasonably determined. The Group determines the progress of providing services based on the input method. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
Variable consideration
Some contracts between the Group and customers include arrangements for reward points, forming variable consideration. The Group determines the best estimate of variable consideration based on either the expected value or the most likely amount to be realized. However, the transaction price that includes variable consideration does not exceed the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur, once the related uncertainty is resolved.
Sales return terms
For sales with sales return provisions, when the Group transfers control of the relevant goods to the customer, revenue is recognized based on the amount expected to be entitled for transferring the goods to the customer. The expected amount to be refunded due to sales returns is recognized as a provision for expected liabilities. Simultaneously, an asset is recognized for the expected cost of goods to be returned, which is calculated as the difference between the book value of the goods to be returned and the estimated costs (including the value impairment) associated with returning the goods. The net amount is recorded as a receivable for return cost. The cost is then recognized by deducting the net amount from the book value of the transferred goods. On each balance sheet date, the Group reassesses the future sales return situation and re-measures the aforementioned assets and liabilities.
Reward points program
The Group grants reward points to customers when selling goods or providing services. Customers can use these points to redeem free or discounted goods or services. The reward points program provides significant rights to customers, which are recognized by the Group as a separate performance obligation. Revenue is allocated based on the relative proportion of the standalone selling price of goods or services provided and the reward points and is recognized when customers obtain control over the points or when the points expire.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Main responsible person/agent
When the Group acquires goods from third parties and subsequently transfers them to customers, the Group exercises control over the goods, making it the primary obligor. Revenue is recognized based on the total consideration received or receivable. Otherwise, the Group is an agent, and the revenue shall be recognized based on the amount of commission or handling fee that is expected to be charged, and such amount shall be determined based on the net amount of the total consideration received or receivable after deducting the prices payable to other related parties or according to the established commission amount or proportion.
| (2). | Different accounting policies for revenue recognition due to different business models adopted by similar businesses |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Governmental subsidies are recognized when they meet the conditions attached to and can be received. Where the governmental subsidiaries are monetary assets, they are measured according to the amount received or receivable. If the governmental subsidies are non-monetary assets, they shall be measured at their fair value. If their fair value cannot be obtained in a reliable way, they shall be measured at the nominal amount.
Government subsidies used for purchasing or forming long-term assets are recognized as government grants related to assets when the fundamental conditions for obtaining the subsidies are met, as specified in government documents. If the government documents do not provide clear guidance, grants that are based on the condition of purchasing or forming long-term assets are considered as government grants related to assets, while others are recognized as government grants related to revenue.
The Group recognizes received government grants based on their total amount.
Where the governmental subsidy related to the proceeds is used to compensate relevant costs or losses in the later period, the subsidy is recognized as deferred proceeds when acquired, and accounted into profits and losses of the current period during the period of recognition; where it is used to compensate the occurred costs or losses, it is directly into profits and losses of the current period directly.
Government subsidies related to assets shall be recognized as deferred income, which shall be included in profits and losses by stages according to a reasonable and systematic method within the service life of the relevant assets (but the government subsidies measured according to the nominal amount shall be directly included in the current profits and losses). If the relevant assets are sold, transferred, scrapped or damaged before the end of the service life, the undistributed balance of relevant deferred income shall be transferred into the profits and losses of the current period of asset disposal.
| 41. | Deferred tax assets/deferred tax liabilities |
| | √ | Applicable | ¨ | Not applicable |
Income tax comprises current and deferred income taxes. Except for the adjusted goodwill caused by the business merger, or the business accounted directly into the shareholder's equity, or the relevant accounted into the shareholder' equity, all the income tax expense or revenue shall be accounted into the current profits and losses.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The current income tax liabilities or assets of the Group incurred during the current period and previous periods are measured based on the expected amount of income tax payable or refunded in accordance with the provisions of the tax law.
Regarding the temporary difference between the book value and tax base of assets and liabilities on the balance sheet date and of the item that is not recognized as an asset and liability but whose tax base can be determined in accordance with the tax law, the deferred income tax of the Group is recorded using the balance sheet liability method.
All taxable temporary differences are recognized as deferred tax liabilities,
| (1) | except when the taxable temporary differences arise from the following transactions: the initial recognition of business reputation, and the initial recognition of assets or liabilities arising from the following transactions which are simultaneously featured by the following: the transaction is not business combination, and at the time of transaction, the accounting profits will not be affected, nor will the taxable amount or the deductible loss be affected. |
| | | |
| (2) | The turning-back time of the temporary difference of taxable relevant to the investment of subsidiaries, cooperative enterprises and joint ventures can be controlled, or the temporary difference will not turn back at a very high possibility in a foreseeable future. |
As for any deductible temporary difference, and deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible temporary difference, and deductible loss or tax deduction to be likely obtained. Unless:
| (1) | Temporary differences that are deductible arise from transactions that are not business combinations and do not affect accounting profits or taxable income or deductible losses. |
| (2) | As for the deductible temporary difference of taxable relevant to the investment of subsidiaries, cooperative enterprises and joint ventures, the corresponding deferred income tax assets can be recognized when it can simultaneously meet the following the conditions: the temporary difference is likely to turn back, and the amount of the taxable can be obtained to offset the deductible temporary difference at a high possibility in the future. |
According to the tax law, on the balance sheet date, the deferred income tax assets and the deferred income liabilities shall be measured by the Group in accordance with the applicable tax rate during the period of recovering the assets as estimated or paying off the abilities, and it shall reflect the effect of the income tax of the recovering assets as estimated or the way of paying off the liabilities on the balance sheet date.
On the balance sheet date, the Group rechecks book value of deferred income tax assets of the Group. If it is unlikely to obtain sufficient taxable income taxes to offset the benefit of the deferred income tax assets, the book value of the deferred income tax assets shall be written down. On the balance sheet date, the Group reassesses the unrecognized deferred income tax assets and recognizes the deferred income tax assets within the limits that it is probable that sufficient taxable income is available for all or part of the deferred income tax assets.
If the following conditions are met simultaneously, the Company will present and report the deferred income tax assets and the deferred income tax liabilities at a net amount after offsetting: the Company has the legal right to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount with regard to taxes levied from the same taxpayer or different taxpayers with the same tax collection and management department, but the taxpayer involved intends to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount or obtain the assets and satisfy the liabilities simultaneously within every period of reversal of significant deferred income tax assets and deferred income tax liabilities.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Accounting arrangement method for operating lease |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Accounting method for finance lease |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Determination methods and accounting treatment for leases under the new leasing standard. |
| | √ | Applicable | ¨ | Not applicable |
Identification of lease
On the commencement date of the contract, the Group evaluates whether the contract is a lease or includes a lease. If one party in the contract transfers the right to control the use of one or more identified assets for a certain period of time in exchange for consideration, the contract is a lease or includes a lease. To determine whether the contract has transferred the right to control the use of identified assets for a certain period of time, the Group evaluates whether customers in the contract have the right to obtain almost all economic benefits arising from the use of identified assets during the use period, and have the right to dominate the use of identified assets during that use period.
Identification of separate lease
If multiple separate leases are included in the contract, the Group will split the contract and conduct accounting for each separate lease. If the following conditions are met simultaneously, the right to use the identified assets constitutes a separate lease in the contract:
| (1) | The lessee can profit from using the asset alone or together with other resources that are easily available; |
| | | |
| (2) | There is no high dependence or correlation between this asset and other assets in the contract. |
Separation of lease part and non-lease part
If the contract contains both the lease part and the non-lease part, the Group, as the lessor and lessee, shall carry out the accounting treatment after separating the lease part and the non-lease part.
Estimation of lease term
The lease term refers to an irrevocable period during which the Group is entitled to use the leased assets. The Group has the renewal option, i.e. the right to renew the lease of this asset, and is reasonably certain that it will exercise this option; the lease term also includes the period covered by the renewal option. If the Group has the termination option, i.e. the right to terminate the lease of this asset, but is reasonably certain that it will not exercise this option, the lease term includes the period covered by the termination option. In the event of a major event or change within the Group's control that affects whether the Group is reasonably certain that it will exercise the corresponding option, the Group will re-evaluate whether it is reasonably certain that it will exercise the renewal option or purchase option or it will not exercise the termination option.
As lessee
Refer to Note V, 28, and Note III, 34 for the general accounting treatment for the Group as a lessee.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Lease change
Lease change refers to the change of lease scope, lease consideration and lease term beyond the original contract terms, including increasing or terminating the right to use one or more leased assets, extending or shortening the lease term stipulated in the contract, etc.
If the lease changes and the following conditions are met, the Group will treat the lease change as a separate lease for accounting:
| (1) | The lease change expands the scope of the lease by adding the right to use one or more leased assets; |
| | | |
| (2) | The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease scope adjusted according to the contract. |
When lease change isn't used for accounting treatment as a separate lease, the Group redefines the lease term on the effective date of lease change, and discounts the changed lease payments at the revised discount rate to recalculate the lease liabilities. When calculating the present value of lease payments after the change, the Group adopts the interest rate implicit in lease in the remaining lease term as a discount rate. If it is unable to recognize the interest rate implicit in lease in the remaining lease term, the incremental borrowing rate of the Group on the lease change effective date will be used as the discount rate.
Regarding the impact of the lease liability adjustment mentioned above, the Group distinguishes the following situations for accounting treatment:
| (1) | Lease change that result in a reduction in the lease scope or lease term are adjusted by reducing the carrying value of the right-of-use asset to reflect the partial or complete termination of the lease. Gains or losses related to the partial or complete termination of the lease are recognized in the current period; |
| | | |
| (2) | For other lease changes, the Group adjusts the book value of the right-of-use assets accordingly. |
Short-term leases and leases of low-value assets
Leases that have a lease term of no more than 12 months from the lease commencement date and do not include a purchase option are classified as short-term leases by the Group. Leases where the value of the underlying leased asset, when it is new and does not exceed RMB40,000, are classified as low-value asset leases. If the Group sublets or anticipates subleasing leased assets, the original lease is not recognized as a low-value asset lease. The Group chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and low-value asset leases. Costs or expenses related to the leased asset are recognized over the lease term using the straight-line method or another systematic and rational method.
As lessor
The lease for which all risks and rewards related to the ownership of the leased asset are substantially transferred on the commencement date of lease is a finance lease, and the other leases are an operating lease. When the Group acts as a sublease lessor, it classifies subleases based on the right of use assets generated from the original lease.
As a lessor of finance lease
On the commencement date of the lease term, the Group recognizes the receivable financing leasing payments for financing leases and terminates the recognition of financing leasing assets. When the Group initially measures the receivable financing leasing payments, the net lease investment shall be taken as the entry value of the receivable financing lease payments. The net lease investment is the sum of the unsecured residual value and the present value of the lease receipts not yet received on the commencement date of the lease term, which is discounted at the interest rate implicit in lease.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group calculates and recognizes the interest income for each period of the lease term at a fixed periodic interest rate. The variable lease payments obtained by the Group that are not included in the measurement of net lease investments are recognized in the current period's profit and loss when actually incurred.
As an operating lessor
The rental income from operating leases is recognized as revenue on a straight-line basis or another systematic and rational method over the lease term. Variable lease payments not included in the measurement of lease receivables are recognized as revenue when they become due.
In the event that the operating lease changes, the Group uses it for accounting treatment as a new lease since the effective date of lease, and deems it together with the advance receipts or lease receivables related to the lease before change as new lease receipts.
Rental concessions due to the COVID-19 pandemic
For rental concessions, such as rent reductions or deferred payments, agreed upon between the Group and counterparties due to the direct impact of the COVID-19 pandemic, a simplified method is applied to all leases that meet the following conditions:
| (1) | The lease consideration after the concession is reduced or basically unchanged compared with that before the concession; |
| | | |
| (2) | The concession only applies to lease payments due before June 30, 2022; |
| | | |
| (3) | Other terms and conditions of the lease are confirmed to be unchanged after a comprehensive consideration of qualitative and quantitative factors. |
As lessee
The Group does not assess whether a lease change has occurred and continues to calculate the interest expense on lease liabilities using the discount rate applied prior to the concession. The Group also continues to depreciate the right-of-use asset using the same method as before the concession. Rent concessions are treated as variable lease payments and offset against the related asset cost or expense. The lease liability is adjusted accordingly when agreements are reached to release the original rental payment obligation.
As lessor
For operating leases, the Group continues to recognize the original lease payments as lease income using the same method as before the concession. If rental concessions occur, the Group treats the reduced rental as a variable lease payment and offsets it against lease income during the concession period. If there are delays in collecting the rental, the Group recognizes the expected rental as accounts receivable in the original collection period and offsets it against the previously recognized accounts receivable upon actual receipt.
For finance leases, the Group continues to recognize unrealized finance income using the same implicit interest rate as before the concession. If rental concessions occur, the Group treats the reduced rental as a variable lease payment. When agreements are reached to waive the original right to collect rent, the Group offsets the previously recognized lease income with the reduced rental. If the offset is insufficient, the remaining amount is included in investment income, and the accounts receivable for finance leases are adjusted accordingly. If there are delays in collecting the rental, the Group offsets the previously recognized accounts receivable for finance leases upon actual receipt.
Incremental borrowing rate for lessee
For leases where the lease interest rate cannot be determined, the Group takes the incremental borrowing rate of the lessee as the discount rate to calculate the present value of lease payments. When determining the incremental borrowing rate, the Group considers observable rates in the economic environment as the reference basis and makes adjustments based on its own circumstances, the nature of the leased asset, the lease term, and the lease liability amount to derive the applicable incremental borrowing rate.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
43. Other significant accounting policies and accounting estimates
| | √ | Applicable | ¨ | Not applicable |
| (1). | Measurement at fair value |
The Group measures equity instruments investments at fair value on each balance sheet date. The fair value is a price received by the market participants from selling an asset or paid by them for transferring a liability during orderly transaction at the measurement date. When the Group measures the relevant assets or liabilities at fair value, it assumes that the orderly transactions of selling assets or transferring liabilities is conducted in the main market of the relevant assets or liabilities; if there is no major market, it assumes that the transaction is conducted in the most advantageous market for the relevant assets or liabilities. The major market (or the most advantageous market) is the trading market in which the Group can enter on the measurement date. The Group adopts the assumption used by the market participants during the pricing for the assets or liabilities to maximize their economic interests.
When non-financial assets are measured at fair value, it shall be considered that the market participants' abilities to use the asset for the best purpose for economic interests or abilities to sell the asset to other market participants for the best purpose for economic interests.
The Group prioritizes the use of relevant observable input values and only resorts to unobservable input values when observable input values are not obtainable or are not practically feasible, provided that appropriate valuation techniques are applicable and sufficient data and other information are available to support the valuation.
For the assets and liabilities measured or disclosed at fair value in the financial statements, the level of fair value to which they belong is determined according to the lowest-level input value that is significant to the fair value measurement as a whole: The first level input valve is that the input value that can be obtained on measurement date and not adjusted quoted price of same assets or liabilities in active market; second level is the input value that can be directly or indirectly observed by relevant assets or liabilities except from first-level input value; third level is the input value that can not be observed by relevant assets or liabilities.
On each balance sheet date, the Group reassesses the assets and liabilities that are recognized in the financial statements to be consistently measured at fair value to determine whether to shift between levels of fair value measurement.
The consideration and transaction costs are paid for repurchasing equity instruments to reduce shareholders' equity. Apart from share-based payments, the issuance (including refinancing), buy-back, sale, or cancellation of equity instruments are accounted for as changes in equity.
The cash dividends of the Company are recognized as liabilities after approval by the Shareholders' Meeting.
| (4). | Significant accounting estimate |
In line with historical experience and other factors including the reasonable anticipation for future events, the Group shall make continuous evaluation for main accounting estimates and assumptions.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Impairment of financial instruments
The Group uses the expected credit loss model to evaluate the impairment of financial instruments. It requires significant judgment and estimation, and taking into account all reasonable and based information, including forward-looking information for the application of the expected credit loss model. In making these judgments and estimates, the Group combines historical repayment data with factors such as economic policies, macroeconomic indicators, industry risks, and other factors to assess the expected changes in credit risk of the debtors. Differences in estimates may have an impact on the provision for Impairment. A provision for impairment may not be equal to the actual amount of impairment losses in the future.
Impairment of non-current assets other than financial assets (except goodwill)
On the income statement date, the Group judges whether there are any signs of possible impairment of non-current assets other than financial assets. For intangible assets with uncertain useful life, in addition to the annual impairment test, when there is any indication of impairment, the impairment test is also carried out. Other non-current assets excluding financial assets are tested for impairment when there is an indication that the carrying amount is not recoverable. When the book value of an asset or asset group is higher than the recoverable amount, that is, the higher of the net amount remained after the disposal expenses are deducted from the fair value and the present value of the estimated future cash flow, it indicates that impairment has occurred. The net amount after the fair value deducts the disposal expenses is determined by reference to the sales agreement price of the similar assets in the fair trade or the observable market price deducts the incremental cost directly attributable to the disposal of the assets. When estimating the present value of future cash flow, the Management must estimate the estimated future cash flow of the asset or asset group and select an appropriate discount rate to determine the present value of future cash flow. Refer to Note VII, 74 of this section for details.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. It requires that the present value of the future cash flow of the asset group or portfolio of asset groups allocated with goodwill be estimated. When estimating the present value of future cash flows, the Group needs to estimate the cash flows generated by future asset groups or combinations of asset groups, and select an appropriate discount rate to determine the present value of future cash flows. Refer to Note VII, 30 of this section for details.
Fair value of non-listed equity investments
Valuation of non-listed equity investments is performed using the market approach model, based on assumptions not supported by observable market prices or rates. This requires the Group to make estimates regarding credit risk, volatility, discount rates, liquidity discount, and the selection of comparable companies under the market approach, thereby involving uncertainties.
Deferred tax asset
Deferred income tax assets shall be recognized for all unused deductible losses to the extent that it is probable that there will be sufficient taxable income to offset the deductible losses. This requires the Management to use substantial judgments to estimate the time and amount of future taxable income and adopt the tax planning strategies to determine the amount of deferred income tax assets that should be recognized.
Reward points
The Group estimates a reasonable selling price for reward points separately, taking into account all relevant information, including the ability of customers to redeem reward points for free goods or enjoy discounts on goods, as well as the likelihood of customers exercising their redemption rights in order to allocate the consideration under the contracts. When estimating the likelihood of customers exercising their redemption rights, the Group conducts a comprehensive analysis based on historical data on point redemptions, current point redemption activities, and considerations of customer behavior and market trends in the future. The Group reassesses the estimated redemption rate of reward points at least on each balance sheet date and calculates the amount of revenue to be recognized and the amount of balances related to reward points based on the results of the reassessment.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Assessment of constraints on variable consideration
When estimating variable consideration, the Group considers all information reasonably available, including historical, current, and forecast information, to estimate the range of possible amounts of consideration that may occur and their respective probabilities within a reasonable range. The transaction price including the variable consideration shall not exceed the amount that the accumulated recognized income is likely not to have a significant reversal when the relevant uncertainty is eliminated. When assessing the elimination of uncertainty related to variable consideration, the Group considers the likelihood of revenue reversal and the proportion of the amount that is not reasonably expected to be significant when determining whether cumulative revenue already recognized may be subject to a significant reversal. On each balance sheet date, the Group reassesses the contingent consideration amount, including reassessing the estimates related to contingent consideration, to reflect the circumstances existing at the end of the reporting period and any changes that occurred during the reporting period.
| 44. | Changes in significant accounting policies and accounting estimate |
(1). Changes in significant accounting policies
| | √ | Applicable | ¨ | Not applicable |
| | Contents and reasons for accounting policy changes | | Approval
procedure | | Remarks
(Materially
affected items in
statements and
amount) |
| | | | | | |
| | In 2018, the Ministry of Finance promulgated the revised CASBE No. 21 – Lease (referred to as the "new lease standards"). The new lease standards, based on the single model similar to the current accounting of financing release, require the lessee to recognize the right-of-use assets and lease liabilities, as well as depreciation and interest expenses, for all leases other than short-term leases and low-value asset leases. Since January 1, 2021, the Group has conducted accounting treatment in accordance with the newly revised lease standards. For contracts existing prior to the first execution, the Group has chosen not to re-evaluate whether they are leases or include leases, and will not adjust the information of comparable periods in accordance with the cohesion provisions. The differences between the new lease standards and the current lease standards on the first execution date are retroactively adjusted to the retained earnings at the beginning of 2021: | | Approval from the Board of Directors | | As detailed below |
| | | | | | |
| | (1) | For financial leases prior to the first execution date, the Group measures the right-of-use assets and lease liabilities respectively based on the original book values of the financially leased assets and the financial lease payments payable; | | | | |
| | | | | | | |
| | (2) | Assume that the new leasing standard is adopted from the lease commencement date and the incremental borrowing rate of the Group as the lessee is used as the discount rate to determine the lease liability at the carrying amount and measure the right-of-use assets; | | | | |
| | | | | | | |
| | (3) | The Group performs impairment testing on the right-of-use assets in accordance with Note V, 30 and makes appropriate accounting treatments. | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
The Group adopts simplified treatment for the operational leases whose leased assets are low-value assets before the first execution date or which are to be completed within 12 months, and does not recognize the right-of-use assets and lease liabilities. In addition, the Group adopts the following simplified treatment for the operational leases prior to the first execution date:
| (1) | When measuring lease liabilities, the same discount rate may be used for leases with similar characteristics; the measurement of right-of-use assets may not include the initial direct expenses; |
| | | |
| (2) | Where there is an option to renew or terminate the lease, the Group determines the lease term based on the actual exercise of the option prior to the first implementation date and other up-to-date circumstances. |
| | | |
| (3) | As an alternative to the impairment test of right-of-use assets, the contract containing lease is evaluated by the Group whether it is a loss contract before the first execution date, and the right-of-use assets are adjusted based on the amount of loss reserve included in the balance sheet before the first execution date; |
| | | |
| (4) | For lease changes prior to the first execution date, the Group conducts accounting treatment in accordance with the final arrangement of the lease changes. |
Prior to the initial adoption date, leases classified as operating leases are still outstanding after the initial adoption date were reassessed and classified by the Group as subleases based on the remaining lease term and terms of the original lease and the sublease. If it is reclassified as a finance lease, the Group will treat it as a new finance lease. In addition, the Group has not made adjustments to leases where it is the sublessor.
For significant operating leases disclosed in the 2020 financial statements with unpaid minimum lease payments, the Group has adjusted the present value discounted at the incremental borrowing rate as of January 1, 2021, and the difference from the lease liability recognized on January 1, 2021, as follows:
| Minimum lease payments for significant operating leases as of December 31, 2020. | | | 39,429,535,202.65 | |
| Less: Lease payments with simplified approach | | | 176,016,769.37 | |
| Including: Short-term lease | | | 176,016,769.37 | |
| | | | | |
| Weighted average incremental borrowing rate | | | 4.90 | % |
| Present value of lease payments and lease liability as of January 1, 2021 | | | 26,904,328,571.13 | |
| (2). | Changes in significant accounting estimates |
| | ¨ | Applicable | √ | Not applicable |
| (3). | The financial statements at the beginning of the year for the first implementation of adjustment in the New Lease Standards in 2021 |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Consolidated Balance Sheet | |
| | |
| | Unit: Yuan Currency: RMB | |
| | | |
| | | December 31, | | | January 1, | | | Adjustment | |
| Items | | 2021 | | | 2021 | | | amount | |
| Current assets: | | | | | | | | | | | | |
| Monetary funds | | | 12,005,455,154.69 | | | | 12,005,455,154.69 | | | | | |
| Loans and advances granted (short-term) | | | 1,393,758,718.35 | | | | 1,393,758,718.35 | | | | | |
| Deposit reservation for balance | | | | | | | | | | | | |
| Lending funds | | | | | | | | | | | | |
| Trading financial assets | | | 241,410,438.34 | | | | 241,410,438.34 | | | | | |
| Derivative financial assets | | | | | | | | | | | | |
| Notes receivable | | | | | | | | | | | | |
| Factoring receivable | | | 2,710,166,360.05 | | | | 2,710,166,360.05 | | | | | |
| Account receivable | | | 447,397,868.68 | | | | 447,397,868.68 | | | | | |
| Receivables financing | | | | | | | | | | | | |
| Advance payments | | | 2,467,802,583.53 | | | | 2,319,388,177.80 | | | | -148,414,405.73 | |
| Premiums receivable | | | | | | | | | | | | |
| Reinsurance accounts receivable | | | | | | | | | | | | |
| Provision of cession receivable | | | | | | | | | | | | |
| Other receivables | | | 938,269,620.40 | | | | 938,269,620.40 | | | | | |
| Including: interests receivable | | | 211,245.24 | | | | 211,245.24 | | | | | |
| Dividends receivable | | | | | | | | | | | | |
| Redemptory monetary capital for sale | | | | | | | | | | | | |
| Inventories | | | 10,881,679,092.38 | | | | 10,881,679,092.38 | | | | | |
| Contract assets | | | | | | | | | | | | |
| Assets held for sale | | | | | | | | | | | | |
| Non-current assets due within one year | | | | | | | 48,150,956.00 | | | | 48,150,956.00 | |
| Other current assets | | | 2,092,549,539.13 | | | | 2,092,549,539.13 | | | | | |
| Total current assets | | | 33,178,489,375.55 | | | | 33,078,225,925.82 | | | | -100,263,449.73 | |
| Non-current assets: | | | | | | | | | | | | |
| Loans and advances | | | 201,557,024.80 | | | | 201,557,024.80 | | | | | |
| Debt investment | | | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | | | |
| Long-term receivables | | | | | | | 76,858,788.21 | | | | 76,858,788.21 | |
| Long-term equity investment | | | 5,409,972,860.53 | | | | 5,405,465,544.07 | | | | -4,507,316.46 | |
| Investment in other equity instruments | | | | | | | | | | | | |
| Other non-current financial assets | | | 5,618,159,570.30 | | | | 5,618,159,570.30 | | | | | |
| Investment properties | | | 332,748,387.92 | | | | 332,748,387.92 | | | | | |
| Fixed assets | | | 5,310,424,471.89 | | | | 5,310,424,471.89 | | | | | |
| Construction in progress | | | 194,264,567.11 | | | | 194,264,567.11 | | | | | |
| Productive biological assets | | | | | | | | | | | | |
| Oil and gas assets | | | | | | | | | | | | |
| Right-of-use assets | | | | | | | 22,617,545,731.53 | | | | 22,617,545,731.53 | |
| Intangible assets | | | 1,616,982,112.68 | | | | 1,616,982,112.68 | | | | | |
| Development expenses | | | | | | | | | | | | |
| Goodwill | | | 121,331,244.79 | | | | 121,331,244.79 | | | | | |
| Long-term deferred expenses | | | 3,701,445,094.02 | | | | 3,670,323,205.72 | | | | -31,121,888.30 | |
| Deferred tax asset | | | 472,606,455.22 | | | | 1,134,195,726.44 | | | | 661,589,271.22 | |
| Other non-current assets | | | | | | | | | | | | |
| Total non-current assets | | | 22,979,491,789.26 | | | | 46,299,856,375.46 | | | | 23,320,364,586.20 | |
| Total assets | | | 56,157,981,164.81 | | | | 79,378,082,301.28 | | | | 23,220,101,136.47 | |
| Current liabilities: | | | | | | | | | | | | |
| Short-term loans | | | 13,889,997,357.11 | | | | 13,889,997,357.11 | | | | | |
| Borrowings from central bank | | | | | | | | | | | | |
| Borrowing funds | | | | | | | | | | | | |
| Trading financial liabilities | | | | | | | | | | | | |
| Derivative financial liabilities | | | | | | | | | | | | |
| Notes payable | | | | | | | | | | | | |
| Accounts payable | | | 12,513,674,031.70 | | | | 12,513,674,031.70 | | | | | |
| Accounts collected in advance | | | 197,284,021.08 | | | | 164,020,698.54 | | | | -33,263,322.54 | |
| Contract liabilities | | | 3,472,076,794.19 | | | | 3,472,076,794.19 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | December 31, | | | January 1, | | | Adjustment | |
| Items | | 2021 | | | 2021 | | | amount | |
| Financial assets sold for repurchase | | | | | | | | | | | | |
| Deposits from customers and interbank | | | | | | | | | | | | |
| Acting trading securities | | | | | | | | | | | | |
| Acting underwriting securities | | | | | | | | | | | | |
| Payroll payable | | | 721,581,678.15 | | | | 721,581,678.15 | | | | | |
| Taxes payable | | | 266,452,210.54 | | | | 266,452,210.54 | | | | | |
| Other payables | | | 3,510,335,991.72 | | | | 3,584,876,268.65 | | | | 74,540,276.93 | |
| Including: interests payable | | | | | | | | | | | | |
| Dividends payable | | | 11,528,208.00 | | | | 11,528,208.00 | | | | | |
| Handling charges and commissions payable | | | | | | | | | | | | |
| Reinsurance accounts payable | | | | | | | | | | | | |
| Liabilities held for sale | | | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | | | 2,237,649,650.10 | | | | 2,237,649,650.10 | |
| Other current liabilities | | | 321,886,940.98 | | | | 321,886,940.98 | | | | | |
| Total current liabilities | | | 34,893,289,025.47 | | | | 37,172,215,629.96 | | | | 2,278,926,604.49 | |
| Non-current liabilities: | | | | | | | | | | | | |
| Provision for insurance contracts | | | | | | | | | | | | |
| Long-term borrowings | | | | | | | | | | | | |
| Bonds payable | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Lease liabilities | | | | | | | 24,666,678,921.03 | | | | 24,666,678,921.03 | |
| Long-term accounts payable | | | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | | | |
| Estimated liabilities | | | 123,670,630.29 | | | | 3,352,627.57 | | | | -120,318,002.72 | |
| Deferred income | | | 130,947,523.55 | | | | 130,947,523.55 | | | | | |
| Deferred tax liabilities | | | 616,873,988.17 | | | | 616,873,988.17 | | | | | |
| Other non-current liabilities | | | | | | | | | | | | |
| Total non-current liabilities | | | 871,492,142.01 | | | | 25,417,853,060.32 | | | | 24,546,360,918.31 | |
| Total liabilities | | | 35,764,781,167.48 | | | | 62,590,068,690.28 | | | | 26,825,287,522.80 | |
| Equity (or shareholders' equity): | | | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | 9,516,285,608.00 | | | | 9,516,285,608.00 | | | | | |
| Other equity instruments | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Capital reserves | | | 6,926,920,343.78 | | | | 6,926,920,343.78 | | | | | |
| Less: Treasury shares | | | 2,009,067,652.38 | | | | 2,009,067,652.38 | | | | | |
| Other comprehensive income | | | -584,134.06 | | | | -584,134.06 | | | | | |
| Special reserves | | | | | | | | | | | | |
| Surplus reserves | | | 1,030,866,477.21 | | | | 1,020,964,555.44 | | | | -9,901,921.77 | |
| General risk reserves | | | | | | | | | | | | |
| Undistributed profits | | | 3,886,681,562.18 | | | | 402,631,831.65 | | | | -3,484,049,730.53 | |
| Total Equity (or shareholders' equity) attributable to parent company | | | 19,351,102,204.73 | | | | 15,857,150,552.43 | | | | -3,493,951,652.30 | |
| Minority interests | | | 1,042,097,792.60 | | | | 930,863,058.57 | | | | -111,234,734.03 | |
| Total equity (or shareholders' equity) | | | 20,393,199,997.33 | | | | 16,788,013,611.00 | | | | -3,605,186,386.33 | |
| Total liabilities and owners' (or shareholders') equity | | | 56,157,981,164.81 | | | | 79,378,082,301.28 | | | | 23,220,101,136.47 | |
Explanation of adjustments of each item:
| | √ | Applicable | ¨ | Not applicable |
The Company has adopted the new leasing standard since January 1, 2021, recognizing right-of-use assets and lease liabilities for all leases except for short-term leases and leases of low-value assets, and recognizing depreciation and interest expenses separately.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Balance Sheet of the Parent Company
| | Unit: Yuan Currency: RMB | |
| | | |
| | | December 31, | | | January 1, | | | Adjustment | |
| Items | | 2021 | | | 2021 | | | amount | |
| Current assets: | | | | | | | | | | | | |
| Monetary funds | | | 6,910,650,846.27 | | | | 6,910,650,846.27 | | | | | |
| Trading financial assets | | | 50,719,741.48 | | | | 50,719,741.48 | | | | | |
| Derivative financial assets | | | | | | | | | | | | |
| Notes receivable | | | | | | | | | | | | |
| Account receivable | | | 60,915,137.48 | | | | 60,915,137.48 | | | | | |
| Receivables financing | | | | | | | | | | | | |
| Advance payments | | | 137,433,276.57 | | | | 127,591,716.38 | | | | -9,841,560.19 | |
| Other receivables | | | 24,906,579,097.05 | | | | 24,906,579,097.05 | | | | | |
| Including: interests receivable | | | | | | | | | | | | |
| Dividends receivable | | | | | | | | | | | | |
| Inventories | | | 473,979,768.06 | | | | 473,979,768.06 | | | | | |
| Contract assets | | | | | | | | | | | | |
| Assets held for sale | | | | | | | | | | | | |
| Non-current assets due within one year | | | 6,699,798.05 | | | | | | | | 6,699,798.05 | |
| Other current assets | | | 164,936,487.28 | | | | 164,936,487.28 | | | | | |
| Total current assets | | | 32,705,214,354.19 | | | | 32,702,072,592.05 | | | | -3,141,762.14 | |
| Non-current assets: | | | | | | | | | | | | |
| Debt investment | | | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | | | |
| Long-term receivables | | | 14,849,325.56 | | | | | | | | 14,849,325.56 | |
| Long-term equity investment | | | 11,453,358,655.85 | | | | 11,448,851,339.39 | | | | -4,507,316.46 | |
| Investment in other equity instruments | | | | | | | | | | | | |
| Other non-current financial assets | | | 4,458,278,378.94 | | | | 4,458,278,378.94 | | | | | |
| Investment properties | | | | | | | | | | | | |
| Fixed assets | | | 478,837,682.00 | | | | 478,837,682.00 | | | | | |
| Construction in progress | | | 32,888,275.21 | | | | 32,888,275.21 | | | | | |
| Productive biological assets | | | | | | | | | | | | |
| Oil and gas assets | | | | | | | | | | | | |
| Right-of-use assets | | | | | | | 633,071,055.29 | | | | 633,071,055.29 | |
| Intangible assets | | | 211,227,926.32 | | | | 211,227,926.32 | | | | | |
| Development expenses | | | | | | | | | | | | |
| Goodwill | | | | | | | | | | | | |
| Long-term deferred expenses | | | 89,764,211.59 | | | | 80,526,302.72 | | | | -9,237,908.87 | |
| Deferred tax asset | | | 189,913,289.70 | | | | 215,590,239.89 | | | | 25,676,950.19 | |
| Other non-current assets | | | | | | | | | | | | |
| Total non-current assets | | | 16,914,268,419.61 | | | | 17,574,120,525.32 | | | | 659,852,105.71 | |
| Total assets | | | 49,619,482,773.80 | | | | 50,276,193,117.37 | | | | 656,710,343.57 | |
| Current liabilities: | | | | | | | | | | | | |
| Short-term loans | | | 10,808,265,416.68 | | | | 10,808,265,416.68 | | | | | |
| Trading financial liabilities | | | | | | | | | | | | |
| Derivative financial liabilities | | | | | | | | | | | | |
| Notes payable | | | 1,380,000,000.00 | | | | 1,380,000,000.00 | | | | | |
| Accounts payable | | | 677,988,956.10 | | | | 677,988,956.10 | | | | | |
| Accounts collected in advance | | | 15,075,140.35 | | | | 15,075,140.35 | | | | | |
| Contract liabilities | | | 233,649,565.20 | | | | 233,649,565.20 | | | | | |
| Payroll payable | | | 63,342,110.44 | | | | 63,342,110.44 | | | | | |
| Taxes payable | | | 8,667,008.99 | | | | 8,667,008.99 | | | | | |
| Other payables | | | 18,623,630,326.09 | | | | 18,632,555,816.57 | | | | 8,925,490.48 | |
| Including: interests payable | | | | | | | | | | | | |
| Dividends payable | | | 11,528,208.00 | | | | 11,528,208.00 | | | | | |
| Liabilities held for sale | | | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | | | 14,344,670.17 | | | | 14,344,670.17 | |
| Other current liabilities | | | 21,698,155.17 | | | | 21,698,155.17 | | | | | |
| Total current liabilities | | | 31,832,316,679.02 | | | | 31,855,586,839.67 | | | | 23,270,160.65 | |
| Non-current liabilities: | | | | | | | | | | | | |
| Long-term borrowings | | | | | | | | | | | | |
| Bonds payable | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Lease liabilities | | | | | | | 733,745,400.63 | | | | 733,745,400.63 | |
| Long-term accounts payable | | | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | | | |
| Estimated liabilities | | | 1,286,000.00 | | | | | | | | -1,286,000.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | December 31, | | | January 1, | | | Adjustment | |
| Items | | 2021 | | | 2021 | | | amount | |
| Deferred income | | | 6,933,333.36 | | | | 6,933,333.36 | | | | | |
| Deferred tax liabilities | | | 197,810,762.52 | | | | 197,810,762.52 | | | | | |
| Other non-current liabilities | | | | | | | | | | | | |
| Total non-current liabilities | | | 206,030,095.88 | | | | 938,489,496.51 | | | | 732,459,400.63 | |
| Total liabilities | | | 32,038,346,774.90 | | | | 32,794,076,336.18 | | | | 755,729,561.28 | |
| Equity (or shareholders’ equity): | | | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | 9,516,285,608.00 | | | | 9,516,285,608.00 | | | | | |
| Other equity instruments | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Capital reserves | | | 6,764,350,200.40 | | | | 6,764,350,200.40 | | | | | |
| Less: Treasury shares | | | 2,009,067,652.38 | | | | 2,009,067,652.38 | | | | | |
| Other comprehensive income | | | -796,187.66 | | | | -796,187.66 | | | | | |
| Special reserves | | | | | | | | | | | | |
| Surplus reserves | | | 1,030,866,477.21 | | | | 1,020,964,555.44 | | | | -9,901,921.77 | |
| Undistributed profits | | | 2,279,497,553.33 | | | | 2,190,380,257.39 | | | | -89,117,295.94 | |
| Total equity (or shareholders’ equity) | | | 17,581,135,998.90 | | | | 17,482,116,781.19 | | | | -99,019,217.71 | |
| Total liabilities and owners’ (or shareholders’) equity | | | 49,619,482,773.80 | | | | 50,276,193,117.37 | | | | 656,710,343.57 | |
Explanation of adjustments of each item:
| √ | Applicable | ¨ | Not applicable |
The Company has adopted the new leasing standard since January 1, 2021, recognizing right-of-use assets and lease liabilities for all leases except for short-term leases and leases of low-value assets, and recognizing depreciation and interest expenses separately.
| (4). | Explanation of restating comparative data for the first-time adoption of the new leasing standard from 2021 |
| ¨ | Applicable | √ | Not applicable |
45. Others
| ¨ | Applicable | √ | Not applicable |
| 1. | Main tax categories and tax rates |
Main tax categories and tax rates
| √ | Applicable | ¨ | Not applicable |
| Type of tax | | Taxation basis | | Tax rate |
| VAT | | Taxable income | | 13%, 9%, 6%, |
| | | | | 5%, 0% |
| Urban maintenance and construction tax | | Actually paid turnover tax | | 7%, 5% |
| Corporate Income Tax | | Taxable income | | 25%, 20%, 16.5%, |
| | | | | 15%, 8.25%, 0% |
| Housing property tax | | Housing property original value, rental income | | 12%, 1.2% |
| Extra charges for education and local extra charges for education | | Actually paid turnover tax | | 3%, 2% |
| Note 1: | The applicable VAT rates are 0% for the sales of family planning supplies, vegetables, and some meat, poultry, and eggs; 6% for the revenue from cultural media, warehousing services, etc.; 9% for rental income, and 5% for those subject to simplified collection; 9% for the taxable revenue from sales of fruits, aquatic products, some dried goods, grains and oils, dairy products, and 13% for the taxable revenue from the sales of other goods. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Note 2: | The self-owned properties are subject to a certain proportion of its original value (70% for Yonghui Superstores Co., Ltd., Fujian Yonghui Commercial Co., Ltd., Anhui Yonghui Logistics Co., Ltd., Jiangsu Yonghui Superstores Co., Ltd., Chongqing Yonghui Superstores Co., Ltd., Yonghui Logistics Co., Ltd., Chengdu Yonghui Business Development Co., Ltd., Chongqing Xuanhui Real Estate Development Co., Ltd., Fujian Yonghui Logistics Co., Ltd., Anhui Yonghui Superstores Co., Ltd., Fujian Yonghui Superstores Co., Ltd., and Gansu Minxian Yonghui Agricultural Development Co., Ltd.; 70% for Fuzhou Minhou Yonghui Superstores Co., Ltd. above ground and (70% * 80%) for underground), with a tax rate of 1.2%; and 12% for rental properties based on rental income. |
Explanations shall be disclosed for different taxpayers for tax rate of enterprise income tax
| √ | Applicable | ¨ | Not applicable |
| Name of taxpayer | | Income tax rate | |
| | | (%) | |
| Chongqing Yonghui Superstores Co., Ltd. | | | 15 | |
| Guizhou Yonghui Superstores Co., Ltd. | | | 15 | |
| Yunnan Yonghui Superstores Co., Ltd. | | | 15 | |
| Guangxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Logistics Co., Ltd. | | | 15 | |
| Xizang Yonghui Superstores Co., Ltd. | | | 15 | |
| Guansu Yonghui Superstores Co., Ltd. | | | 15 | |
| Qinghai Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Yunjin Technology Co., Ltd. | | | 15 | |
| Sichuan Yonghui Store Co., Ltd. | | | 15 | |
| Chengdu Yonghui Business Development Co., Ltd. | | | 15 | |
| Shaanxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | | 15 | |
| Ningxia Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Qinghe Business Factoring (Chongqing) Co., Ltd. | | | 15 | |
| Guizhou Yonghui Logistics Co., Ltd. | | | 15 | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | | 0 | |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | | 0 | |
| Hebei Fuji Supply Chain Management Co., Ltd. | | | 0, 25 | |
| Yonghui Holdings Co., Ltd. | | | 16.5, 8.25 | |
| Dixing Co., Ltd. | | | 16.5 | |
| LOHAS Life International Business Co., Ltd. | | | 16.5 | |
| Ningbo Xinzhi Investment Co., Ltd. | | | 20 | |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | | 20 | |
| Shanghai Yinjie International Trade Co., Ltd. | | | 20 | |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | | 20 | |
| Chongqing Fuyu Supply Chain Management Co., Ltd. | | | 20 | |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | | 20 | |
| Guizhou Fuping Supply Chain Management Co., Ltd. | | | 20 | |
| Hainan Fuli Supply Chain Management Co., Ltd. | | | 20 | |
| Hubei Fuhan Supply Chain Management Co., Ltd. | | | 20 | |
| Guangdong Fuyue Supply Chain Management Co., Ltd. | | | 20 | |
| Fuzhou Fuping Supply Chain Management Co., Ltd. | | | 20 | |
| Ningbo Xinguan Investment Co., Ltd. | | | 20 | |
| Hebei Yuanxiaoji Technology Development Co., Ltd. | | | 20 | |
| √ | Applicable | ¨ | Not applicable |
| Note 1: | According to the Announcement on Extending the VAT Preferential Policies for Cultural and Educational Products by the Ministry of Finance and the State Taxation Administration (CS [2021] No. 10), value added tax on wholesale and retail sales of books is exempted from January 1, 2021 to December 31, 2023. |
| Note 2: | According to the Announcement on Exemption of VAT on Vegetable Circulation Link issued by the Ministry of Finance and the State Taxation Administration (CS [2011] No. 137), VAT on vegetable circulation link has been exempted since January 1, 2012. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Note 3: | According to the Notice on Exempting VAT on Certain Fresh Meat and Egg Products in Agricultural Product Wholesale and Retail by the Ministry of Finance and the State Taxation Administration (CS [2012] No. 75), value added tax on certain fresh meat and egg products sold by taxpayers engaged in agricultural product wholesale and retail is exempted from October 1, 2012. |
| Note 4: | Subsidiary companies of the Company, including Chongqing Yonghui Superstores Co., Ltd., Guizhou Yonghui Superstores Co., Ltd., Yunnan Yonghui Superstores Co., Ltd., Guangxi Yonghui Superstores Co., Ltd., Yonghui Logistics Co., Ltd., Xizang Yonghui Superstores Co., Ltd., Gansu Yonghui Superstores Co., Ltd., Qinghai Yonghui Superstores Co., Ltd., Sichuan Yonghui Superstores Co., Ltd., Chengdu Yonghui Commercial Development Co., Ltd., Shaanxi Yonghui Superstores Co., Ltd., Fuping Yunshang Supply Chain Management Co., Ltd., Ningxia Yonghui Superstores Co., Ltd., and Guizhou Yonghui Logistics Co., Ltd., enjoy preferential enterprise income tax policies, with enterprise income tax being levied at a rate of 15% from January 1, 2011 to December 31, 2030 according to the relevant provisions of the Ministry of Finance, General Administration of Customs, and the State Taxation Administration regarding deepening the implementation of tax policies related to the development of the Western Development Strategy (CS [2011] No. 58), Announcement on Enterprise Income Tax Issues Concerning the Implementation of the Western Development Strategy by the State Taxation Administration (State Taxation Administration Announcement No. 12 of 2012), and Announcement on Extending Enterprise Income Tax Policies for the Western Development Strategy (Ministry of Finance Announcement No. 23 of 2020). |
| Note 5: | The subsidiary companies, Fuping Yonghui Modern Agriculture Development Co., Ltd., Gansu Minxian Yonghui Agriculture Development Co., Ltd., Hebei Fuji Supply Chain Management Co., Ltd., are eligible for the preferential policy of exempting corporate income tax on primary agricultural products processing and production in accordance with the relevant provisions in Article 86 of the Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China (State Council Order No. 512). |
| Note 6: | The subsidiary companies, Ningbo Xinzi Investment Co., Ltd., Ruilingtong Marketing Service (Shanghai) Co., Ltd., Shanghai Yinjie International Trade Co., Ltd., Chongqing Boyuan Xunke Technology Co., Ltd., Chongqing Fuyu Supply Chain Management Co., Ltd., Yunnan Fuping Yunshang Supply Chain Management Co., Ltd., Guizhou Fuping Supply Chain Management Co., Ltd., Hainan Fuli Supply Chain Management Co., Ltd., Hubei Fuhan Supply Chain Management Co., Ltd., Guangdong Fuyue Supply Chain Management Co., Ltd., Fuzhou Fuping Supply Chain Management Co., Ltd., Ningbo Xinguang Investment Co., Ltd., and Hebei Yuanxiaoji Technology Development Co., Ltd., are eligible for the preferential corporate income tax policy according to the Notice on Implementing the Policy of Tax Relief for Small and Micro Enterprises (CS [2019] No. 13). For the portion of the annual taxable income of small and micro-profit enterprises that does not exceed RMB1 million, the taxable income is reduced by 25% and the corporate income tax is levied at a rate of 20%. For the portion of the annual taxable income exceeding RMB1 million but not exceeding RMB3 million, the taxable income is reduced by 50% and the corporate income tax is levied at a rate of 20%. |
| Note 7: | The subsidiary companies of the Company are subject to the two-tier profit tax system as announced in the 2017 Policy Address, in accordance with the 2018 Inland Revenue (Amendment) (No. 3) Bill of the Hong Kong Special Administrative Region Government. The two-tier profit tax system applies to taxable years starting on or after April 1, 2018. For the first HKD2 million of assessable profits of a corporation, the tax rate will be reduced to 8.25%. Any profits thereafter will continue to be taxed at 16.5%. The two-tier profit tax system will benefit eligible enterprises with assessable profits, regardless of their size. To ensure that eligible enterprises are mainly small and medium-sized enterprises, only one related enterprise can be nominated for the benefits. The subsidiary company, Yonghui Holdings Limited, meets the above requirements and will be subject to the two-tier tax rates of 8.25% and 16.5%. The sub-subsidiaries, Dixing and LOHAS Life International Business, will be subject to the tax rate of 16.5%. |
| ¨ | Applicable | √ | Not applicable |
| VII. | Notes to Items of Consolidated Financial Statements |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Cash in hand | | | 72,596,557.48 | | | | 101,335,211.22 | |
| Bank deposit | | | 8,462,314,974.49 | | | | 10,988,863,063.79 | |
| Other monetary funds | | | 628,216,208.25 | | | | 915,256,879.68 | |
| Total | | | 9,163,127,740.22 | | | | 12,005,455,154.69 | |
| Including: total amount of deposit abroad | | | 17,321,750.74 | | | | 16,469,207.74 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| (1) | The year-end cash mainly represents the sales funds not yet deposited in banks by each store at year-end. |
| (2) | The funds held overseas at year-end represent funds held overseas by the subsidiaries Yonghui Holdings Co., Ltd., Yonghui Japan Co., Ltd., and LOHAS Life International Business Co., Ltd. |
| (3) | The restricted monetary funds at year-end of the Group amounted to RMB452,918,396.74 (2020: RMB1,318,416,175.48, as disclosed in Note VII, 83. |
| (4) | Interest income is derived from bank current deposits at the prevailing interest rate. The term of fixed-term fixed deposits is determined based on the cash needs of the Group, and interest income is earned at the corresponding interest rate of the bank fixed deposits. |
| (5) | Other monetary funds, excluding margin and escrow account funds, mainly consist of funds in transit, including POS machine card payment income, APP bank card payment income not yet transferred to the Group’s bank accounts, and balances in WeChat and other APP accounts. |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Total amount of loans and advances | | | 814,617,180.15 | | | | 1,595,315,743.15 | |
| Among which: | | | | | | | | |
| 1. Amount of loans and advances due within one year | | | 621,955,079.39 | | | | 1,442,483,313.30 | |
| Less: Provision for loan losses due within one year | | | 53,148,824.03 | | | | 48,724,594.95 | |
| Net value of loans and advances due within one year | | | 568,806,255.36 | | | | 1,393,758,718.35 | |
| 2. Amount of loans and advances due after one year | | | 249,554,238.37 | | | | 208,164,880.36 | |
| Less: Provision for loan losses due after one year | | | 3,743,313.58 | | | | 6,607,855.56 | |
| Net value of loans and advances due after one year | | | 245,810,924.79 | | | | 201,557,024.80 | |
| | Note: | The loans and advances represent corporate loans and advances, consumer credit, etc. provided by Yonghui Small Loans Co., Ltd., a sub-subsidiary of the Group. |
The changes in the provision for loan losses are as follows:
| | | Opening
balance | | | Provision
made in
this year | | | Provision
written-off in
this year | | | Closing
balance | |
| Year 2021 | | | 55,332,450.51 | | | | 75,322,082.56 | | | | 73,762,395.46 | | | | 56,892,137.61 | |
| Year 2020 | | | 33,098,266.35 | | | | 45,540,106.72 | | | | 23,305,922.56 | | | | 55,332,450.51 | |
| 3. | Trading financial assets |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Financial assets measured at fair value with changes included in current profits and losses | | | 1,560,917,920.71 | | | | 241,410,438.34 | |
| Among which: | | | | | | | | |
| Equity instrument investment | | | 1,234,713,554.16 | | | | 180,283,725.12 | |
| Fund products | | | 326,204,366.55 | | | | 53,793,451.37 | |
| Debt instruments investment | | | | | | | 7,333,261.85 | |
| Total | | | 1,560,917,920.71 | | | | 241,410,438.34 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| √ | Applicable | ¨ | Not applicable |
Trading financial assets mainly consist of fund products, stocks, asset management products, and wealth management products purchased during the year.
| 4. | Derivative financial assets |
| ¨ | Applicable | √ | Not applicable |
| (1). | Category of notes receivable |
| ¨ | Applicable | √ | Not applicable |
| (2). | Notes receivable secured by the Company at the end of period |
| ¨ | Applicable | √ | Not applicable |
| (3). | Undue closing notes receivable before balance sheet date that endorsed or discounted by the Company |
| ¨ | Applicable | √ | Not applicable |
| (4). | Notes adjusted by the Company to accounts receivable due to default of the drawer at the end of period |
| ¨ | Applicable | √ | Not applicable |
| (5). | Classified disclosure by bad-debt provision method |
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| ¨ | Applicable | √ | Not applicable |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| ¨ | Applicable | √ | Not applicable |
| (6). | Situation of the provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
| (7). | Details of notes receivable actually written off during the current period. |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Factoring receivable | | | 1,477,389,559.46 | | | | 2,742,661,083.16 | |
| Less: bad debt provision | | | 65,934,194.43 | | | | 32,494,723.11 | |
| Total | | | 1,411,455,365.03 | | | | 2,710,166,360.05 | |
| Note: | The balance of accounts receivable from factoring is formed by the sub-subsidiary Yonghui Qinghe Commercial Factoring (Chongqing) Co., Ltd. engaging in factoring business. |
| (1) | Disclosure by category |
| | | December 31, 2021 | |
| | | | | | | | | Bad debt | | | | |
| Items | | Amount | | | Ratio | | | provision | | | Net amount | |
| | | | | | % | | | | | | | |
| Accounts receivable from factoring with recourse | | | 1,477,389,559.46 | | | | 100 | | | | 65,934,194.43 | | | | 1,411,455,365.03 | |
| Accounts receivable from factoring with recourse | | | 2,742,661,083.16 | | | | 100 | | | | 32,494,723.11 | | | | 2,710,166,360.05 | |
| (2) | Bad debt provision recorded, recovered, or reversed during the year |
Unit: Yuan Currency: RMB
| | | Allowance for | |
| Items | | doubtful accounts | |
| January 1, 2021 | | | 32,494,723.11 | |
| Provision reversed in this year | | | 45,049,155.91 | |
| Provision written-off in this year | | | -11,609,684.59 | |
| December 31, 2021 | | | 65,934,194.43 | |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Aging | | Closing book balance | |
| Sub-total within one year | | | 456,316,792.14 | |
| 1-2 years | | | 52,641,347.92 | |
| 2-3 years | | | 11,090,391.75 | |
| Over 3 years | | | 11,982,918.05 | |
| Total | | | 532,031,449.86 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Classified disclosure by bad-debt provision method |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Book balance | | Closing balance
Bad debt provision | | | | Book balance | | Opening balance
Bad debt provision | | | |
| Category | | Amount | | Ratio | | Amount | | Proportion
of bad-debt
provision | | Carrying
value | | Amount | | Ratio | | Amount | | Proportion
of bad-debt
provision | | Carrying
value | |
| | | | % | | | | (%) | | | | | | % | | | | (%) | | | |
| Provision made on an individual basis | | | 1,894,322.62 | | | 0.36 | | | 1,894,322.62 | | | 100.00 | | | | | | 1,894,322.62 | | | 0.39 | | | 1,894,322.62 | | | 100.00 | | | | |
| Provision made on a collective basis | | | 530,137,127.24 | | | 99.64 | | | 53,136,897.40 | | | 10.02 | | | 477,000,229.84 | | | 490,094,344.81 | | | 99.61 | | | 42,696,476.13 | | | 8.71 | | | 447,397,868.68 | |
| Among which: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | | 371,214,525.69 | | | 69.77 | | | 25,335,691.17 | | | 6.83 | | | 345,878,834.52 | | | 342,396,746.92 | | | 69.59 | | | 20,769,764.87 | | | 6.07 | | | 321,626,982.05 | |
| Supplier service fees and rentals | | | 129,366,361.61 | | | 24.31 | | | 25,256,896.17 | | | 19.52 | | | 104,109,465.44 | | | 121,477,447.71 | | | 24.69 | | | 20,429,125.54 | | | 16.82 | | | 101,048,322.17 | |
| Construction payment | | | 6,467,449.86 | | | 1.22 | | | 2,313,422.16 | | | 35.77 | | | 4,154,027.70 | | | 13,753,818.98 | | | 2.80 | | | 1,373,266.20 | | | 9.98 | | | 12,380,552.78 | |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Receivables from affiliated parties | | | 23,088,790.08 | | | 4.34 | | | 230,887.90 | | | 1.00 | | | 22,857,902.18 | | | 12,466,331.20 | | | 2.53 | | | 124,319.52 | | | 1.00 | | | 12,342,011.68 | |
| Total | | | 532,031,449.86 | | | / | | | 55,031,220.02 | | | / | | | 477,000,229.84 | | | 491,988,667.43 | | | / | | | 44,590,798.75 | | | / | | | 447,397,868.68 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | |
| Name | | Book
balance | | | Bad debt
provision | | | Proportion
of bad-debt
provision | | | Reasons for
provision | |
| | | | | | | | | | | | (%) | | | | | |
SHANGHAI MATEY TRADE
CO., LTD | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100 | | | | Expected not to be recovered | |
| Total | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100 | | | | / | |
Explanation for individual bad debt provision:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| √ | Applicable | ¨ | Not applicable |
Combined provision items: Combination 1
Unit: Yuan Currency: RMB
| | | Closing balance | |
| Name | | Account receivable | | | Bad debt provision | | | Proportion of bad-debt provision | |
| | | | | | | | | (%) | |
| Within 1 year | | | 437,150,744.82 | | | | 21,297,191.73 | | | | 4.87 | |
| 1-2 years | | | 48,754,595.63 | | | | 15,113,924.62 | | | | 31.00 | |
| 2-3 years | | | 11,066,913.25 | | | | 6,418,809.69 | | | | 58.00 | |
| Over 3 years | | | 10,076,083.46 | | | | 10,076,083.46 | | | | 100.00 | |
| Total | | | 507,048,337.16 | | | | 52,906,009.50 | | | | 10.43 | |
Validation standards and specifications of combined bed-debt provision based:
| ¨ | Applicable | √ | Not applicable |
Combined provision items: Combination 2
Unit: Yuan Currency: RMB
| | | Closing balance | |
| Name | | Account receivable | | | Bad debt provision | | | Proportion of bad-debt provision | |
| | | | | | | | | (%) | |
| Within 1 year | | | 19,166,047.32 | | | | 191,660.47 | | | | 1 | |
| 1-2 years | | | 3,886,752.29 | | | | 38,867.52 | | | | 1 | |
| 2-3 years | | | 23,478.50 | | | | 234.79 | | | | 1 | |
| Over 3 years | | | 12,511.97 | | | | 125.12 | | | | 1 | |
| Total | | | 23,088,790.08 | | | | 230,887.90 | | | | 1 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Validation standards and specifications of combined bed-debt provision based:
| ¨ | Applicable | √ | Not applicable |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| ¨ | Applicable | √ | Not applicable |
| (3). | Situation of the provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| Category | | Opening
balance | | | Provision | | | Provision
Recovered
or Reversed | | | Charge-off
or write-off | | | Other
changes | | | Closing
balance | |
| Bad debt provision for accounts receivable | | | 44,590,798.75 | | | | 28,433,783.51 | | | | | | | | 17,993,362.24 | | | | | | | | 55,031,220.02 | |
| Total | | | 44,590,798.75 | | | | 28,433,783.51 | | | | | | | | 17,993,362.24 | | | | | | | | 55,031,220.02 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | √ | Not applicable |
| (4). | Receivables actually verified and cancelled in the current period |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Write-off amount | |
| Accounts receivable actually written off | | | 17,993,362.24 | |
Significant write-off of accounts receivable during the year
| ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of receivables:
| ¨ | Applicable | √ | Not applicable |
| (5). | Receivables of first five companies with the greatest amount of closing amount (categorizing by debtor) |
| √ | Applicable | ¨ | Not applicable |
The aggregate amount of the year-end balances of the top five accounts receivable classified by the debtor is RMB142,635,621.03, accounting for 26.81% of the total year-end balance of accounts receivable. The corresponding year-end balance of bad debt provision is RMB3,307,056.76.
| (6). | Accounts receivable ceased to be recognized due to the transfer of financial assets |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (7). | Transferred receivables and capital and liabilities formed after continuous involvement |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (1). | Advance payments listed by aging |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Aging | | Closing balance Amount | | | Ratio | | | Opening balance Amount | | | Ratio | |
| | | | | | % | | | | | | % | |
| Within 1 year | | | 1,615,621,832.61 | | | | 81.91 | | | | 2,028,421,993.42 | | | | 82.20 | |
| 1-2 years | | | 194,321,731.94 | | | | 9.85 | | | | 217,707,397.23 | | | | 8.82 | |
| 2-3 years | | | 85,736,781.60 | | | | 4.35 | | | | 79,604,886.42 | | | | 3.23 | |
| Over 3 years | | | 76,640,364.08 | | | | 3.89 | | | | 142,068,306.46 | | | | 5.75 | |
| Total | | | 1,972,320,710.23 | | | | 100.00 | | | | 2,467,802,583.53 | | | | 100.00 | |
Reasons for untimely settlement of advance payment that has aging of over one year and of significant amount:
Prepayments with an age of more than 1 year are mainly prepayment for goods.
| (2). | Prepayments for the top five ending balances collected according to prepayment object |
| √ | Applicable | ¨ | Not applicable |
The aggregate amount of the year-end balances of the top five prepayments collected by the payee during the current period is RMB340,708,563.64, accounting for 17.27% of the total year-end balance of prepayments.
Other disclosures
| ¨ | Applicable | √ | Not applicable |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Interest receivable | | | 201,536.05 | | | | 211,245.24 | |
| Dividends receivable | | | | | | | | |
| Other receivables | | | 742,167,792.38 | | | | 938,058,375.16 | |
| Total | | | 742,369,328.43 | | | | 938,269,620.40 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Interest receivable
| (1). | Classification of interest receivable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Interest on small loans | | | 201,536.05 | | | | 211,245.24 | |
| Total | | | 201,536.05 | | | | 211,245.24 | |
| 1. | Significant overdue interest |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (2). | Significant overdue interest |
| ¨ | Applicable | √ | Not applicable |
| (3). | Provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (5). | Significant dividend receivable of more than 1 year |
| ¨ | Applicable | √ | Not applicable |
| (6). | Provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other receivables
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Aging | | Closing book balance | |
| Sub-total within one year | | | 195,736,741.39 | |
| 1-2 years | | | 125,427,263.92 | |
| 2-3 years | | | 115,342,741.38 | |
| Over 3 years | | | 375,788,397.65 | |
| Total | | | 812,295,144.34 | |
| (8). | Classification of other accounts payable according to the nature of payment |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Nature of payment | | Closing
book balance | | | Opening
book balance | |
| Various types of deposits and guarantees receivable | | | 612,708,570.56 | | | | 743,354,517.97 | |
| Purchases and store petty cash payments | | | 110,940,830.98 | | | | 140,681,845.63 | |
| Receivables from affiliated parties | | | 13,288,531.51 | | | | 40,738,975.81 | |
| Other receivables | | | 75,357,211.29 | | | | 87,356,982.93 | |
| Total | | | 812,295,144.34 | | | | 1,012,132,322.34 | |
| (9). | Provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Phase I | | | Phase II | | | Phase III | | | | |
| Bad debt provision | | Expected
credit loss
over the next
12 months | | | Expected
credit loss
within
the whole
duration
(no credit
impairment
occurred) | | | Expected
credit loss
within
the whole
duration
(credit
impairment
incurred) | | | Total | |
| Balance as of January 1, 2021 | | | 9,613,197.40 | | | | 3,339,874.03 | | | | 61,120,875.75 | | | | 74,073,947.18 | |
| Current balance as of January 1, 2021 | | | | | | | | | | | | | | | | |
| –Transferred to Phase II | | | -462,487.53 | | | | 462,487.53 | | | | | | | | | |
| –Transferred to Phase III | | | | | | | -5,791,897.96 | | | | 5,791,897.96 | | | | | |
| –Reversed to Phase II | | | | | | | | | | | | | | | | |
| –Reversed to Phase I | | | | | | | | | | | | | | | | |
| Provision of the current period | | | 9,399,110.25 | | | | 2,767,527.15 | | | | 7,078,986.40 | | | | 19,245,623.80 | |
| Provision reversed in current period | | | -9,771,316.82 | | | | | | | | -849,475.04 | | | | -10,620,791.86 | |
| Charge-off of the current period | | | | | | | | | | | | | | | | |
| Write-off of the current period | | | | | | | | | | | -12,571,427.16 | | | | -12,571,427.16 | |
| Other changes | | | | | | | | | | | | | | | | |
| Balances as at December 31, 2021 | | | 8,778,503.30 | | | | 777,990.75 | | | | 60,570,857.91 | | | | 70,127,351.96 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of significant changes in the book value of other receivables with provision changes in the current period:
| √ | Applicable | ¨ | Not applicable |
| | | Expected
credit losses
within
the next
12 months for
phase I | | | Expected
credit losses
throughout
the remaining
lifetime for
phase II | | | Credit-
impaired
financial
assets that
have incurred
credit losses
throughout
the remaining lifetime for
phase III | | | Total | |
| Opening balance | | | 944,959,009.78 | | | | 6,052,436.81 | | | | 61,120,875.75 | | | | 1,012,132,322.34 | |
| – Transferred to Phase II | | | -9,249,750.55 | | | | 9,249,750.55 | | | | | | | | | |
| –Transferred to Phase III | | | | | | | -12,870,884.36 | | | | 12,870,884.36 | | | | | |
| Increases in current year | | | 187,982,205.00 | | | | | | | | | | | | 187,982,205.00 | |
| Other increases during the year | | | | | | | | | | | | | | | | |
| Derecognition | | | -374,398,480.80 | | | | | | | | -849,475.04 | | | | -375,247,955.84 | |
| Provision written-off in this year | | | | | | | | | | | -12,571,427.16 | | | | -12,571,427.16 | |
| Closing balance | | | 749,292,983.43 | | | | 2,431,303.00 | | | | 60,570,857.91 | | | | 812,295,144.34 | |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| ¨ | Applicable | √ | Not applicable |
(10). Situation of the provision of bad debts
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | Opening | | | | | | Provision Recovered | | | Charge-off | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | or Reversed | | | or write-off | | | changes | | | balance | |
| Bad-debt provision for other receivables | | | 74,073,947.18 | | | | 19,245,623.80 | | | | 10,620,791.86 | | | | 12,571,427.16 | | | | | | | | 70,127,351.96 | |
| Total | | | 74,073,947.18 | | | | 19,245,623.80 | | | | 10,620,791.86 | | | | 12,571,427.16 | | | | | | | | 70,127,351.96 | |
Significant reversal or recovery of bad-debt provision of current year is:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
(11). Other receivables actually verified and cancelled of current year
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Write-off amount | |
| Other receivables actually written off | | | 12,571,427.16 | |
Where the other receivables written off is important:
| ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of other receivables:
| ¨ | Applicable | √ | Not applicable |
(12). Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Unit name | | Nature of receivable | | Closing
balance | | | Aging | | Proportion in
total closing
balance of
other
receivables | | | Closing
balance of
bad-debt
provision | |
| | | | | | | | | | (%) | | | | |
| Yuhong District Bureau of Finance, Shenyang | | Various types of deposits and guarantees receivable | | | 54,750,000.00 | | | Over 3 years | | | 6.74 | | | | 447,500.00 | |
| Fujian Huiyouyuan Real Estate Development Co., Ltd. | | Various types of deposits and guarantees receivable | | | 24,000,000.00 | | | Over 3 years | | | 2.95 | | | | 240,000.00 | |
| Personal prepaid card payments | | Other receivables | | | 16,972,427.96 | | | Over 3 years | | | 2.09 | | | | 16,972,427.96 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Receivables from affiliated parties | | | 11,942,088.70 | | | 1-2 years | | | 1.48 | | | | 119,420.89 | |
| Fuzhou Soarfree Information Technology Co., Ltd. | | Various types of deposits and guarantees receivable | | | 10,000,000.00 | | | Within 1 year | | | 1.23 | | | | 100,000.00 | |
| Total | | / | | | 117,664,516.66 | | | / | | | 14.49 | | | | 17,879,348.85 | |
| 1. | Accounts receivable involving governmental subsidies |
| ¨ | Applicable | √ | Not applicable |
| 2. | Other receivables with terminated confirmation due to financial assets transfer |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 3. | Amount of assets and liabilities formed through transfer of other accounts receivable and continuous involvement |
| ¨ | Applicable | √ | Not applicable |
(13). Accounts receivable involving governmental subsidies
| ¨ | Applicable | √ | Not applicable |
(14). Other receivables with terminated confirmation due to financial assets transfer
| ¨ | Applicable | √ | Not applicable |
(15). Amount of assets and liabilities formed through transfer of other accounts receivable and continuous involvement
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| (1). | Inventory classification |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Book balance | | | Closing balance
Provision for
inventory
depreciation or
provision for
impairment of
contract
fulfilling costs | | | Carrying value | | | Book balance | | | Opening balance
Provision for
inventory
depreciation or
provision for
impairment of
contract
fulfilling costs | | | Carrying value | |
| Raw material | | | 6,493,421.17 | | | | | | | | 6,493,421.17 | | | | 3,590,421.53 | | | | | | | | 3,590,421.53 | |
| Inventory goods | | | 10,740,019,264.38 | | | | | | | | 10,740,019,264.38 | | | | 10,833,444,376.12 | | | | | | | | 10,833,444,376.12 | |
| Low-cost consumables | | | 44,978,521.31 | | | | | | | | 44,978,521.31 | | | | 44,644,294.73 | | | | | | | | 44,644,294.73 | |
| Total | | | 10,791,491,206.86 | | | | | | | | 10,791,491,206.86 | | | | 10,881,679,092.38 | | | | | | | | 10,881,679,092.38 | |
| (2). | Provision for inventory depreciation or provision for impairment of contract fulfilling costs |
| ¨ | Applicable | √ | Not applicable |
| (3). | Explanation for ending balance of inventories containing capitalized borrowing expense |
| ¨ | Applicable | √ | Not applicable |
| (4). | Explanation of amortization of contract fulfillment costs in the current period |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (2). | Amounts and reasons for significant changes in book value during the reporting period |
| ¨ | Applicable | √ | Not applicable |
| (3). | Provision of impairment losses of contract assets of the current period |
| ¨ | Applicable | √ | Not applicable |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
13. Available-for-sale assets
| ¨ | Applicable | √ | Not applicable |
14. Non-current assets due within one year
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Finance lease receivable due within one year | | | 41,563,339.26 | | | | 48,150,956.00 | |
| Total | | | 41,563,339.26 | | | | 48,150,956.00 | |
End-of-year significant creditor investments and other creditor investments
| ¨ | Applicable | √ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
Unit:Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Input tax to be certified | | | 1,644,071,966.91 | | | | 1,802,188,965.51 | |
| Input tax to be deducted | | | 294,935,904.60 | | | | 246,822,644.50 | |
| Advance income tax | | | 44,161,141.25 | | | | 42,678,827.69 | |
| Advance payment of other taxes | | | 2,262,183.27 | | | | 859,101.43 | |
| Total | | | 1,985,431,196.03 | | | | 2,092,549,539.13 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| ¨ | Applicable | √ | Not applicable |
| 1. | End-of-year significant creditor investments |
| ¨ | Applicable | √ | Not applicable |
2. Provision of impairment losses
| ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| ¨ | Applicable | √ | Not applicable |
(2). End-of-year significant creditor investments
| ¨ | Applicable | √ | Not applicable |
(3). Provision of impairment losses
| ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
17. Other creditor investments
(1). Situation of other creditor investments
| ¨ | Applicable | √ | Not applicable |
(2). End-of-year significant other creditor investments
| ¨ | Applicable | √ | Not applicable |
(3). Provision of impairment losses
| ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Long-term receivables |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | | | |
| Items | | Book balance | | | Bad debt
provision | | | Carrying
value | | | Book balance | | | Bad debt
provision | | Carrying
value | | | Discount
rate interval |
| Finance lease outlay | | | 73,044,056.84 | | | | | | | | 73,044,056.84 | | | | 76,858,788.21 | | | | | | 76,858,788.21 | | | 4.35%-4.9% |
| Including: unrealized | | | | | | | | | | | | | | | | | | | | | | | | |
| financing income | | | 17,551,350.54 | | | | | | | | 17,551,350.54 | | | | 15,224,218.72 | | | | | | 15,224,218.72 | | | |
| Total | | | 73,044,056.84 | | | | | | | | 73,044,056.84 | | | | 76,858,788.21 | | | | | | 76,858,788.21 | | | / |
| (2). | Provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period
| ¨ | Applicable | √ | Not applicable |
| (3). | Derecognized long-term receivables caused by transfer of financial assets |
| ¨ | Applicable | √ | Not applicable |
| (4). | Amount of assets and liabilities formed through transfer of long-term accounts receivable and continuous involvement. |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 19. | Long-term equity investments |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase/decrease in the current period | | | | | | | |
| Investee | | Opening
balance | | | Increased
investment | | | Decreased
investment | | | Investment
profit and loss
recognized with
the equity
method | | | Other
comprehensive
income
adjustments | | | Other equity
changes | | | Distribution of
cash dividends
or profits | | | Provision of
impairment
losses | | | Closing
balance | | | Closing balance
of provision for
impairment | |
| I. Cooperative enterprises | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. (Note 1) | | | 199,453,270.93 | | | | | | | | | | | | -150,395,271.51 | | | | | | | | 107,664,946.83 | | | | | | | | | | | | 156,722,946.25 | | | | | |
| Subtotal | | | 199,453,270.93 | | | | | | | | | | | | -150,395,271.51 | | | | | | | | 107,664,946.83 | | | | | | | | | | | | 156,722,946.25 | | | | | |
| II. Joint ventures | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Zhongbai Holdings Group Co., Ltd. (“Zhongbai Group”) (Note 2) | | | 1,688,000,000.00 | | | | | | | | | | | | -19,307,690.03 | | | | | | | | -26,021,019.30 | | | | -10,167,606.30 | | | | -316,503,684.37 | | | | 1,316,000,000.00 | | | | 555,451,006.05 | |
| Chengdu Hongqi Chain Co., Ltd. (“Hongqi Chain”) | | | 1,892,680,864.41 | | | | | | | | | | | | 101,079,401.14 | | | | | | | | | | | | -45,124,800.00 | | | | | | | | 1,948,635,465.55 | | | | | |
Zhanjiang Guolian Aquatic Products Co., Ltd.
(Note III) | | | 289,866,740.21 | | | | | | | | -290,021,282.52 | | | | 160,212.29 | | | | -5,669.98 | | | | | | | | | | | | | | | | | | | | | |
| Fujian OneBank Co., Ltd. (“OneBank”) | | | 600,076,754.62 | | | | | | | | | | | | 1,422,868.63 | | | | 1,652,642.73 | | | | | | | | | | | | | | | | 603,152,265.98 | | | | | |
| Xiangcun Gaokao Agricultural Co., Ltd. | | | 285,000,000.00 | | | | | | | | | | | | 1,190,547.42 | | | | | | | | | | | | | | | | | | | | 286,190,547.42 | | | | 159,920,284.65 | |
| Fujian Minwei Industrial Co., Ltd. | | | 76,621,138.19 | | | | | | | | | | | | 9,547,662.25 | | | | | | | | | | | | | | | | | | | | 86,168,800.44 | | | | | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 92,040,875.39 | | | | | | | | | | | | -16,384,492.04 | | | | | | | | | | | | | | | | | | | | 75,656,383.35 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | Increase/decrease in the current period | | | | | | |
| Investee | | Opening
balance | | | Increased
investment | | Decreased
investment | | | Investment
profit and loss
recognized with
the equity
method | | | Other
comprehensive
income
adjustments | | | Other equity
changes | | | Distribution of
cash dividends
or profits | | | Provision of
impairment
losses | | | Closing
balance | | | Closing balance
of provision for
impairment | |
| Beijing Friendship Messenger Trading Co., Ltd. | | | 17,419,070.33 | | | | | | | | | | | | 34,432,570.90 | | | | | | | | | | | | | | | | | | | | 51,851,641.23 | | | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 14,656,107.88 | | | | | | | | | | 5,653,503.50 | | | | | | | | | | | | | | | | | | | | 20,309,611.38 | | | | | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | | 29,885.11 | | | | | | | | | | -29,885.11 | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. | | | 16,515,572.68 | | | | | | | | | | -2,658,172.27 | | | | | | | | | | | | | | | | | | | | 13,857,400.41 | | | | | |
1233 International Supply Chain Management
Co., Ltd. | | | 194,895,104.58 | | | | | | | | | | -6,037,848.58 | | | | | | | | | | | | | | | | | | | | 188,857,256.00 | | | | | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | | 13,033,951.27 | | | | | | | | | | 182,564.15 | | | | | | | | | | | | -2,380,000.00 | | | | | | | | 10,836,515.42 | | | | | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | | 12,316,345.35 | | | | | | | | | | -3,564,272.36 | | | | | | | | | | | | | | | | -3,218,259.25 | | | | 5,533,813.74 | | | | 3,218,259.25 | |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | | 4,106,615.61 | | | | | | | | | | -185.73 | | | | | | | | | | | | | | | | -4,062,445.92 | | | | 43,983.96 | | | | 4,062,445.92 | |
| Fujian Enhui Technology Co., Ltd. | | | 3,249,033.66 | | | | | | | | | | -863,043.19 | | | | | | | | | | | | | | | | -1,784,677.08 | | | | 601,313.39 | | | | 1,784,677.08 | |
| Jiangsu Shenguo Technology Co., Ltd. | | | 2,643,774.87 | | | | | | -2,541,986.74 | | | | -101,788.13 | | | | | | | | | | | | | | | | | | | | | | | | | |
Shanghai Xuanhui Business Service Technology
Co., Ltd. | | | 1,998,517.50 | | | | | | | | | | -1,998,517.50 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fujian Caimeimei Supply Chain Management
Co., Ltd. | | | 738,472.16 | | | | | | | | | | -738,472.16 | | | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Increase/decrease in the current period | | | | | | | |
| Investee | | Opening
balance | | | Increased
investment | | | Decreased
investment | | | Investment
profit and loss
recognized with
the equity
method | | | Other
comprehensive
income
adjustments | | | Other equity
changes | | | Distribution of
cash dividends
or profits | | | Provision of
impairment
losses | | | Closing
balance | | | Closing balance
of provision for
impairment | |
| Quanzhou Lixia Business Management Co., Ltd. | | | 123,449.32 | | | | | | | | -12,434.56 | | | | -111,014.76 | | | | | | | | | | | | | | | | | | | | | | | | | |
Beijing Yonghui Yuanxin Health Technology
Co., Ltd. (Note 4) | | | | | | | 9,800,000.00 | | | | | | | | -664,537.40 | | | | | | | | | | | | | | | | | | | | 9,135,462.60 | | | | | |
| Subtotal | | | 5,206,012,273.14 | | | | 9,800,000.00 | | | | -292,575,703.82 | | | | 101,209,411.02 | | | | 1,646,972.75 | | | | -26,021,019.30 | | | | -57,672,406.30 | | | | -325,569,066.62 | | | | 4,616,830,460.87 | | | | 724,436,672.95 | |
| Total | | | 5,405,465,544.07 | | | | 9,800,000.00 | | | | -292,575,703.82 | | | | -49,185,860.49 | | | | 1,646,972.75 | | | | 81,643,927.53 | | | | -57,672,406.30 | | | | -325,569,066.62 | | | | 4,773,553,407.12 | | | | 724,436,672.95 | |
Other disclosures
| Note 1: | The Group’s Cooperative Enterprises Yonghui Fresh Food Development Co., Ltd. (“Yonghui Fresh Food”) completed Series A financing in 2020. The Group fulfilled its capital contribution obligations to the Yonghui Fresh Food in 2020. In 2021, other third-party shareholders of Yonghui Fresh Food fulfilled their capital contribution obligations, resulting in an increase of RMB107,664,946.83 in the Group’s net assets share of Yonghui Fresh Food. |
| | |
| Note 2: | The Group’s affiliated business Zhongbai Group had changes in capital reserve in 2021, resulting in a decrease of RMB26,021,019.30 in the Group’s net assets share of Zhongbai Group. |
| | |
| Note 3: | The Group reduced all equity interests in Zhanjiang Guolian Aquatic Products Development Co., Ltd. through the bulk trading platform of Shenzhen Stock Exchange in 2021. |
| | |
| Note 4: | The Group jointly established Beijing Yonghui Yuanxin Health Technology Co., Ltd. with Beijing Yuanxin Technology Group Co., Ltd., with a registered capital of RMB20,000,000.00. The Group’s subscribed capital contribution amount was RMB9,800,000.00, accounting for 49.00% of the registered capital. As of December 31, 2021, the Group has fulfilled its capital contribution obligations to Beijing Yonghui Yuanxin Health Technology Co., Ltd. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 20. | Other equity instrument investments |
| (1). | Other equity instrument investments |
| ¨ | Applicable | √ | Not applicable |
| (2). | Non-trading equity instrument investments |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
21. Other non-current financial assets
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Equity instrument investment | | | | | | | | |
| Financial assets measured at fair value with changes included in current profits and losses | | | | | | | | |
| Karman Topco L.P. (Note I) | | | | | | | 1,148,540,187.18 | |
| Dalian Wanda Commercial Management Group Co., Ltd. | | | 4,100,000,000.00 | | | | 3,708,000,000.00 | |
| Yihai Kerry Arawana Holdings Co., Ltd. (Note 1) | | | | | | | 750,278,378.94 | |
| Ningbo Meishan Bonded Port Zone Kangyu Investment Partnership Enterprise (Limited Partnership) | | | | | | | 11,341,004.18 | |
| Total | | | 4,100,000,000.00 | | | | 5,618,159,570.30 | |
Other notes:
| √ | Applicable | ¨ | Not applicable |
Note 1: These financial assets were released from restricted sale during the current year and reclassified to trading financial assets.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Measurement model for investment properties
| (1). | Investment properties measured with cost measurement model |
Unit: Yuan Currency: RMB
| Items | | Houses and
buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 397,840,556.69 | | | | 397,840,556.69 | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 397,840,556.69 | | | | 397,840,556.69 | |
| II. Accumulated depreciation and amortization | | | | | | | | |
| 1. Opening balance | | | 65,092,168.77 | | | | 65,092,168.77 | |
| 2. Increase in current period | | | 10,807,004.14 | | | | 10,807,004.14 | |
| (1) Depreciation or amortization | | | 10,807,004.14 | | | | 10,807,004.14 | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 75,899,172.91 | | | | 75,899,172.91 | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 321,941,383.78 | | | | 321,941,383.78 | |
| 2. Opening book value | | | 332,748,387.92 | | | | 332,748,387.92 | |
| (2). | Investment properties with unsettled property certificate |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Fixed assets | | | 4,646,074,375.37 | | | | 5,310,424,471.89 | |
| Total | | | 4,646,074,375.37 | | | | 5,310,424,471.89 | |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Fixed assets
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Houses
and
buildings | | | Machinery
and
equipment | | | Transportation
equipment | | | Electronic
equipment | | | Tools
and
instruments | | | Total | |
| I. Original Book Value: | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 2,666,621,481.79 | | | | 2,718,721,642.87 | | | | 307,374,042.63 | | | | 1,023,079,953.39 | | | | 2,467,651,442.85 | | | | 9,183,448,563.53 | |
| 2. Increase in current period | | | 102,595,521.27 | | | | 173,368,139.02 | | | | 5,727,653.69 | | | | 113,911,525.94 | | | | 106,917,534.79 | | | | 502,520,374.71 | |
| (1) Acquisition | | | 93,503,890.56 | | | | 32,939,685.71 | | | | 5,457,843.03 | | | | 63,735,756.72 | | | | 29,452,098.00 | | | | 225,089,274.02 | |
| (2) Transfer from construction in progress | | | 9,091,630.71 | | | | 140,428,453.31 | | | | 269,810.66 | | | | 50,175,769.22 | | | | 77,465,436.79 | | | | 277,431,100.69 | |
| 3. Decrease in current period | | | | | | | 190,002,272.63 | | | | 6,345,822.51 | | | | 113,965,920.05 | | | | 330,926,681.41 | | | | 641,240,696.60 | |
| (1) Disposal or scrapping | | | | | | | 190,002,272.63 | | | | 6,345,822.51 | | | | 113,965,920.05 | | | | 330,926,681.41 | | | | 641,240,696.60 | |
| (2) Other decrease | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Closing balance | | | 2,769,217,003.06 | | | | 2,702,087,509.26 | | | | 306,755,873.81 | | | | 1,023,025,559.28 | | | | 2,243,642,296.23 | | | | 9,044,728,241.64 | |
| II. Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 449,313,031.53 | | | | 1,403,166,132.25 | | | | 60,758,555.21 | | | | 623,721,924.20 | | | | 1,336,064,448.45 | | | | 3,873,024,091.64 | |
| 2. Increase in current period | | | 77,257,234.06 | | | | 358,795,761.89 | | | | 17,695,151.53 | | | | 178,559,414.02 | | | | 318,673,723.10 | | | | 950,981,284.60 | |
| (1) Provision | | | 77,257,234.06 | | | | 358,795,761.89 | | | | 17,695,151.53 | | | | 178,559,414.02 | | | | 318,673,723.10 | | | | 950,981,284.60 | |
| 3. Decrease in current period | | | | | | | 128,547,590.42 | | | | 5,411,310.49 | | | | 85,634,933.58 | | | | 243,181,850.55 | | | | 462,775,685.04 | |
| (1) Disposal or scrapping | | | | | | | 128,547,590.42 | | | | 5,411,310.49 | | | | 85,634,933.58 | | | | 243,181,850.55 | | | | 462,775,685.04 | |
| (2) Other decrease | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Closing balance | | | 526,570,265.59 | | | | 1,633,414,303.72 | | | | 73,042,396.25 | | | | 716,646,404.64 | | | | 1,411,556,321.00 | | | | 4,361,229,691.20 | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Increase in current period | | | | | | | 18,498,545.45 | | | | 112,407.73 | | | | 5,564,730.20 | | | | 13,248,491.69 | | | | 37,424,175.07 | |
| (1) Provision | | | | | | | 18,498,545.45 | | | | 112,407.73 | | | | 5,564,730.20 | | | | 13,248,491.69 | | | | 37,424,175.07 | |
| 3. Decrease in current period | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) Disposal or scrapping | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Closing balance | | | | | | | 18,498,545.45 | | | | 112,407.73 | | | | 5,564,730.20 | | | | 13,248,491.69 | | | | 37,424,175.07 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Closing book value | | | 2,242,646,737.47 | | | | 1,050,174,660.09 | | | | 233,601,069.83 | | | | 300,814,424.44 | | | | 818,837,483.54 | | | | 4,646,074,375.37 | |
| 2. Opening book value | | | 2,217,308,450.26 | | | | 1,315,555,510.62 | | | | 246,615,487.42 | | | | 399,358,029.19 | | | | 1,131,586,994.40 | | | | 5,310,424,471.89 | |
(2). Temporary idle fixed assets
| ¨ | Applicable | √ | Not applicable |
(3). Fixed assets acquired from financing lease
| ¨ | Applicable | √ | Not applicable |
(4). Fixed assets acquired from operating leasing
| ¨ | Applicable | √ | Not applicable |
(5). Fixed assets without certificate of title
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| Items | | Carrying
value | | | Reasons for failure
to get the certificates
of title |
| Shijiazhuang Minxin Square Housing Property | | | 163,236,276.84 | | | Processing |
| Factories and office buildings of Shaanxi Yonghui Superstores Co., Ltd. | | | 37,121,596.09 | | | Processing |
| Rail interface of the underground passage at Nanqiaosi Station, Chongqing Xuanhui Real Estate | | | 27,452,687.48 | | | The Group only has the right to use without ownership. |
| Office building of Fuping Yonghui Modern Agriculture Development Co., Ltd. | | | 9,251,535.47 | | | Processing |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Disposal of fixed asset
| | ¨ | Applicable | √ | Not applicable |
| 24. | Construction in progress |
Itemized list
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Construction in progress | | | 410,335,149.87 | | | | 194,264,567.11 | |
| Total | | | 410,335,149.87 | | | | 194,264,567.11 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Construction in progress
| (1). | Construction in progress |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Closing balance
Impairment | | Carrying | | | | | Opening balance
Impairment | | Carrying | |
| Items | | Book balance | | | provision | | value | | Book balance | | | provision | | value | |
| Store decoration | | | 126,818,264.09 | | | | | | 126,818,264.09 | | | 113,222,545.77 | | | | | | 113,222,545.77 | |
| Guizhou Logistics Park Industrial Park | | | 171,652,726.33 | | | | | | 171,652,726.33 | | | 35,895,588.54 | | | | | | 35,895,588.54 | |
| Information technology upgrade project | | | 5,627,818.78 | | | | | | 5,627,818.78 | | | 34,133,835.46 | | | | | | 34,133,835.46 | |
| Yonghui Northeast Warehousing Center Construction Project | | | 87,151,397.84 | | | | | | 87,151,397.84 | | | 11,012,597.34 | | | | | | 11,012,597.34 | |
| Fujian Yonghui Warehousing Center for New Business Format | | | 19,084,942.83 | | | | | | 19,084,942.83 | | | | | | | | | | |
| Total | | | 410,335,149.87 | | | | | | 410,335,149.87 | | | 194,264,567.11 | | | | | | 194,264,567.11 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 1. | Current changes in major projects under construction |
| (2). | Current changes in major projects under construction |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Project name | | Budget
amount | | Opening
balance | | Increase in
current
period | | Amount of
transferred
fixed assets of
current
period | | Other
decreased
amount of
current
period | | Closing
balance | | Proportion of
accumulative
total project
investment in
the budget | | Project
progress | | Accumulated
amount of
interest
capitalization | | Including:
amount of
capitalization
of current
interest | | Interest
capitalization
rate in the
current
period | | Source of
funds |
| | | | | | | | | | | | | | | (%) | | | | | | | | (%) | | |
Yonghui Northeast Warehousing Center
Construction Project | | 400,000,000.00 | | 11,012,597.34 | | 76,138,800.50 | | | | | | 87,151,397.84 | | 22 | | 65 | | | | | | | | Self-funded |
| Guizhou Logistics Park Industrial Park | | 330,670,772.60 | | 35,895,588.54 | | 135,757,137.79 | | | | | | 171,652,726.33 | | 52 | | 80 | | | | | | | | Self-funded |
Nantong Logistics Park Warehousing Center Building No. 8 | | 80,000,000.00 | | | | 16,330,275.23 | | | | | | 16,330,275.23 | | 20 | | 38 | | | | | | | | Self-funded |
| Total | | 810,670,772.60 | | 46,908,185.88 | | 228,226,213.52 | | | | | | 275,134,399.40 | | / | | / | | | | | | / | | / |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Provision of impairment losses of construction in progress in current period |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Project materials
| (4). | Status of project materials |
| | ¨ | Applicable | √ | Not applicable |
| 25. | Productive biological assets |
| (1). | Productive biological assets measured at cost |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Planting industry
Immature
persimmon trees | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | 11,627,554.75 | | | | 11,627,554.75 | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 11,627,554.75 | | | | 11,627,554.75 | |
| II. Accumulated depreciation | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 11,627,554.75 | | | | 11,627,554.75 | |
| 2. Opening book value | | | | | | | | |
| (2). | Productive biological assets measured at fair value |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Houses and
buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 32,452,088,775.09 | | | | 32,452,088,775.09 | |
| 2. Increase in current period | | | 2,663,057,324.15 | | | | 2,663,057,324.15 | |
| (1) Additions | | | 2,663,057,324.15 | | | | 2,663,057,324.15 | |
| 3. Decrease in current period | | | 1,273,915,807.94 | | | | 1,273,915,807.94 | |
| (1) Disposal | | | 1,273,915,807.94 | | | | 1,273,915,807.94 | |
| 4. Closing balance | | | 33,841,230,291.30 | | | | 33,841,230,291.30 | |
| II. Accumulated depreciation | | | | | | | | |
| 1. Opening balance | | | 9,714,225,040.84 | | | | 9,714,225,040.84 | |
| 2. Increase in current period | | | 2,227,949,432.01 | | | | 2,227,949,432.01 | |
| (1) Provision | | | 2,227,949,432.01 | | | | 2,227,949,432.01 | |
| 3. Decrease in current period | | | 400,594,984.46 | | | | 400,594,984.46 | |
| (1) Disposal | | | 400,594,984.46 | | | | 400,594,984.46 | |
| 4. Closing balance | | | 11,541,579,488.39 | | | | 11,541,579,488.39 | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | 120,318,002.72 | | | | 120,318,002.72 | |
| 2. Increase in current period | | | 212,171,440.65 | | | | 212,171,440.65 | |
| (1) Provision | | | 212,171,440.65 | | | | 212,171,440.65 | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 332,489,443.37 | | | | 332,489,443.37 | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 21,967,161,359.54 | | | | 21,967,161,359.54 | |
| 2. Opening book value | | | 22,617,545,731.53 | | | | 22,617,545,731.53 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Land use right | | Patent rights | | Non-patented
technologies | | Software | | Sales network | | Total | |
| I. Original book value | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 646,453,759.17 | | | 159,739.89 | | | 31,193,166.14 | | | 1,287,028,343.82 | | | 124,688,679.24 | | | 2,089,523,688.26 | |
| 2. Increase in current period | | | 50,309.00 | | | | | | | | | 200,375,174.51 | | | | | | 200,425,483.51 | |
| (1) Acquisition | | | 50,309.00 | | | | | | | | | 61,814,552.34 | | | | | | 61,864,861.34 | |
| (2) Internal R&D | | | | | | | | | | | | | | | | | | | |
| (3) Transfer from work in progress | | | | | | | | | | | | 138,560,622.17 | | | | | | 138,560,622.17 | |
| 3. Decrease in current period | | | | | | | | | | | | 98,860.30 | | | | | | 98,860.30 | |
| (1) Disposal | | | | | | | | | | | | 98,860.30 | | | | | | 98,860.30 | |
| 4. Closing balance | | | 646,504,068.17 | | | 159,739.89 | | | 31,193,166.14 | | | 1,487,304,658.03 | | | 124,688,679.24 | | | 2,289,850,311.47 | |
| II. Accumulated amortization | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 131,660,266.29 | | | 29,282.90 | | | 728,265.12 | | | 299,671,402.78 | | | 20,702,358.49 | | | 452,791,575.58 | |
| 2. Increase in current period | | | 14,072,444.69 | | | 13,713.76 | | | 6,109,963.70 | | | 236,441,877.91 | | | 9,959,979.55 | | | 266,597,979.61 | |
| (1) Provision | | | 14,072,444.69 | | | 13,713.76 | | | 6,109,963.70 | | | 236,441,877.91 | | | 9,959,979.55 | | | 266,597,979.61 | |
| 3. Decrease in current period | | | | | | | | | | | | 97,885.70 | | | | | | 97,885.70 | |
| (1) Disposal | | | | | | | | | | | | 97,885.70 | | | | | | 97,885.70 | |
| 4. Closing balance | | | 145,732,710.98 | | | 42,996.66 | | | 6,838,228.82 | | | 536,015,394.99 | | | 30,662,338.04 | | | 719,291,669.49 | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | | | | | | | | | | | | | 19,750,000.00 | | | 19,750,000.00 | |
| 2. Increase in current period | | | | | | | | | | | | | | | 25,373,333.33 | | | 25,373,333.33 | |
| (1) Provision | | | | | | | | | | | | | | | 25,373,333.33 | | | 25,373,333.33 | |
| 3. Decrease in current period | | | | | | | | | | | | | | | | | | | |
| (1) Disposal | | | | | | | | | | | | | | | | | | | |
| 4. Closing balance | | | | | | | | | | | | | | | 45,123,333.33 | | | 45,123,333.33 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | |
| 1. Closing book value | | | 500,771,357.19 | | | 116,743.23 | | | 24,354,937.32 | | | 951,289,263.04 | | | 48,903,007.87 | | | 1,525,435,308.65 | |
| 2. Opening book value | | | 514,793,492.88 | | | 130,456.99 | | | 30,464,901.02 | | | 987,356,941.04 | | | 84,236,320.75 | | | 1,616,982,112.68 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Land use right with incomplete certificates of title |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 29. | Development expenditures |
¨ Applicable √ Not applicable
| (1). | Original book value of goodwill |
| | √ | Applicable | ¨ | Not applicable |
Name of invested entity or matter
forming goodwill | | | Opening
balance | | | Increase in
the current
period
Formed by
business
merger | | | | Decrease in
the current
period
Provision of
impairment
losses | | | Closing
balance | |
| Shanghai Dongzhan International Trade Co., Ltd. | | | 3,661,378.25 | | | | | | | | | | 3,661,378.25 | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 305,456,779.92 | | | | | | | | | | 305,456,779.92 | |
| Total | | | 309,118,158.17 | | | | | | | | | | 309,118,158.17 | |
| (2). | Provision for goodwill impairment |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
Name of invested entity or matter
forming goodwill | | Opening
balance | | | Increase in
the current
period
Provision | | | Decrease in
the current
period
Disposal | | | Closing
balance | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 187,786,913.38 | | | | 117,669,866.54 | | | | | | | | 305,456,779.92 | |
| Total | | | 187,786,913.38 | | | | 117,669,866.54 | | | | | | | | 305,456,779.92 | |
| (3). | Information about the asset group or asset group portfolio of the goodwill |
| | √ | Applicable | ¨ | Not applicable |
Goodwill acquired through business combination has been allocated to the assets group of Guangdong PARK&YH Superstores Co., Ltd. for impairment testing. Based on the results of the impairment test, the Group recognized goodwill impairment loss for the year 2021 as approved by the Group's board of directors.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Explanation of the goodwill impairment testing process, key parameters (such as forecast period growth rate, stable period growth rate, profit margin, discount rate, and forecast period, etc., if applicable), and methods for recognizing goodwill impairment loss. |
| | √ | Applicable | ¨ | Not applicable |
The asset group of Guangdong PARK&YH Superstores Co., Ltd. is mainly composed of long-term assets. As of December 31, 2021, the carrying value of this asset group has been RMB285,129,210.26 (excluding goodwill) (December 31, 2020: RMB358,276,749.21), and the allocated carrying value of goodwill for this asset group has been RMB305,456,779.92 (December 31, 2020: RMB305,456,779.92). The recoverable amount is determined based on the present value of the estimated future cash flows of the asset group, using cash flow forecasts based on a five-year financial budget approved by the Management. For the year 2021, the discount rate used for the cash flow forecasts was 14.6% (2020: 14.6%), and the growth rate assumed for cash flows beyond five years was 0% (2020: 0%).
The calculation of the present value of estimated future cash flows for the asset group as of December 31, 2021 and December 31, 2020, is based on certain assumptions. The following describes the key assumptions made by the Management in determining the cash flow forecasts for the impairment testing of goodwill:
Budgeted gross profit — The basis is adjusted from the average gross profit rate achieved in the previous year based on expected efficiency improvements and market development.
Discount rate — The discount rate used reflects the pre-tax discount rate that reflects the specific risks of the relevant asset group.
The amounts attributed to the key assumptions for the above asset group or portfolio of asset group are consistent with the Group's historical experience and external information.
| (5). | Impact of impairment test of business reputation |
| | √ | Applicable | ¨ | Not applicable |
Based on the results of the impairment test, RMB117,669,866.54 of impairment loss was recognized for goodwill at the end of the year.
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| 31. | Long-term unamortized expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in
current period | | | Amortization
amount in
current period | | | Other decreases | | | Provision of
impairment
losses | | | Closing
balance | |
| Renovation costs of rented store | | 3,640,749,223.76 | | | 717,300,892.12 | | | 688,072,377.10 | | | 172,452,178.91 | | | 59,228,474.07 | | | 3,438,297,085.80 | |
| Decoration expenses for Nantong Logistics Park project | | 16,096,840.71 | | | 19,570,942.98 | | | 3,971,722.17 | | | | | | | | | 31,696,061.52 | |
| Decoration expenses for East China Logistics Park | | 13,477,141.25 | | | 984,353.20 | | | 1,965,606.35 | | | | | | | | | 12,495,888.10 | |
| House rent | | | | | | | | | | | | | | | | | | |
| Leasehold tenure | | | | | | | | | | | | | | | | | | |
| Total | | 3,670,323,205.72 | | | 737,856,188.30 | | | 694,009,705.62 | | | 172,452,178.91 | | | 59,228,474.07 | | | 3,482,489,035.42 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
The decrease in long-term prepaid expenses for the year is due to the closure of certain stores.
As of the end of 2020, the long-term prepaid expenses for rental properties mainly consist of the construction payments for the store building of Fuzhou Wusi North Store, amounting to RMB30,371,207.71, advanced by the Company on behalf of the owner, Fuzhou Rongfu Group Co., Ltd., and is amortized evenly over a 20-year lease term starting from February 2007. On January 1, 2021, it was remeasured and recognized as right-of-use assets in accordance with the new lease standards. See Note V, 44 for more details.
The leasehold represent the cost of subleases paid for acquired stores and are amortized evenly over the period of benefit. On January 1, 2021, it was remeasured and recognized as right-of-use assets in accordance with the new lease standards. See Note V, 44 for more details.
| 32. | Deferred tax assets/Deferred tax liabilities |
| (1). | Deferred income tax assets not offset |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | Opening balance | |
| | | Deductible | | | | | | Deductible | | | | |
| | | temporary | | | Deferred tax | | | temporary | | | Deferred tax | |
| Items | | differences | | | asset | | | differences | | | asset | |
| Lease liabilities | | | 17,098,796,792.01 | | | | 3,560,224,981.50 | | | | | | | | | |
| Provision for impairment of assets | | | 986,612,162.81 | | | | 185,677,515.48 | | | | 662,656,951.85 | | | | 144,377,775.71 | |
| Unrealized profits in internal transaction | | | 40,622,102.73 | | | | 10,155,525.69 | | | | 45,721,581.00 | | | | 11,430,395.25 | |
| Deductible loss | | | 2,371,321,390.45 | | | | 545,288,112.14 | | | | 1,025,713,561.11 | | | | 231,865,420.89 | |
| Equity incentives | | | | | | | | | | | 119,089,750.65 | | | | 29,772,437.67 | |
| Provision for impairment of credit | | | 191,562,369.81 | | | | 38,988,455.63 | | | | 170,874,902.89 | | | | 37,920,894.37 | |
| Estimated liabilities | | | 2,740,384.12 | | | | 505,635.62 | | | | 38,051,539.30 | | | | 8,742,014.82 | |
| Reward points program | | | 29,168,757.37 | | | | 5,847,123.91 | | | | 40,594,721.46 | | | | 8,497,516.51 | |
| Total | | | 20,720,823,959.30 | | | | 4,346,687,349.97 | | | | 2,102,703,008.26 | | | | 472,606,455.22 | |
| (2). | Deferred tax liabilities not offset |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | Opening balance | |
| | | Temporary
taxable
| | Deferred tax
| | Temporary
taxable
| | Deferred tax
| |
| Items | | difference | | liabilities | | difference | | liabilities | |
| Profits and losses from changes in fair value | | 1,074,164,007.75 | | 253,147,239.81 | | 945,180,671.35 | | 220,901,405.71 | |
| One-time deduction of fixed assets | | 649,957,740.00 | | 126,104,146.83 | | 882,231,189.69 | | 172,898,776.19 | |
| Receivable from finance lease payments | | 62,371,748.65 | | 14,661,750.15 | | | | | |
| Right-of-use assets | | 14,043,209,983.69 | | 2,918,453,404.70 | | | | | |
| Estimated value added of the assets in business combination not under same control | | 684,761,996.23 | | 171,190,499.06 | | 892,295,225.08 | | 223,073,806.27 | |
| Total | | 16,514,465,476.32 | | 3,483,557,040.55 | | 2,719,707,086.12 | | 616,873,988.17 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Deferred income tax assets or deferred income tax liabilities listed in net amount after offset |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount not
Offset in the
Period of
Deferred
Income Tax
Assets and
Liabilities | | | Closing Balance
of Offset
Deferred
Income Tax
Assets or
Liabilities | | | Amount not
Offset in the
Period of
Deferred
Income Tax
Assets and
Liabilities | | | Closing Balance
of Offset
Deferred
Income Tax
Assets or
Liabilities | |
| Deferred tax asset | | | 3,310,662,181.26 | | | | 1,036,025,168.71 | | | | | | | | 472,606,455.22 | |
| Deferred tax liabilities | | | 3,310,662,181.26 | | | | 172,894,859.29 | | | | | | | | 616,873,988.17 | |
| (4). | Details of unrecognized deferred income tax assets |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Deductible temporary differences | | | 1,919,864,334.95 | | | | 203,769,374.99 | |
| Deductible loss | | | 5,910,552,113.05 | | | | 3,866,702,524.94 | |
| Total | | | 7,830,416,448.00 | | | | 4,070,471,899.93 | |
| (5). | Deductible losses of unconfirmed deferred income tax assets will be expired in the following listed year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Year | | Closing Balance | | | Opening Balance | | | Comments | |
| Year 2021 | | | | | | | 123,599,636.97 | | | | | |
| Year 2022 | | | 150,240,764.94 | | | | 210,560,917.45 | | | | | |
| Year 2023 | | | 641,389,976.35 | | | | 707,103,789.14 | | | | | |
| Year 2024 | | | 1,426,277,987.99 | | | | 1,487,360,188.66 | | | | | |
| Year 2025 | | | 1,274,737,823.74 | | | | 1,338,077,992.72 | | | | | |
| Year 2026 | | | 2,417,905,560.03 | | | | | | | | | |
| Total | | | 5,910,552,113.05 | | | | 3,866,702,524.94 | | | | / | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 33. | Other non-current assets |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Classification of short-term loans |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | 10,947,557,472.21 | | | | 13,889,997,357.11 | |
| Total | | | 10,947,557,472.21 | | | | 13,889,997,357.11 | |
Descriptions for categories of short-term loans:
The Group had had no overdue short-term borrowings as of December 31, 2021 and December 31, 2020.
| (2). | Overdue unliquidated short-term loans |
| | ¨ | Applicable | √ | Not applicable |
The significant overdue and unpaid short-term borrowings are as follows:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| 35. | Trading financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
| 36. | Derivative financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
| (1). | List of notes payable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Category | | Closing balance | | | Opening balance | |
| Commercial acceptance bill | | | 33,000,000.00 | | | | | |
| Total | | | 33,000,000.00 | | | | | |
There is no unpaid mature notes payable at the end of this period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | List of accounts payable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Payment for goods | | | 12,518,578,825.59 | | | | 12,513,674,031.70 | |
| Total | | | 12,518,578,825.59 | | | | 12,513,674,031.70 | |
| 1. | Important accounts payable with more than one-year aging |
| (2). | Important accounts payable with more than one-year aging |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (1). | Presentation of advance receipts |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Prepaid rent from lessees | | | 199,815,968.65 | | | | 164,020,698.54 | |
| Total | | | 199,815,968.65 | | | | 164,020,698.54 | |
| (2). | Important accounts collected in advance with more than one-year aging |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Reason for outstanding
payment or carry-over |
| Prepaid rent from lessees | | | 62,144,625.72 | | | Services not yet provided |
| Total | | | 62,144,625.72 | | | / |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Advance payments from customers | | | 4,168,427,116.82 | | | | 3,336,292,122.11 | |
| Reward points program | | | 42,813,907.80 | | | | 47,747,634.87 | |
| Advance payment of supplier service fees | | | 91,833,351.24 | | | | 88,037,037.21 | |
| Total | | | 4,303,074,375.86 | | | | 3,472,076,794.19 | |
The balance of the contract liability at the beginning of 2021 was RMB3,472,076,794.19, of which RMB2,032,509,276.68 was transferred to income in 2021.
| (2). | Amounts and reasons for significant changes in book value during the reporting period |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 41. | Employee compensation payable |
| (1). | List of payrolls payable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Opening
| | | Increase in the
| | | Decrease in the
| | | Closing
| |
| Items | | balance | | | current period | | | current period | | | balance | |
| I. Short-term payrolls | | | 670,232,792.09 | | | | 7,957,025,770.48 | | | | 8,003,197,536.68 | | | | 624,061,025.89 | |
| II. Post-employment welfare – defined contribution plan | | | 48,820,158.82 | | | | 703,391,385.38 | | | | 713,152,551.36 | | | | 39,058,992.84 | |
| III. Dismiss welfare | | | 2,528,727.24 | | | | 20,032,140.79 | | | | 20,395,135.58 | | | | 2,165,732.45 | |
| Total | | | 721,581,678.15 | | | | 8,680,449,296.65 | | | | 8,736,745,223.62 | | | | 665,285,751.18 | |
| (2). | List of short-term payrolls |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing
balance | |
| I. Salaries, bonuses, allowances and subsidies | | | 622,550,269.61 | | | | 7,042,331,267.19 | | | | 7,095,461,257.42 | | | | 569,420,279.38 | |
| II. Employee services and benefits | | | 5,755,535.94 | | | | 275,517,269.84 | | | | 279,864,680.78 | | | | 1,408,125.00 | |
| III. Social Insurance | | | 21,884,505.27 | | | | 446,786,690.00 | | | | 443,808,495.88 | | | | 24,862,699.39 | |
| Include: medical insurance premiums | | | 17,497,229.45 | | | | 413,271,887.02 | | | | 411,161,115.29 | | | | 19,608,001.18 | |
| Work injury insurance premium | | | 2,288,323.30 | | | | 18,566,052.56 | | | | 18,926,779.95 | | | | 1,927,595.91 | |
| Maternity insurance premiums | | | 2,098,952.52 | | | | 14,948,750.42 | | | | 13,720,600.64 | | | | 3,327,102.30 | |
| IV. Housing provident fund | | | 4,498,796.58 | | | | 154,042,630.24 | | | | 154,201,045.65 | | | | 4,340,381.17 | |
| V. Labor union expenditure and employee education expenses | | | 15,543,684.69 | | | | 38,347,913.21 | | | | 29,862,056.95 | | | | 24,029,540.95 | |
| Total | | | 670,232,792.09 | | | | 7,957,025,770.48 | | | | 8,003,197,536.68 | | | | 624,061,025.89 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | List of defined contribution plans |
| | ¨ | Applicable | √ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing
balance | |
| 1. Basic endowment insurance | | | 46,232,294.11 | | | | 679,903,730.77 | | | | 689,335,592.55 | | | | 36,800,432.33 | |
| 2. Unemployment insurance premium | | | 2,587,864.71 | | | | 23,487,654.61 | | | | 23,816,958.81 | | | | 2,258,560.51 | |
| Total | | | 48,820,158.82 | | | | 703,391,385.38 | | | | 713,152,551.36 | | | | 39,058,992.84 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Corporate Income Tax | | | 40,140,539.85 | | | | 140,019,793.93 | |
| VAT | | | 96,701,387.72 | | | | 79,878,329.87 | |
| Personal income tax | | | 17,353,270.53 | | | | 18,054,633.20 | |
| Maintenance fees for river and sea embankments | | | 20,081,784.29 | | | | 11,364,361.93 | |
| Urban maintenance and construction tax | | | 11,040,529.90 | | | | 6,070,786.27 | |
| Housing property tax | | | 3,580,870.82 | | | | 4,844,388.77 | |
| Education Surcharge | | | 11,227,948.43 | | | | 4,535,308.82 | |
| Others | | | 2,723,685.92 | | | | 1,684,607.75 | |
| Total | | | 202,850,017.46 | | | | 266,452,210.54 | |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Dividends payable | | | 12,000,000.00 | | | | 11,528,208.00 | |
| Other payables | | | 2,749,266,270.83 | | | | 3,573,348,060.65 | |
| Total | | | 2,761,266,270.83 | | | | 3,584,876,268.65 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Interest payable
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Dividends payable
| | √ | Applicable | ¨ | Not applicable |
| Items | | Closing balance | | | Opening balance | |
| Common stock dividend | | | | | | | 11,528,208.00 | |
| Dividends to minority shareholders | | | 12,000,000.00 | | | | | |
| Total | | | 12,000,000.00 | | | | 11,528,208.00 | |
Other payables
| (1). | Other payables listed by nature of payment |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Accrued expenses for store rent, electricity, freight, and other expenses | | | 1,155,109,363.42 | | | | 1,083,785,446.57 | |
| Equipment and engineering payments | | | 588,253,490.87 | | | | 929,970,440.72 | |
| Deposits and guarantees | | | 471,705,601.32 | | | | 505,145,053.46 | |
| Investment section | | | 246,944,000.00 | | | | 496,944,000.00 | |
| Restricted stock subscription payments by employees | | | | | | | 215,833,173.64 | |
| Others | | | 287,253,815.22 | | | | 341,669,946.26 | |
| Total | | | 2,749,266,270.83 | | | | 3,573,348,060.65 | |
| (2). | Other significant payables with more than one-year aging |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Reason for outstanding
payment or carry-over |
| Cao Shiru | | | 273,379,959.05 | | | Escrowed equity transfer payments and interest |
| Cao Zengjun | | | 37,816,815.92 | | | Escrowed equity transfer payments and interest |
| PARKnSHOP (China) Investment Co., Ltd. | | | 44,634,787.59 | | | Fund lending/borrowing |
| Total | | | 355,831,562.56 | | | / |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 44. | Liabilities held for sale |
| | ¨ | Applicable | √ | Not applicable |
| 45. | Non-current liabilities due within one year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Long-term borrowings due within one year | | | 30,030,833.33 | | | | | |
| Lease liabilities due within 1 year | | | 2,039,820,377.09 | | | | 2,237,649,650.10 | |
| Total | | | 2,069,851,210.42 | | | | 2,237,649,650.10 | |
| 46. | Other current liabilities |
Other current liabilities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Amount of tax to be written off | | | 390,433,950.39 | | | | 321,886,940.98 | |
| Total | | | 390,433,950.39 | | | | 321,886,940.98 | |
The increases and reductions of short-term bonds payable:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1). | Classification of long-term loans |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | 1,021,069,722.22 | | | | |
| Total | | | 1,021,069,722.22 | | | | |
Other descriptions, including the interest rate range:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Increase and decrease of bonds payable (excluding the preference shares, perpetual capital securities and other financial instruments classified as financial liabilities) |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Explanation of conversion conditions and conversion time for convertible corporate bonds |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Description on other financial instruments classified as financial liabilities |
Basic information of Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Table of change in Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Descriptions of the other financial tools in financial liabilities:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Houses and buildings | | | 26,866,381,468.91 | | | | 26,904,328,571.13 | |
| Less: Lease liabilities due within one year | | | 2,039,820,377.09 | | | | 2,237,649,650.10 | |
| Total | | | 24,826,561,091.82 | | | | 24,666,678,921.03 | |
Itemized list
| ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Long-term accounts payable
| (1). | List of long-term payables according to nature of funds |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Special accounts payable
| (2). | Special payables categorized by nature of payment |
| | ¨ | Applicable | √ | Not applicable |
| 51. | Long-term payroll payable |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Closing
balance | | Cause | |
| Pending Litigation and Arbitration | | | 3,352,627.57 | | | | 3,628,259.35 | | Litigation involved | |
| Estimated liabilities from onerous contracts | | | | | | | | | | |
| Total | | | 3,352,627.57 | | | | 3,628,259.35 | | / | |
Other descriptions, including the descriptions of relevant important assumptions and estimations of important accrued liabilities:
The year-end balance of contingent liabilities arises from disputes related to house lease and payment of goods.
The year-end balance of estimated liabilities from loss stores arises from lease contracts with losses. On January 1, 2021, the amount mentioned was reclassified as right-of-use assets in accordance with the new lease standards. See Note V, 44 for more details.
Deferred income
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in the
current period | | | Decrease in
the current
period | | | Closing
balance | | | Cause |
| Governmental subsidy | | | 130,947,523.55 | | | | 1,765,400.00 | | | | 14,342,633.76 | | | | 118,370,289.79 | | | Received governmental subsidy related to assets |
| Total | | | 130,947,523.55 | | | | 1,765,400.00 | | | | 14,342,633.76 | | | | 118,370,289.79 | | | / |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Items involved in governmental subsidies:
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Newly increased | | Amount of
non-operating | | | Amount included | | | | | | | | | | |
| | | Opening | | | subsidy amount in | | income included | | | in other incomes | | | Other | | | Closing | | | Assets-related/ | |
| Liability item | | balance | | | current period | | in current period | | | in current period | | | changes | | | balance | | | Income-related | |
| Yonghui Logistics Phase I Project Industrial | | | 46,908,321.36 | | | | | | | | | | 1,421,464.32 | | | | | | | | 45,486,857.04 | | | | Asset-related | |
| Juppyri rungs Chongqing Yonghui Urban Life Plaza Project | | | 32,234,413.30 | | | | | | | | | | 1,121,196.96 | | | | | | | | 31,113,216.34 | | | | Asset-related | |
| Subsidy from Cuozhen Town People's Government | | | 15,722,201.61 | | | | | | | | | | 502,113.48 | | | | | | | | 15,220,088.13 | | | | Asset-related | |
| Yonghui Superstores Cold Chain Logistics Terminal Standardization Construction | | | 5,200,000.50 | | | | | | | | | | 2,599,999.92 | | | | | | | | 2,600,000.58 | | | | Asset-related | |
| Project for 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shapingba District Treasury — Supply Chain Project Subsidies | | | 2,333,333.28 | | | | | | | | | | 800,000.00 | | | | | | | | 1,533,333.28 | | | | Asset-related | |
| Fujian Yonghui Logistics Warehousing Center | | | 2,400,000.04 | | | | | | | | | | 399,999.96 | | | | | | | | 2,000,000.08 | | | | Asset-related | |
| Refund of Yonghui Headquarters Construction Supporting Fees | | | 2,693,520.26 | | | | | | | | | | 93,687.60 | | | | | | | | 2,599,832.66 | | | | Asset-related | |
| Pilot Project for Supply Chain System Construction | | | 1,989,666.70 | | | | | | | | | | 507,999.96 | | | | | | | | 1,481,666.74 | | | | Asset-related | |
| Energy Management Center Project | | | 920,336.04 | | | | | | | | | | 501,999.96 | | | | | | | | 418,336.08 | | | | Asset-related | |
| Subsidies for Supply Chain System Construction | | | 1,633,333.30 | | | | | | | | | | 400,000.00 | | | | | | | | 1,233,333.30 | | | | Asset-related | |
| Equipment Acquisition Subsidies | | | 696,000.00 | | | | | | | | | | 288,000.00 | | | | | | | | 408,000.00 | | | | Asset-related | |
| Special Fund Subsidy for Logistics Standardization Pilot Project of Guanshanhu Bureau of Commerce | | | 388,937.16 | | | | | | | | | | 388,937.16 | | | | | | | | | | | | Asset-related | |
| Provincial Cold Chain Logistics Special Fund for 2017 | | | 559,999.96 | | | | | | | | | | 80,000.04 | | | | | | | | 479,999.92 | | | | Asset-related | |
| Fund for the Construction of Important Product Traceability System | | | 449,675.70 | | | | | | | | | | 154,174.44 | | | | | | | | 295,501.26 | | | | Asset-related | |
| Subsidy for Lugu Store Poverty Alleviation Project | | | 73,340.97 | | | | | | | | | | 28,389.96 | | | | | | | | 44,951.01 | | | | Asset-related | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Opening | | | Newly increased
subsidy amount in | | | Amount of
non-operating
income included | | | Amount included
in other incomes | | | Other | | | Closing | | | Assets-related/ | |
| Liability item | | balance | | | current period | | | in current period | | | in current period | | | changes | | | balance | | | Income-related | |
| Supply Chain System Construction Project of Kunshan Bureau of Commerce | | | 3,500,000.00 | | | | | | | | | | | | 1,500,000.00 | | | | | | | | 2,000,000.00 | | | | Asset-related | |
| Subsidy for Supply Chain System Construction Project of Nanjing Jiangbei New District Management Committee Finance Bureau | | | 1,927,999.98 | | | | | | | | | | | | 482,000.04 | | | | | | | | 1,445,999.94 | | | | Asset-related | |
| Subsidy for Supply Chain System Construction Project of Fuzhou City | | | 6,933,333.36 | | | | | | | | | | | | 1,599,999.96 | | | | | | | | 5,333,333.40 | | | | Asset-related | |
| Subsidy for Supply Chain System Construction Project of Nantong Town Financial Office, Minhou County | | | 4,383,110.03 | | | | | | | | | | | | 1,031,319.96 | | | | | | | | 3,351,790.07 | | | | Asset-related | |
| Subsidy for Zhejiang Agricultural Product Supply Chain Construction | | | | | | | 1,765,400.00 | | | | | | | | 441,350.04 | | | | | | | | 1,324,049.96 | | | | Asset-related | |
| Total | | | 130,947,523.55 | | | | 1,765,400.00 | | | | | | | | 14,342,633.76 | | | | | | | | 118,370,289.79 | | | | | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 54. | Other non-current liabilities |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease in current period (+, -) | |
| | | Opening
balance | | | New issue | | | Share donation | | | converted
reserved | | | Share
from
funds | | | Others | | | Subtotal | | | Closing
balance | |
| Total number of shares | | | 9,516,285,608.00 | | | | | | | | | | | | | | | | | | | | -441,248,615.00 | | | | -441,248,615.00 | | | | 9,075,036,993.00 | |
Other notes:
On July 6, 2021, the Company held the 29th meeting of the fourth board of directors to approve the proposal on terminating the implementation of the 2017 and 2018 restricted stock phase-III incentive plan and repurchasing and canceling the shares. On July 22, 2021, the 2021 first extraordinary general meeting approved the proposal. The Company agreed to repurchase and cancel 48,034,200 shares of restricted stock that had been granted but not yet released to 326 incentive recipients. On July 6, 2021, the Company held the 29th meeting of the fourth board of directors to approve the proposal on terminating the implementation of the 2017 and 2018 restricted stock phase-III incentive plan and repurchasing and canceling the shares. On July 22, 2021, the 2021 first extraordinary general meeting approved the proposal. Based on the Company's future development strategy and considering factors such as the Company's financial condition and operating conditions, the Company intends to change the purpose of repurchasing shares from "source of shares for the implementation of equity incentive or employee shareholding plan" to "cancellation to reduce registered capital". The number of shares proposed to be canceled this time is 393,214,415 shares, accounting for 4.13% of the Company's total share capital before cancellation. As of December 31, 2021, the Company has completed the industrial and commercial registration for the aforementioned changes in share capital.
| 56. | Other equity instruments |
| (1). | Basic information of Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Table of change in Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
Other descriptions for change situations and reasons on increase and decrease of equity instruments in current period, and relevant accounting treatment basis:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| Capital premium (share capital premium) | | | 6,099,816,713.28 | | | | | | | | 2,727,608,348.90 | | | | 3,372,208,364.38 | |
| Other capital reserves | | | 827,103,630.50 | | | | 81,316,628.17 | | | | 4,483,811.25 | | | | 903,936,447.42 | |
| Total | | | 6,926,920,343.78 | | | | 81,316,628.17 | | | | 2,732,092,160.15 | | | | 4,276,144,811.80 | |
Other descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
| (1) | As stated in Note VII, 55, the Company canceled 441,248,615 restricted stocks this year, resulting in a decrease of RMB2,727,608,348.90 in share premium. |
| (2) | As stated in Note VII, 19 notes 1 and 2, the related matters resulted in an increase of RMB81,316,628.17 in capital reserves — Others. |
| (3) | The reduction of capital reserves — Others for the 2017 and 2018 restricted stock incentive plans amounted to RMB4,483,811.25 this year. |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| Equity incentive buyback | | | 2,009,067,652.38 | | | | 1,159,789,311.52 | | | | 3,168,856,963.90 | | | | | |
| Total | | | 2,009,067,652.38 | | | | 1,159,789,311.52 | | | | 3,168,856,963.90 | | | | | |
Other descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
| (1) | On October 29, 2020, the Company held the 23rd meeting of the fourth board of directors and approved the proposal on repurchasing company shares. It was decided to use self-owned funds of no more than RMB2.7 billion to repurchase shares at a price not exceeding RMB9 per share, with the repurchase period starting from November 4, 2020, to October 28, 2021. As of December 31, 2021, the Company has cumulatively bought back 393,214,415 shares through centralized bidding, accounting for 4.13% of the total share capital of the Company. The lowest transaction price was RMB5.26 per share, and the highest transaction price was RMB8.14 per share. The total amount paid for the buy-back was RMB2,699,960,993.30. |
| (2) | As stated in Note VII, 55, the Company canceled 441,248,615 shares this year, resulting in a decrease of RMB3,168,856,963.90 in treasury stock. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 59. | Other comprehensive income |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of current period | |
| Items | | Opening
balance | | | Amount before
income tax in
the current
period | | | Less:
transferring
other
comprehensive
income
recorded in the
last period into
the profit and
loss of current
period | | | Less:
transferring
other
comprehensive
income
recorded in the
last period into
the retained
earnings of
current period | | | Less: income
tax expense | | | Attributable to
parent company
after tax | | | Attributable to
minority
shareholders
after tax | | | Closing
balance | |
| I. Other comprehensive income that cannot be re-classified into profits and losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Other comprehensive income to be re-classified into profits and losses | | | -584,134.06 | | | | 2,078,468.25 | | | | | | | | | | | | | | | | 2,078,468.25 | | | | | | | | 1,494,334.19 | |
| Including: other comprehensive incomes that can be transferred into profit and loss under the equity method | | | -796,187.66 | | | | 2,448,830.39 | | | | | | | | | | | | | | | | 2,448,830.39 | | | | | | | | 1,652,642.73 | |
| Balance arising from the translation of foreign currency financial statements | | | 212,053.60 | | | | -370,362.14 | | | | | | | | | | | | | | | | -370,362.14 | | | | | | | | -158,308.54 | |
| Total of other comprehensive income | | | -584,134.06 | | | | 2,078,468.25 | | | | | | | | | | | | | | | | 2,078,468.25 | | | | | | | | 1,494,334.19 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ Applicable | √ Not applicable |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| Statutory surplus reserve | | | 1,020,964,555.44 | | | | 82,842,151.71 | | | | | | | | 1,103,806,707.15 | |
| Total | | | 1,020,964,555.44 | | | | 82,842,151.71 | | | | | | | | 1,103,806,707.15 | |
Surplus reserves descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
Due to the retrospective adjustments made in accordance with the CASBE and related new regulations, there is an impact on the beginning balance of statutory surplus reserves of RMB9,901,921.77, as detailed in Note V, 44 of this section.
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| Items | | Current period | | | Last period | |
| Undistributed profits at the end of last period before adjustment | | | 3,886,681,562.18 | | | | 3,532,326,671.64 | |
| Total opening undistributed profits during adjustment (increase is indicated by "+", and decrease is indicated by "-") | | | -3,484,049,730.53 | | | | | |
| Undistributed profits at the beginning of the year after adjustment | | | 402,631,831.65 | | | | 3,532,326,671.64 | |
| Add: net profit attributable to the owner of parent company in current period | | | -3,943,871,849.80 | | | | 1,794,470,167.16 | |
| Less: appropriation to statutory surplus reserves | | | 82,842,151.71 | | | | 208,957,562.58 | |
| Ordinary stock dividends payable | | | 173,602,545.63 | | | | 1,231,157,714.04 | |
| Undistributed profit at the end of the period | | | -3,797,684,715.49 | | | | 3,886,681,562.18 | |
Details of adjustment of undistributed profits at the beginning of the year:
Due to the retrospective adjustments made in accordance with the CASBE and related new regulations, there is an impact on the beginning balance of undistributed profits of RMB3,484,049,730.53, as detailed in Note V, 44 of this section.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 63. | Operating revenue and operating costs |
| (1). | Operating revenue and costs |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of current period | | | Amount of last period | |
| Items | | Revenue | | | Cost | | | Revenue | | | Cost | |
| Main business | | | 84,957,828,262.31 | | | | 73,589,282,912.20 | | | | 86,784,855,751.70 | | | | 72,617,277,003.01 | |
| Other business | | | 6,104,066,049.82 | | | | 437,929,346.10 | | | | 6,414,251,912.33 | | | | 663,236,424.88 | |
| Total | | | 91,061,894,312.13 | | | | 74,027,212,258.30 | | | | 93,199,107,664.03 | | | | 73,280,513,427.89 | |
| (2). | Operating Revenue Deduction Statement |
Unit: Yuan 10,000 Currency: RMB
| Items | | Current year | | | Specific deductions | | | Last year | | | Specific deductions | |
| Operating revenue amount | | 9,106,189.43 | | | | | | | 9,319,910.77 | | | | | |
| Total amount of deducted items from operating revenue | | 24,480.10 | | | | | | | 34,272.64 | | | | | |
| Percentage of total amount of items deducted from operating income to operating income (%) | | 0.27% | | | | | | | 0.37% | | | | | |
| I. Non-core Business Income | | | | | | | | | | | | | | | | |
| 1. Other business income unrelated to normal operations. such as rental of fixed assets, intangible assets, packing materials, sale of materials, non-monetary asset exchanges using materials, income from entrusted management services, and other income included in the main operating income but unrelated to the normal operations of the listed company. | | 19,154.75 | | | | Sales revenue from waste paper and scraps: RMB190.8954 million, as well as trustee fee income of RMB0.6521 million | | | 18,053.20 | | | | Sales revenue from waste paper and scraps: RMB179.5352 million, as well as trustee fee income of RMB0.9968 million. | |
| 2. Income from non-qualified financial business activities, such as interests income from funds borrowed; income generated from non-qualified financial businesses introduced in the current and previous fiscal years, such as guarantee, factoring, microloans, finance leasing, pawnbroking, etc., excluding finance leasing activities conducted for the purpose of selling main products. | | | | | | | | | | | | | | | | |
| 3. Income generated from new trade business in the current and previous fiscal years. | | | | | | | | | | | | | | | | |
| 4. Income generated from related-party transactions unrelated to the Company’s existing normal business operations. | | 5,325.35 | | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. | | | 16,219.44 | | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. | |
| 5. Income of subsidiary companies consolidated under the same control from the beginning of the period to the consolidation date. | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Current year | | | Specific deductions | | | Last year | | | Specific deductions | |
| Income generated from business activities that have not formed or have difficulty forming a stable business model. | | | | | | | | | | | | | | | | |
| Subtotal of non-core business income | | 24,480.10 | | | | | | | 34,272.64 | | | | | |
| II. Income without Substantive Commercial Nature | | | | | | | | | | | | | | | | |
| 1. Income generated from transactions or events that do not significantly change the future cash flow of the company in terms of risk, timing, or amount. | | | | | | | | | | | | | | | | |
| 2. Income generated from transactions without genuine business activities, such as false income realized through self-trading, and false income generated through the use of internet technology or other methods to construct transactions. | | | | | | | | | | | | | | | | |
| 3. Income generated from business activities with unfair transaction prices. | | | | | | | | | | | | | | | | |
| 4. Income generated from subsidiary companies or businesses acquired during the current fiscal year at unfair consideration or non-transaction methods. | | | | | | | | | | | | | | | | |
| 5. Income involved in non-standard audit opinions in the audit report. | | | | | | | | | | | | | | | | |
| 6. Income generated from other transactions or events without commercial rationality. | | | | | | | | | | | | | | | | |
| Subtotal of income without substantive commercial nature | | | | | | | | | | | | | | | | |
| III. Other Income Unrelated to or without Substantive Commercial Nature of the Core Business | | | | | | | | | | | | | | | | |
| Operating revenue after deductions | | | 9,081,709.33 | | | | | | | | 9,285,638.13 | | | | | |
| Note 1: | The deducted income in the current year, in addition to regular business income, includes sales revenue from waste paper and scraps: RMB190.8954 million (2020: RMB179.5352 million), as well as trustee fee income: RMB0.6521 million (2020: RMB0.9968 million). Yonghui Superstores Co., Ltd.’s main business includes the sale of fresh products, food supplies, clothing, and related promotional services, logistics and distribution, property purchase and rental, etc. The above-mentioned income is unrelated to the core business and is deducted. |
| | |
| Note 2: | The non-operating income deducted in the current year, which is unrelated to the existing normal operating business, generated from related-party transactions amounts to RMB53.2535 million (2020: RMB162.1944 million). This portion represents income obtained by the Group from providing financial shared services and information system services to related parties, which are unrelated to the main business and therefore deducted. |
| | |
| Note 3: | The Group’s factoring and small loans business has been conducted since 2017 and is not a newly added non-financial business in the current and previous fiscal years, so the related income does not require deduction. |
| | |
| Note 4: | Apart from the above, the Group has no other non-core business income or income without substantive commercial nature that needs to be deducted. |
| (3). | Conditions of incomes generated by contract |
| | ¨ Applicable | √ Not applicable |
Explanation of revenue generated from contracts:
| | ¨ Applicable | √ Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Description of performance obligations |
| | ¨ Applicable | √ Not applicable |
| (5). | Description of allocating to the residual fulfillment obligations |
| | ¨ Applicable | √ Not applicable |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Urban maintenance and construction tax | | | 49,944,537.60 | | | | 57,202,512.09 | |
| Education Surcharge | | | 39,580,546.58 | | | | 42,738,341.73 | |
| Housing property tax | | | 29,173,671.38 | | | | 26,233,184.19 | |
| Land use tax | | | 6,282,588.02 | | | | 5,717,229.86 | |
| Stamp duty | | | 50,995,772.71 | | | | 48,046,107.13 | |
| Flood control fees | | | 24,875,179.81 | | | | 26,556,027.97 | |
| Others | | | 12,087,922.01 | | | | 13,256,472.53 | |
| Total | | | 212,940,218.11 | | | | 219,749,875.50 | |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Employee compensation | | | 7,046,857,303.99 | | | | 6,229,272,262.68 | |
| Depreciation and amortization | | | 3,552,285,375.38 | | | | 1,485,365,468.35 | |
| Water and electricity fees and fuel expenses | | | 1,379,250,486.39 | | | | 1,247,815,472.93 | |
| Freight and warehousing service fees | | | 1,235,941,963.87 | | | | 1,174,395,969.90 | |
| Rent and property management fees | | | 750,713,040.72 | | | | 2,809,555,990.73 | |
| Business publicity expense | | | 539,686,946.80 | | | | 518,481,743.69 | |
| Cleaning fees | | | 522,660,045.32 | | | | 502,959,223.44 | |
| Low-cost consumables | | | 489,632,689.54 | | | | 532,316,374.80 | |
| Repair fees | | | 342,255,794.69 | | | | 273,278,472.16 | |
| Platform service fee | | | 285,958,224.26 | | | | 262,132,020.82 | |
| Office expenses such as car, travel, and communication expenses | | | 192,986,250.12 | | | | 193,088,029.38 | |
| Others | | | 291,279,947.52 | | | | 210,068,840.84 | |
| Total | | | 16,629,508,068.60 | | | | 15,438,729,869.72 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 66. | Administrative expenses |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Employee compensation | | | 1,197,805,771.55 | | | | 1,212,178,237.13 | |
| Depreciation and amortization | | | 307,727,664.43 | | | | 231,051,215.18 | |
| Costs of wear and tear of commodities | | | 212,270,303.09 | | | | 222,994,413.80 | |
| Rent and property management fees | | | 61,445,423.78 | | | | 80,297,316.10 | |
| Office expenses such as car, travel, and communication expenses | | | 124,038,919.26 | | | | 144,568,864.96 | |
| Consulting, audit, legal, and other intermediary service expenses | | | 73,524,424.83 | | | | 144,174,148.69 | |
| Low-cost consumables | | | 22,029,683.00 | | | | 5,527,607.04 | |
| Equity incentives | | | 11,565,233.98 | | | | 92,387,678.15 | |
| Others | | | 145,048,567.96 | | | | 159,848,462.89 | |
| Total | | | 2,155,455,991.88 | | | | 2,293,027,943.94 | |
| 67. | Research and development expenses |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Employee compensation | | | 385,006,006.42 | | | | | |
| Depreciation & Amortization | | | 23,975,573.56 | | | | | |
| Office expenses such as car, travel, and communication expenses | | | 17,892,281.13 | | | | | |
| Low-cost consumables | | | 1,150,762.14 | | | | | |
| Repair fees | | | 78,802.39 | | | | | |
| Others | | | 4,042.57 | | | | | |
| Total | | | 428,107,468.21 | | | | | |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Interest expense | | | 1,677,039,950.99 | | | | 314,446,061.01 | |
| Less: interest income | | | -292,633,975.09 | | | | -251,939,362.97 | |
| Exchange gains and losses | | | 1,823,788.56 | | | | -2,378,054.62 | |
| Service fees and others | | | 165,463,912.02 | | | | 163,332,668.96 | |
| Total | | | 1,551,693,676.48 | | | | 223,461,312.38 | |
| Note 1: | In the current year, interest expenses include RMB1,289,206,203.75 for lease liabilities. |
| | |
| Note 2: | In the current year, interest income includes RMB5,534,563.91 for interest income from finance lease receivables related to subleasing. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Governmental subsidy | | | 178,841,982.84 | | | | 302,314,124.74 | |
| Return of individual income tax withheld service changes withheld and remitted | | | 4,615,700.99 | | | | 14,172,493.84 | |
| Total | | | 183,457,683.83 | | | | 316,486,618.58 | |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Long-term equity investment income measured with equity method | | | -49,185,860.49 | | | | -273,205,995.95 | |
| Investment income for disposing long-term equity investment production | | | 40,869,144.79 | | | | 33,630,974.05 | |
| Investment income from trading financial assets | | | 132,419,255.68 | | | | 24,482,602.43 | |
| Interest income from debt investments during the holding period | | | | | | | 844,065.56 | |
| Investment income from non-current financial assets during the holding period | | | 67,910,214.00 | | | | 71,305,724.70 | |
| Total | | | 192,012,753.98 | | | | -142,942,629.21 | |
| 71. | Income from net exposure hedging |
| | ¨ Applicable | √ Not applicable |
| 72. | Fair value changes in equity investments |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Sources generating income from changes in fair value | | current period | | | last period | |
| Trading financial assets | | | -642,061,075.16 | | | | 98,673,994.07 | |
| Other non-current financial assets | | | 263,534,314.84 | | | | 1,052,881,968.82 | |
| Total | | | -378,526,760.32 | | | | 1,151,555,962.89 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Bad debt loss of accounts receivable | | | 28,433,783.51 | | | | -6,524,189.96 | |
| Bad debt loss of other receivables | | | 8,624,831.94 | | | | 31,492,264.79 | |
| Bad debt losses on loans | | | 75,322,082.56 | | | | 45,540,106.72 | |
| Bad debt losses on factored receivables | | | 45,049,155.91 | | | | 12,857,357.58 | |
| Total | | | 157,429,853.92 | | | | 83,365,539.13 | |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| I. Bad-debt losses | | | | | | |
| II. Inventory Write-Down Losses and Contract Fulfillment Costs Impairment loss | | | | | | | | |
| III. Impairment Loss on Long-term Equity Investments | | | 325,569,066.62 | | | | 306,631,855.96 | |
| IV. Impairment Loss on Investment Properties | | | | | | | | |
| V. Impairment losses on fixed assets | | | 37,424,175.07 | | | | | |
| VI. Impairment Loss of Engineering Material | | | | | | | | |
| VII. Impairment Loss on Work in Progress | | | | | | | | |
| VIII. Impairment Loss of Productive Biological Asset | | | | | | | | |
| IX. Impairment Loss on Oil and Gas Assets | | | | | | | | |
| X. Impairment Loss on Intangible Assets | | | 25,373,333.33 | | | | 19,750,000.00 | |
| XI. Goodwill impairment loss | | | 117,669,866.54 | | | | 187,786,913.38 | |
| XII. Others | | | | | | | | |
| XIII. Impairment Loss on Right-of-Use Assets | | | 212,171,440.65 | | | | | |
| XIII. Impairment Loss on Long-term Prepaid Expenses | | | 59,228,474.07 | | | | 178,275,156.56 | |
| Total | | | 777,436,356.28 | | | | 692,443,925.90 | |
| Other notes: | | | | | | | | |
The Group recognized an impairment loss of RMB59,228,474.07 on long-term prepaid expenses and an impairment loss of RMB212,171,440.65 on right-of-use assets in the current year. These impairment losses were made due to the recoverable amounts being lower than the carrying amounts, resulting in the recognition of impairment provisions for the Group's leased stores. The recoverable amount is determined based on the higher of the present value of expected future cash flows and the fair value less disposal costs of the asset group. The asset group mainly consists of fixed assets of leased stores, right-of-use assets, and long-term prepaid expenses. A discount rate of 12.5% is used to determine the present value of the expected future cash flows of the asset group.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 75. | Gains on disposal of assets |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Loss on disposal of fixed assets | | | -52,848,517.31 | | | | -7,909,111.91 | |
| Disposal loss on intangible assets | | | -974.60 | | | | -250,113.89 | |
| Gains from disposal of right-of-use assets | | | 106,213,567.40 | | | | | |
| Total | | | 53,364,075.49 | | | | -8,159,225.80 | |
Non-operating income
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | | | Amount included in
the non-recurring
profit and loss of
the current period | |
| Compensation income | | | 227,085,191.51 | | | | 227,136,132.64 | | | | | |
| Income from store lease penalty compensation | | | | | | | 2,734,476.97 | | | | | |
| Cash overage | | | 1,155,687.16 | | | | 1,434,468.89 | | | | | |
| Accounts payable that can’t be paid | | | 35,508,692.36 | | | | 29,916,895.43 | | | | 35,434,758.63 | |
| Others | | | 80,196,573.08 | | | | 29,167,380.56 | | | | 78,674,194.27 | |
| Total | | | 343,946,144.11 | | | | 290,389,354.49 | | | | 114,108,952.90 | |
Governmental subsidies included in current profits and losses
| | ¨ Applicable | √ Not applicable |
Other notes:
| | ¨ Applicable | √ Not applicable |
| 77. | Non-operating expenses |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | | | Amount included in
the non-recurring
profit and loss of
the current period | |
| Total losses on disposal of non-current assets | | | 133,781,977.67 | | | | 175,860,835.01 | | | | 133,781,977.67 | |
| Including: losses on disposal of fixed assets | | | | | | | | | | | | |
| External donation | | | 2,678,137.16 | | | | 6,637,843.22 | | | | 2,678,137.16 | |
| Compensation and litigation expenses, etc | | | 95,487,107.10 | | | | 93,748,501.27 | | | | 95,487,107.10 | |
| Onerous contracts | | | | | | | 120,318,002.72 | | | | | |
| Others | | | 6,489,823.97 | | | | 4,400,619.01 | | | | 6,489,823.97 | |
| Total | | | 238,437,045.90 | | | | 400,965,801.23 | | | | 238,437,045.90 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Table of income tax expenses |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Current income tax expenses | | | 118,314,551.71 | | | | 437,926,162.80 | |
| Deferred income tax expenses | | | -345,808,571.15 | | | | 83,065,308.97 | |
| Total | | | -227,494,019.44 | | | | 520,991,471.77 | |
| (2). | Adjustment of accounting profits and income tax expenses |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | |
| Total profit | | | -4,722,072,728.46 | |
| Income tax expense calculated as per legal/applicable tax rate | | | -1,180,518,182.12 | |
| Impact on different applicable rates in subsidiary | | | 83,560,644.96 | |
| Impact on adjustment of income tax in last period | | | 5,986,036.53 | |
| Impact on nontaxable income | | | -48,852,871.99 | |
| Impact on nondeductible cost, expense and loss | | | 40,280,308.77 | |
| Impact on deductible loss of unrecognized assets from deferred income tax in the previous period | | | -47,945,131.79 | |
| Impact on deductible transient difference or deductible loss of unconfirmed assets from deferred income tax in the current period | | | 922,584,836.14 | |
| Profit/(Loss) attributable to Cooperative Enterprises and Joint Ventures | | | 10,137,965.16 | |
| Others | | | -12,727,625.10 | |
| Income tax expenses | | | -227,494,019.44 | |
| | Other notes: | |
| | | |
| | ¨ Applicable | √ Not applicable |
| 79. | Other comprehensive income |
| | √ Applicable | ¨ Not applicable |
See Note VII, 59 of the financial statements for details.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 80. | Cash flow statement items |
| (1). | Other cash receipts relating to operating activities |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Governmental subsidy | | | 170,880,450.07 | | | | 324,400,552.37 | |
| Interest income of bank deposit | | | 327,484,533.35 | | | | 239,431,006.81 | |
| Income from compensation, etc. | | | 227,085,191.51 | | | | 229,870,609.61 | |
| Deposits and guarantees, etc. | | | 130,645,947.41 | | | | | |
| Cash overage | | | 1,155,687.16 | | | | 1,434,468.89 | |
| Collection of receivables | | | 127,452,500.09 | | | | 17,734,351.11 | |
| Repayments of loans from small loan and factoring companies in Chongqing | | | 1,959,038,319.55 | | | | 38,394,032.74 | |
| Others | | | 76,843,945.51 | | | | 29,167,380.56 | |
| Total | | | 3,020,586,574.65 | | | | 880,432,402.09 | |
| (2). | Other cash payments relating to operating activities |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Sales expenses, administrative expenses, and research and development expenses | | | 6,530,210,224.44 | | | | 8,439,096,442.73 | |
| Financial expenses — financial service fees | | | 165,463,912.02 | | | | 163,332,668.96 | |
| Expenditure on donation | | | 2,678,137.16 | | | | 6,637,843.22 | |
| Penalties, compensation, overdue fine and other non-operating expenses | | | 98,348,671.72 | | | | 101,597,011.78 | |
| Deposits and reserves, etc. | | | 33,439,452.14 | | | | 46,056,912.63 | |
| Payment of letters of guarantee and security for costs | | | 70,409,194.65 | | | | | |
| Total | | | 6,900,549,592.13 | | | | 8,756,720,879.32 | |
| (3). | Other cash received relating to investment activities |
| | √ Applicable | ¨ Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Financial products recovered | | | 1,589,421,555.93 | | | | 5,609,884,505.21 | |
| Receipt of investment income from financial management | | | 131,898,172.96 | | | | 37,835,024.15 | |
| Receipt of cash dividends from non-current financial assets during the holding period | | | 67,910,214.00 | | | | 71,305,724.70 | |
| Net cash received from the payment by the subsidiaries and other business entities | | | | | | | 107,486,377.88 | |
| Redemption of fixed-term deposits | | | 685,906,973.39 | | | | | |
| Receipt of cash dividends from trading financial assets during the holding period | | | 521,082.72 | | | | | |
| Total | | | 2,475,657,999.00 | | | | 5,826,511,631.94 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Other paid cash relating to investment activities |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Purchase of bank wealth management, asset management, and trust products | | | 1,966,236,083.15 | | | | 5,387,235,544.57 | |
| Total | | | 1,966,236,083.15 | | | | 5,387,235,544.57 | |
| (5). | Other received cash relating to financing activities |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Receipt of lease payments from finance leases | | | 39,947,401.43 | | | | | |
| Total | | | 39,947,401.43 | | | | | |
| (6). | Other paid cash relating to financing activities |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Share buy-backs | | | 1,160,116,610.88 | | | | 1,540,171,681.78 | |
| Payment of employee's withdrawal share | | | 215,833,173.64 | | | | 229,785,075.08 | |
| Payment of fixed rent for non-exempt lease contracts | | | 3,104,100,299.39 | | | | | |
| Total | | | 4,480,050,083.91 | | | | 1,769,956,756.86 | |
| 81. | Supplementary information for cash flow statement |
| (1). | Supplementary data to cash flow statement |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Amount of | | | Amount of | |
| Supplementary information | | current period | | | last period | |
| 1. Cash flows converted from net profits for business operation activities: | | | | | | | | |
| Net profit | | | -4,494,578,709.02 | | | | 1,653,188,577.52 | |
| Plus: provision for impairment of assets | | | 777,436,356.28 | | | | 692,443,925.90 | |
| Credit impairment loss | | | 157,429,853.92 | | | | 83,365,539.13 | |
| Depreciation of fixed assets, depreciation of oil & gas assets, and depreciation of productive biological assets | | | 950,981,284.60 | | | | 917,275,286.45 | |
| Depreciation of right-of-use assets | | | 2,227,949,432.01 | | | | | |
| Amortisation of intangibles | | | 266,597,979.61 | | | | 89,928,640.58 | |
| Depreciation and amortization of investment properties | | | 10,807,004.14 | | | | 10,800,472.11 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Amount of | | | Amount of | |
| Supplementary information | | current period | | | last period | |
| Amortization of long-term deferred expenses | | | 694,009,705.62 | | | | 709,212,756.50 | |
| Losses on the disposal of fixed assets, intangible assets and other long-term assets (profit is indicated by “-”) | | | -53,364,075.49 | | | | 8,159,225.80 | |
| Loss on scrapping of fixed assets (profit is indicated by “-”) | | | 133,781,977.67 | | | | 175,860,835.01 | |
| Loss on changes in fair value (profit is indicated by “-”) | | | 378,526,760.32 | | | | -1,151,555,962.89 | |
| Financial expenses (profit is indicated by “-”) | | | 1,673,329,175.64 | | | | 299,559,650.23 | |
| Investment loss (profit is indicated by “-”) | | | -192,012,753.98 | | | | 142,942,629.21 | |
| Decrease in deferred income tax assets (increase is indicated by “-”) | | | 98,170,557.73 | | | | -51,913,279.38 | |
| Increase in deferred income tax liabilities (decrease is indicated by “-”) | | | -443,979,128.88 | | | | 134,978,588.35 | |
| Decrease of inventory (increase is indicated by “-”) | | | 90,187,885.52 | | | | 1,549,841,784.57 | |
| Decrease of operational receivables (increase is indicated by “-”) | | | 2,520,064,591.49 | | | | 680,457,520.96 | |
| Increase in operational payables (decrease is indicated by “-”) | | | 1,048,368,445.30 | | | | -22,008,031.07 | |
| Others | | | -16,785,413.23 | | | | 217,171,723.16 | |
| Net cash flow from operating activities | | | 5,826,920,929.25 | | | | 6,139,709,882.14 | |
| 2. Major investment and financing activities that do not involve cash receipts and payments: | | | | | | | | |
| Conversion of debts into capital Convertible bonds due within one year Fixed assets under financing lease | | | | | | | | |
| 3. Net change in cash and cash equivalents: | | | | | | | | |
| Closing balance of cash | | | 8,643,661,498.06 | | | | 10,587,979,162.31 | |
| Minus: opening balance of cash | | | 10,587,979,162.31 | | | | 6,514,581,080.98 | |
| Add: closing balance of cash equivalents | | | | | | | | |
| Minus: opening balance of cash equivalents Net increase in cash and cash equivalents | | | -1,944,317,664.25 | | | | 4,073,398,081.33 | |
| (2). | Net cash paid in current period and acquired from subsidiary |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Net cash received from disposal of subsidiaries during the current period |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Composition of cash and cash equivalents |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| I. Cash | | | 8,643,661,498.06 | | | | 10,587,979,162.31 | |
| Including: cash on hand | | | 72,596,557.48 | | | | 101,335,211.22 | |
| Bank deposit ready for payment at any time | | | 8,302,138,878.64 | | | | 10,152,024,975.83 | |
| Other monetary funds ready for payment at any time | | | 268,926,061.94 | | | | 334,618,975.26 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Closing balance | | | Opening balance | |
| II. Cash equivalents | | | | | | | | |
| Including: bond investments due in three months | | | | | | | | |
| III. Closing balance of cash and cash equivalents | | | 8,643,661,498.06 | | | | 10,587,979,162.31 | |
| Including: restricted cash and cash equivalents used by parent company or subsidiaries | | | 452,918,396.74 | | | | 1,318,416,175.48 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 82. | Notes to items in statement of changes in equity |
Description for adjustment on item name of "Others", adjustment amount and other matters at the end of last year:
| | ¨ | Applicable | √ | Not applicable |
| 83. | Assets with restricted ownership or right of use |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| Items | | Closing book value | | | Reason for restriction | |
| Monetary funds | | | 452,918,396.74 | | | | Deposits and funds in escrow accounts | |
| Total | | | 452,918,396.74 | | | | / | |
Other notes:
As of December 31, 2021, monetary funds with a carrying value of RMB320,879,510.26 (December 31, 2020: RMB555,381,141.18) are deposited in a escrow account, which will be used to pay for the purchase of equity in Chengdu Hongqi Chain Co., Ltd. by the Group upon maturity.
As of December 31, 2021, monetary funds with a carrying value of RMB38,410,636.05 (December 31, 2020: RMB25,256,763.24) are used for the deposit of lease guarantees.
As of December 31, 2021, monetary funds with a carrying value of RMB93,628,250.43 (December 31, 2020: RMB36,372,928.59) are frozen due to litigation cases.
As of December 31, 2020, monetary funds with a carrying value of RMB701,405,342.47 are restricted from early withdrawal.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 84. | Foreign currency monetary items |
| (1). | Monetary items of foreign currency |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan | |
| | | | | | | |
| | | Closing
balance of | | Conversion | | | Closing balance
converted into | |
| Items | | foreign currency | | | exchange rate | | | RMB | |
| Monetary funds | | | | | | | | | | | | |
| Including: USD | | | 1,775,523.27 | | | | 6.38 | | | | 11,320,203.71 | |
| HKD | | | 9,776,174.96 | | | | 0.82 | | | | 7,993,000.65 | |
| GBP | | | 16,739.22 | | | | 8.61 | | | | 144,064.42 | |
| JPY | | | 22,512,939.43 | | | | 0.06 | | | | 1,247,554.54 | |
| Account receivable | | | – | | | | – | | | | | |
| Including: USD | | | 24,578.12 | | | | 6.38 | | | | 156,702.72 | |
| JPY | | | 33,060,551.00 | | | | 0.06 | | | | 1,832,050.43 | |
| Accounts payable | | | | | | | | | | | | |
| Including: USD | | | 2,327,876.05 | | | | 6.38 | | | | 14,841,839.33 | |
| EUR | | | 513,453.51 | | | | 7.22 | | | | 3,706,980.31 | |
| AUD | | | 271,995.63 | | | | 4.62 | | | | 1,257,163.80 | |
| CAD | | | 28,540.00 | | | | 5.00 | | | | 142,831.28 | |
| JPY | | | 55,495.00 | | | | 0.06 | | | | 3,075.26 | |
| (2). | Descriptions of entities running businesses overseas: including description of main operating place, recording currency and selection basis, and the reason for change of recording currency of major entities running businesses overseas |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Basic information of governmental subsidies |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | |
| Category | | Amount | | | Reported
items | | Amount
recorded in
current profits
and losses | |
| Yonghui Logistics Phase I Project Industrial Support Funds | | | 45,486,857.04 | | | Other incomes | | | 1,421,464.32 | |
| Chongqing Yonghui Urban Life Plaza Project | | | 31,113,216.34 | | | Other incomes | | | 1,121,196.96 | |
| Subsidy from Cuozhen Town People's Government | | | 15,220,088.13 | | | Other incomes | | | 502,113.48 | |
| Yonghui Superstores Cold Chain Logistics Terminal Standardization Construction Project for 2017 | | | 2,600,000.58 | | | Other incomes | | | 2,599,999.92 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Category | | Amount | | | Reported
items | | Amount
recorded in
current profits
and losses | |
| Shapingba District Treasury –Supply Chain Project Subsidies | | | 1,533,333.28 | | | Other incomes | | | 800,000.00 | |
| Fujian Yonghui Logistics Warehousing Center | | | 2,000,000.08 | | | Other incomes | | | 399,999.96 | |
| Refund of Yonghui Headquarters Construction Supporting Fees | | | 2,599,832.66 | | | Other incomes | | | 93,687.60 | |
| Pilot Project for Supply Chain System Construction | | | 1,481,666.74 | | | Other incomes | | | 507,999.96 | |
| Energy Management Center Project | | | 418,336.08 | | | Other incomes | | | 501,999.96 | |
| Subsidies for Supply Chain System Construction | | | 1,233,333.30 | | | Other incomes | | | 400,000.00 | |
| Equipment Acquisition Subsidies | | | 408,000.00 | | | Other incomes | | | 288,000.00 | |
| Special Fund Subsidy for Logistics Standardization Pilot Project of Guanshanhu Bureau of Commerce | | | | | | Other incomes | | | 388,937.16 | |
| Provincial Cold Chain Logistics Special Fund for 2017 | | | 479,999.92 | | | Other incomes | | | 80,000.04 | |
| Fund for the Construction of Important Product Traceability System | | | 295,501.26 | | | Other incomes | | | 154,174.44 | |
| Subsidy for Lugu Store Poverty Alleviation Project | | | 44,951.01 | | | Other incomes | | | 28,389.96 | |
| Supply Chain System Construction Project of Kunshan Bureau of Commerce | | | 2,000,000.00 | | | Other incomes | | | 1,500,000.00 | |
| Subsidy for Supply Chain System Construction Project of Nanjing Jiangbei New District Management Committee Finance Bureau | | | 1,445,999.94 | | | Other incomes | | | 482,000.04 | |
| Subsidy for Supply Chain System Construction Project of Fuzhou City | | | 5,333,333.40 | | | Other incomes | | | 1,599,999.96 | |
| Subsidy for Supply Chain System Construction Project of Nantong Town Financial Office, Minhou County | | | 3,351,790.07 | | | Other incomes | | | 1,031,319.96 | |
| Subsidy for Zhejiang Agricultural Product Supply Chain Construction | | | 1,324,049.96 | | | Other incomes | | | 441,350.04 | |
| Total | | | 118,370,289.79 | | | | | | 14,342,633.76 | |
| (2). | Return of governmental subsidy |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| VIII. | Change of Consolidation Scope |
| 1. | Business combination not under the same control |
| | √ | Applicable | ¨ | Not applicable |
| (1). | Business combination not under the same control in current period |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Combined cost and goodwill |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Identifiable assets and liabilities of acquiree on the acquisition date |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Profit or loss by recalculating the shares before acquisition date according to fair value |
Whether the situations exist that business combination is realized in steps by deal for many times and the control right is acquired in the reporting period
| | ¨ | Applicable | √ | Not applicable |
| (5). | Description of the determination failure of reasonable combination consideration at acquisition date or at end of combination period or the fair value of assets and liabilities that can be identified by the acquiree |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| 2. | Business combination under the same control |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| 4. | Disposal of subsidiaries |
Whether the situation exists that control right is lost in the subsidiary investment by single disposal
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 5. | Changes in the combination scope for other reasons |
Descriptions for change in combination ranges caused by other reasons (e.g. newly establishment of subsidiary, clearing of subsidiary, etc.), and relevant situations:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ | Applicable | √ | Not applicable |
| IX. | Equity in Other Entities |
| (1). | Constitution of the enterprise group |
| | √ | Applicable | ¨ | Not applicable |
| | | Principal Place | | Registered | | Nature of | | Shareholding
ratio (%) | | | Acquisition |
| Name of Subsidiary | | of Business | | address | | business | | Direct | | | Indirect | | | method |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Xiamen Yonghui Minsheng Superstores Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Xiamen Yonghui Commercial Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Fujian Strait Food Development Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Guangdong Yonghui Superstores Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | – | | | | 50 | | | Investment establishment |
| Fujian Yonghui Logistics Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Logistic distribution | | | 95 | | | | 5 | | | Investment establishment |
| Fujian Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Shenzhen Yonghui Superstores Co., Ltd. | | Shenzhen, Guangdong | | Shenzhen, Guangdong | | Commercial retail | | | – | | | | 50 | | | Investment establishment |
| Fujian Yonghui Import and Export Trade Co., Ltd. | | Pingtan, Fujian | | Pingtan, Fujian | | Commercial trade | | | – | | | | 100 | | | Investment establishment |
| Fujian Yongjin Trading Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | 49 | | | | 51 | | | Investment establishment |
| Jiangxi Yonghui Superstores Co., Ltd. | | Nanchang, Jiangxi | | Nanchang, Jiangxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Chongqing Yonghui Superstores Co., Ltd. | | Chongqing | | Chongqing | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Yonghui Logistics Co., Ltd. | | Chongqing | | Chongqing | | Logistic distribution | | | 90 | | | | 10 | | | Investment establishment |
| Sichuan Yonghui Store Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Guizhou Yonghui Superstores Co., Ltd. | | Guiyang, Guizhou | | Guiyang, Guizhou | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Chengdu Yonghui Business Development Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Logistic distribution | | | 80 | | | | 20 | | | Investment establishment |
| Chongqing Xuanhui Real Estate Development Co., Ltd. | | Chongqing | | Chongqing | | Real estate | | | – | | | | 100 | | | Investment establishment |
| Shaanxi Yonghui Superstores Co., Ltd. | | Xi'an, Shaanxi | | Xi'an, Shaanxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | Fuping, Shaanxi | | Fuping, Shaanxi | | Food processing | | | 72.97 | | | | – | | | Investment establishment |
| Guansu Yonghui Superstores Co., Ltd. | | Lanzhou, Gansu | | Lanzhou, Gansu | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal Place | | Registered | | Nature of | | Shareholding
ratio (%) | | | Acquisition |
| Name of Subsidiary | | of Business | | address | | business | | Direct | | | Indirect | | | method |
| Qinghai Yonghui Superstores Co., Ltd. | | Xining, Qinghai | | Xining, Qinghai | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Baotou Yonghui Superstores Co., Ltd. | | Beijing, China | | Beijing, China | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Yonghui Yunjin Technology Co., Ltd. | | Chongqing, China | | Chongqing, China | | Technical service | | | 100 | | | | – | | | Investment establishment |
| Sichuan Yunfu Supply Chain Management Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Beijing Fujing Supply Chain Management Co., Ltd. | | Beijing, China | | Beijing, China | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Chongqing Fuping Supply Chain Management Co., Ltd. | | Chongqing, China | | Chongqing, China | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Guizhou Fuping Supply Chain Management Co., Ltd. | | Guiyang, Guizhou | | Guiyang, Guizhou | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | Kunming, Yunnan | | Kunming, Yunnan | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Fuzhou Fuping Supply Chain Management Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Henan Yunfu Supply Chain Management Co., Ltd. | | Zhengzhou, Henan | | Zhengzhou, Henan | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Yonghui Holdings Co., Ltd. | | Hong Kong | | Hong Kong | | Investment | | | 100 | | | | – | | | Investment establishment |
| Chongqing Yonghui Small Loan Co., Ltd. | | Chongqing | | Chongqing | | Commercial loan | | | – | | | | 100 | | | Investment establishment |
| Yonghui Qinghe Business Factoring (Chongqing) Co., Ltd. | | Chongqing | | Chongqing | | Commercial factoring | | | – | | | | 100 | | | Investment establishment |
| Dixing Co., Ltd. | | Hong Kong | | Hong Kong | | Commercial trade | | | – | | | | 100 | | | Investment establishment |
| LOHAS Life International Business Co., Ltd. | | Hong Kong | | Hong Kong | | Commercial trade | | | – | | | | 100 | | | Investment establishment |
| Xiangxin Investment Fund Management Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Investment | | | 100 | | | | – | | | Investment establishment |
| Yonghui Japan Co., Ltd. | | Japan | | Japan | | Commercial trade | | | – | | | | 80 | | | Investment establishment |
| Ningbo Xinguan Investment Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Ningbo Xinzhi Investment Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Information technology | | | 100 | | | | – | | | Investment establishment |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Engineering construction | | | 60 | | | | – | | | Investment establishment |
| Tianjin Yonghui Superstores Co., Ltd. | | Tianjin | | Tianjin | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Fujian Hechuang Project Supervision Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Engineering construction | | | – | | | | 60 | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal Place | | Registered | | Nature of | | Shareholding
ratio (%) | | | Acquisition |
| Name of Subsidiary | | of Business | | address | | business | | Direct | | | Indirect | | | method |
| Ningbo Yicun Yipin Investment Partnership Enterprise (Limited Partnership) | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Ningbo Xinzi Investment Partnership Enterprise (Limited Partnership) | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Anhui Yonghui Superstores Co., Ltd. | | Hefei, Anhui | | Hefei, Anhui | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Anhui Yonghui Logistics Co., Ltd. | | Feidong, Anhui | | Feidong, Anhui | | Logistic distribution | | | 100 | | | | – | | | Investment establishment |
| Jiangsu Yonghui Superstores Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Zhejiang Yonghui Superstores Co., Ltd. | | Hangzhou, Zhejiang | | Hangzhou, Zhejiang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Jiangsu Yonghui Business Management Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Ningbo Yonghui Superstores Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| East China Yonghui Logistics Co., Ltd. | | Kunshan, Jiangsu | | Kunshan, Jiangsu | | Logistic distribution | | | 100 | | | | – | | | Investment establishment |
| Jiaxing Yonghui Superstores Co., Ltd. | | Jiaxing, Zhejiang | | Jiaxing, Zhejiang | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Henan Yonghui Superstores Co., Ltd. | | Zhengzhou, Henan | | Zhengzhou, Henan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Shanxi Yonghui Superstores Co., Ltd. | | Taiyuan, Shanxi | | Taiyuan, Shanxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Heilongjiang Yonghui Superstores Co., Ltd. | | Harbin, Heilongjiang | | Harbin, Heilongjiang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Jilin Yonghui Superstores Co., Ltd. | | Changchun, Jilin | | Changchun, Jilin | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Liaoning Yonghui Superstores Co., Ltd. | | Shenyang, Liaoning | | Shenyang, Liaoning | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Liaoning Yonghui Logistics Co., Ltd. | | Shenyang, Liaoning | | Shenyang, Liaoning | | Logistic distribution | | | – | | | | 100 | | | Investment establishment |
| Songyuan Yonghui Superstores Co., Ltd. | | Songyuan, Jilin | | Songyuan, Jilin | | Commercial retail | | | – | | | | 55 | | | Investment establishment |
| Shanghai Yonghui Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Shanghai Baoshan Yonghui Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Shanghai Yonghui Yangpu Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Shanghai Songjiang Yonghui Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | Fuping, Shaanxi | | Fuping, Shaanxi | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Xizang Yonghui Superstores Co., Ltd. | | Lhasa, Xizang | | Lhasa, Xizang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Guizhou Yonghui Logistics Co., Ltd. | | Guiyang, Guizhou | | Guiyang, Guizhou | | Logistic distribution | | | 100 | | | | – | | | Investment establishment |
| Chengde Yonghui Renhe Superstores Co., Ltd. | | Chengde, Hebei | | Chengde, Hebei | | Commercial retail | | | – | | | | 51 | | | Investment establishment |
| Hebei Yonghui Superstores Co., Ltd. | | Shijiazhuang, Hebei | | Shijiazhuang, Hebei | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal Place | | Registered | | Nature of | | Shareholding
ratio (%) | | | Acquisition |
| Name of Subsidiary | | of Business | | address | | business | | Direct | | | Indirect | | | method |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | Minxian, Gansu | | Minxian, Gansu | | Food processing | | | – | | | | 51 | | | Investment establishment |
| Shandong Yonghui Superstores Co., Ltd. | | Jinan, Shandong | | Jinan, Shandong | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Fuzhou Dongzhan International Trade Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | – | | | | 100 | | | Investment establishment |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | Shanghai | | Shanghai | | Business services | | | – | | | | 57 | | | Investment establishment |
| Guangdong PARK&YH Superstores Co., Ltd. | | Shenzhen, Guangdong | | Shenzhen, Guangdong | | Commercial retail | | | 50 | | | | – | | | Investment establishment |
| Beijing Yonghui Superstores Co., Ltd. | | Beijing | | Beijing | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Hubei Yonghui Zhongbai Superstores Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Commercial retail | | | 55 | | | | – | | | Investment establishment |
| Yunnan Yonghui Superstores Co., Ltd. | | Kunming, Yunnan | | Kunming, Yunnan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Ningxia Yonghui Superstores Co., Ltd. | | Yinchuan, Ningxia | | Yinchuan, Ningxia | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Hunan Yonghui Superstores Co., Ltd. | | Changsha, Hunan | | Changsha, Hunan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Guangxi Yonghui Superstores Co., Ltd. | | Nanning, Guangxi | | Nanning, Guangxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Beijing Yonghui Commercial Co., Ltd. | | Beijing | | Beijing | | Commercial retail | | | – | | | | 100 | | | Consolidation not under the same control |
| Shanghai Dongzhan International Trade Co., Ltd. | | Shanghai | | Shanghai | | Commercial trade | | | 100 | | | | – | | | Consolidation not under the same control |
| Shanghai Yinjie International Trade Co., Ltd. | | Shanghai | | Shanghai | | Commercial trade | | | – | | | | 100 | | | Consolidation not under the same control |
| Guangzhou PARK&YH Superstores Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | – | | | | 48.34 | | | Consolidation not under the same control |
| Jiangmen ParknShop Supermarket Co., Ltd. | | Jiangmen, Guangdong | | Jiangmen, Guangdong | | Commercial retail | | | – | | | | 48.34 | | | Consolidation not under the same control |
| Dongguan DG Mall Supermarket Co., Ltd. | | Dongguan, Guangdong | | Dongguan, Guangdong | | Commercial retail | | | – | | | | 48.34 | | | Consolidation not under the same control |
| Yonghui Yunchuang Technology Co., Ltd. | | Shanghai, China | | Shanghai, China | | Business services | | | 46.6 | | | | – | | | Consolidation not under the same control |
| Fujian Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Shenzhen Yonghui Yunchuang Technology Co., Ltd. | | Shenzhen, Guangdong | | Shenzhen, Guangdong | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Xiamen Yonghui Yunchuang Technology Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal Place | | Registered | | Nature of | | Shareholding
ratio (%) | | | Acquisition |
| Name of Subsidiary | | of Business | | address | | business | | Direct | | | Indirect | | | method |
| Guangdong Yonghui Yunchuang Technology Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Fujian Yunwang Technology Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | – | | | | 27.96 | | | Consolidation not under the same control |
| Chongqing Yonghui Yunchuang Technology Co., Ltd. | | Chongqing, China | | Chongqing, China | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Sichuan Yonghui Yunchuang Technology Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Fuzhou Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Shaanxi Yonghui Yunchuang Technology Co., Ltd. | | Xi’an, Shaanxi | | Xi’an, Shaanxi | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Beijing Yonghui Yunchuang Technology Co., Ltd. | | Beijing, China | | Beijing, China | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Beijing Huichuang Youpin Technology Co., Ltd. | | Beijing, China | | Beijing, China | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Jiangsu Yonghui Yunchuang Technology Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Zhejiang Yonghui Yunchuang Technology Co., Ltd. | | Hangzhou, Zhejiang | | Hangzhou, Zhejiang | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Anhui Yonghui Yunchuang Technology Co., Ltd. | | Hefei, Anhui | | Hefei, Anhui | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Ningbo Yonghui Yunchuang Technology Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Xiamen Yongyun Technology Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | – | | | | 27.96 | | | Consolidation not under the same control |
| Shanghai Yonghui Yunchuang Technology Co., Ltd. | | Shanghai, China | | Shanghai, China | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Jiangxi Yonghui Yunchuang Zhongcheng Technology Co., Ltd. | | Nanchang, Jiangxi | | Nanchang, Jiangxi | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Henan Yonghui Yunchuang Technology Co., Ltd. | | Zhengzhou, Henan | | Zhengzhou, Henan | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | – | | | Consolidation under the same control |
| Fujian Yonghui Culture Media Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Business services | | | 100 | | | | – | | | Consolidation under the same control |
| Fujian Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | – | | | Consolidation under the same control |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal Place | | Registered | | Nature of | | Shareholding
ratio (%) | | | Acquisition |
| Name of Subsidiary | | of Business | | address | | business | | Direct | | | Indirect | | | method |
| Hubei Fuhan Supply Chain Management Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Guangxi Fuping Supply Chain Management Co., Ltd. | | Nanning, Guangxi | | Nanning, Guangxi | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Shanghai Yunfu Supply Chain Management Co., Ltd. | | Shanghai | | Shanghai | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Zhejiang Yunfu Supply Chain Management Co., Ltd. | | Hangzhou, Zhejiang | | Hangzhou, Zhejiang | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Jiangsu Yunfu Supply Chain Management Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Food processing | | | – | | | | 100 | | | Investment establishment |
| Xiamen Zhongzhi Huiteng Technology Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | – | | | | 46.6 | | | Consolidation not under the same control |
| Baotou Yonghui Commercial Co., Ltd. | | Inner Mongolia Autonomous Region | | Inner Mongolia Autonomous Region | | Commercial retail | | | 100 | | | | | | | Investment establishment |
| Beijing Yonghui Technology Co., Ltd. | | Beijing | | Beijing | | Commercial retail | | | 100 | | | | | | | Investment establishment |
| Fujian Yuntong Supply Chain Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Fujian Yongyuehui Business Management Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Shandong Fuping Supply Chain Management Co., Ltd. | | Weifang, Shandong | | Weifang, Shandong | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Jiangxi Fuping Supply Chain Management Co., Ltd. | | Nanchang, Jiangxi | | Nanchang, Jiangxi | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Shaanxi Fuping Supply Chain Management Co., Ltd. | | Weinan, Shaanxi | | Weinan, Shaanxi | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Hainan Fuli Supply Chain Management Co., Ltd. | | Sanya, Hainan | | Sanya, Hainan | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Anhui Fuwan Supply Chain Management Co., Ltd. | | Hefei, Anhui | | Hefei, Anhui | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Zhuhai Fuyue Supply Chain Management Co., Ltd. | | Zhuhai, Guangdong | | Zhuhai, Guangdong | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Hebei Fuji Supply Chain Management Co., Ltd. | | Shijiazhuang, Hebei | | Shijiazhuang, Hebei | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Chongqing Fuyu Supply Chain Management Co., Ltd. | | Chongqing | | Chongqing | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Xinjiang Fuchi Supply Chain Management Co., Ltd. | | Aksu, Xinjiang | | Aksu, Xinjiang | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Guangdong Fuyue Supply Chain Management Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| Hebei Yuanxiaoji Technology Development Co., Ltd. | | Shijiazhuang, Hebei | | Shijiazhuang, Hebei | | Commercial retail | | | | | | | 100 | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
None
Basis on being controllable of the invested company with half or less voting rights as well as on being uncontrollable of the invested company but with half or more voting rights:
Although the Group only holds less than 50% of the equity interest in Guangdong ParknShop Yonghui Superstores Co., Ltd ("Guangdong ParknShop") and its subsidiaries, Guangdong ParknShop is a Sino-foreign joint venture where the highest governing body is the Board of Directors, consisting of six directors. The Group has the right to appoint the chairman and two additional directors. Major operational decisions require approval by more than half (including half) of the directors. If the attending directors reach a consensus of equal number of approvals and rejections, the Board of Directors shall vote again on the resolution, and all attending directors shall vote according to the chairman's voting result. Therefore, the Group considers it as a subsidiary.
Despite the Group's ownership of only 46.60% of the equity in Yunchuang and its subsidiaries, Yunchuang is a Sino-foreign joint venture operating enterprise with the Board of Directors as its highest governing body. The Board of Directors consists of seven members, and the Group has the authority to appoint four directors. With major operational decisions requiring approval by a majority of the directors, the Group recognizes Yunchuang as its subsidiary.
The control basis on important structured bodies within the consolidation scope:
None
Basis for determining whether the company is an agent or a bailor:
None
Other notes:
None
| (2). | Important non-wholly-owned subsidiaries |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | |
| Name of Subsidiary | | Shareholding
ratio of
minority
shareholders | | | Profit and loss
attributable to
minority
shareholders
in this term | | | Dividends
assigned to
shareholders
in this term | | | Closing
balance of
equity of
minority
shareholders | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 50.00 | | | | -253,335,903.70 | | | | | | | | 134,087,843.34 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 53.40 | | | | 270,653,038.15 | | | | | | | | 251,690,080.73 | |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Main financial information of important non-wholly-owned subsidiaries |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan 10,000 Currency: RMB
| | | | Closing balance | | | | Opening balance | |
| Name of Subsidiary | | | Current
assets | | | | Non-
current
asset | | | | Total assets | | | | Current
liabilities | | | | Non-
current
liabilities | | | | Total
liabilities | | | | Current
assets | | | | Non-
current
asset | | | | Total assets | | | | Current
liabilities | | | | Non-
current
liabilities | | | | Total
liabilities | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 308,898.72 | | | | 137,390.21 | | | | 446,288.93 | | | | 336,801.95 | | | | 118,772.88 | | | | 455,574.83 | | | | 145,197.06 | | | | 49,081.91 | | | | 194,278.97 | | | | 134,252.25 | | | | 2,181.25 | | | | 136,433.50 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 1,304,316.31 | | | | 10,919.17 | | | | 1,315,235.48 | | | | 1,318,720.85 | | | | 650.87 | | | | 1,319,371.72 | | | | 64,594.25 | | | | 31,197.28 | | | | 95,791.53 | | | | 63,340.92 | | | | | | | | 63,340.92 | |
| | | | Amount of current period | | | | Amount of last period | |
| Name of Subsidiary | | | Operating
revenue | | | | Net profit | | | | Total
comprehensive
income | | | | Cash flow
from
operating
activities | | | | Operating
revenue | | | | Net profit | | | | Total
comprehensive
income | | | | Cash flow
from
operating
activities | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 491,479.87 | | | | -50,309.91 | | | | -50,309.91 | | | | 38,292.31 | | | | 478,848.31 | | | | -29,576.87 | | | | -29,576.87 | | | | -66,726.58 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 47,492.91 | | | | -37,921.76 | | | | -37,921.76 | | | | -15,874.79 | | | | 190,392.42 | | | | -15,084.29 | | | | -15,084.29 | | | | -113,439.60 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Important limitations on using Group's assets and paying off liabilities of the Group |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Financial support and other support provided to the structured entities that are included in the combined financial statement |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 2. | Transactions controlling the subsidiaries in case of equity shares change of subsidiaries |
| | ¨ | Applicable | √ | Not applicable |
| 3. | Equities in Cooperative Enterprises and Joint Ventures |
| | √ | Applicable | ¨ | Not applicable |
| (1). | Important cooperative enterprises and joint ventures |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
Names of
cooperative
enterprises and joint | | Principal
Place of | | Registered | | Nature of | | | Shareholding ratio (%) | | | Accounting
treatment
method for
investment in
cooperative
enterprises and |
| ventures | | Business | | address | | business | | | Direct | | | | Indirect | | | joint ventures |
| Zhongbai Holdings Group Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Commercial retail | | | 5.00 | | | | 24.86 | | | Equity method |
| Fujian OneBank Limited | | Pingtan, Fujian | | Pingtan, Fujian | | Finance | | | 27.50 | | | | | | | Equity method |
| Chengdu Hongqi Chain Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | 21.00 | | | | | | | Equity method |
Description on the difference between the shareholding ratio in cooperative enterprises or joint ventures and voting right:
None
Basis on holding a voting right below 20% but having significant influence, or holding a voting right above 20% but having no significant influence:
None
| (2). | Main financial information of important cooperative enterprises |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Main financial information of important joint ventures |
| √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | | | Unit: Yuan 10,000 Currency: RMB | |
| | | | | | | | | | | | | |
| | | Closing balance/amount of current period | | | Opening balance/incurred amount
of last period | |
| | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | |
| Current assets | | | 339,288.92 | | | | 1,598,749.58 | | | | 352,949.30 | | | | 355,749.70 | | | | 2,032,196.17 | | | | 386,693.58 | |
| Non-current asset | | | 906,842.45 | | | | 244,685.24 | | | | 399,596.68 | | | | 599,979.00 | | | | 227,987.61 | | | | 225,384.85 | |
| Total assets | | | 1,246,131.37 | | | | 1,843,434.82 | | | | 752,545.98 | | | | 955,728.70 | | | | 2,260,183.78 | | | | 612,078.43 | |
| Current liabilities | | | 673,669.54 | | | | 663,308.91 | | | | 291,713.11 | | | | 603,845.86 | | | | 813,261.58 | | | | 265,561.62 | |
| Non-current liabilities | | | 258,339.07 | | | | 960,804.04 | | | | 92,441.67 | | | | 5,464.53 | | | | 1,227,363.04 | | | | 2,030.00 | |
| Total liabilities | | | 932,008.61 | | | | 1,624,112.95 | | | | 384,154.78 | | | | 609,310.39 | | | | 2,040,624.62 | | | | 267,591.62 | |
| Minority interests | | | 6,742.83 | | | | | | | | | | | | 24,795.63 | | | | | | | | 122.72 | |
| Shareholders’ equity attributable to the parent company | | | 307,379.93 | | | | 219,321.87 | | | | 368,391.20 | | | | 321,622.68 | | | | 219,559.16 | | | | 344,364.09 | |
| Net asset share calculated as per shareholding ratio | | | 91,783.65 | | | | 60,313.51 | | | | 77,362.15 | | | | 96,036.53 | | | | 60,378.77 | | | | 72,316.46 | |
| Adjustments | | | 39,460.25 | | | | 1.72 | | | | 117,501.40 | | | | 72,763.47 | | | | 1.71 | | | | 116,951.63 | |
| — Goodwill | | | | | | | | | | | | | | | | | | | | | | | | |
| — Unrealized profits in internal transaction | | | | | | | | | | | | | | | | | | | | | | | | |
| — Others | | | 39,460.25 | | | | 1.72 | | | | 117,501.40 | | | | 72,763.47 | | | | 1.71 | | | | 116,951.63 | |
| Book value on equity investment of joint ventures | | | 131,243.90 | | | | 60,315.23 | | | | 194,863.55 | | | | 168,800.00 | | | | 60,380.48 | | | | 189,268.09 | |
| Fair value of equity investment of joint ventures with public offer | | | 101,879.42 | | | | | | | | 151,939.20 | | | | 125,682.66 | | | | | | | | 199,063.20 | |
| Operating revenue | | | 1,233,055.37 | | | | 31,265.79 | | | | 935,107.08 | | | | 1,312,878.60 | | | | 49,111.16 | | | | 905,338.03 | |
| Net profit | | | -1,314.16 | | | | 517.41 | | | | 48,069.62 | | | | 4,313.19 | | | | 1,043.99 | | | | 50,487.21 | |
| Net profits under discontinued operations | | | | | | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income | | | | | | | 197.98 | | | | | | | | | | | | -28.10 | | | | | |
| Total comprehensive income | | | -1,314.16 | | | | 715.39 | | | | 48,069.62 | | | | 4,313.19 | | | | 1,015.89 | | | | 50,487.21 | |
| Annual dividend received from joint ventures | | | 1,016.76 | | | | | | | | 4,512.48 | | | | 1,016.76 | | | | | | | | 2,484.72 | |
| Other disclosures | | | | | | | | | | | | | | | | | | | | | | | | |
| None | | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Financial information summary of unimportant cooperative enterprises and joint ventures |
| √ | Applicable | ¨ | Not applicable |
| | | | Unit: Yuan Currency: RMB | |
| | | | | |
| | | | Closing balance/amount of current period | | | | Opening balance/incurred amount of last period | |
| Cooperative enterprises: | | | | | | | | |
| Total book value of investment | | | 156,722,946.25 | | | | 200,232,512.85 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | | |
| — Net profit | | | -384,544,289.20 | | | | -416,321,560.34 | |
| — Other comprehensive income | | | | | | | | |
| — Total comprehensive income | | | -384,544,289.20 | | | | -416,321,560.34 | |
| Joint ventures: | | | | | | | | |
| Total book value of investment | | | 749,042,729.34 | | | | 1,025,254,654.11 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | | |
| — Net profit | | | 18,014,831.28 | | | | 36,662,213.72 | |
| — Other comprehensive income | | | -5,669.98 | | | | | |
| — Total comprehensive income | | | 18,009,161.30 | | | | 36,662,213.72 | |
Other disclosures
As there is no obligation to bear additional losses for Fuzhou Yijiu San San Bean Products Co., Ltd. and Shanghai Xuanhui Business Service Technology Co., Ltd., its net loss is recognized only up to the carrying value of long-term equity investments and other long-term equity interests that essentially represent its net investment, with a write-down to zero.
| (5). | Description on significant limitations of the ability to transfer funds to the Company by cooperative enterprises and joint ventures |
| ¨ | Applicable | √ | Not applicable |
| (6). | Excess loss occurred to cooperative enterprises and joint ventures |
| √ | Applicable | ¨ | Not applicable |
| | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | |
| Names of cooperative enterprises and joint ventures | | | Accumulated unrecognized losses accumulated in the previous period | | | | Unconfirmed losses this term (or net profit shared this term) | | | | Accumulated unconfirmed losses at the end of term | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | | | | | | 4,442,354.61 | | | | 4,442,354.61 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | | | | | | 1,043,783.69 | | | | 1,043,783.69 | |
| (7). | Unconfirmed commitment related to cooperative enterprise investment |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (8). | Contingent liability related to cooperative enterprise or joint venture investment |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| 5. | Equity in structured entities not included in the consolidated financial statement |
| | |
| | Description on the structured main body that is not included in the combined financial statement: |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| X. | Risks Related to Financial Instruments |
| √ | Applicable | ¨ | Not applicable |
| 1. | Classification of financial instruments |
The Group’s main financial instruments include cash and cash equivalents, accounts receivable, other receivables, other current assets, trading financial assets, debt investments, other non-current financial assets, accounts payable, other payables, and short-term borrowings. Details of the financial instruments are disclosed in the relevant notes. The risks associated with these financial instruments and the risk management policies adopted by the Group to mitigate these risks are described below. The Management of the Group manages and monitors these risk exposures to ensure that the risks are kept within limits.
The book values of various financial instruments on the balance sheet date are as follows:
Financial assets as of 2021
| | | | Financial assets | | | | | | | |
| | | | measured at fair | | | | | | | |
| | | | value with changes | | | Financial assets | | | | |
| | | | included in current | | | measured at | | | | |
| Item | | | profits and losses | | | amortized costs | | | Total | |
| Monetary funds | | | | | | | 9,163,127,740.22 | | | | 9,163,127,740.22 | |
| Loans and advances | | | | | | | 814,617,180.15 | | | | 814,617,180.15 | |
| Trading financial assets | | | 1,560,917,920.71 | | | | | | | | 1,560,917,920.71 | |
| Factoring receivable | | | | | | | 1,411,455,365.03 | | | | 1,411,455,365.03 | |
| Account receivable | | | | | | | 477,000,229.84 | | | | 477,000,229.84 | |
| Other receivables | | | | | | | 742,369,328.43 | | | | 742,369,328.43 | |
| Non-current assets due within one year | | | | | | | 41,563,339.26 | | | | 41,563,339.26 | |
| Long-term receivables | | | | | | | 73,044,056.84 | | | | 73,044,056.84 | |
| Other non-current financial assets | | | 4,100,000,000.00 | | | | | | | | 4,100,000,000.00 | |
| Total | | | 5,660,917,920.71 | | | | 12,723,177,239.77 | | | | 18,384,095,160.48 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Financial assets as of 2020
| | | Financial assets | | | | | | | |
| | | measured at fair | | | | | | | |
| | | value with changes | | | Financial assets | | | | |
| | | included in current | | | measured at | | | | |
| Item | | profits and losses | | | amortized costs | | | Total | |
| Monetary funds | | | | | | | 12,005,455,154.69 | | | | 12,005,455,154.69 | |
| Loans and advances | | | | | | | 1,595,315,743.15 | | | | 1,595,315,743.15 | |
| Trading financial assets | | | 241,410,438.34 | | | | | | | | 241,410,438.34 | |
| Factoring receivable | | | | | | | 2,710,166,360.05 | | | | 2,710,166,360.05 | |
| Account receivable | | | | | | | 447,397,868.68 | | | | 447,397,868.68 | |
| Other receivables | | | | | | | 938,269,620.40 | | | | 938,269,620.40 | |
| Other non-current financial assets | | | 5,618,159,570.30 | | | | | | | | 5,618,159,570.30 | |
| Total | | | 5,859,570,008.64 | | | | 17,696,604,746.97 | | | | 23,556,174,755.61 | |
Financial liabilities
| | | Financial | | | Financial | |
| | | liabilities | | | liabilities | |
| | | measured at | | | measured at | |
| | | amortized cost | | | amortized cost | |
| Item | | as of 2021 | | | as of 2020 | |
| Short-term loans | | | 10,947,557,472.21 | | | | 13,889,997,357.11 | |
| Notes payable | | | 33,000,000.00 | | | | | |
| Accounts payable | | | 12,518,578,825.59 | | | | 12,513,674,031.70 | |
| Other payables | | | 1,606,156,907.41 | | | | 2,501,090,822.09 | |
| Non-current liabilities due within one year | | | 2,069,851,210.42 | | | | | |
| Long-term borrowings | | | 1,021,069,722.22 | | | | | |
| Lease liabilities | | | 24,826,561,091.82 | | | | | |
| Total | | | 53,022,775,229.67 | | | | 28,904,762,210.90 | |
2. Risks of financial instruments
The Group faces various risks related to financial instruments in its day-to-day activities, primarily credit risk, liquidity risk, and market risk (including exchange rate risk, interest rate risk, and commodity price risk). The Group’s main financial instruments include cash and cash equivalents, equity investments, debt investments, borrowings, accounts receivable, bills payable, and accounts payable. The risks associated with these financial instruments and the risk management strategies adopted by the Group to mitigate these risks are described below.
The Board of Directors is responsible for establishing the risk management framework for the Group, formulating risk management policies and guidelines, and overseeing the implementation of risk management measures. The Group has established risk management policies to identify and analyze the risks it faces. These risk management policies provide specific guidelines for managing various aspects of risk, including market risk, credit risk, and liquidity risk. The Group periodically assesses the market environment and changes in its business activities to determine whether updates are required for the risk management policies and systems. The risk management for the Group is conducted by the Risk Management Committee in accordance with the policies approved by the Board of Directors. The Risk Management Committee identifies, evaluates, and mitigates relevant risks through close cooperation with other business departments within the Group. The Group’s internal audit department conducts regular audits of risk management controls and procedures, and reports the audit findings to the Group’s Audit Committee.
The Group diversifies its investment and business portfolio appropriately to mitigate financial instrument risks. It also reduces risks concentrated in a single industry, specific geographical area, or specific counterparties by developing corresponding risk management policies.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Credit risk
The Group only trades with recognized third party with good reputation. According to the Group’s policy, credit checks are conducted on all customers who request credit transactions. Furthermore, the Group continuously monitors the balance of accounts receivable to ensure it does not face significant bad debt risks. For transactions not settled in the functional currency of the relevant operating unit, the Group does not provide credit terms unless specifically approved by the Group’s credit control department.
As the counterparties for cash and fund product transactions are reputable banks with high credit ratings, the credit risk associated with these financial instruments is low.
The Group’s other financial assets include debt investments, accounts receivable, and other receivables, with credit risk arising from counterparty default. The maximum risk exposure is equal to the carrying amount of these instruments.
The maximum credit risk exposure to the Group on each balance sheet date is the total amount receivable from customers, net of impairment allowances.
Since the Group only trades with recognized and reputable third parties, no collateral is required. Credit risk concentrations are managed based on customers/counterparties, geographical areas, and industries. As of December 31, 2021, the Group has exposed to specific credit risk concentration, as 26.81% (December 31, 2020: 24.49%) of the Group’s accounts receivable is derived from the top five customers with the largest outstanding balances.
Criteria for determining a significant increase in credit risk
The Group assesses on each balance sheet date whether there has been a significant increase in credit risk of the relevant financial instruments since initial recognition. When determining whether there is a significant increase in credit risk after initial recognition, the Group considers obtaining reasonable and supportable information without incurring unnecessary additional costs or efforts. This includes qualitative and quantitative analysis based on the Group’s historical data, external credit risk ratings, and forward-looking information. Based on a single financial instrument or a combination of financial instruments with similar credit risk characteristics, the Group compares the default risk of financial instruments on the balance sheet date with the default risk on the initial recognition date to determine the change of the default risk of financial instruments during the expected duration of the financial instruments.
When the following qualitative criteria are triggered, the Group considers that there has been a significant increase in credit risk for financial instruments:
| · | The qualitative criteria primarily include significant adverse changes in the debtor’s business or financial condition and the occurrence of credit-impaired assets on the watchlist. |
To determine if credit impairment has occurred, the Group applies criteria consistent with its internal credit risk management objectives, considering both quantitative and qualitative indicators. The Group considers the following factors primarily when assessing whether a debtor has incurred credit impairment:
| (1) | The issuer or debtor experiences significant financial difficulties. |
| (2) | The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.; |
| (3) | The creditor, due to economic or contractual considerations relating to the debtor’s financial difficulties, grants the debtor concessions that would not otherwise be made; |
| (4) | The debtor is likely to become bankrupt or carry out other financial reorganizations; |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5) | The financial difficulties of the issuer or the debtor cause the disappearance of active market for the financial asset; |
| (6) | For a financial asset that has been purchased at a substantial discount or an original financial asset, the discount has reflected the fact that a credit loss has occurred. |
Credit impairment of financial instrument may be caused by the joint action of multiple events, instead of an individually identifiable event.
Parameters for measuring expected credit losses
On the view of whether the credit risk has increased significantly and whether the credit impairment has occurred, the Group measures the impairment reserve for different assets with the expected credit loss of 12 months or the whole duration. Key parameters for measurement of expected credit losses include the probability of default, loss given default and exposure at default. Considering the quantitative analysis and forward-looking information of historical statistical data (such as counterparty rating, guarantee method and collateral type, repayment method, etc.), the Group established models of the probability of default, loss given default and exposure at default. The following definitions will be used:
| (1) | The probability of default refers to the possibility that the debtor will be unable to fulfill its repayment obligations over the next 12 months or throughout the remaining duration. The Group’s default probability is adjusted based on the universal model results, added with forward-looking information reflect the debtor’s default probability in the current macroeconomic environment; |
| (2) | Loss given default refers to the Group’s expectation of the loss degree in exposure at default. According to the types of counterparties, the way and priority of recourse, and the different collateral, loss given default is also different. The default loss rate is the percentage of risk exposure loss at default, calculated on the basis of the next 12 months or the whole duration; |
| (3) | Default risk exposure refers to the amount that the Group shall be paid when default occurs over the next 12 months or throughout the remaining duration. |
The assessment of a significant increase in credit risk and the calculation of expected credit loss both involve forward-looking information. Through the analysis of historical data, the Group identifies the key economic indicators that affect the credit risk and expected credit loss of various business types.
The impact of these economic indicators on the probability of default and loss given default is different for different business types. In this process, the Group refers to authoritative forecast values and, based on the results, predicts these economic indicators and determines their impact on default probability and default loss rate.
The Group’s maximum risk exposure and year-end classification by credit risk grade for financial assets are as follows:
| Year 2021 | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| | Expected credit
loss over the
next 12 months | | | Expected credit losses for the whole duration | |
| Items | | Phase I | | | Phase II | | | Phase III | | | Simplified method | | | Total | |
| Monetary funds | | | 9,163,127,740.22 | | | | | | | | | | | | | | | | 9,163,127,740.22 | |
| Loans and advances | | | 788,569,705.76 | | | | 19,168,132.97 | | | | 6,879,341.42 | | | | | | | | 814,617,180.15 | |
| Factoring receivable | | | 1,406,455,554.61 | | | | 361,602.66 | | | | 4,638,207.76 | | | | | | | | 1,411,455,365.03 | |
| Account receivable | | | | | | | | | | | | | | | 477,000,229.84 | | | | 477,000,229.84 | |
| Other receivables | | | 740,716,016.18 | | | | 1,653,312.25 | | | | | | | | | | | | 742,369,328.43 | |
| Non-current assets due within one year | | | | | | | | | | | | | | | 41,563,339.26 | | | | 41,563,339.26 | |
| Long-term receivables | | | | | | | | | | | | | | | 73,044,056.84 | | | | 73,044,056.84 | |
| Total | | | 12,098,869,016.77 | | | | 21,183,047.88 | | | | 11,517,549.18 | | | | 591,607,625.94 | | | | 12,723,177,239.77 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Year 2020 | | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | | |
| | | Expected credit loss over the | | | | | | | | | | |
| | | next 12 months | | | Expected credit losses for the whole duration | | | | |
| Items | | Phase I | | | Phase II | | | Phase III | | | Simplified method | | | Total | |
| Monetary funds | | | 12,005,455,154.69 | | | | | | | | | | | | | | | | 12,005,455,154.69 | |
| Loans and advances | | | 1,557,323,746.70 | | | | 21,399,668.57 | | | | 16,592,327.88 | | | | | | | | 1,595,315,743.15 | |
| Factoring receivable | | | 2,706,767,238.74 | | | | 1,168,009.96 | | | | 2,231,111.35 | | | | | | | | 2,710,166,360.05 | |
| Account receivable | | | | | | | | | | | | | | | 447,397,868.68 | | | | 447,397,868.68 | |
| Other receivables | | | 935,557,057.62 | | | | 2,712,562.78 | | | | | | | | | | | | 938,269,620.40 | |
| Total | | | 17,205,103,197.75 | | | | 25,280,241.31 | | | | 18,823,439.23 | | | | 447,397,868.68 | | | | 17,696,604,746.97 | |
Liquidity risk
The Group uses a cyclical liquidity planning tool to manage the risk of funding shortfalls. The tool is associated with both the maturity date of its financial instruments and the estimated cash flows generated by the Group’s operations.
The Group’s objective is to maintain a balance between the continuity and flexibility of financing by utilizing various means of financing, such as bank loan. As of December 31, 2021, 43.76% (2020: 100.00%) of the Group’s debts mature within one year.
The maturity period of financial liabilities based on non-discounted contractual cash flows is analyzed as follows:
| Year 2021 | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | |
| Items | | Within 1 year | | | 1-5 years | | | Over 5 years | | Total | |
| Short-term loans | | | 11,040,698,472.22 | | | | | | | | | | 11,040,698,472.22 | |
| Notes payable | | | 33,000,000.00 | | | | | | | | | | 33,000,000.00 | |
| Accounts payable | | | 12,518,578,825.59 | | | | | | | | | | 12,518,578,825.59 | |
| Other payables | | | 1,606,156,907.41 | | | | | | | | | | 1,606,156,907.41 | |
| Non-current liabilities due within one year | | | 3,348,205,509.27 | | | | | | | | | | 3,348,205,509.27 | |
| Long-term borrowings | | | | | | | 1,118,859,527.78 | | | | | | 1,118,859,527.78 | |
| Lease liabilities | | | | | | | 12,831,809,551.57 | | | 22,743,509,411.50 | | | 35,575,318,963.07 | |
| Total | | | 28,546,639,714.49 | | | | 13,950,669,079.35 | | | 22,743,509,411.50 | | | 65,240,818,205.34 | |
| Year 2020 | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | |
| Items | | | Within 1 year | | | | 1-5 years | | | Over 5 years | | | Total | |
| Short-term loans | | | 14,064,416,662.65 | | | | | | | | | | 14,064,416,662.65 | |
| Accounts payable | | | 12,513,674,031.70 | | | | | | | | | | 12,513,674,031.70 | |
| Other payables | | | 2,501,090,822.09 | | | | | | | | | | 2,501,090,822.09 | |
| Total | | | 29,079,181,516.44 | | | | | | | | | | 29,079,181,516.44 | |
Market risk
Interest rate risks
The Group’s bank borrowings are fixed-rate, so the Group does not face the risk of market interest rate fluctuations.
Exchange rate risk
The Group is exposed to transactional currency risk. Such risks are caused by sales or purchases made by business units in currencies other than their functional currencies. The Group focuses its main business throughout China, which are settled in RMB. Therefore, the Group faces a low risk of currency fluctuations.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Equity instrument investment price risk
The equity instrument investment price risk refers to the risk of a decrease in the fair value of equity securities due to changes in stock index levels and individual security values. As of December 31, 2021, the Group has exposed to equity instrument investment price risk due to certain individual equity instrument investments classified at fair value through profit or loss and whose changes are recognized in the current period. The listed equity instrument investments held by the Group or its subsidiaries are listed on stock exchanges in Shenzhen, Hong Kong, and the United States and are measured at market quotations on the balance sheet date.
The market stock indices of the following stock exchanges, as well as their respective highest and lowest closing points during the year, are as follows:
| | | At the End | | | Year 2021 | | At the End | | | Year 2020 | |
| Items | | of 2021 | | | Max./min. | | of 2020 | | | Max./min. | |
| Shenzhen-A Stock Index | | | 2,530 | | | | 2,571/2,130 | | | 2,438 | | | | 2,442/1,683 | |
| Hong Kong-Hang Seng Index | | | 23,398 | | | | 31,085/22,745 | | | 27,231 | | | | 29,056/21,696 | |
| USA-NASDAQ Index | | | 15,645 | | | | 31,085/22,745 | | | 12,888 | | | | 12,973/6,631 | |
The following table demonstrates the sensitivity of the Group’s net profit and other comprehensive income after tax to a 5% change in the fair value of equity instrument investments (based on the carrying value on the balance sheet date), assuming all other variables remain constant.
Year 2021
| | | | | | | | | Increase/ | | | |
| | | Carrying | | | | | | (Decrease) | | Increase/ | |
| | | value of | | | | | | in other | | (Decrease) | |
| | | equity | | | Increase/ | | | comprehensive | | in total | |
| | | instrument | | | (Decrease) in | | | income after | | shareholders’ | |
| Items | | investments | | | net profit | | | tax | | equity | |
| Equity instrument investment | | | | | | | | | | | | | | |
| Shenzhen-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | 487,156,170.27 | | | | 18,268,356.38/-18,268,356.38 | | | | | | 18,268,356.38/-18,268,356.38 | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | 733,589,445.29 | | | | 36,679,472.26/-36,679,472.26 | | | | | | 36,679,472.26/-36,679,472.26 | |
Year 2020
| | | | | | | | | | | Increase/ | | | | |
| | | | Carrying | | | | | | | (Decrease) | | | Increase/ | |
| | | | value of | | | | | | | in other | | | (Decrease) | |
| | | | equity | | | | Increase/ | | | comprehensive | | | in total | |
| | | | instrument | | | | (Decrease) in | | | income after | | | shareholders’ | |
| Items | | | investments | | | | net profit | | | tax | | | equity | |
| Equity instrument investment | | | | | | | | | | | | | | |
| Shenzhen-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | 750,278,378.94 | | | | 28,135,439.21/-28,135,439.21 | | | | | | 28,135,439.21/-28,135,439.21 | |
| Hong Kong-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | 180,283,725.12 | | | | 8,553,736.26/-8,553,736.26 | | | | | | 8,553,736.26/-8,553,736.26 | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | 1,148,540,187.18 | | | | 57,427,009.36/-57,427,009.36 | | | | | | 57,427,009.36/-57,427,009.36 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group’s primary objective of capital management is to ensure the Group’s ability to continue as a going concern and maintain healthy capital ratios to support business development and maximize shareholder value.
The Group manages its capital structure and makes adjustments based on the economic situation and changes in the risk characteristics of the relevant assets. To maintain or adjust the capital structure, the Group may adjust the distribution of profits to shareholders, return capital to shareholders, or issue new shares. There have been no changes in the capital management objectives, policies, or procedures for the year ended 2021 and 2020.
The Group manages its capital using the debt-to-equity ratio, which has been 84.47% as of December 31, 2021, representing an increase of 20.78% compared to the previous year-end. This increase is mainly due to the impact of the new lease standard, where the increase in lease liabilities exceeds the increase in right-of- use assets. Excluding the impact of the new lease standard, the debt- to-equity ratio at the end of the reporting period is 68.95%. The Management believes that it is in compliance with the requirements of the Group’s capital management.
| XI. | Disclosure of Fair Value |
| 1. | Closing fair value of assets and liabilities measured at fair value |
| √ | Applicable | ¨ | Not applicable |
| | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | |
| | | Closing fair value | | | | |
| | | Primary | | | Secondary | | Tertiary | | | | |
| | | fair value | | | fair value | | fair value | | | | |
| Items | | calculation | | | calculation | | calculation | | | Total | |
| I. Continuous fair value calculation (I) Trading financial assets | | | 1,546,949,982.11 | | | | | | 13,967,938.60 | | | | 1,560,917,920.71 | |
| 1. Financial assets measured at fair value and booked into current profits and losses | | | 1,546,949,982.11 | | | | | | 13,967,938.60 | | | | 1,560,917,920.71 | |
| (1) Debt instrument investment | | | | | | | | | | | | | | |
| (2) Equity instrument investment | | | 1,220,745,615.56 | | | | | | 13,967,938.60 | | | | 1,234,713,554.16 | |
| (3) Fund product investments | | | 326,204,366.55 | | | | | | | | | | 326,204,366.55 | |
| 2. Financial assets that are specified to be measured at fair value and whose changes are booked into current profits and losses | | | | | | | | | | | | | | |
| (1) Debt instrument investment | | | | | | | | | | | | | | |
| (2) Equity instrument investment | | | | | | | | | | | | | | |
| (II) Other creditor investments | | | | | | | | | | | | | | |
| (III) Investment in other equity instruments | | | | | | | | | | | | | | |
| (IV) Investment properties | | | | | | | | | | | | | | |
| 1. The right to use land for lease | | | | | | | | | | | | | | |
| 2. Buildings for lease | | | | | | | | | | | | | | |
| 3. Land use right held and transferred after preparation for increment | | | | | | | | | | | | | | |
| (V) Biological assets | | | | | | | | | | | | | | |
| 1. Consumable biological assets | | | | | | | | | | | | | | |
| 2. Productive biological assets (IV) Other non-current financial assets | | | | | | | | | 4,100,000,000.00 | | | | 4,100,000,000.00 | |
| Total assets measured at fair value continuously | | | 1,546,949,982.11 | | | | | | 4,113,967,938.60 | | | | 5,660,917,920.71 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group recognizes the transfer between levels based on the occurrence date of the events that cause the transfer between levels.
The Management has assessed that cash and cash equivalents, accounts receivable, and accounts payable have relatively short remaining terms and their fair values are close to their carrying amounts.
The Financial Department of the Group is led by the Financial Manager and is responsible for formulating policies and procedures for fair value measurement of financial instruments. The Financial Manager reports directly to the Chief Financial Officer. On each balance sheet date, the financial department analyzes the value changes of financial instruments and determines the main input values applicable to the valuation. Valuations require approval from the Chief Financial Officer.
Fair value refers to the amount at which both parties to a transaction who are familiar with the condition exchange their assets or clear off their debts under fair conditions instead of the amount induced by forced selling or liquidation. The following methods and assumptions are used to estimate the fair values.
Long-term receivables, long and short-term borrowings, etc., are valued at fair value using the discounted cash flow method, using the market yield of other financial instruments with similar contractual terms, credit risks, and remaining maturities as the discount rate. On December 31, 2021, the Group assessed the self-non-compliance risk of borrowings, both long-term and short-term, as not significant.
Listed equity instrument investments are valued at market quotations. For unlisted equity instruments, the fair value is estimated using market-based models that rely on assumptions not supported by observable market prices or rates. The Group needs to make estimates regarding the selection of comparable companies for market-based valuation. The Group believes that the fair value and its changes estimated using valuation techniques are reasonable and represent the most appropriate values as of the balance sheet date.
| 2. | Basis for determination of market price for measurement of fair value of the first level on an ongoing concern or not |
| √ | Applicable | ¨ | Not applicable |
For financial instruments traded in active markets, the Group determines their fair value based on their active market quotations;
| 3. | For continuous and discontinuous secondary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| √ | Applicable | ¨ | Not applicable |
For financial instruments not traded in active markets, the Group determines their fair value with the aid of valuation techniques.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 4. | For continuous and discontinuous tertiary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| √ | Applicable | ¨ | Not applicable |
| | | Fair value | | | | | | | | | | | |
| Equity instrument | | at the end of | | Valuation | | | Unobservable | | | Range interval |
| investment | | the year | | techniques | | | Inputs | | | (weighted average) |
| Dalian Wanda Commercial | | 2021: 4,100,000,000.00 | | Market | | | approach | | | Marketability Discount | | | Higher liquidity discount, lower fair value |
| Management Group Co., Ltd. | | 2020: 3,708,000,000.00 | | | Market | | | | approach | | | | Marketability Discount | | | Higher liquidity discount, lower fair value |
| 5. | Continuous tertiary fair value calculating projects, adjustment information among book values at term start and term end as well as sensitivity analysis on unobserved parameters |
| √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Changes in |
| | | | | | | | | | | | | | | | | unrealized gains |
| | | | | | | | | | | | | | | | | | or losses on |
| | | | | | | | | | | | | | | | | assets held at |
| | | | | | | | | | | | Current gains | | | | | the end of the |
| | | | | | | | | | | | or losses are | | | | | year that are |
| | | Opening | | | Transferred-in | | | Transferred-out | | | recognized in | | | Closing | | | recognized in |
| | | balance | | | to level 3 | | | from level 3 | | | profit or loss | | | balance | | profit or loss |
| Trading financial assets | | | | | | | | | | | | | | | | | | | | | | |
| Equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | | | | | 11,341,004.18 | | | | | | | | 2,626,934.42 | | | | 13,967,938.60 | | | 2,626,934.42 |
| Other non-current financial assets | | | 5,618,159,570.30 | | | | -11,341,004.18 | | | | -1,770,352,880.96 | | | | 263,534,314.84 | | | | 4,100,000,000.00 | | | 392,000,000.00 |
| Total | | | 5,618,159,570.30 | | | | | | | | -1,770,352,880.96 | | | | 266,161,249.26 | | | | 4,113,967,938.60 | | | 394,626,934.42 |
| 6. | For continuous fair value calculating items, the transfer reasons and the policy of determining the transfer time point shall be described if transferring occurs among levels in the term |
| √ | Applicable | ¨ | Not applicable |
| Year 2021 | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| | Transferred-in | | | Transferred-out | | | Cause | |
| First level | | | 1,770,352,880.96 | | | | | | | Note 1 | |
| Second level | | | | | | | | | | | |
| Third level | | | | | | | 1,770,352,880.96 | | | Note 1 | |
| | | | 1,770,352,880.96 | | | | 1,770,352,880.96 | | | | |
| | Note 1: Compared to 2020, in 2021, RMB1,770,352,880.96 of equity instrument investments were released from restrictions, resulting in a transfer from Level 3 to Level 1 in the fair value hierarchy. |
| | |
| 7. | Estimate technology change occurred in the current year and change reasons |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 8. | Financial asset not measured in fair value and fair value of financial liabilities |
| √ | Applicable | ¨ | Not applicable |
The following is a comparison of the carrying value and fair value of various categories of financial instruments, excluding lease liabilities and financial instruments with minimal differences between carrying value and fair value:
Unit: Yuan Currency: RMB
| | Carrying value | | | Fair value | |
| Financial liabilities | | | | | | | | |
| Long-term borrowings | | | 1,021,069,722.22 | | | | 1,000,997,871.08 | |
| ¨ | Applicable | √ | Not applicable |
| XII. | Affiliated Parties and Transactions |
| 1. | Parent company of the Company |
| ¨ | Applicable | √ | Not applicable |
| 2. | Subsidiaries of the Company |
For details on the Company’s subsidiaries, please refer to the notes
| √ | Applicable | ¨ | Not applicable |
For details of subsidiaries, please refer to Section IX.1. Equity in subsidiaries.
| 3. | Cooperative enterprises and joint ventures of the Company |
See Note for significant cooperative enterprises and joint ventures of the Company
| √ | Applicable | ¨ | Not applicable |
For details of important cooperative enterprises and joint venture, please refer to section IX. 3. Equities in Cooperative Enterprises and Joint Ventures
The information of other cooperative enterprises and joint ventures that have related-party transaction with the Company in this term, or had related-party transaction with the Company at earlier term and have formed balances
| √ | Applicable | ¨ | Not applicable |
| Names of cooperative enterprises and joint ventures | | Relation to the Company |
| Yonghui Fresh Food Development Co., Ltd. | | The Group’s shareholding ratio of 32.33% |
| Zhongbai Holdings Group Co., Ltd. | | The Group’s shareholding ratio of 29.86% |
| Fujian OneBank Limited | | The Group’s shareholding ratio of 27.50% |
| Chengdu Hongqi Chain Co., Ltd. | | The Group’s shareholding ratio of 21.00% |
| Xiangcun Gaokao Agricultural Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | The Group’s shareholding ratio of 42.00% |
| Beijing Friendship Messenger Trading Co., Ltd. | | The Group’s shareholding ratio of 30.00% |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Names of cooperative enterprises and joint ventures | | Relation to the Company |
| Fujian Minwei Industrial Co., Ltd. | | The Group’s shareholding ratio of 19.64% |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 30.00% |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. | | The Group’s shareholding ratio of 40.00% |
| 1233 International Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 40.00% |
| Fuzhou Yunchuang Life Information Technology Co., Ltd. | | The Group’s shareholding ratio of 15.84% |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | The Group’s shareholding ratio of 15.53% |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | The Group’s shareholding ratio of 15.84% |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | The Group’s shareholding ratio of 4.24% |
| Fujian Enhui Technology Co., Ltd. | | The Group’s shareholding ratio of 18.64% |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | The Group’s shareholding ratio of 18.64% |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. | | The Group’s shareholding ratio of 49.00% |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| 4. | Other affiliated parties |
| √ | Applicable | ¨ | Not applicable |
| Name of other affiliated parties | | Relationship of other affiliated parties with the Company |
| Tencent Technology (Shenzhen) Co. Ltd | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Shenzhen Tencent Computer System Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Guangdong Mannings Chain Commercial Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| Mannings (Chongqing) Health Products Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| Mannings Chain Commercial (Beijing) Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| Mannings Daily Necessities Commercial (Shanghai) Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| Beijing Jingbangda Trading Co., Ltd. | | Companies controlled by Jiangsu Jingdong Bangneng Investment Management Co., Ltd. and Jiangsu Yuanzhou Electronic Commerce Co., Ltd., which together hold 13.38% equity of the Company |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of other affiliated parties | | Relationship of other affiliated parties with the Company |
| JD.COM INTERNATIONAL LIMITED | | Companies controlled by Jiangsu Jingdong Bangneng Investment Management Co., Ltd. and Jiangsu Yuanzhou Electronic Commerce Co., Ltd., which together hold 13.38% equity of the Company |
| Beijing Jingdong 360 Degrees E-Commerce Co., Ltd. | | Companies controlled by Jiangsu Jingdong Bangneng Investment Management Co., Ltd. and Jiangsu Yuanzhou Electronic Commerce Co., Ltd., which together hold 13.38% equity of the Company |
| Beijing Jingdong Century Trade Co., Ltd. | | Companies controlled by Jiangsu Jingdong Bangneng Investment Management Co., Ltd. and Jiangsu Yuanzhou Electronic Commerce Co., Ltd., which together hold 13.38% equity of the Company |
| Beijing Jingdong Century Information Technology Co., Ltd. | | Companies controlled by Jiangsu Jingdong Bangneng Investment Management Co., Ltd. and Jiangsu Yuanzhou Electronic Commerce Co., Ltd., which together hold 13.38% equity of the Company |
| Chengdu Jingdong Century Trading Co., Ltd. | | Companies controlled by Jiangsu Jingdong Bangneng Investment Management Co., Ltd. and Jiangsu Yuanzhou Electronic Commerce Co., Ltd., which together hold 13.38% equity of the Company |
| Jiangsu Jingdong Information Technology Co., Ltd. | | Companies controlled by Jiangsu Jingdong Bangneng Investment Management Co., Ltd. and Jiangsu Yuanzhou Electronic Commerce Co., Ltd., which together hold 13.38% equity of the Company |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 11.70% equity of the Company |
| Fujian Xuanhui Yongjia Business Operation Management Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 11.70% equity of the Company |
| Fujian Xuanhui Property Management Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 11.70% equity of the Company |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 11.70% equity of the Company |
| Sanming Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 11.70% equity of the Company |
| Sanming Xuanhui Business Operation Management Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 11.70% equity of the Company |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 11.70% equity of the Company |
| Zhang Xuansong | | Natural person holding 11.70% equity of the Company |
| Zhang Xuanning | | Natural person holding 8.20% equity of the Company |
| Songyuan Rongtong Real Estate Development Co., Ltd. | | Minority shareholder of the Company’s sub-subsidiary |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of other affiliated parties | | Relationship of other affiliated parties with the Company |
| Fuping County Qijin Ecological Agriculture Technology Development Co., Ltd. | | Minority shareholder of the Company’s subsidiary |
| PARKnSHOP (China) Investment Co., Ltd. | | Minority shareholder of the Company’s subsidiary |
| Fuzhou Shouyao Construction Labor Engineering Co., Ltd. | | Minority shareholder of the Company’s subsidiary |
| CJ FRESHWAY Yonghui (Shanghai) Trade Co., Ltd. | | Original cooperative enterprise of the Company |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Original cooperative enterprise of the Company |
| Quanzhou Lixia Business Management Co., Ltd. | | Original cooperative enterprise of the Company |
| Jiangsu Shenguo Technology Co., Ltd. | | Original cooperative enterprise of the Company |
| Fujian Caimeimei Supply Chain Management Co., Ltd. | | Original cooperative enterprise of the Company |
| Directors, Supervisors, Chief Financial Officer, and Board Secretary | | Key Management Staff |
| 5. | Affiliated transactions |
| | |
| (1). | Related transactions for purchasing and selling commodities and providing and accepting labor service |
| | |
| | Table for goods procurement/labor service acceptance |
| √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB | |
| Affiliated parties | | Content
of related
transaction | | | Amount of
current period | | | Amount of
last period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Commodity purchase | | | 2,804,850,064.28 | | | 2,093,905,247.27 | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Commodity purchase | | | 525,754,592.90 | | | 854,445,897.32 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Commodity purchase | | | 713,546,399.67 | | | 590,426,154.53 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Commodity purchase | | | 306,258,789.30 | | | 156,559,120.24 | |
| Zhanjiang Guolian Aquatic Development Co., Ltd. and its subsidiaries | | Commodity purchase | | | 166,981,811.67 | | | 138,531,768.19 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Commodity purchase | | | 81,413,682.49 | | | 119,797,629.97 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Commodity purchase | | | 22,227,655.29 | | | 11,399,324.02 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content
of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | 70,007,310.80 | | | | 65,689,776.69 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Commodity purchase | | | 12,307,206.55 | | | | | |
| Fujian Enhui Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | 1,106,696.90 | | | | | |
| Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | Commodity purchase | | | 39,706.03 | | | | | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Commodity purchase | | | 24,238.13 | | | | | |
| CJ FRESHWAY Yonghui (Shanghai) Trade Co., Ltd. | | Commodity purchase | | | | | | | 38,385,950.68 | |
| Yonghui Yunchuang Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | | | | | 13,364,994.48 | |
| Guangdong Mannings Chain Commercial Co., Ltd. | | Commodity purchase | | | | | | | 3,525,334.33 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 171,466,331.56 | | | | | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 104,621,610.61 | | | | | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 89,987,622.18 | | | | | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Labor service acceptance | | | 19,848,270.70 | | | | 16,573,669.87 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 20,869,727.37 | | | | 15,542,337.06 | |
| Fujian Enhui Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 6,385,244.66 | | | | | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 1,160,850.41 | | | | | |
| Yonghui Yunchuang Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | | | | | 12,922,349.29 | |
| Beijing Jingbangda Trading Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 743,631.65 | | | | | |
| Quanzhou Lixia Business Management Co., Ltd. | | Labor service acceptance | | | 516,042.69 | | | | | |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. | | Labor service acceptance | | | 207,547.16 | | | | 3,109,046.41 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content
of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Chengdu Hongqi Chain Co., Ltd. | | Labor service acceptance | | | 167,484.67 | | | | 960,269.58 | |
| Fuping County Qijin Ecological Agriculture Technology Development Co., Ltd. | | Labor service acceptance | | | | | | | 707,547.17 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 294,466.32 | | | | 429,604.91 | |
| Jiangsu Shenguo Technology Co., Ltd. | | Labor service acceptance | | | 256,072.21 | | | | | |
| Sanming Xuanhui Business Operation Management Co., Ltd. | | Labor service acceptance | | | 148,981.08 | | | | | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Acquisition of fixed assets | | | 16,054,746.77 | | | | | |
| PARKnSHOP (China) Investment Co., Ltd. | | Usage fee for funds | | | 2,262,239.54 | | | | 2,382,949.10 | |
| Table for goods sale/labor service rendering |
| √ Applicable | ¨ Not applicable | |
| Affiliated parties | | Content
of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Yonghui Yunchuang Technology Co., Ltd. and its subsidiaries | | Sales of goods | | | | | | | 645,438,004.92 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Sales of goods | | | 686,337,847.76 | | | | 453,861,937.05 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Sales of goods | | | 107,842,574.21 | | | | 125,318,753.62 | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Sales of goods | | | 295,412.84 | | | | 1,259,633.03 | |
| Fujian Enhui Technology Co., Ltd. and its subsidiaries | | Sales of goods | | | 19,127,024.66 | | | | | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Sales of goods | | | 2,921,108.08 | | | | | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Sales of goods | | | 619,277.31 | | | | | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Sales of goods | | | 594,561.79 | | | | 895,442.70 | |
| Fujian OneBank Limited | | Sales of goods | | | 14,511.50 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content
of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Provision of labor services | | | 9,766,268.00 | | | | 80,903,084.17 | |
| Yonghui Yunchuang Technology Co., Ltd. and its subsidiaries | | Provision of labor services | | | | | | | 57,494,727.17 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Provision of labor services | | | 34,487,987.75 | | | | 15,806,808.82 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Provision of labor services | | | 4,075,471.69 | | | | 2,588,362.42 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Provision of labor services | | | 1,633,582.83 | | | | 2,214,265.09 | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Provision of labor services | | | 782,028.88 | | | | 1,151,506.41 | |
| CJ FRESHWAY Yonghui (Shanghai) Trading Co., Ltd. | | Provision of labor services | | | | | | | 812,622.23 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Provision of labor services | | | 67,254.74 | | | | 147,932.62 | |
| Sanming Xuanhui Property Development Co., Ltd. | | Provision of labor services | | | | | | | 304,732.47 | |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Provision of labor services | | | | | | | 227,735.78 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Provision of labor services | | | 143,136.67 | | | | 20,540.76 | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | Provision of labor services | | | 184,395.73 | | | | 522,119.70 | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Provision of labor services | | | 604,752.84 | | | | | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Provision of labor services | | | 1,500,856.67 | | | | | |
| Fujian OneBank Limited | | Interest income | | | 17,890,879.20 | | | | 18,032,715.38 | |
| Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | Interest income | | | 4,761,423.13 | | | | 5,312,758.92 | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Interest income | | | 2,167,190.75 | | | | 2,819,706.48 | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | Interest income | | | 3,412,085.71 | | | | 2,685,927.67 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Interest income | | | 1,225,366.89 | | | | 2,502,096.45 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Interest income | | | | | | | 370,649.9 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Interest income | | | | | | | 243,591.35 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Interest income | | | 563,696.18 | | | | 344,016.59 | |
Affiliated transaction description on purchase and sale of goods, supply and labor service acceptance
| ¨ | Applicable | √ | Not applicable |
| (2). | Related entrusted management/contracting and mandatory management/outsourcing conditions |
Table for trustee management and contracting of the Company:
| ¨ | Applicable | √ | Not applicable |
Description of the condition of affiliated trusteeship/contracting
| ¨ | Applicable | √ | Not applicable |
List of entrusted management/outsource cases of the Company
| ¨ | Applicable | √ | Not applicable |
Description on affiliated management/contracting condition
| ¨ | Applicable | √ | Not applicable |
The Company is the lessor:
| √ | Applicable | ¨ | Not applicable |
| Name of lessee | | Type of
leased assets | | Confirmed
leasing income in
current period | | | Confirmed
leasing income in
previous period | |
| Mannings Daily Necessities Commercial (Shanghai) Co., Ltd. | | Commercial land — Luban Store, Huangpu District | | | | | | | 70,026.68 | |
| Mannings (Chongqing) Health Products Co., Ltd. | | Commercial land — Zhongjia Lijing Store, Dadukou District | | | | | | | 84,158.87 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse leasing | | | 22,520,068.71 | | | | 19,321,752.13 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of lessee | | Type of
leased assets | | Confirmed
leasing income in
current period | | | Confirmed
leasing income in
previous period | |
| 1233 International Supply Chain Management Co., Ltd. | | Commercial land – Fuzhou MIXC | | | 3,310,861.36 | | | | | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | Commercial land – Chongqing Xuanhui Real Estate Company | | | 609,430.07 | | | | | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | Commercial land – Guanghua Avenue Store, Wenjiang, Chengdu | | | 319,790.77 | | | | | |
| Yonghui Yunchuang Technology Co., Ltd. and its subsidiaries | | Warehouse leasing | | | | | | | 10,547,503.37 | |
The Company as the Leasee:
| √ | Applicable | ¨ | Not applicable |
| Name of Lessor | | Type of
leased assets | | Confirmed
leasing fee in
current period | | | Confirmed
leasing fee in
last period | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Commercial land and office building – Jinshan Park Store | | | | | | | 5,239,067.28 | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Quangang Yongjia Store, Quanzhou | | | | | | | 2,512,204.20 | |
| Zhang Xuansong | | Commercial land – Daru Shijia Store | | | | | | | 5,674,250.06 | |
| Zhang Xuansong | | Office building – Zuohai Office Building | | | | | | | 3,366,502.89 | |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Commercial land – Pucheng Xinhua Store | | | | | | | 4,353,823.38 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Xiangyang Minfa Plaza Store | | | | | | | 128,173.49 | |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Fuzhou Minhou Nantong Branch Store | | | | | | | 922,065.35 | |
| Sanming Xuanhui Property Development Co., Ltd. | | Yongjia Tiandi Store | | | | | | | 703,706.40 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse leasing | | | | | | | 2,412,591.62 | |
Descriptions of affiliated leases condition
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Since January 1, 2021, the Company has been adopting the new leasing standard. Under the new standard, for non-exempt lease contracts, the Company no longer recognizes lease expenses on the balance sheet. Lease expenses for exempt contracts are recognized using the straight-line method.
| (4). | Related-party guarantee |
The Company as the guarantor
| ¨ | Applicable | √ | Not applicable |
The Company as the guaranteed party
| ¨ | Applicable | √ | Not applicable |
Description of affiliated guarantee
| ¨ | Applicable | √ | Not applicable |
| (5). | Fund inter-bank lending for affiliated parties |
| √ | Applicable | ¨ | Not applicable |
| Affiliated | | Lending | | | | | | | | |
| parties | | amount | | | Starting date | | Due date | | Explanation | |
| Borrowings | | | | | | | | | | | | |
| PARKnSHOP (China) Investment Co., Ltd. | | | 46,250,000.00 | | | May 9, 2019 | | May 8, 2023 | | | Borrowings | |
| Affiliated | | Lending | | | | | | | | | |
| parties | | amount | | | Starting date | | Due date | | | Explanation | |
| Lendings Fujian Minwei Industrial Co., Ltd. | | | 61,900,000.00 | | | July 6, 2021 | | October 23, 2022 | | | Factoring funds | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 35,000,000.00 | | | June 8, 2021 | | June 3, 2022 | | | Factoring funds | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | 100,000,000.00 | | | October 26, 2021 | | December 30, 2021 | | | Factoring funds | |
| Zhanjiang Guolian Aquatic Products Co., Ltd. | | | 34,407,187.09 | | | July 20, 2021 | | December 12, 2022 | | | Factoring funds | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 11,729,000.00 | | | January 8, 2020 | | February 24, 2024 | | | Group borrowings | |
Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries received a total of RMB2,695,000.00 funds from the Group during the current year, with an annual interest rate of 4.785%, starting from January 13, 2021, and due on February 24, 2024 (2020: RMB9,104,000.00, with an annual interest rate of 4.785%, starting from January 8, 2020, received early repayment of RMB70,000.00 in the current year, and the remaining RMB9,034,000.00 is due on February 24, 2024).
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Fuzhou Minwei Industrial Co., Ltd. and its subsidiaries received a total of RMB61,900,000.00 factoring funds from the Group during the current year, with an annual interest rate of 8.50%, starting from July 6, 2021, and due on October 23, 2022 (2020: RMB50,000,000.00, with an annual interest rate of 8.50%, starting from January 10, 2020, fully repaid on October 8, 2021).
Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries received a total of RMB35,000,000.00 factoring funds from the Group during the current year, with an annual interest rate of 12.00%, starting from June 8, 2021, and due on June 3, 2022 (2020: RMB45,000,000.00, with an annual interest rate of 11.50%, starting from June 11, 2020, fully repaid on November 11, 2021).
Yonghui Fresh Food Development Co., Ltd. and its subsidiaries received a total of RMB100,000,000.00 factoring funds from the Group during the current year, with an annual interest rate of 7.00%, starting from October 26, 2021, fully repaid on December 30, 2021 (2020: RMB80,000,000.00, with an annual interest rate of 7.00%, starting from July 13, 2020, fully repaid on July 11, 2021).
Zhanjiang Guolian Aquatic Development Co., Ltd. and its subsidiaries received a total of RMB34,407,187.09 factoring funds from the Group during the current year, with an annual interest rate of 10.00%. Among them, RMB25,000,000.00 with a starting date of July 20, 2021, is due on July 15, 2022, and RMB9,407,187.09 with a starting date of December 17, 2021, is due on December 12, 2022 (2020: RMB50,000,000.00, with an annual interest rate of 10.00%, starting from January 7, 2020, fully repaid on July 9, 2021).
| (6). | Assets transferring and debt restructuring of affiliated parties |
| ¨ | Applicable | √ | Not applicable |
| (7). | Remuneration for key management personnel |
| √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan 10,000 Currency: RMB |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Remuneration for key management personnel | | | 3,509.50 | | | | 4,497.89 | |
| (8). | Other related transactions |
| ¨ | Applicable | √ | Not applicable |
| 6. | Receivables and payables of affiliated parties |
| √ | Applicable | ¨ | Not applicable |
| | | | | Closing balance | | | Opening balance | |
| | | | | Book | | | Bad debt | | | Book | | | Bad debt | |
| Project name | | Affiliated parties | | balance | | | provision | | | balance | | | provision | |
| Account receivable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 1,914,602.52 | | | | 19,146.03 | | | | 7,550,983.37 | | | | 75,509.83 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing balance | | | Opening balance | |
| | | | | Book | | | Bad debt | | | Book | | | Bad debt | |
| Project name | | Affiliated parties | | balance | | | provision | | | balance | | | provision | |
| Account receivable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 4,442,427.43 | | | | 44,424.27 | | | | 2,887,321.55 | | | | 28,873.22 | |
| Account receivable | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | 9,884,452.60 | | | | 98,844.53 | | | | 1,598,059.73 | | | | 15,980.60 | |
| Account receivable | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | 6,240.47 | | | | 62.40 | | | | 169,069.64 | | | | 1,690.70 | |
| Account receivable | | Jiangsu Jingdong Information Technology Co., Ltd. | | | 249,643.22 | | | | 2,496.43 | | | | 160,874.44 | | | | 1,608.74 | |
| Account receivable | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 6,058,292.95 | | | | 60,582.93 | | | | 66,666.00 | | | | 666.66 | |
| Account receivable | | Chengdu Hongqi Chain Co., Ltd. and its subsidiaries | | | 18,750.00 | | | | 187.50 | | | | 18,750.00 | | | | 187.50 | |
| Account receivable | | Beijing Jingdong Century Trade Co., Ltd. | | | 514,380.89 | | | | 5,143.81 | | | | 11,000.00 | | | | 110.00 | |
| Other receivables | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | | | | | | | | | 25,963,154.34 | | | | | |
| Other receivables | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 11,942,088.70 | | | | 119,420.89 | | | | 9,141,512.48 | | | | 91,415.13 | |
| Other receivables | | Jiangsu Shenguo Technology Co., Ltd. | | | | | | | | | | | 4,410,705.07 | | | | | |
| Other receivables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 100,000.00 | | | | 1,000.00 | | | | 521,474.96 | | | | | |
| Other receivables | | Zhang Xuansong | | | | | | | | | | | 450,360.00 | | | | 4,503.60 | |
| Other receivables | | Fujian OneBank Limited | | | 434,591.63 | | | | 4,345.92 | | | | 201,768.96 | | | | 2,017.69 | |
| Other receivables | | Beijing Jingdong Century Trade Co., Ltd. | | | 150,000.00 | | | | 1,500.00 | | | | 50,000.00 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing balance | | | Opening balance | |
| | | | | Book | | | Bad debt | | | Book | | | Bad debt | |
| Project name | | Affiliated parties | | balance | | | provision | | | balance | | | provision | |
| Other receivables | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 514,601.18 | | | | 5,146.01 | | | | | | | | | |
| Other receivables | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | | 100,000.00 | | | | 1,000.00 | | | | | | | | | |
| Other receivables | | Fujian Xuanhui Real Estate Development Co., Ltd. and its subsidiaries | | | 47,250.00 | | | | 472.5 | | | | | | | | | |
| Prepaid accounts | | Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 118,118,547.54 | | | | | | | | 214,680,548.52 | | | | | |
| Prepaid accounts | | Beijing Friendship Messenger Trading Co., Ltd. | | | 71,637,166.57 | | | | | | | | 67,252,708.57 | | | | | |
| Prepaid accounts | | Zhanjiang Guolian Aquatic Development Co., Ltd. and its subsidiaries | | | | | | | | | | | 7,080,569.27 | | | | | |
| Prepaid accounts | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 827,917.11 | | | | | | | | 6,172,686.73 | | | | | |
| Prepaid accounts | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | | | | | | | | | 4,808,666.96 | | | | | |
| Prepaid accounts | | Yonghui (Pucheng) Real Estate Development Co., Ltd. | | | | | | | | | | | 4,335,762.19 | | | | | |
| Prepaid accounts | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | 6,031,628.92 | | | | | | | | 3,874,138.47 | | | | | |
| Prepaid accounts | | Jiangsu Shenguo Technology Co., Ltd. | | | | | | | | | | | 2,396,910.80 | | | | | |
| Prepaid accounts | | Origin Country Network Technology (Shanghai) Co., Ltd. | | | | | | | | | | | 51,863.09 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing balance | | | Closing balance | |
| | | | | Book | | | Bad debt | | | Book | | | Bad debt | |
| Project name | | Affiliated parties | | balance | | | provision | | | balance | | | provision | |
| Prepaid accounts | | Shanghai Xuanhui Business Service Technology Co., Ltd. | | | | | | | | | | | 37,900.00 | | | | | |
| Prepaid accounts | | Fujian Lingyu Jinhua Brand Management Co., Ltd. | | | 155,296.26 | | | | | | | | 21,000.00 | | | | | |
| Prepaid accounts | | Tencent Cloud Computing (Beijing) Co., Ltd. | | | 17,964.72 | | | | | | | | 17,964.00 | | | | | |
| Prepaid accounts | | Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | | 43,304.42 | | | | | | | | 15,432.57 | | | | | |
| Prepaid accounts | | Fujian Xuanhui Real Estate Development Co., Ltd. | | | 120,266.10 | | | | | | | | | | | | | |
| Prepaid accounts | | Shenzhen Tencent Computer System Co., Ltd. | | | 50,000.00 | | | | | | | | 300.00 | | | | | |
| Factoring receivable | | Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | | | | | | | | | 80,272,222.22 | | | | 802,722.22 | |
| Factoring receivable | | Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | | 58,099,555.36 | | | | 580,995.55 | | | | 40,113,333.34 | | | | 401,133.33 | |
| Factoring receivable | | Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | | 30,185,604.58 | | | | 301,856.05 | | | | 30,130,000.00 | | | | 301,300.00 | |
| Factoring receivable | | Zhanjiang Guolian Aquatic Development Co., Ltd. and its subsidiaries | | | | | | | | | | | 30,150,000.00 | | | | 301,500.00 | |
| Loans and advances | | Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | | | | | | | | | | 20,056,666.67 | | | | 300,850.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
(2). Accounts payable
| √ | Applicable | ¨ | Not applicable |
| | | | | Closing book | | | Opening book | |
| Project name | | Affiliated parties | | balance | | | balance | |
| Notes payable | | Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | 33,000,000.00 | | | | | |
| Accounts payable | | Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | 286,827,632.90 | | | | 177,221,582.75 | |
| Accounts payable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 104,997,669.53 | | | | 111,575,913.89 | |
| Accounts payable | | Zhanjiang Guolian Aquatic Development Co., Ltd. and its subsidiaries | | | | | | | 25,662,780.03 | |
| Accounts payable | | Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | | 9,263,911.27 | | | | 14,700,299.03 | |
| Accounts payable | | Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | | 5,789,907.83 | | | | 10,251,182.90 | |
| Accounts payable | | Jiangsu Shenguo Technology Co., Ltd. | | | | | | | 6,271,114.73 | |
| Accounts payable | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | 491,723.42 | | | | 4,604,720.96 | |
| Accounts payable | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 2,316,644.04 | | | | 3,017,763.80 | |
| Accounts payable | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | 5,459,248.10 | | | | 2,931,376.45 | |
| Accounts payable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 820,154.49 | | | | 1,420,824.52 | |
| Accounts payable | | Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | | | | | | 90,381.90 | |
| Accounts payable | | Fuping County Qijin Ecological Agriculture Technology Development Co., Ltd. | | | 13,474.86 | | | | 13,474.86 | |
| Accounts payable | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 45,196.69 | | | | | |
| Other payables | | PARKnSHOP (China) Investment Co., Ltd. | | | 46,897,027.13 | | | | 46,528,173.47 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing Book | | | Opening Book | |
| Project name | | Affiliated parties | | balance | | | balance | |
| Other payables | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | 32,051,174.31 | | | | 40,365,987.90 | |
| Other payables | | Shanghai Xuanhui Business Service Technology Co., Ltd. | | | 19,917,251.43 | | | | 3,487,499.38 | |
| Other payables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 10,344,983.99 | | | | 19,946,224.22 | |
| Other payables | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | | | | | 3,316,991.41 | |
| Other payables | | Songyuan Rongtong Real Estate Development Co., Ltd. | | | 1,778,060.52 | | | | 1,778,060.52 | |
| Other payables | | Chengdu Hongqi Chain Co., Ltd. and its subsidiaries | | | 160,000.00 | | | | 600,000.00 | |
| Other payables | | Tencent Cloud Computing (Beijing) Co., Ltd. | | | 1,204,212.55 | | | | 394,893.66 | |
| Other payables | | Jiangsu Shenguo Technology Co., Ltd. | | | | | | | 212,367.89 | |
| Other payables | | Zhang Xuansong | | | 1,880,742.05 | | | | 210,406.50 | |
| Other payables | | Fujian Xuanhui Real Estate Development Co., Ltd. and its subsidiaries | | | 2,161,422.15 | | | | 173,632.37 | |
| Other payables | | Fuzhou Xuanhui Property Development Co., Ltd. | | | | | | | 131,225.06 | |
| Other payables | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 41,649.54 | | | | | |
| Other payables | | Mannings (Chongqing) Health Products Co., Ltd. | | | 30,000.00 | | | | 30,000.00 | |
| Other payables | | Sanming Xuanhui Property Development Co., Ltd. | | | | | | | 85,706.38 | |
| Other payables | | Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | | 66,150.00 | | | | | |
| Other payables | | Beijing Jingbangda Trading Co., Ltd. and its subsidiaries | | | 8,706.63 | | | | | |
| Contract liabilities | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | 1,865,081.22 | | | | 11,321,786.23 | |
| Contract liabilities | | Jiangsu Shenguo Technology Co., Ltd. | | | | | | | 1,318,222.79 | |
| Contract liabilities | | Beijing Jingdong Century Trade Co., Ltd. | | | 242,624.90 | | | | 239,388.48 | |
| Contract liabilities | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 1,115,657.81 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing Book | | | Opening Book | |
| Project name | | Affiliated parties | | balance | | | balance | |
| Contract liabilities | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 631,407.85 | | | | | |
| Contract liabilities | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 158,362.93 | | | | | |
| Advance payment | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | 53,481.73 | | | | | |
| Advance payment | | Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | | 94,500.00 | | | | | |
| Lease liabilities | | Fujian Xuanhui Real Estate Development Co., Ltd. | | | 46,117,005.45 | | | | | |
| Lease liabilities | | Zhang Xuansong | | | 29,770,869.55 | | | | | |
| Lease liabilities | | Fuzhou Xuanhui Property Development Co., Ltd. | | | 24,023,367.54 | | | | | |
| Lease liabilities | | Yonghui (Pucheng) Real Estate Development Co., Ltd. | | | 23,834,992.60 | | | | | |
| Lease liabilities | | Sanming Xuanhui Property Development Co., Ltd. | | | 19,252,212.34 | | | | | |
7. Commitment of affiliated parties
| ¨ | Applicable | √ | Not applicable |
8. Others
| √ | Applicable | ¨ | Not applicable |
Deposition of monetary funds of affiliated parties
| | | | | Carrying | | | Carrying | |
| | | | | amount at | | | amount at | |
| | | | | end of | | | beginning of | |
| Items | | Affiliated parties | | the period | | | the period | |
| Bank deposit | | Fujian OneBank Co., Ltd. | | | 651,099,553.50 | | | | 638,208,674.31 | |
XIII. Share-based Payment
1. Overall condition of share-based payment
| ¨ | Applicable | √ | Not applicable |
2. Condition of equity-settled share-based payment
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Measures for confirmation of the fair value of the equity instruments on the grant date | | Grant date closing price of the stock |
| | | |
| Basis for determining the number of exercisable equity instruments | | Based on the granted restricted quota, taking into consideration the changes in the number of eligible employees for exercising the rights on each balance sheet date, as well as the performance evaluation indicators of each eligible year and the individual performance evaluation of the incentive targets, the determination is made. |
| | | |
| Reasons for any significant difference between the estimate in current period and the one in last period | | None |
| Accumulative amount of share-based payment settled in equity as part of the capital reserve | | | 697,468,779.90 | |
| | | | | |
| Total expenses recognized by equity-settled share-based payments in the current period | | | 11,565,233.98 | |
3. Condition of cash-settled share-based payment
| ¨ | Applicable | √ | Not applicable |
4. Condition of modification and termination of share-based payment
| √ | Applicable | ¨ | Not applicable |
On July 6, 2021, the Company held the 29th meeting of the fourth board of directors to approve the proposal on terminating the implementation of the 2017 and 2018 restricted stock phase-III incentive plan and repurchasing and canceling the shares. On July 22, 2021, the 2021 first extraordinary general meeting approved the proposal. The Company agreed to repurchase and cancel 48,034,200 shares of restricted stock that had been granted but not yet released to 326 incentive recipients.
5. Others
| ¨ | Applicable | √ | Not applicable |
XIV. Commitments and Contingencies
1. Major commitments
| ¨ | Applicable | √ | Not applicable |
2. Contingencies
(1). Important contingencies existed on the balance sheet date
| ¨ | Applicable | √ | Not applicable |
(2). The descriptions shall be given to significant contingencies which do not require separate disclosure by the Company:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
3. Others
| ¨ | Applicable | √ | Not applicable |
XV. Events Occurring after the Balance Sheet Date
1. Important non-adjusting events
| ¨ | Applicable | √ | Not applicable |
2. Profit distributions
| √ | Applicable | ¨ | Not applicable |
| Profits or dividends proposed to be allocated | | | 181,500,739.86 | |
| Profits or dividends announced to be issued after review and approval | | | | |
On April 28, 2022, the 5th Board of Directors of the Company held its second meeting and approved the profit distribution plan for 2021, distributing cash dividends of RMB181,500,739.86 (i.e., RMB0.02 per share).
3. Sales return
| ¨ | Applicable | √ | Not applicable |
4. Description of other events occurring after the balance sheet date
| ¨ | Applicable | √ | Not applicable |
XVI. Other Important Matters
1. Correction of accounting error at earlier stage
(1). Retrospective restatement
| ¨ | Applicable | √ | Not applicable |
(2). Prospective application
| ¨ | Applicable | √ | Not applicable |
2. Debt restructuring
| ¨ | Applicable | √ | Not applicable |
3. Assets swap
(1). Non-monetary assets exchange
| ¨ | Applicable | √ | Not applicable |
(2). Other assets replacements
| ¨ | Applicable | √ | Not applicable |
4. Pension plan
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
5. Operation termination
| ¨ | Applicable | √ | Not applicable |
6. Segment information
(1). Determination basis and accounting policy of reporting division
| ¨ | Applicable | √ | Not applicable |
(2). Financial information of report segments
| ¨ | Applicable | √ | Not applicable |
| (3). | The Company shall explain the reason if there is no report segment or it can not disclose the total assets and total balance in the report segments. |
| √ | Applicable | ¨ | Not applicable |
Excluding the retail business, the Group does not operate any other business that has a significant impact on its operational results. The products sold by the Group have similar characteristics and bear similar risks and returns. Therefore, the Group's operating activities belong to a single business segment. As the Group operates its business only in one region, with the majority of its revenue and assets located within the territory of China, the Group is not required to disclose segment data.
| ¨ | Applicable | √ | Not applicable |
7. Other significant transactions and matters having effect on investor's decision
| ¨ | Applicable | √ | Not applicable |
8. Others
| ¨ | Applicable | √ | Not applicable |
XVII. Notes to Major Items of Parent Company's Financial Statements
1. Accounts receivable
(1). Disclosure by aging
| √ | Applicable | ¨ | Not applicable |
| | | Closing book | |
| Aging | | balance | |
| Within 1 year | | | | |
| Of which: subentry within one year | | | | |
| Payment for goods | | | 38,588,415.06 | |
| Sub-total within one year | | | 38,588,415.06 | |
| 1-2 years | | | 272,848.49 | |
| 2-3 years | | | 108,645.63 | |
| Over 3 years | | | 622,309.33 | |
| Total | | | 39,592,218.51 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
(2). Classified disclosure by bad-debt provision method
| √ | Applicable | ¨ | Not applicable |
| | | | | | | | | Closing balance | | | | | | | | | | | | Opening balance | | | | |
| | | Book balance | | | Bad debt provision | | | | | | Book balance | | | Bad debt provision | | | | |
| | | | | | | | | | | | Proportion | | | | | | | | | | | | | | | Proportion | | | | |
| | | | | | | | | | | | of bad-debt | | | Carrying | | | | | | | | | | | | of bad-debt | | | Carrying | |
| Category | | Amount | | | Ratio | | | Amount | | | provision | | | value | | | Amount | | | Ratio | | | Amount | | | provision | | | value | |
| | | | | | % | | | (%) | | | | | | | | | | | | % | | | | | | (%) | | | | |
| Provision made on a collective basis | | | 39,592,218.51 | | | | 100.00 | | | | 2,683,304.53 | | | | 6.78 | | | | 36,908,913.98 | | | | 65,022,588.23 | | | | 100 | | | | 4,107,450.75 | | | | 6.32 | | | | 60,915,137.48 | |
| Among which: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | | 37,884,060.51 | | | | 95.69 | | | | 2,249,862.80 | | | | 5.94 | | | | 35,634,197.71 | | | | 59,749,322.49 | | | | 91.89 | | | | 3,607,795.96 | | | | 6.04 | | | | 56,141,526.53 | |
| Supplier service fees and rentals | | | 1,307,581.84 | | | | 3.30 | | | | 429,435.97 | | | | 32.84 | | | | 878,145.87 | | | | 2,872,073.44 | | | | 4.42 | | | | 475,642.87 | | | | 16.56 | | | | 2,396,430.57 | |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from affiliated parties | | | 400,576.16 | | | | 1.01 | | | | 4,005.76 | | | | 1.00 | | | | 396,570.40 | | | | 2,401,192.30 | | | | 3.69 | | | | 24,011.92 | | | | 1.00 | | | | 2,377,180.38 | |
| Total | | | 39,592,218.51 | | | | 100.00 | | | | 2,683,304.53 | | | | 6.78 | | | | 36,908,913.98 | | | | 65,022,588.23 | | | | 100.00 | | | | 4,107,450.75 | | | | 6.32 | | | | 60,915,137.48 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| √ | Applicable | ¨ | Not applicable |
Combined provision items: Combination 1
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| | | Closing balance | |
| | | | | | | | | Proportion | |
| | | Account | | | Bad debt | | | of bad-debt | |
| Name | | receivable | | | provision | | | provision | |
| | | | | | | | | | | | (%) | |
| Within 1 year | | | 38,187,838.90 | | | | 1,909,391.94 | | | | 5 | |
| 1-2 years | | | 272,848.49 | | | | 84,583.03 | | | | 31 | |
| 2-3 years | | | 108,645.63 | | | | 63,014.47 | | | | 58 | |
| 3-4 years | | | 622,309.33 | | | | 622,309.33 | | | | 100 | |
| Total | | | 39,191,642.35 | | | | 2,679,298.77 | | | | | |
Validation standards and specifications of combined bed-debt provision based:
| ¨ | Applicable | √ | Not applicable |
Combined provision items: Combination 2
| | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | |
| | | | Closing balance | |
| | | | | | | | | | | | Proportion | |
| | | | Account | | | | Bad debt | | | | of bad-debt | |
| Name | | | receivable | | | | provision | | | | provision | |
| | | | | | | | | | | | (%) | |
| Accounts receivable from affiliated parties | | | 400,576.16 | | | | 4,005.76 | | | | 1 | |
| Total | | | 400,576.16 | | | | 4,005.76 | | | | 1 | |
Validation standards and specifications of combined bed-debt provision based:
| ¨ | Applicable | √ | Not applicable |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Situation of the provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered | | | Charge-off | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | or Reversed | | | or write-off | | | changes | | | balance | |
| Bad-debt provision for accounts receivable | | | 4,107,450.75 | | | | 1,133,635.35 | | | | | | | | 2,557,781.57 | | | | | | | | 2,683,304.53 | |
| Total | | | 4,107,450.75 | | | | 1,133,635.35 | | | | | | | | 2,557,781.57 | | | | | | | | 2,683,304.53 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | √ | Not applicable |
| (4). | Receivables actually verified and cancelled in the current period |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Write-off
amount | |
| Accounts receivable actually written off | | | 2,557,781.57 | |
Significant write-off of accounts receivable during the year
| ¨ | Applicable | √ | Not applicable |
| (5). | Receivables of first five companies with the greatest amount of closing amount (categorizing by debtor) |
| √ | Applicable | ¨ | Not applicable |
Total receivables of the first five companies with the greatest closing balance in the current year categorizing by debtor is RMB16,769,780.28, accounting for 42.36% of the total closing balance of receivables, and the total amount of the closing balance of the relevant bad debt provision is RMB838,489.01.
| (6). | Accounts receivable ceased to be recognized due to the transfer of financial assets |
| ¨ | Applicable | √ | Not applicable |
| (7). | Transferred receivables and capital and liabilities formed after continuous involvement |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Dividends receivable | | | 18,000,000.00 | | | | | |
| Other receivables | | | 43,463,029,538.77 | | | | 24,906,579,097.05 | |
| Total | | | 43,481,029,538.77 | | | | 24,906,579,097.05 | |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Interest receivable
| (1). | Classification of interest receivable |
| ¨ | Applicable | √ | Not applicable |
| 1. | Significant dividend receivable of more than 1 year |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (2). | Significant overdue interest |
| ¨ | Applicable | √ | Not applicable |
| (3). | Provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing | | | Opening | |
| Project (or Invested Company) | | balance | | | balance | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | 18,000,000.00 | | | | | |
| Total | | | 18,000,000.00 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 1. | Significant dividend receivable of more than 1 year |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (5). | Significant dividend receivable of more than 1 year |
| ¨ | Applicable | √ | Not applicable |
| (6). | Provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Other receivables
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book | |
| Aging | | balance | |
| Sub-total within one year | | | 43,393,609,093.15 | |
| 1-2 years | | | 12,983,394.05 | |
| 2-3 years | | | 15,840,994.05 | |
| Over 3 years | | | 43,797,598.05 | |
| Total | | | 43,466,231,079.30 | |
| (2). | Classification of other accounts payable according to the nature of payment |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book | | | Opening book | |
| Nature of payment | | balance | | | balance | |
| Various types of deposits and guarantees receivable | | | 64,738,198.89 | | | | 100,295,924.28 | |
| Purchases and store petty cash payments | | | 5,816,136.09 | | | | 4,931,922.27 | |
| Receivables from affiliated parties | | | 12,382,088.70 | | | | 9,481,465.98 | |
| Other receivables | | | 4,392,480.71 | | | | 2,608,415.62 | |
| Intra-group receivables | | | 43,378,902,174.91 | | | | 24,791,618,984.38 | |
| Total | | | 43,466,231,079.30 | | | | 24,908,936,712.53 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Phase I | | | Phase II | | | Phase III | | | | |
| Bad debt provision | | Expected credit
loss over the
next 12 months | | | Expected credit
loss within the
whole duration
(no credit
impairment
occurred) | | | Expected credit
loss within the
whole duration
(credit
impairment
incurred) | | | Total | |
| Balance as of January 1, 2021 | | | 1,158,156.03 | | | | 1,199,459.45 | | | | | | | | 2,357,615.48 | |
| Current balance as of January 1, 2021 | | | | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -19,378.60 | | | | 19,378.60 | | | | | | | | | |
| – Transferred to Phase III | | | | | | | -804,846.01 | | | | 804,846.01 | | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | | | | | | |
| Provision of the current period | | | | | | | 129,281.99 | | | | 983,700.67 | | | | 1,112,982.66 | |
| Provision reversed in current period | | | -259,124.57 | | | | | | | | | | | | -259,124.57 | |
| Charge-off of the current period | | | | | | | | | | | | | | | | |
| Write-off of the current period | | | | | | | | | | | -9,933.04 | | | | -9,933.04 | |
| Other changes | | | | | | | | | | | | | | | | |
| Balances as at December 31, 2021 | | | 879,652.86 | | | | 543,274.03 | | | | 1,778,613.64 | | | | 3,201,540.53 | |
Explanation of significant changes in the book value of other receivables with provision changes in the current period:
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Year 2021 | | | | | | | |
| | | Phase I | | | Phase II | | | Phase III | | | | |
| Other receivables | | Expected credit
loss over the
next 12 months | | | Expected credit
loss within the
whole duration
(no credit
impairment
occurred) | | | Expected credit
loss within the
whole duration
(credit
impairment
incurred) | | | Total | |
| Beginning balance 2021 | | | 24,906,328,296.91 | | | | 2,608,415.62 | | | | | | | | 24,908,936,712.53 | |
| Opening balance of this year | | | | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -387,572.01 | | | | 387,572.01 | | | | | | | | | |
| – Transferred to Phase III | | | | | | | -1,788,546.68 | | | | 1,788,546.68 | | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | | | | | | |
| Increases in current year | | | 18,562,486,791.21 | | | | | | | | | | | | 18,562,486,791.21 | |
| Other increases during the year | | | | | | | | | | | | | | | | |
| Derecognition | | | -5,182,491.40 | | | | | | | | | | | | -5,182,491.40 | |
| Provision written-off in this year | | | | | | | | | | | -9,933.04 | | | | -9,933.04 | |
| Other decreases in current year | | | | | | | | | | | | | | | | |
| Ending balance 2021 | | | 43,463,245,024.71 | | | | 1,207,440.95 | | | | 1,778,613.64 | | | | 43,466,231,079.30 | |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Situation of the provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | |
| Category | | Opening balance | | | Provision | | | Recovered
or Reversed | | | Charge-off
or write-off | | Other
balance | | Closing balance | |
| Bad-debt provision for other receivables | | | 2,357,615.48 | | | | 1,112,982.66 | | | | 259,124.57 | | | | 9,933.04 | | | | | 3,201,540.53 | |
| Total | | | 2,357,615.48 | | | | 1,112,982.66 | | | | 259,124.57 | | | | 9,933.04 | | | | | 3,201,540.53 | |
Significant reversal or recovery of bad-debt provision of current year is:
| ¨ | Applicable | √ | Not applicable |
| (5). | Other receivables actually verified and cancelled of current year |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Write-off amount | |
| Other receivables actually written off | | | 9,933.04 | |
Where the other receivables written off is important:
| ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of other receivables:
| ¨ | Applicable | √ | Not applicable |
| (6). | Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Unit name | | Nature of
receivable | | Closing balance | | | Aging | | Proportion
in total
closing
balance
of other
receivables | | | Closing
balance
of bad-
debt
provision | |
| | | | | | | | | | (%) | | | | |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | Intra-group receivables. | | | 9,818,290,585.16 | | | Within 1 year | | | 22.59 | | | | | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | Intra-group receivables. | | | 3,838,222,935.02 | | | Within 1 year | | | 8.83 | | | | | |
| Fujian Yuntong Supply Chain Co., Ltd. | | Intra-group
receivables. | | | 3,729,806,184.18 | | | Within 1 year | | | 8.58 | | | | | |
| Ningbo Yonghui Superstores Co., Ltd. | | Intra-group
receivables. | | | 3,706,888,114.25 | | | Within 1 year | | | 8.53 | | | | | |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | Intra-group
receivables. | | | 3,448,332,884.10 | | | Within 1 year | | | 7.93 | | | | | |
| Total | | | | | 24,541,540,702.71 | | | / | | | 56.46 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (7). | Accounts receivable involving governmental subsidies |
| ¨ | Applicable | √ | Not applicable |
| (8). | Other receivables with terminated confirmation due to financial assets transfer |
| ¨ | Applicable | √ | Not applicable |
| (9). | Amount of assets and liabilities formed through transfer of other accounts receivable and continuous involvement |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| 3. | Long-term equity investment |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Book balance | | | Closing balance
Impairment provision | | | Carrying value | | | Book balance | | | Opening balance
Impairment
provision | | | Carrying value | |
Investment in
subsidiaries | | | 8,142,103,936.20 | | | | | | | | 8,142,103,936.20 | | | | 7,160,103,936.20 | | | | | | | | 7,160,103,936.20 | |
| Investment in cooperative enterprises and joint ventures | | | 4,231,766,891.91 | | | | 250,959,537.39 | | | | 3,980,807,354.52 | | | | 4,672,458,055.92 | | | | 383,710,652.73 | | | | 4,288,747,403.19 | |
| Total | | | 12,373,870,828.11 | | | | 250,959,537.39 | | | | 12,122,911,290.72 | | | | 11,832,561,992.12 | | | | 383,710,652.73 | | | | 11,448,851,339.39 | |
| (1). | Investment in subsidiaries |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Investee | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | | | Depreciation
provision
accrued in
current period | | | Closing balance
of provision for
impairment | |
| Investee Fujian Yonghui Superstores Co., Ltd. | | | 800,000,000.00 | | | | | | | | | | | | 800,000,000.00 | | | | | | | | | |
| Chongqing Yonghui Superstores Co., Ltd. | | | 714,400,000.00 | | | | | | | | | | | | 714,400,000.00 | | | | | | | | | |
| Beijing Yonghui Superstores Co., Ltd. | | | 600,000,000.00 | | | | | | | | | | | | 600,000,000.00 | | | | | | | | | |
| Liaoning Yonghui Superstores Co., Ltd. | | | 600,000,000.00 | | | | | | | | | | | | 600,000,000.00 | | | | | | | | | |
| Sichuan Yonghui Store Co., Ltd. | | | 300,000,000.00 | | | | 700,000,000.00 | | | | | | | | 1,000,000,000.00 | | | | | | | | | |
| Jilin Yonghui Superstores Co., Ltd. | | | 300,000,000.00 | | | | | | | | | | | | 300,000,000.00 | | | | | | | | | |
| Shanghai Yonghui Superstores Co., Ltd. | | | 300,000,000.00 | | | | | | | | | | | | 300,000,000.00 | | | | | | | | | |
| Anhui Yonghui Superstores Co., Ltd. | | | 285,080,000.00 | | | | | | | | | | | | 285,080,000.00 | | | | | | | | | |
| Fujian Yonghui Logistics Co., Ltd. | | | 285,000,000.00 | | | | | | | | | | | | 285,000,000.00 | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Investee | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | | | Depreciation
provision
accrued in
current period | | | Closing balance
of provision for
impairment | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 370,000,000.00 | | | | | | | | | | | | 370,000,000.00 | | | | | | | | | |
| Guizhou Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Hebei Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Jiangsu Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Zhejiang Yonghui Superstores Co., Ltd. | | | 120,000,000.00 | | | | | | | | | | | | 120,000,000.00 | | | | | | | | | |
| Chengdu Yonghui Business Development Co., Ltd. | | | 104,000,000.00 | | | | | | | | | | | | 104,000,000.00 | | | | | | | | | |
| Yonghui Logistics Co., Ltd. | | | 90,000,000.00 | | | | | | | | | | | | 90,000,000.00 | | | | | | | | | |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | | 89,521,504.19 | | | | | | | | | | | | 89,521,504.19 | | | | | | | | | |
| Henan Yonghui Superstores Co., Ltd. | | | 80,860,000.00 | | | | | | | | | | | | 80,860,000.00 | | | | | | | | | |
| Shanghai Dongzhan International Trade Co., Ltd. | | | 59,210,296.00 | | | | | | | | | | | | 59,210,296.00 | | | | | | | | | |
Hubei Yonghui Zhongbai
Superstores Co., Ltd. | | | 55,000,000.00 | | | | | | | | | | | | 55,000,000.00 | | | | | | | | | |
| Fujian Strait Food Development Co., Ltd. | | | 53,000,000.00 | | | | | | | | | | | | 53,000,000.00 | | | | | | | | | |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| Anhui Yonghui Logistics Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| Shandong Yonghui Superstores Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
Xiamen Yonghui Minsheng
Superstores Co., Ltd. | | | 41,670,000.00 | | | | | | | | | | | | 41,670,000.00 | | | | | | | | | |
| Hunan Yonghui Superstores Co., Ltd. | | | 40,000,000.00 | | | | | | | | | | | | 40,000,000.00 | | | | | | | | | |
| Fujian Yonghui Commercial Co., Ltd. | | | 37,398,045.18 | | | | | | | | | | | | 37,398,045.18 | | | | | | | | | |
Jiangsu Yonghui Business
Management Co., Ltd. | | | 30,000,000.00 | | | | | | | | | | | | 30,000,000.00 | | | | | | | | | |
| Fujian Yonghui Culture Media Co., Ltd. | | | 28,256,090.88 | | | | | | | | | | | | 28,256,090.88 | | | | | | | | | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | | 28,030,000.00 | | | | | | | | | | | | 28,030,000.00 | | | | | | | | | |
| Yonghui Holdings Co., Ltd. | | | 25,277,999.95 | | | | | | | | | | | | 25,277,999.95 | | | | | | | | | |
| Ningbo Yonghui Superstores Co., Ltd. | | | 20,000,000.00 | | | | | | | | | | | | 20,000,000.00 | | | | | | | | | |
| Guangxi Yonghui Superstores Co., Ltd. | | | 60,000,000.00 | | | | | | | | | | | | 60,000,000.00 | | | | | | | | | |
| Xiamen Yonghui Commercial Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Investee | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | | | Depreciation
provision accrued
in current period | | | Closing balance
of provision for
impairment | |
| Jiangxi Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Shaanxi Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Shanxi Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
Heilongjiang Yonghui
Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
Xiangxin Investment Fund
Management Co., Ltd. | | | 10,000,000.00 | | | | 1,500,000.00 | | | | | | | | 11,500,000.00 | | | | | | | | | |
| Yunnan Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Ningxia Yonghui Superstores Co., Ltd. | | | 60,000,000.00 | | | | | | | | | | | | 60,000,000.00 | | | | | | | | | |
Chongqing Boyuan Xunke
Technology Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Fujian Lianchuang Zhiye | | | | | | | | | | | | | | | | | | | | | | | | |
| Construction Engineering Co., Ltd. | | | 9,000,000.00 | | | | | | | | | | | | 9,000,000.00 | | | | | | | | | |
| Fujian Yongjin Trading Co., Ltd. | | | 4,900,000.00 | | | | | | | | | | | | 4,900,000.00 | | | | | | | | | |
| Fuping Yunshang Supply | | | | | | | | | | | | | | | | | | | | | | | | |
| Chain Management Co., Ltd. | | | 70,500,000.00 | | | | 129,500,000.00 | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Shanghai Baoshan Yonghui Superstores Co., Ltd. | | | 19,000,000.00 | | | | | | | | 19,000,000.00 | | | | | | | | | | | | | |
Shanghai Yonghui Yangpu
Superstores Co., Ltd. | | | 40,000,000.00 | | | | | | | | 40,000,000.00 | | | | | | | | | | | | | |
| Guizhou Yonghui Logistics Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| Yonghui Yunjin Technology Co., Ltd. | | | 500,000,000.00 | | | | | | | | | | | | 500,000,000.00 | | | | | | | | | |
| Xizang Yonghui Superstores Co., Ltd. | | | 20,000,000.00 | | | | | | | | | | | | 20,000,000.00 | | | | | | | | | |
| Guansu Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Qinghai Yonghui Superstores Co., Ltd. | | | 20,000,000.00 | | | | | | | | | | | | 20,000,000.00 | | | | | | | | | |
| Beijing Yonghui Technology Co., Ltd. | | | | | | | 10,000,000.00 | | | | | | | | 10,000,000.00 | | | | | | | | | |
Fujian Yuntong Supply
Chain Co., Ltd. | | | | | | | 100,000,000.00 | | | | | | | | 100,000,000.00 | | | | | | | | | |
| Fujian Yongyuehui | | | | | | | | | | | | | | | | | | | | | | | | |
| Business Management Co., Ltd. | | | | | | | 100,000,000.00 | | | | | | | | 100,000,000.00 | | | | | | | | | |
| Total | | | 7,160,103,936.20 | | | | 1,041,000,000.00 | | | | 59,000,000.00 | | | | 8,142,103,936.20 | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Investment in cooperative enterprises and joint ventures |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase/decrease in the current period | |
| Investment unit | | Opening balance | | | Increased
investment | | | Decreased
investment | | | Investment
profit and loss
recognized with
the equity
method | | | Other
comprehensive income adjustments | | | Other equity
changes | | | Distribution of
cash dividends
or profits | | | Provision of
impairment
losses | | | Others | | | Closing balance | | | Closing balance
of provision for
impairment | |
| I. Cooperative enterprises Yonghui Fresh Food Development Co., Ltd. | | | 199,453,270.93 | | | | | | | | | | | | -150,395,271.51 | | | | | | | | 107,664,946.83 | | | | | | | | | | | | | | | | 156,722,946.25 | | | | | |
| Subtotal | | | 199,453,270.93 | | | | | | | | | | | | -150,395,271.51 | | | | | | | | 107,664,946.83 | | | | | | | | | | | | | | | | 156,722,946.25 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
II. Joint ventures Zhongbai Holdings Group
Co., Ltd. | | | 282,652,377.76 | | | | | | | | | | | | -3,233,035.84 | | | | | | | | -4,357,170.01 | | | | 1,702,554.50 | | | | 52,997,936.18 | | | | | | | | 220,361,681.23 | | | | 91,039,252.74 | |
| Chengdu Hongqi Chain Co., Ltd. | | | 1,892,680,864.41 | | | | | | | | | | | | 101,079,401.14 | | | | | | | | | | | | 45,124,800.00 | | | | | | | | | | | | 1,948,635,465.55 | | | | | |
Zhanjiang Guolian Aquatic
Products Co., Ltd | | | 289,866,740.21 | | | | | | | | 290,021,282.52 | | | | 160,212.29 | | | | -5,669.98 | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fujian OneBank Limited | | | 600,076,754.62 | | | | | | | | | | | | 1,422,868.63 | | | | 1,652,642.73 | | | | | | | | | | | | | | | | | | | | 603,152,265.98 | | | | | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 338,279,834.79 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 338,279,834.79 | | | | | |
| Xiangcun Gaokao Agricultural Co., Ltd. | | | 285,000,000.00 | | | | | | | | | | | | 1,190,547.42 | | | | | | | | | | | | | | | | | | | | | | | | 286,190,547.42 | | | | 159,920,284.65 | |
| Fujian Minwei Industrial Co., Ltd. | | | 76,621,138.19 | | | | | | | | | | | | 9,547,662.25 | | | | | | | | | | | | | | | | | | | | | | | | 86,168,800.44 | | | | | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 80,600,681.70 | | | | | | | | | | | | -14,180,777.86 | | | | | | | | | | | | | | | | | | | | | | | | 66,419,903.84 | | | | | |
| Shanghai Shangshu Yonghui Fresh Food Co., Ltd. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Beijing Friendship Messenger Trading Co., Ltd. | | | 17,419,070.33 | | | | | | | | | | | | 34,432,570.90 | | | | | | | | | | | | | | | | | | | | | | | | 51,851,641.23 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Increase/decrease in the current period | |
| Investment unit | | Opening balance | | | Increased
investment | | | Decreased
investment | | | Investment
profit and loss
recognized with
the equity
method | | | Other
comprehensive income adjustments | | | Other equity
changes | | | Distribution of
cash dividends
or profits | | | Provision of
impairment
losses | | | Others | | | Closing balance | | | Closing balance
of provision for
impairment | |
| CJ FRESHWAY Yonghui (Shanghai) Trading Co., Ltd. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 14,656,107.88 | | | | | | | | | | | | 5,653,503.50 | | | | | | | | | | | | | | | | | | | | | | | | 20,309,611.38 | | | | | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | | 29,885.11 | | | | | | | | | | | | -29,885.11 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Anhui Gubang Technology Co., Ltd. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. | | | 16,515,572.68 | | | | | | | | | | | | -2,658,172.27 | | | | | | | | | | | | | | | | | | | | | | | | 13,857,400.41 | | | | | |
| 1233 International Supply Chain Management Co., Ltd. | | | 194,895,104.58 | | | | | | | | | | | | -6,037,848.58 | | | | | | | | | | | | | | | | | | | | | | | | 188,857,256.00 | | | | | |
| Subtotal | | | 4,089,294,132.26 | | | | | | | | 290,021,282.52 | | | | 127,347,046.47 | | | | 1,646,972.75 | | | | -4,357,170.01 | | | | 46,827,354.50 | | | | 52,997,936.18 | | | | | | | | 3,824,084,408.27 | | | | 250,959,537.39 | |
| Total | | | 4,288,747,403.19 | | | | | | | | 290,021,282.52 | | | | -23,048,225.04 | | | | 1,646,972.75 | | | | 103,307,776.82 | | | | 46,827,354.50 | | | | 52,997,936.18 | | | | | | | | 3,980,807,354.52 | | | | 250,959,537.39 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
Explanation of long-term investment impairment
| | | | | | Increased in the | | | Decreased in the | | | | |
| Joint venture | | Opening balance | | | current year | | | current year | | | Closing balance | |
| Zhongbai Holdings Group Co., Ltd. | | | 38,041,316.56 | | | | 52,997,936.18 | | | | | | | | 91,039,252.74 | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | | 185,749,051.52 | | | | | | | | 185,749,051.52 | | | | | |
| Xiangcun Gaokao Agricultural Co., Ltd. | | | 159,920,284.65 | | | | | | | | | | | | 159,920,284.65 | |
| Total | | | 383,710,652.73 | | | | 52,997,936.18 | | | | 185,749,051.52 | | | | 250,959,537.39 | |
| 4. | Operating revenues and operating costs |
| (1). | Operating revenue and costs |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of current period | | | Amount of last period | |
| Items | | Revenue | | | Cost | | | Revenue | | | Cost | |
| Main business | | | 7,358,310,070.68 | | | | 6,808,157,965.86 | | | | 7,204,158,703.69 | | | | 6,478,014,409.10 | |
| Other business | | | 583,321,768.28 | | | | 34,047,723.99 | | | | 671,168,834.22 | | | | 21,197,722.00 | |
| Total | | | 7,941,631,838.96 | | | | 6,842,205,689.85 | | | | 7,875,327,537.91 | | | | 6,499,212,131.10 | |
| (2). | Conditions of incomes generated by contract |
| ¨ | Applicable | √ | Not applicable |
| (3). | Description of performance obligations |
| ¨ | Applicable | √ | Not applicable |
| (4). | Description of allocating to the residual fulfillment obligations |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Long-term equity investment income measured with cost method | | | 929,000,000.00 | | | | 2,040,891,773.47 | |
| Long-term equity investment income measured with equity method | | | -23,048,225.04 | | | | -285,682,412.24 | |
| Investment income for disposing long-term equity investment production | | | 42,413,884.07 | | | | 35,334,292.04 | |
| Investment income of trading financial assets during the holding period | | | 521,082.72 | | | | 17,129,807.62 | |
| Investment income of holding trading financial assets | | | 342,553.95 | | | | | |
| Investment income from non-current financial assets during the holding period | | | 67,910,214.00 | | | | 71,305,724.70 | |
| Total | | | 1,017,139,509.70 | | | | 1,878,979,185.59 | |
| ¨ | Applicable | √ | Not applicable |
XVIII. Supplementary Information
| 1. | Detailed statement of current non-recurring profit and loss |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount | | | Explanation | |
| Gains and losses on disposal of non-current assets | | | -39,548,757.39 | | | | | |
| Government grants included in current profits and losses (excluding the government grants closely related to the Company’s business operations and government grants based on standard quota or quantitative amounts according to unified national standards) | | | 183,457,683.83 | | | | | |
| Gains or losses attributable to change in fair value for held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, and derivative financial liabilities; and investment income from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other creditor investments, excluding the effective hedging business related to the normal operation of the Company | | | -246,107,504.64 | | | | | |
| Trustee fee income from entrusted operation | | | 652,110.45 | | | | | |
| Other non-operating income and expenditures except the items above | | | 11,050,197.21 | | | | | |
| Other profit and loss items conforming to the definition of non-recurring profit and loss | | | 44,680,774.76 | | | | | |
| Less: income tax impact amount | | | 66,506,946.98 | | | | | |
| Minority equity impact amounts | | | -1,622,060.05 | | | | | |
| Total | | | -110,700,382.71 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The causes for non-recurring profits and losses defined by the Company in accordance with the definitions in Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 1: Explanatory Announcement – Non-Recurring Profit and Loss and the items of non-recurring profit and loss listed in Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 1: Explanatory Announcement – Non-Recurring Profit and Loss and defined as items of recurrent profit and loss shall be explained.
| ¨ | Applicable | √ | Not applicable |
| 2. | Returns on equity and earnings per share |
| √ | Applicable | ¨ | Not applicable |
| | | | | | Earnings per share | |
| Profits during the reporting period | | Weighted
average
return on
equity | | | Basic EPS | | | Diluted EPS | |
| | | | (%) | | | | | | | | | |
| Net profits attributable to the Company’s ordinary shareholders | | | -30.24 | | | | -0.43 | | | | -0.43 | |
| Net profits attributable to the Company’s ordinary shareholders after the deduction of the non- recurring profits and losses | | | -29.39 | | | | -0.42 | | | | -0.42 | |
| 3. | Accounting data difference arising from foreign and domestic accounting standards |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
Chairman: Zhang Xuansong
Approved by the Board of Directors and submitted on April 28, 2022
Revision Information
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 2. | For the year ended December 31, 2022 |
Section X Financial Reports
| √ | Applicable | ¨ | Not applicable |
Audit Report
AYHM (2023) SZi No. 60922355_B01
Yonghui Superstores Co., Ltd.
All Shareholders of Yonghui Superstores Co., Ltd.:
We have audited the financial statements of Yonghui Superstores Co., Ltd., which comprise of the consolidated and the company’s balance sheet as of December 31, 2022, the consolidated and the company’s income statement, statement of changes in equity, and cash flow statement for the year then ended, and the notes to the relevant financial statements.
We think that the accompanying financial statements of Yonghui Superstores Co., Ltd. have been prepared in accordance with the CASBE and fairly present the consolidated and the company’s financial position of Yonghui Superstores Co., Ltd. as of December 31, 2022, and the consolidated and the company’s financial performance and cash flows for the year then ended.
| II. | Basis for Formation of Audit Opinions |
We have conducted our audit in accordance with the Auditing Standards for CPAs in China. In the “Responsibilities of CPAs for Auditing Financial Statements” of this report, our responsibilities under these standards are further elaborated. In accordance with China Certified Public Accountant Auditing Standards, we are independent of the Yonghui Superstores Co., Ltd. and have performed other duties about occupational ethics. We believe that the audit evidence we obtained is sufficient and appropriate, which provides a reasonable basis for our audit opinions.
Key matters are the matters that we believe are the most significant to the audit of the financial statements for the current period based on our professional judgment. These matters were addressed in the context of the audit of the financial statements as a whole and the formation of our audit opinions, and we do not give separate opinions on these matters. We have described in how we addressed each of the following matters in the audit, as a background to this description.
We have fulfilled our responsibilities as described in the section “CPAs’ responsibilities for the audit of financial statements” of this report, including those responsibilities related to the key audit matters. Accordingly, our audit work includes performing audit procedures designed to respond to the assessed risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the following key audit matters, provide a basis for our audit opinion on the financial statements as a whole.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Key audit matters:
Recognition of supplier income
Yonghui Superstores Co., Ltd. reported RMB5,962,692 thousand of other operating revenue for the year 2022, mainly obtained from suppliers. Yonghui Superstores Co., Ltd. recognizes income from suppliers based on the contractual or supplementary agreement amounts when providing the corresponding services and obtaining the right to collect payments. These arrangements vary in nature and scale, including storage service fees charged to suppliers, display- related service fees, and various service-related fees associated with assisting suppliers in conducting marketing activities.
Due to the significant contribution of supplier income to Yonghui Superstores Co., Ltd.’s profits and the increasing frequency and complexity of transactions with suppliers, there is inherent risk of inaccurate recognition of income or improper allocation to accounting periods. Therefore, we have determined the recognition of supplier income as a key audit matter.
Relevant information is disclosed in the audit report of Note III, 23 “Revenue from contracts with customers”, Note III, 31 “Significant accounting judgments and estimates”, and Note V, 44 “Operating revenue and costs” of the financial statements.
How the matter was addressed in our audit:
Our audit procedures include:
| (1) | Understanding the accounting policies and key internal controlling measures adopted by the Management for supplier revenue recognition, and testing and evaluating the effectiveness of the related internal control design and operation; |
| (2) | Testing the general controls and key application controls of the information system with the assistance of internal IT experts, including evaluating whether the IT system operates as designed, and the integrity and authenticity of data transfer between IT systems; |
| (3) | Examining the terms and conditions stipulated in the various types of standard contract agreements signed with suppliers to assess the appropriateness of the accounting treatment for the recognition of supplier income; |
| (4) | Selecting samples to perform detailed testing of various types of supplier income recognized by the Company, including verifying the supporting documents such as supplier contracts, invoices, supplier statements, and financial vouchers for the recognition of supplier income; |
| (5) | Performing the external confirmation procedure, comparing the results with the amounts recorded in the Company’s books, and performing alternative procedures for suppliers giving no response. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Key audit matters:
Provision for impairment loss on long-term equity investments
As of December 31, 2022, Yonghui Superstores Co., Ltd. had a carrying amount of RMB3,639,581 thousand for long-term equity investments, with an impairment provision of RMB533,759 thousand. This provision is made for long-term equity investments where the recoverable amount is lower than their carrying amount.
Due to the significance of long-term equity investments to the financial statements as a whole, and the management’s significant judgments and estimates involved in the provision for impairment loss on long-term equity investments. Therefore, we have identified the provision for impairment loss on long-term equity investments made by Yonghui Superstores Co., Ltd. as a key audit matter.
Relevant information is disclosed in the audit report of Note III, 9 “Long-term equity investments”, Note III, 17 “Impairment of assets”, Note III, 31 “Significant accounting judgments and estimates”, and Note V, 12 “Long-term equity investments” of the financial statements.
How the matter was addressed in our audit:
Our audit procedures include:
| (1) | Understanding and assessing the design and effectiveness of internal controls related to the impairment testing of long-term equity investments; |
| (2) | Conducting interviews with the Management of Yonghui Superstores Co., Ltd. to understand their investment intentions, the implementation of strategic cooperation, and the expectations of the cooperation, and viewing documents such as board resolutions related to the investment; |
| (3) | Discussing with management the basis for assessing indicators of impairment of long- term equity investments, obtaining financial statements of the investee companies, analyzing their financial information, and evaluating the reasonableness of management’s judgments regarding indicators of impairment of long-term equity investments; |
| (4) | Evaluating the independence, professional competence, and objectivity of external valuation experts hired by management, communicating with management, external valuation experts and internal valuation experts to assess key valuation parameters, with the assistance of internal valuation experts, evaluating the reasonableness of the methods, assumptions, and estimates used in the discounting of projected future cash flows of the assets based on the requirements of the CASBE; |
| (5) | Evaluating the disclosure of impairment provisions for long-term equity investments in the financial statements to determine compliance with the requirements of the CASBE. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Key audit matters:
Provision for impairment loss on store asset groups
The store asset groups primarily include long-term assets, such as fixed assets, long-term prepaid expenses, and right-of-use assets. As of December 31, 2022, the carrying amount of these assets has totaled RMB23,113,731 thousand, with impairment provision totaled RMB873,101 thousand. This provision is made for store asset groups where the recoverable amount is lower than their carrying amount.
Due to the significance of store asset groups to the financial statements as a whole, and the management’s significant judgments and estimates involved in the provision for impairment loss on store asset groups, therefore, we have identified the provision for impairment loss on store asset groups made by Yonghui Superstores Co., Ltd. as a key audit matter.
Relevant information is disclosed in the audit report of Note III, 11 “Fixed assets”, Note III, 15 “Right-of-use assets”, Note III, 17 “Impairment of assets”, Note III, 18 (“Long-term prepaid expenses”), Note III, 31 (“Significant accounting judgments and estimates”, Note V, 15 “Fixed assets”, Note V, 18 “Right-of-use assets”, and Note V, 22 “Long-term prepaid expenses” of the financial statements.
How the matter was addressed in our audit:
Our audit procedures include:
| (1) | Understanding and assessing the design and effectiveness of internal controls related to impairment testing of store assets; |
| (2) | Discussing with management the basis for judging the indicators of impairment of the store asset groups and evaluate whether management’s judgment on the indicators of impairment of the store asset groups is reasonable; |
| (3) | Communicating with management and internal valuation experts to evaluate key parameters of valuation; with assistance from internal valuation experts, assessing the appropriateness of the methods, assumptions, and estimates used to discount the projected future cash flows of asset groups based on the requirements of the CASBE; |
| (4) | Evaluating whether the disclosures related to impairment of store asset groups in the financial statements comply with the requirements of the CASBE. |
The Management of Yonghui Superstores Co., Ltd. is responsible for other information. Other information includes information covered in the annual report, but not financial statements and our audit reports.
Our audit opinions on the financial statements exclude other information and we do not publish any form of verification conclusions on other information.
In combination with our audit of financial statements, it is our responsibility to read other information, and in this process, consider whether other information to the financial statements or the situation we learned in the process of auditing is materially inconsistent or seems to have material misstatement.
Based on the work we have done, we should report the fact if we are certain that other information is materially misreported. In this respect, we have nothing to report.
| V. | Responsibilities of the Management and the Governance for Financial Statements |
The Management is responsible for preparing financial statements in accordance with the CASBE and fairly presenting the financial statements, as well as designing, implementing, and maintaining a system of internal control necessary to make sure the financial statements are free from material misstatement, whether due to fraud or error.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
During the preparation of the financial statements, the management is responsible for assessing the ability of Yonghui Superstores Co., Ltd. to continue as a going concern, disclosing any relevant matters related to going concern (if applicable), and applying the going concern assumption, unless it intends to liquidate, cease operations, or has no other realistic option.
The governance level is responsible for overseeing the financial reporting process of Yonghui Superstores Co., Ltd.
| VI. | Responsibilities of CPAs for Auditing Financial Statements |
Our objective is to obtain reasonable assurance for that the financial statements are free of material misstatements due to fraud or errors and to issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that audits conducted according to audit standards will always identify a material misstatement that exists. A misstatement may be caused by fraud or errors and it is usually considered “material” when it is reasonably expected that the misstatement would, either individually or aggregately, affect the user’s economic decisions based on the financial statements.
In the process of auditing according to the auditing standards, we have applied our professional judgment and maintained professional skepticism. Meanwhile, we have also carried out the following work:
| (1) | Identifying and assessing risks of material misstatement of financial statements due to fraud or errors; designing and implementing audit procedures to address these risks; obtaining adequate and appropriate audit evidence as a basis for issuing audit opinions. As fraud may involve collusion, forgery, willful omission, false statements, or overriding internal control, the risk of failing to identify material misstatements due to fraud is higher than that due to errors. |
| (2) | Understanding the internal control relevant to the audit in order to design audit procedures that are appropriate. |
| (3) | Evaluating the appropriateness of accounting policies adopted by the Management and the reasonableness of accounting estimates and related disclosures. |
| (4) | Reaching a conclusion on the appropriateness of the Management’s use of continuing operation assumption. Meanwhile, based on the audit evidence obtained, a conclusion may be obtained on whether there may be major uncertainties in matters or circumstances leading to major doubts about the continuing operation ability of the Yonghui Superstores Co., Ltd. If we conclude a significant uncertainty, we shall, as required by the auditing standards, draw the attention of users of the financial statements to the relevant disclosures in the audit report; if the disclosure is insufficient, we shall give a modified opinion. Our conclusions are based on information available as of the audit report date. However, future matters or conditions may lead to an inability of Yonghui Superstores Co., Ltd. to continue as a going concern. |
| (5) | Evaluating the overall presentation, structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
| (6) | Obtaining sufficient and appropriate audit evidence regarding the financial information of entities or business activities within Yonghui Superstores Co., Ltd. in order to express an audit opinion on the financial statements. We are responsible for guiding, supervising, and executing the Group’s audit, and bearing all liabilities for our audit opinions. |
We communicated with the Governance on planned audit coverage, scheduling, and major audit findings, including the internal control defects deserving attention which were identified in the audit.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
We also provided a statement to the Governance on compliance with ethical requirements related to independence and discussed with them all relationships and other matters that may reasonably be considered to affect our independence, as well as associated preventive actions (where applicable).
From the matters that we communicated with the Governance, we decided which were the most important to the audit of the current financial statements and therefore constituted key audit matters. We shall describe these matters in the audit report, unless the public disclosure of these matters is prohibited by laws and regulations, or in rare cases, if reasonably expected, the negative consequences of communicating a matter in an audit report outweigh the benefits in the public interest, we shall determine that the matter should not be communicated in the audit report.
AYHM (2023) SZi No. 60922355_B01
Yonghui Superstores Co., Ltd.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
II. Financial Statements
Consolidated Balance Sheet
December 31, 2022
Prepared by: Yonghui Superstores Co., Ltd.
Unit: Yuan Currency: RMB
| | | | | | December 31, | | | December 31, | |
| Items | | Notes | | | 2022 | | | 2021 | |
| Current assets: | | | | | | | | | | | | |
| Monetary funds | | | | | | | 7,615,940,712.22 | | | | 9,163,127,740.22 | |
| Loans and advances (short-term) | | | | | | | 818,071,041.50 | | | | 568,806,255.36 | |
| Trading financial assets | | | | | | | 890,826,719.10 | | | | 1,560,917,920.71 | |
| Notes receivable | | | | | | | | | | | | |
| Factoring receivable | | | | | | | 639,126,680.56 | | | | 1,411,455,365.03 | |
| Account receivable | | | | | | | 530,610,931.13 | | | | 477,000,229.84 | |
| Receivables financing | | | | | | | | | | | | |
| Advance payments | | | | | | | 1,389,235,355.79 | | | | 1,972,320,710.23 | |
| Other receivables | | | | | | | 649,676,328.75 | | | | 742,369,328.43 | |
| Including: interests receivable | | | | | | | 770,879.94 | | | | 201,536.05 | |
| Dividends receivable | | | | | | | | | | | | |
| Inventories | | | | | | | 10,466,589,497.14 | | | | 10,791,491,206.86 | |
| Assets held for sale | | | | | | | | | | | | |
| Non-current assets due within one year | | | | | | | 43,534,741.35 | | | | 41,563,339.26 | |
| Other current assets | | | | | | | 1,493,846,008.90 | | | | 1,985,431,196.03 | |
| Total current assets | | | | | | | 24,537,458,016.44 | | | | 28,714,483,291.97 | |
| Non-current assets: | | | | | | | | | | | | |
| Loans and advances | | | | | | | 76,991,144.35 | | | | 245,810,924.79 | |
| Debt investment | | | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | | | |
| Long-term receivables | | | | | | | 264,650,510.99 | | | | 73,044,056.84 | |
| Long-term equity investment | | | | | | | 3,639,581,470.56 | | | | 4,773,553,407.12 | |
| Investment in other equity instruments | | | | | | | | | | | | |
| Other non-current financial assets | | | | | | | 3,918,000,000.00 | | | | 4,100,000,000.00 | |
| Investment properties | | | | | | | 311,134,379.64 | | | | 321,941,383.78 | |
| Fixed assets | | | | | | | 4,114,413,404.13 | | | | 4,646,074,375.37 | |
| Construction in progress | | | | | | | 383,281,366.61 | | | | 410,335,149.87 | |
| Productive biological assets | | | | | | | 12,727,696.62 | | | | 11,627,554.75 | |
| Right-of-use assets | | | | | | | 19,417,724,491.81 | | | | 21,967,161,359.54 | |
| Intangible assets | | | | | | | 1,313,822,703.50 | | | | 1,525,435,308.65 | |
| Development expenses | | | | | | | 10,899,846.17 | | | | | |
| Goodwill | | | | | | | 3,661,378.25 | | | | 3,661,378.25 | |
| Long-term deferred expenses | | | | | | | 2,900,454,980.29 | | | | 3,482,489,035.42 | |
| Deferred tax asset | | | | | | | 1,238,414,692.18 | | | | 1,036,025,168.71 | |
| Other non-current assets | | | | | | | | | | | | |
| Total non-current assets | | | | | | | 37,605,758,065.10 | | | | 42,597,159,103.09 | |
| Total assets | | | | | | | 62,143,216,081.54 | | | | 71,311,642,395.06 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | December 31, | | | December 31, | |
| Items | | Notes | | | 2022 | | | 2021 | |
| Current liabilities: | | | | | | | | | | | | |
| Short-term loans | | | | | | | 6,528,480,368.69 | | | | 10,947,557,472.21 | |
| Trading financial liabilities | | | | | | | | | | | | |
| Notes payable | | | | | | | | | | | 33,000,000.00 | |
| Accounts payable | | | | | | | 12,155,435,663.28 | | | | 12,518,578,825.59 | |
| Accounts collected in advance | | | | | | | 196,630,132.94 | | | | 199,815,968.65 | |
| Contract liabilities | | | | | | | 4,826,600,547.79 | | | | 4,303,074,375.86 | |
| Payroll payable | | | | | | | 758,314,886.20 | | | | 665,285,751.18 | |
| Taxes payable | | | | | | | 229,606,730.28 | | | | 202,850,017.46 | |
| Other payables | | | | | | | 1,899,603,590.71 | | | | 2,761,266,270.83 | |
| Including: interests payable | | | | | | | | | | | | |
| Dividends payable | | | | | | | | | | | 12,000,000.00 | |
| Non-current liabilities due within one year | | | | | | | 2,011,863,655.60 | | | | 2,069,851,210.42 | |
| Other current liabilities | | | | | | | 460,794,502.35 | | | | 390,433,950.39 | |
| Total current liabilities | | | | | | | 29,067,330,077.84 | | | | 34,091,713,842.59 | |
| Non-current liabilities: | | | | | | | | | | | | |
| Long-term borrowings | | | | | | | 2,070,085,001.67 | | | | 1,021,069,722.22 | |
| Bonds payable | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Lease liabilities | | | | | | | 23,110,834,161.62 | | | | 24,826,561,091.82 | |
| Long-term accounts payable | | | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | | | |
| Estimated liabilities | | | | | | | 7,383,565.56 | | | | 3,628,259.35 | |
| Deferred income | | | | | | | 104,500,259.85 | | | | 118,370,289.79 | |
| Deferred tax liabilities | | | | | | | 126,183,109.37 | | | | 172,894,859.29 | |
| Other non-current liabilities | | | | | | | | | | | | |
| Total non-current liabilities | | | | | | | 25,418,986,098.07 | | | | 26,142,524,222.47 | |
| Total liabilities | | | | | | | 54,486,316,175.91 | | | | 60,234,238,065.06 | |
| Equity (or shareholders’ equity): | | | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | | | 9,075,036,993.00 | | | | 9,075,036,993.00 | |
| Other equity instruments | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Capital reserves | | | | | | | 4,292,122,541.86 | | | | 4,276,144,811.80 | |
| Less: Treasury shares | | | | | | | 263,483,654.25 | | | | | |
| Other comprehensive income | | | | | | | 440,260.72 | | | | 1,494,334.19 | |
| Special reserves | | | | | | | | | | | | |
| Surplus reserves | | | | | | | 1,113,275,260.54 | | | | 1,103,806,707.15 | |
| General risk reserves | | | | | | | | | | | | |
| Undistributed profits | | | | | | | -6,751,820,069.61 | | | | -3,797,684,715.49 | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | | | | | 7,465,571,332.26 | | | | 10,658,798,130.65 | |
| Minority interests | | | | | | | 191,328,573.37 | | | | 418,606,199.35 | |
| Total equity (or shareholders’ equity) | | | | | | | 7,656,899,905.63 | | | | 11,077,404,330.00 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | | | 62,143,216,081.54 | | | | 71,311,642,395.06 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Balance Sheet of the Parent Company
December 31, 2022
Prepared by: Yonghui Superstores Co., Ltd.
Unit: Yuan Currency: RMB
| | | | | | December 31, | | | December 31, | |
| Items | | Notes | | | 2022 | | | 2021 | |
| Current assets: | | | | | | | | | | | | |
| Monetary funds | | | | | | | 3,783,211,358.85 | | | | 3,842,006,361.29 | |
| Trading financial assets | | | | | | | 253,755,385.82 | | | | 543,039,966.58 | |
| Derivative financial assets | | | | | | | | | | | | |
| Notes receivable | | | | | | | | | | | | |
| Account receivable | | | | | | | 72,737,987.04 | | | | 36,908,913.98 | |
| Receivables financing | | | | | | | | | | | | |
| Advance payments | | | | | | | 64,776,716.71 | | | | 107,686,813.66 | |
| Other receivables | | | | | | | 11,153,838,335.49 | | | | 43,481,029,538.77 | |
| Including: interests receivable | | | | | | | | | | | | |
| Dividends receivable | | | | | | | | | | | 18,000,000.00 | |
| Inventories | | | | | | | 368,298,463.42 | | | | 381,558,282.19 | |
| Contract assets | | | | | | | | | | | | |
| Assets held for sale | | | | | | | | | | | | |
| Non-current assets due within one year | | | | | | | 6,357,530.82 | | | | 7,503,976.35 | |
| Other current assets | | | | | | | 69,830,506.40 | | | | 123,273,153.05 | |
| Total current assets | | | | | | | 15,772,806,284.55 | | | | 48,523,007,005.87 | |
| Non-current assets: | | | | | | | | | | | | |
| Debt investment | | | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | | | |
| Long-term receivables | | | | | | | 1,531,345.04 | | | | 7,345,349.21 | |
| Long-term equity investment | | | | | | | 11,738,586,682.57 | | | | 12,122,911,290.72 | |
| Investment in other equity instruments | | | | | | | | | | | | |
| Other non-current financial assets | | | | | | | 3,918,000,000.00 | | | | 4,100,000,000.00 | |
| Investment properties | | | | | | | | | | | | |
| Fixed assets | | | | | | | 346,607,781.14 | | | | 446,381,583.68 | |
| Construction in progress | | | | | | | 3,998,093.26 | | | | 13,427,506.63 | |
| Productive biological assets | | | | | | | | | | | | |
| Oil and gas assets | | | | | | | | | | | | |
| Right-of-use assets | | | | | | | 567,549,059.54 | | | | 617,260,980.28 | |
| Intangible assets | | | | | | | 206,431,930.89 | | | | 249,134,183.06 | |
| Development expenses | | | | | | | | | | | | |
| Goodwill | | | | | | | | | | | | |
| Long-term deferred expenses | | | | | | | 72,494,628.86 | | | | 69,977,631.10 | |
| Deferred tax asset | | | | | | | 126,706,236.37 | | | | 31,228,402.46 | |
| Other non-current assets | | | | | | | | | | | | |
| Total non-current assets | | | | | | | 16,981,905,757.67 | | | | 17,657,666,927.14 | |
| Total assets | | | | | | | 32,754,712,042.22 | | | | 66,180,673,933.01 | |
| Current liabilities: | | | | | | | | | | | | |
| Short-term loans | | | | | | | 1,828,480,368.69 | | | | 7,645,637,472.21 | |
| Trading financial liabilities | | | | | | | | | | | | |
| Derivative financial liabilities | | | | | | | | | | | | |
| Notes payable | | | | | | | 3,500,000,000.00 | | | | 1,833,000,000.00 | |
| Accounts payable | | | | | | | 371,341,837.03 | | | | 943,391,714.96 | |
| Accounts collected in advance | | | | | | | 108,195,847.09 | | | | 12,301,803.89 | |
| Contract liabilities | | | | | | | 439,087,861.62 | | | | 722,349,016.49 | |
| Payroll payable | | | | | | | 60,595,465.25 | | | | 36,188,048.25 | |
| Taxes payable | | | | | | | 12,100,931.30 | | | | 10,523,947.10 | |
| Other payables | | | | | | | 6,757,386,210.90 | | | | 36,043,303,593.22 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | December 31, | | | December 31, | |
| Items | | Notes | | | 2022 | | | 2021 | |
| Including: interests payable | | | | | | | | | | | | |
| Dividends payable | | | | | | | | | | | | |
| Liabilities held for sale | | | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | | | 261,631,905.17 | | | | 109,141,831.96 | |
| Other current liabilities | | | | | | | 40,849,231.73 | | | | 65,707,109.62 | |
| Total current liabilities | | | | | | | 13,379,669,658.78 | | | | 47,421,544,537.70 | |
| Non-current liabilities: | | | | | | | | | | | | |
| Long-term borrowings | | | | | | | 2,070,085,001.67 | | | | 1,021,069,722.22 | |
| Bonds payable | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Lease liabilities | | | | | | | 559,114,586.21 | | | | 654,634,402.00 | |
| Long-term accounts payable | | | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | | | |
| Estimated liabilities | | | | | | | | | | | | |
| Deferred income | | | | | | | 3,733,333.44 | | | | 5,333,333.40 | |
| Deferred tax liabilities | | | | | | | | | | | | |
| Other non-current liabilities | | | | | | | | | | | | |
| Total non-current liabilities | | | | | | | 2,632,932,921.32 | | | | 1,681,037,457.62 | |
| Total liabilities | | | | | | | 16,012,602,580.10 | | | | 49,102,581,995.32 | |
| Equity (or shareholders’ equity): | | | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | | | 9,075,036,993.00 | | | | 9,075,036,993.00 | |
| Other equity instruments | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Capital reserves | | | | | | | 4,150,421,623.94 | | | | 4,135,238,517.71 | |
| Less: Treasury shares | | | | | | | 263,483,654.25 | | | | | |
| Other comprehensive income | | | | | | | 785,921.18 | | | | 1,652,642.73 | |
| Special reserves | | | | | | | | | | | | |
| Surplus reserves | | | | | | | 1,113,275,260.54 | | | | 1,103,806,707.15 | |
| Undistributed profits | | | | | | | 2,666,073,317.71 | | | | 2,762,357,077.10 | |
| Total equity (or shareholders’ equity) | | | | | | | 16,742,109,462.12 | | | | 17,078,091,937.69 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | | | 32,754,712,042.22 | | | | 66,180,673,933.01 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Income Statement
January – December 2022
Unit: Yuan Currency: RMB
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| I. Total operating income | | | | | | | 90,090,819,396.14 | | | | 91,061,894,312.13 | |
| Including: operating income | | | | | | | 90,090,819,396.14 | | | | 91,061,894,312.13 | |
| II.Total operating cost | | | | | | | 92,481,130,331.71 | | | | 95,004,917,681.58 | |
| Including: operating cost | | | | | | | 72,360,590,128.08 | | | | 74,027,212,258.30 | |
| Taxes and surcharges | | | | | | | 204,290,684.25 | | | | 212,940,218.11 | |
| Selling expenses | | | | | | | 15,849,737,690.89 | | | | 16,629,508,068.60 | |
| Administrative expenses | | | | | | | 2,046,416,100.93 | | | | 2,155,455,991.88 | |
| Research and development expenses | | | | | | | 481,898,435.04 | | | | 428,107,468.21 | |
| Financial expenses | | | | | | | 1,538,197,292.52 | | | | 1,551,693,676.48 | |
| Including: interest expenses | | | | | | | 1,556,082,561.75 | | | | 1,677,039,950.99 | |
| Interest income | | | | | | | 201,725,230.95 | | | | 292,633,975.09 | |
| Plus: other income | | | | | | | 211,947,320.51 | | | | 183,457,683.83 | |
| Investment income | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -105,277,829.92 | | | | 192,012,753.98 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | | | -49,507,225.29 | | | | -49,185,860.49 | |
| Income from fair value variation | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -594,680,167.44 | | | | -378,526,760.32 | |
| Credit impairment losses | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -119,960,638.17 | | | | -157,429,853.92 | |
| Assets impairment losses | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -635,207,660.63 | | | | -777,436,356.28 | |
| Gains from disposal of assets | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | 335,708,161.50 | | | | 53,364,075.49 | |
| III. Operating profits | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -3,297,781,749.72 | | | | -4,827,581,826.67 | |
| Plus: non-operating income | | | | | | | 332,093,309.52 | | | | 343,946,144.11 | |
| Less: Non-operating expenses | | | | | | | 252,787,354.20 | | | | 238,437,045.90 | |
| IV. Total profit | | | | | | | | | | | | |
| (total loss is indicated by “-”) | | | | | | | -3,218,475,794.40 | | | | -4,722,072,728.46 | |
| Less: income tax expense | | | | | | | -218,800,851.85 | | | | -227,494,019.44 | |
| V. Net profit (net loss is indicated by “-”) | | | | | | | -2,999,674,942.55 | | | | -4,494,578,709.02 | |
| (I) Classified by business continuity | | | | | | | | | | | | |
| 1. Net profit from continuous operation (net loss is indicated by “-”) | | | | | | | -2,999,674,942.55 | | | | -4,494,578,709.02 | |
| 2. Net profit from discontinued operations (net loss is indicated by “-”) | | | | | | | | | | | | |
| (II) Classified by ownership | | | | | | | | | | | | |
| 1. Net profit attributable to the owners of the Parent Company | | | | | | | | | | | | |
| (net loss is indicated by “-”) | | | | | | | -2,763,166,060.87 | | | | -3,943,871,849.80 | |
| 2. Minority interest income | | | | | | | | | | | | |
| (net loss is indicated by “-”) | | | | | | | -236,508,881.68 | | | | -550,706,859.22 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| VI. After-tax Net Amount of Other Comprehensive Income | | | | | | | -1,054,073.47 | | | | 2,078,468.25 | |
| (I) Net amount of other comprehensive income after tax attributable to the owners of the parent company | | | | | | | -1,054,073.47 | | | | 2,078,468.25 | |
| 1. Other comprehensive income not allowed to be re-classified into profit and loss | | | | | | | | | | | | |
| (1) Changes caused by re-measurement and re-definition of benefit plan | | | | | | | | | | | | |
| (2) Other comprehensive income that cannot be converted into profits or losses under the equity method | | | | | | | | | | | | |
| (3) Fair value changes of other equity instrument investment | | | | | | | | | | | | |
| (4) Fair value changes of enterprise own credit risk | | | | | | | | | | | | |
| 2. Other comprehensive income to be re-classified into profit and loss | | | | | | | -1,054,073.47 | | | | 2,078,468.25 | |
| (1) Other comprehensive income that can be converted into losses and profits under the equity method | | | | | | | -866,721.55 | | | | 2,448,830.39 | |
| (2) Fair value changes of other creditor investments | | | | | | | | | | | | |
| (3) Amount of financial assets re-classified and included in other comprehensive income | | | | | | | | | | | | |
| (4) Provision for credit depreciation of other creditor investments | | | | | | | | | | | | |
| (5) Cash flow hedging reserves | | | | | | | | | | | | |
| (6) Balance arising from the translation of foreign currency financial statements | | | | | | | -187,351.92 | | | | -370,362.14 | |
| (7) Others | | | | | | | | | | | | |
| (II) Net amount after tax of other comprehensive income attributable to minority shareholders | | | | | | | | | | | | |
| VII. Total comprehensive income | | | | | | | -3,000,729,016.02 | | | | -4,492,500,240.77 | |
| (I) Total comprehensive income attributable to the owners of the Parent Company | | | | | | | -2,764,220,134.34 | | | | -3,941,793,381.55 | |
| (II) Total comprehensive income attributable to minority shareholders | | | | | | | -236,508,881.68 | | | | -550,706,859.22 | |
| VIII. Earnings per share: | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | -0.30 | | | | -0.43 | |
| (II) Diluted EPS (RMB/share) | | | | | | | -0.30 | | | | -0.43 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Income Statement of the Parent Company
January – December 2022
Unit: Yuan Currency: RMB
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| I. Operation Revenue | | | | | | | 8,210,925,003.98 | | | | 7,941,631,838.96 | |
| Less: operating cost | | | | | | | 6,980,139,553.15 | | | | 6,842,205,689.85 | |
| Taxes and surcharges | | | | | | | 17,334,970.29 | | | | 16,978,178.50 | |
| Selling expenses | | | | | | | 747,841,716.78 | | | | 828,235,306.14 | |
| Administrative expenses | | | | | | | 330,019,925.77 | | | | 351,831,395.07 | |
| Research and development expenses | | | | | | | 66,849,711.16 | | | | 52,851,538.02 | |
| Financial expenses | | | | | | | 156,371,051.26 | | | | 144,191,955.91 | |
| Including: interest expenses | | | | | | | 264,418,567.28 | | | | 391,875,730.93 | |
| Interest income | | | | | | | 129,443,760.54 | | | | 266,765,444.08 | |
| Plus: other income | | | | | | | 2,929,253.13 | | | | 5,957,911.59 | |
| Investment income | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | 328,499,691.96 | | | | 1,017,139,509.70 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | | | 4,843,630.72 | | | | -23,048,225.04 | |
| Income from fair value variation | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -50,678,149.10 | | | | 131,041,846.16 | |
| Credit impairment losses | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -16,735,268.70 | | | | -1,987,493.44 | |
| Assets impairment losses | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -203,165,895.73 | | | | -53,532,530.48 | |
| Gains from disposal of assets | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | 14,600,352.14 | | | | 1,379,773.07 | |
| II. Operating profit | | | | | | | | | | | | |
| (loss is indicated by “-”) | | | | | | | -12,181,940.73 | | | | 805,336,792.07 | |
| Plus: non-operating income | | | | | | | 15,205,506.64 | | | | 22,866,752.75 | |
| Less: Non-operating expenses | | | | | | | 3,815,865.97 | | | | 13,230,952.86 | |
| III. Total profit | | | | | | | | | | | | |
| (total loss is indicated by “-”) | | | | | | | -792,300.06 | | | | 814,972,591.96 | |
| Less: income tax expense | | | | | | | -95,477,833.92 | | | | -13,448,925.09 | |
| IV. Net profit (net loss is indicated by “-”) | | | | | | | 94,685,533.86 | | | | 828,421,517.05 | |
| (I) Net profit from continuous operation (net loss is indicated by “-”) | | | | | | | 94,685,533.86 | | | | 828,421,517.05 | |
| (II) Net profit from discontinued operation (net loss is indicated by “-”) | | | | | | | | | | | | |
| V. After-tax net amount of other comprehensive income | | | | | | | -866,721.55 | | | | 2,448,830.39 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | | | | | | | | | | | | |
| 1. Changes caused by re-measurement of defined benefit plan | | | | | | | | | | | | |
| 2. Other comprehensive income using the equity method that will not be reclassified to profit or loss | | | | | | | | | | | | |
| 3. Changes in fair value of other equity instrument investments | | | | | | | | | | | | |
| 4. Changes in fair value of enterprise’s own credit risk | | | | | | | | | | | | |
| (II) Other comprehensive income to be reclassified to profit or loss | | | | | | | -866,721.55 | | | | 2,448,830.39 | |
| 1. Other comprehensive income that can be reclassified to profit or loss in equity method | | | | | | | -866,721.55 | | | | 2,448,830.39 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| 2. Changes in fair value of other creditor investments | | | | | | | | | | | | |
| 3. Amount of financial assets re- classified and included in other comprehensive income | | | | | | | | | | | | |
| 4. Provision for credit impairment of other creditor investments | | | | | | | | | | | | |
| 5. Cash flow hedging reserve | | | | | | | | | | | | |
| 6. Balance arising from the translation of foreign currency financial statements | | | | | | | | | | | | |
| 7. Others | | | | | | | | | | | | |
| VI. Total comprehensive income | | | | | | | 93,818,812.31 | | | | 830,870,347.44 | |
| VII. Earnings per share (EPS): | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | | | | | | |
| (II) Diluted EPS (RMB/share) | | | | | | | | | | | | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Cash Flow Statement
January – December 2022
Unit: Yuan Currency: RMB
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 98,815,495,414.75 | | | | 100,284,205,560.45 | |
| Tax refunds received | | | | | | | 264,494,708.10 | | | | | |
| Other cash received relating to operating activities | | | | | | | 1,386,207,956.81 | | | | 3,020,586,574.65 | |
| Subtotal of cash inflows from operating activities | | | | | | | 100,466,198,079.66 | | | | 103,304,792,135.10 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 78,820,511,875.02 | | | | 80,837,588,736.76 | |
| Cash paid to and on behalf of employees | | | | | | | 8,529,341,409.46 | | | | 8,702,715,416.83 | |
| Cash paid for taxes | | | | | | | 928,646,566.02 | | | | 1,037,017,460.13 | |
| Other cash paid relating to operating activities | | | | | | | 6,323,617,891.94 | | | | 6,900,549,592.13 | |
| Subtotal of cash outflows from operating activities | | | | | | | 94,602,117,742.44 | | | | 97,477,871,205.85 | |
| Net cash flow from operating activities | | | | | | | 5,864,080,337.22 | | | | 5,826,920,929.25 | |
| II. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 1,218,210,833.38 | | | | 681,186,560.54 | |
| Cash received from investment income | | | | | | | 29,998,400.00 | | | | 57,672,406.30 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 9,776,709.58 | | | | 6,648,320.55 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | | | | | 221,073.29 | | | | | |
| Other cash received relating to investment activities | | | | | | | 2,308,062,035.71 | | | | 2,475,657,999.00 | |
| Subtotal of cash inflows from investment activities | | | | | | | 3,566,269,051.96 | | | | 3,221,165,286.39 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 1,203,678,434.13 | | | | 2,010,217,133.88 | |
| Cash paid for investment | | | | | | | | | | | 159,799,999.46 | |
| Net cash paid for the acquisition of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash paid relating to investment activities | | | | | | | 2,450,000,000.00 | | | | 1,966,236,083.15 | |
| Subtotal of cash outflows from investment activities | | | | | | | 3,653,678,434.13 | | | | 4,136,253,216.49 | |
| Net cash flow from investment activities | | | | | | | -87,409,382.17 | | | | -915,087,930.10 | |
| III. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors | | | | | | | | | | | 50,450,000.00 | |
| Including: cash received by subsidiaries from absorbing minority shareholder’s investment | | | | | | | | | | | 50,450,000.00 | |
| Cash received from borrowings | | | | | | | 10,920,000,000.00 | | | | 15,520,000,000.00 | |
| Other cash received relating to financing activities | | | | | | | 54,280,019.15 | | | | 39,947,401.43 | |
| Subtotal of cash inflows from financing activities | | | | | | | 10,974,280,019.15 | | | | 15,610,397,401.43 | |
| Cash paid for debt repayment | | | | | | | 14,161,100,000.00 | | | | 17,430,840,273.76 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 482,219,907.57 | | | | 555,415,007.07 | |
| Including: dividend and profit paid by subsidiaries to minority shareholders | | | | | | | | | | | 12,000,000.00 | |
| Other cash paid relating to financing activities | | | | | | | 3,312,974,983.35 | | | | 4,480,050,083.91 | |
| Subtotal of cash outflows from financing activities | | | | | | | 17,956,294,890.92 | | | | 22,466,305,364.74 | |
| Net cash flow from financing activities | | | | | | | -6,982,014,871.77 | | | | -6,855,907,963.31 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | 4,690,719.29 | | | | -242,700.09 | |
| V. Net increase in cash and cash equivalents | | | | | | | -1,200,653,197.43 | | | | -1,944,317,664.25 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 8,643,661,498.06 | | | | 10,587,979,162.31 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 7,443,008,300.63 | | | | 8,643,661,498.06 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Cash Flow Statement of the Parent Company
January – December 2022
Unit: Yuan Currency: RMB
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 8,565,804,570.16 | | | | 9,112,576,497.00 | |
| Tax refunds received | | | | | | | | | | | | |
| Other cash received relating to operating activities | | | | | | | 184,492,850.93 | | | | 325,497,331.89 | |
| Subtotal of cash inflows from operating activities | | | | | | | 8,750,297,421.09 | | | | 9,438,073,828.89 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 6,197,364,913.69 | | | | 6,571,173,336.26 | |
| Cash paid to and on behalf of employees | | | | | | | 502,720,974.99 | | | | 519,263,297.75 | |
| Cash paid for taxes | | | | | | | 26,833,236.99 | | | | 17,866,877.16 | |
| Other cash paid relating to operating activities | | | | | | | 404,435,523.44 | | | | 423,944,760.19 | |
| Subtotal of cash outflows from operating activities | | | | | | | 7,131,354,649.11 | | | | 7,532,248,271.36 | |
| Net cash flow from operating activities | | | | | | | 1,618,942,771.98 | | | | 1,905,825,557.53 | |
| II. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 226,982,308.50 | | | | 392,237,024.23 | |
| Cash received from investment income | | | | | | | 398,798,400.00 | | | | 1,025,737,568.50 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 317,597.90 | | | | 431,393.19 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash received relating to investment activities | | | | | | | 3,722,784,778.98 | | | | 685,906,973.39 | |
| Subtotal of cash inflows from investment activities | | | | | | | 4,348,883,085.38 | | | | 2,104,312,959.31 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 114,047,582.10 | | | | 194,711,725.94 | |
| Cash paid for investment | | | | | | | 52,980,000.00 | | | | 1,041,000,000.00 | |
| Net cash paid for the acquisition of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash paid relating to investment activities | | | | | | | | | | | 696,580,376.07 | |
| Subtotal of cash outflows from investment activities | | | | | | | 167,027,582.10 | | | | 1,932,292,102.01 | |
| Net cash flow from investment activities | | | | | | | 4,181,855,503.28 | | | | 172,020,857.30 | |
| III. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors | | | | | | | | | | | | |
| Cash received from borrowings | | | | | | | 6,220,000,000.00 | | | | 10,020,000,000.00 | |
| Other cash received relating to financing activities | | | | | | | 6,908,362.50 | | | | 6,866,258.70 | |
| Subtotal of cash inflows from financing activities | | | | | | | 6,226,908,362.50 | | | | 10,026,866,258.70 | |
| Cash paid for debt repayment | | | | | | | 10,861,100,000.00 | | | | 12,150,000,000.00 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 440,113,532.33 | | | | 521,141,531.76 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2022 | | | Year 2021 | |
| Other cash paid relating to financing activities | | | | | | | 419,071,524.12 | | | | 1,546,620,002.23 | |
| Subtotal of cash outflows from financing activities | | | | | | | 11,720,285,056.45 | | | | 14,217,761,533.99 | |
| Net cash flow from financing activities | | | | | | | -5,493,376,693.95 | | | | -4,190,895,275.29 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | | | | | | |
| V. Net increase in cash and cash equivalents | | | | | | | 307,421,581.31 | | | | -2,113,048,860.46 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 3,418,737,810.88 | | | | 5,531,786,671.34 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 3,726,159,392.19 | | | | 3,418,737,810.88 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Statement of Changes in Equity
January – December 2022
Unit: Yuan Currency: RMB
| | | Year 2022 |
| | | Paid-in | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | | | |
| | | capital | | Other equity instruments | | | | Less: | | Other | | | | | | General | | | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | Capital | | Treasury | | comprehensive | | Special | | Surplus | | risk | | Undistributed | | | | | | Minority | | Total |
| Items | | stock) | | stock | | bonds | | Others | | reserves | | shares | | income | | reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | equity |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,276,144,811.80 | | | | 1,494,334.19 | | | | 1,103,806,707.15 | | | | -3,797,684,715.49 | | | | 10,658,798,130.65 | | 418,606,199.35 | | 11,077,404,330.00 |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Business combination under same control | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,276,144,811.80 | | | | 1,494,334.19 | | | | 1,103,806,707.15 | | | | -3,797,684,715.49 | | | | 10,658,798,130.65 | | 418,606,199.35 | | 11,077,404,330.00 |
| III. Increase and decrease of current period (decrease is indicated by "-") | | | | | | | | | | 15,977,730.06 | | 263,483,654.25 | | -1,054,073.47 | | | | 9,468,553.39 | | | | -2,954,135,354.12 | | | | -3,193,226,798.39 | | -227,277,625.98 | | -3,420,504,424.37 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | -1,054,073.47 | | | | | | | | -2,763,166,060.87 | | | | -2,764,220,134.34 | | -236,508,881.68 | | -3,000,729,016.02 |
| (II) Capital paid in and reduced by owners | | | | | | | | | | 15,977,730.06 | | 263,483,654.25 | | | | | | | | | | | | | | -247,505,924.19 | | 9,231,255.70 | | -238,274,668.49 |
| 1. Ordinary share paid in by owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | 15,977,730.06 | | 263,483,654.25 | | | | | | | | | | | | | | -247,505,924.19 | | 9,231,255.70 | | -238,274,668.49 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 9,468,553.39 | | | | -190,969,293.25 | | | | -181,500,739.86 | | | | -181,500,739.86 |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 9,468,553.39 | | | | -9,468,553.39 | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | -181,500,739.86 | | | | -181,500,739.86 | | | | -181,500,739.86 |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,292,122,541.86 | | 263,483,654.25 | | 440,260.72 | | | | 1,113,275,260.54 | | | | -6,751,820,069.61 | | | | 7,465,571,332.26 | | 191,328,573.37 | | 7,656,899,905.63 |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Year 2021 |
| | | Paid-in | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | | | |
| | | capital | | Other equity instruments | | | | Less: | | Other | | | | | | General | | | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | Capital | | Treasury | | comprehensive | | Special | | Surplus | | risk | | Undistributed | | | | | | Minority | | Total |
| Items | | stock) | | stock | | bonds | | Others | | reserves | | shares | | income | | reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | equity |
| I. Closing balance of last year | | 9,516,285,608.00 | | | | | | | | 6,926,920,343.78 | | 2,009,067,652.38 | | -584,134.06 | | | | 1,030,866,477.21 | | | | 3,886,681,562.18 | | | | 19,351,102,204.73 | | 1,042,097,792.60 | | 20,393,199,997.33 |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | -9,901,921.77 | | | | -3,484,049,730.53 | | | | -3,493,951,652.30 | | -111,234,734.03 | | -3,605,186,386.33 |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Business combination under same control | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,516,285,608.00 | | | | | | | | 6,926,920,343.78 | | 2,009,067,652.38 | | -584,134.06 | | | | 1,020,964,555.44 | | | | 402,631,831.65 | | | | 15,857,150,552.43 | | 930,863,058.57 | | 16,788,013,611.00 |
| III. Increase and decrease of current period (decrease is indicated by "-") | | -441,248,615.00 | | | | | | | | -2,650,775,531.98 | | -2,009,067,652.38 | | 2,078,468.25 | | | | 82,842,151.71 | | | | -4,200,316,547.14 | | | | -5,198,352,421.78 | | -512,256,859.22 | | -5,710,609,281.00 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 2,078,468.25 | | | | | | | | -3,943,871,849.80 | | | | -3,941,793,381.55 | | -550,706,859.22 | | -4,492,500,240.77 |
| (II) Capital paid in and reduced by owners | | -441,248,615.00 | | | | | | | | -2,650,775,531.98 | | -2,009,067,652.38 | | | | | | | | | | | | | | -1,082,956,494.60 | | 50,450,000.00 | | -1,032,506,494.60 |
| 1. Ordinary shares paid in by owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,450,000.00 | | 50,450,000.00 |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | -4,483,811.25 | | | | | | | | | | | | | | | | -4,483,811.25 | | | | -4,483,811.25 |
| 4. Others | | -441,248,615.00 | | | | | | | | -2,646,291,720.73 | | -2,009,067,652.38 | | | | | | | | | | | | | | -1,078,472,683.35 | | | | -1,078,472,683.35 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 82,842,151.71 | | | | -256,444,697.34 | | | | -173,602,545.63 | | -12,000,000.00 | | -185,602,545.63 |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 82,842,151.71 | | | | -82,842,151.71 | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | -173,602,545.63 | | | | -173,602,545.63 | | -12,000,000.00 | | -185,602,545.63 |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,276,144,811.80 | | | | 1,494,334.19 | | | | 1,103,806,707.15 | | | | -3,797,684,715.49 | | | | 10,658,798,130.65 | | 418,606,199.35 | | 11,077,404,330.00 |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Statement of Changes in Equity
January – December 2022
Unit: Yuan Currency: RMB
| | | Year 2022 |
| | | Paid-in capital | | Other equity instruments | | | | | | Other | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | Capital | | Less: Treasury | | comprehensive | | Special | | Surplus | | Undistributed | | Total |
| Items | | stock) | | stock | | bonds | | Others | | reserves | | shares | | income | | reserves | | reserves | | profits | | equity |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,135,238,517.71 | | | | 1,652,642.73 | | | | 1,103,806,707.15 | | 2,762,357,077.10 | | 17,078,091,937.69 |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,135,238,517.71 | | | | 1,652,642.73 | | | | 1,103,806,707.15 | | 2,762,357,077.10 | | 17,078,091,937.69 |
| III. Increase and decrease of current period (decrease is indicated by "-") | | | | | | | | | | 15,183,106.23 | | 263,483,654.25 | | -866,721.55 | | | | 9,468,553.39 | | -96,283,759.39 | | -335,982,475.57 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | -866,721.55 | | | | | | 94,685,533.86 | | 93,818,812.31 |
| (II) Capital paid in and reduced by owners | | | | | | | | | | 15,183,106.23 | | 263,483,654.25 | | | | | | | | | | -248,300,548.02 |
| 1. Ordinary shares paid in by owners | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | 15,183,106.23 | | 263,483,654.25 | | | | | | | | | | -248,300,548.02 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 9,468,553.39 | | -190,969,293.25 | | -181,500,739.86 |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 9,468,553.39 | | -9,468,553.39 | | |
| 2. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | -181,500,739.86 | | -181,500,739.86 |
| 3. Others | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,150,421,623.94 | | 263,483,654.25 | | 785,921.18 | | | | 1,113,275,260.54 | | 2,666,073,317.71 | | 16,742,109,462.12 |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Year 2021 |
| | | Paid-in capital | | Other equity instruments | | | | | | Other | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | Capital | | Less: Treasury | | comprehensive | | Special | | Surplus | | Undistributed | | Total |
| Items | | stock) | | stock | | bonds | | Others | | reserves | | shares | | income | | reserves | | reserves | | profits | | equity |
| I. Closing balance of last year | | 9,516,285,608.00 | | | | | | | | 6,764,350,200.40 | | 2,009,067,652.38 | | -796,187.66 | | | | 1,030,866,477.21 | | 2,279,497,553.33 | | 17,581,135,998.90 |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | -9,901,921.77 | | -89,117,295.94 | | -99,019,217.71 |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,516,285,608.00 | | | | | | | | 6,764,350,200.40 | | 2,009,067,652.38 | | -796,187.66 | | | | 1,020,964,555.44 | | 2,190,380,257.39 | | 17,482,116,781.19 |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | -441,248,615.00 | | | | | | | | -2,629,111,682.69 | | -2,009,067,652.38 | | 2,448,830.39 | | | | 82,842,151.71 | | 571,976,819.71 | | -404,024,843.50 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 2,448,830.39 | | | | | | 828,421,517.05 | | 830,870,347.44 |
| (II) Capital paid in and reduced by owners | | -441,248,615.00 | | | | | | | | -2,629,111,682.69 | | -2,009,067,652.38 | | | | | | | | | | -1,061,292,645.31 |
| 1. Ordinary shares paid in by owners | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | -4,483,811.25 | | | | | | | | | | | | -4,483,811.25 |
| 4. Others | | -441,248,615.00 | | | | | | | | -2,624,627,871.44 | | -2,009,067,652.38 | | | | | | | | | | -1,056,808,834.06 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 82,842,151.71 | | -256,444,697.34 | | -173,602,545.63 |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 82,842,151.71 | | -82,842,151.71 | | |
| 2. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | -173,602,545.63 | | -173,602,545.63 |
| 3. Others | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,135,238,517.71 | | | | 1,652,642.73 | | | | 1,103,806,707.15 | | 2,762,357,077.10 | | 17,078,091,937.69 |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Huang Mingyue
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
III. Company Profile
1. Company Overview
| | √ | Applicable | ¨ | Not applicable |
Yonghui Superstores Co., Ltd. (“the Company”), established on August 13, 2009, is a limited liability company registered in Fujian Province, People’s Republic of China, with a long-term operating period. The Company’s issued common shares, denominated in RMB, are listed on the Shanghai Stock Exchange. The Company is headquartered at No. 436 West 2nd Ring Middle Road, Fuzhou City, Fujian Province.
The main business activities of the Company and its subsidiaries (the “Group”) include the sale of fresh products, food supplies, clothing, and related promotional services, logistics distribution, real estate property acquisition, construction and leasing, etc.
The financial statements were reported upon the approval by the resolution of the Board of Directors on April 27, 2023. According to Articles of Association of the Company, the financial statements would be submitted to the shareholders’ meeting for review.
The consolidation scope of the consolidated financial statements is determined based on control. For changes in the current year, please refer to Section VIII, Change of Consolidation Scope and Section IX, Equity in Other Entities.
2. Scope of Consolidated Financial Statements
| | √ | Applicable | ¨ | Not applicable |
As of December 31, 2022, the Company had owned 129 subsidiary companies, with an decrease of 2 compared to the previous year in the number of entities included in the consolidation scope. The consolidation scope increased by 2 newly established companies and decreased by 3 due to cancellation and 1 due to transfer.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The financial statements were prepared in accordance with the CASBE: Basic Standards promulgated by the Ministry of Finance and the specific accounting standards, application guidelines, explanations and other regulations (collectively referred to as “Accounting Standards for Business Enterprises”) issued and revised thereafter.
2. Going concern
| | √ | Applicable | ¨ | Not applicable |
The financial statements were listed on a going concern basis.
Except for certain financial instruments, the financial statements were prepared in accordance with the historical cost as the basis for measurement. If the asset decreases in value, the provision for impairment of assets should be made according to relevant regulations.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
V. Significant Accounting Policy and Estimate
Specific accounting policies and accounting estimates presentation:
| | √ | Applicable | ¨ | Not applicable |
The Group has formulated specific accounting policies and estimates based on its actual production and operational characteristics, mainly reflected in the provision for bad debts of receivables, inventory valuation methods, depreciation of fixed assets, amortization of intangible assets, capitalization criteria for research and development expenses, amortization of long-term prepaid expenses, recognition of deferred tax assets, provision for impairment of long-term assets, and revenue recognition and measurement.
1. Statement on Compliance with CASBE
The financial statements comply with the requirements of the CASBE, providing a true and complete reflection of the financial position of the Company and the Group as of December 31, 2022, as well as their operating performance and cash flows for the year 2022.
2. Accounting period
The fiscal year of the Group adopts the Gregorian calendar year, that is, every year from January 1 to December 31.
3. Operating cycle
| | √ | Applicable | ¨ | Not applicable |
Business cycle of the Group is 12 months.
4. Recording currency
The recording currency adopted by the Company and its domestic subsidiaries and currency used for preparing the financial statements are RMB. The overseas subsidiary companies of the Company determine their functional currency based on the primary economic environment in which they operate and convert it to RMB when preparing financial statements. Unless otherwise specified, the monetary unit in the financial statements is RMB.
5. Accounting method for business combination under and not under the same control
| | √ | Applicable | ¨ | Not applicable |
Business combination is divided into business combination under and not under same control.
Business combination under same control
For the business combination under same control, the assets and liabilities that the combing party obtains from the combined party, except from the adjustments made due to difference of accounting policies, shall be measured on the basis of the book value of the combined party in the consolidated financial statement of the final controller on the combination date. The difference between the book value of consideration paid and the book value of net assets acquired in a business combination is adjusted to capital reserves. If the capital reserves are insufficient, it is adjusted against retained earnings.
Business combination under same control that is realized by several transactions
In some financial statements, the book value shares of the net assets of the combined party in the consolidated financial statement of the final controller calculated based on the shareholding ratio on the combination date shall be deemed as the initial investment costs of the investment. For the balance between the initial investment costs, the book value of the investment held before the combination plus the book value of the consideration newly paid before the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
In consolidated financial statements, for the assets and liabilities of the acquiree obtained by the acquirer in the acquisition, in addition to the adjustment made due to difference of accounting policy, they shall be measured at the book value on the acquisition date in the consolidated financial statement of the final controller. For the balance between the sum of the book value of the investment held before the combination and the book value of the consideration newly paid on the combination date and the book value of net assets obtained in the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted. For the long-term equity investment held by the combining party before it obtained the control over the combined party, changes in relevant profits and losses, other comprehensive incomes and other owner’s equities recognized from the later one of the date when the original equity is obtained and the date when the combining party and the combined party are under the final control of the same party to the combination date shall respectively be used to offset the retained income at the beginning period of the comparative statement or profits and losses of current period.
Business combination not under the same control
Business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination. In a business combination not under the same control, the party which obtains the control on other combining enterprise(s) on the acquisition date is the acquirer, and other combining enterprise(s) is(are) the acquiree. Acquisition date refers to the date on which the acquirer actually obtains the control on the acquiree.
Under the non-common control condition, acquiree’s identifiable assets, liability and contingent liabilities acquired from the business combination shall be measured at fair value on the acquisition date.
If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is greater than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference is recognized as goodwill and subsequently measured at cost less accumulated impairment losses. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the identifiable assets, liabilities, the fair value of and contingent liabilities, the fair value of merger consideration paid (or the fair value of equity securities issued), and the fair value of equity held by the acquiree before the acquisition date shall be rechecked at first. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is still less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference shall be included in the current profits and losses.
In cases of step-by-step acquisition of businesses under common control, for long-term equity investments held by the acquiring party before the acquisition date, they are remeasured at fair value on the acquisition date. The difference between fair value and the book value is recognized in the current period’s income statement. For the other comprehensive income of the acquired party’s long-term equity investments held before the acquisition date accounted for under the equity method, the accounting treatment is based on the same basis as the direct disposal of the relevant assets or liabilities of the invested entity. Other changes in equity, other than net income, other comprehensive income, and profit distribution, are treated as income in the period to which the acquisition date belongs.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
6. Preparation method of consolidated financial statements
| | √ | Applicable | ¨ | Not applicable |
The combination scope of the consolidated financial statements is determined on the basis of control, including the financial statements Company and all of its subsidiaries. Subsidiaries refer to the entities controlled by the Company (including the detachable parts of the Company and the invested companies, the structured entities controlled by the Company, and so on).
When preparing consolidated financial statements, subsidiary companies adopt the same accounting year and accounting policies as the Company. Assets, liabilities, equity, income, expenses and cash flows generated by all transactions between subsidiaries of the Group are fully offset at the time of the merger.
Where the loss shared by minority shareholders in a subsidiary exceeds the share enjoyed by minority shareholders in the subsidiary’s shareholder’s equity at the beginning of the period, the balance shall be written down with the minority shareholders’ equity.
For subsidiaries acquired through business combination not under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement from the date when the Group acquires the control right to the date when it terminates the control right. In the process of preparing consolidated financial statements, the financial statements of the subsidiary company shall be adjusted on the basis of the fair values of the identifiable assets, liabilities and contingent liabilities determined on the acquisition date.
For subsidiaries acquired through business combination under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement at the beginning of combination. During the preparation of consolidated financial statement, relevant items of financial statement of last year shall be adjusted and they will be regarded as reporting entities for consolidated statement and always exist since the control of final controller.
Where changes in relevant facts and circumstances result in changes to one or more of the control elements, the Group will reassess whether or not to control the investee.
In the circumstance of not losing the control, changes in minority shareholders’ equity are taken as an equity transaction.
| 7. | Accounting method for joint venture arrangement and joint operation |
| | √ | Applicable | ¨ | Not applicable |
Joint arrangement refers to the arrangement jointly controlled by two or more participants. The Group’s joint arrangements are classified as Cooperative Enterprises.
Joint venture refers to the Group only enjoying the right of joint venturing arrangement over the net assets.
The Group shall carry out accounting treatment for the investment of joint ventures in accordance with the provisions on the equity method of accounting for long-term equity investment.
8. Determination of cash and cash equivalents
Cash refers to the Group’s cash on hand and deposits that can be used for payment at any time; cash equivalents refer to the cash held by the Group with short maturity, strong liquidity, and easy conversion to a known amount and the investment of low value changing risks.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 9. | Foreign currency business and the translation of foreign currency financial statement |
| | √ | Applicable | ¨ | Not applicable |
The Group shall translate the amount of a foreign currency transaction into its functional currency.
For foreign currency transactions, the foreign currency amount is initially recognized by using the spot exchange rate as of the transaction date to translate it into the functional currency amount. The foreign currency monetary items on the balance sheet date shall be translated at the spot exchange rate on the balance sheet date. The resulting converted difference between the settlement and monetary items shall be treated as profit or loss in the current period, except for the difference arising from the special borrowings of foreign currency relating to the acquisition and construction of assets eligible for capitalization is disposed as per the principle of borrowing costs capitalization. The foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be changed. Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rate on the date when the fair value is determined. The resulting difference shall be recognized in the current profit or loss or other comprehensive income based on the nature of the non-monetary items.
For overseas operations, the Group translates the financial statements from their functional currency to RMB: for assets and liabilities in the balance sheet, the spot exchange rate as of the balance sheet date is used, while for equity items other than “undistributed profit”, the exchange rate as of the transaction date is used. For income and expense items in the income statement, the average exchange rate during the period is used for translation (unless the exchange rate fluctuations make it inappropriate, in which case the spot exchange rate as of the transaction date is used). The translation differences in the foreign currency financial statements obtained with the above-mentioned conversion method are recognized as other comprehensive income. In disposing of overseas operations, other comprehensive income related to the overseas operations shall be transferred to the disposal of current profits and losses, the partial disposal shall be calculated based on the disposal proportion.
The foreign currency cash flow and cash flow of overseas subsidiary shall be translated at the spot exchange rate on the date when the cash flow occurs. The influence of exchange rate fluctuation on cash shall be separately presented as an adjustment item in the cash flow statement.
| | √ | Applicable | ¨ | Not applicable |
Financial instruments refer to the contracts under which the financial assets of an enterprise are formed and the financial liability or right instruments of any other entity are formed.
Recognition and derecognition of financial instruments
A financial asset or financial liability shall be recognized when the Group becomes a party of financial instrument contract.
A financial asset (or part of it, or a portion of a group of similar financial assets) is derecognized when the following conditions are met, that is, it is written off from its account and balance sheet:
(1) The right to receive cash flow of financial assets expires;
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Transferred the right to receive cash flows from financial assets is transferred, or assumed the obligation to pay the full amount of cash flows to third parties in time under the “pass-through agreement”; and (a) substantially transferred the almost all the risks and rewards of financial assets ownership, or (b) abandoned the control over the financial assets, although all the risks and rewards were substantially transferred or retained. |
Where the responsibility for a financial liability has been fulfilled, revoked or expired, the financial liability will be derecognized. Where the current financial liability is replaced by another financial liability of the same creditor on virtually different terms, or the terms of the current liability are substantially modified, such replacement or modification shall be disposed for derecognition of the original liability and recognition of new liabilities, and the difference shall be included in the current profit and loss.
Financial asset bought and sold by regular means shall be recognized and derecognized in accordance with accounting at the transaction date. Regular way of buying or selling financial assets refers to the collection or delivery of financial assets within the time limit stipulated by regulations or common practices in accordance with the terms of the contract. The trading day is the date on which the Group promises to buy or sell financial assets.
Classification and measurement of financial assets
At the time of initial recognition, the financial assets of the Group are classified as follows according to the Group’s business model of managing financial assets and contractual cash flow characteristics of financial assets: financial assets measured at fair value with changes included in current profits and losses, financial assets measured at amortized cost.
In initial recognition, financial assets shall be measured at fair value, but the accounts receivable arising from the sale of goods or provision of services exclude significant financing elements or do not take into account the financing elements of less than one year, and the initial measurement shall be carried out according to the transaction price.
For the financial assets measured at fair value with changes included in the current profits and losses, the transaction expenses thereof are directly recorded into the profits and losses of the current period; for other categories of financial assets, the transaction expenses thereof are included into the initially recognized amount.
Subsequent measurement of financial assets depends on their classification:
Financial assets measured at amortized costs
Financial assets that meet the following conditions simultaneously and are classified as financial assets measured at amortized cost: the business mode for managing the financial assets is to collect the contractual cash flows; as stipulated in the contract terms of the financial assets, the cash flow generated on a specific date is only the payment for principal and interest based on the amount of outstanding principal. Actual interest method is adopted for determining interest income of such financial assets, the profits and losses that arise when such financial assets are terminated, amortized or depreciated, shall be recorded into the profits and losses of the current period.
Financial assets measured at fair value with changes included in current profits and losses
The Company classifies the financial assets above other than those measured at amortized cost as financial assets measured at fair value with changes included in current profits and losses. For such financial assets, the fair value is used for subsequent measurement, with all changes in fair value included in the current profits and losses.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Classification and measurement of financial liabilities
The financial liabilities of the Group are initially classified as financial liabilities measured at amortized cost. The transaction costs related to financial liabilities measured at amortized cost are included in their initially recognized amounts.
Subsequent measurement of financial liabilities depends on their classification:
Financial liabilities measured at amortised cost
These financial liabilities are calculated with the actual interest rate method with reference to the amortized cost for subsequent measurement.
Impairment of financial instruments
The group recognizes impairment losses and establishes provisions for expected credit losses on financial assets measured at amortized cost and lease receivables.
For accounts receivable without significant financing components, the Group measures the loss provision based on the expected credit loss amount within the whole duration by using the simplified measurement method.
For lease receivables, the Group chooses to apply a simplified measurement approach, measuring the loss provision based on the expected credit loss amount equivalent to the entire lease term.
For financial assets other than those using simplified measurement method, the Group assesses whether the credit risk has increased significantly since the initial recognition on each balance sheet date. If the credit risk does not increase significantly after initial recognition and is in the first stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the next 12 months, and calculates the interest income according to the book balance and the actual interest rate; if the credit risk has increased significantly since the initial recognition, but the credit depreciation has not occurred and the credit risk is in the second stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the book balance and the actual interest rate; if credit depreciation occurs after initial recognition and the credit risk is in the third stage, the Group measures the loss reserves according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the amortization cost and the actual interest rate. For financial instruments with low credit risk on the balance sheet date, the Group assumes that its credit risk has not increased significantly since initial recognition.
The Group assesses the expected credit loss of financial instruments based on individual and collective assessments. Considering the credit risk characteristics of different customers, the Group assesses the expected credit loss of receivables on the basis of aging combination.
For disclosures regarding the criteria for determining a significant increase in credit risk, definition of incurred credit-impaired assets, and assumptions for measuring expected credit losses, please refer to Note X, 2.
The factors reflected by the methods applied by the Group to measure the expected credit loss of financial assets include: unbiased probability weighted average amount determined by evaluating a series of possible results, the time value of money, and reasonable and evidence-based information about past events, current situation and forecast of future economic situation which can be obtained on the balance sheet date without expending unnecessary extra cost or efforts.
If the Group no longer reasonably expects the cash flow of the financial asset contract to be recovered in whole or in part, the book balance of the financial asset shall be directly written down.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Transfer of financial assets
In the event that the Group has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. In case it has retained nearly all of the risks and rewards associated with the ownership of the financial asset, the financial asset shall not be derecognized.
In the event the Group has neither transferred nor retained almost all the risks and rewards of ownership of financial assets, the following cases shall be considered: if the control of the financial assets is abandoned, the financial assets are derecognized and the assets and liabilities are recognized; if the financial assets are controlled, the relevant financial assets are recognized according to the extent to which they continue to be involved in the transferred financial assets, and the related liabilities are recognized accordingly.
In case it continues to be involved by transferring the financial assets and providing financial guarantee, the assets resulted in are recognized according to any one of the book value of the financial assets and the financial guarantee amount, whichever is lower. The amount of financial guarantee refers to the highest amount of repayment to be demanded among the considerations received.
Recognition method and accounting treatment method for expected credit loss of notes receivable
| | ¨ | Applicable | √ | Not applicable |
Recognition method and accounting treatment method for expected credit loss of accounts receivable.
| | √ | Applicable | ¨ | Not applicable |
For accounts receivable, regardless of whether there is a significant financing component, the Group always measures its loss provision based on the amount equivalent to the expected credit loss during the entire duration.
When individual financial assets cannot be assessed for expected credit losses on a reasonable cost basis, the Group classifies receivables into various portfolios based on their credit risk characteristics. Expected credit losses are then calculated on a portfolio basis, and the determination of the portfolio is based on the following criteria:
Accounts receivable portfolio 1: Receivables for sales proceeds, supplier service fees, rent, project payments, and other amounts.
Accounts receivable portfolio 2: Receivables from affiliated parties.
Accounts receivable portfolio 3: Intra-group receivables.
For accounts receivable divided into the portfolio, the Group prepares a comparison table between the aging/days overdue of accounts receivable and the expected credit loss rate in the whole duration to calculate the expected credit loss by referring to the experience of historical credit loss and combining the current situation and the forecast of future economic situation.
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Recognition method and accounting treatment method of expected credit loss of other receivables
| | √ | Applicable | ¨ | Not applicable |
Other receivables are segmented into several portfolios based on their credit risk characteristics. The determination of portfolio composition for other receivables is as follows:
Other receivables portfolio 1: Receivables for various types of deposits, guarantees, purchases, and store reserve funds.
Other receivables portfolio 2: Receivables from related parties.
Other receivables portfolio 3: Other receivables.
Other receivables portfolio 4: Intra-group receivables.
For other receivables, factored receivables, loans granted, and advances that are grouped together, the Group calculates the expected credit losses based on default risk exposure and the expected credit loss rate over the next 12 months or the entire lease term.
| | √ | Applicable | ¨ | Not applicable |
The inventories include raw materials, finished goods, and low-value consumables.
The initial measurement of inventory shall be made at its cost. The costs of the inventory include purchasing cost, processing cost and other costs. The outgoing inventory is valued at actual cost using the weighted average method, while processed inventory is valued at actual cost using the weighted average method. Amortization method is adopted for the amortization of low priced and easily worn articles and packing materials.
The perpetual inventory system is used as the inventory taking method.
The cost or the net realizable value, whichever is lower, is calculated on the balance sheet date. When the inventory cost is higher than its NRV, inventory reserves shall be made, and shall be included in the current profits and losses. The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. When providing for inventory write-down, it is done based on the category of inventory.
| (1) | Recognition methods and standards for contract assets |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Recognition method and accounting treatment method of expected credit loss of contract assets |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Classification and measurement of non-current assets or disposal groups held for sale
The Group mainly classifies it into the held-for-sale category by selling (including non-monetary assets exchange with commercial substance, the same below) instead of continuing to use a non-current asset or disposal group to recover its book value.
The aforementioned non current assets do not include investment properties which are subsequently measured by fair value model, biological assets which are measured by net amount of fair value minus selling expenses, assets formed by employee compensation, financial assets, deferred income tax assets and rights arising from insurance contracts.
Disposal group refers to a group of assets that are disposed together through sale or other means in a transaction, and the liabilities directly related to these assets transferred in the transaction. The disposal group includes goodwill acquired in business combination under specific circumstances.
The Company divides the non-current assets or disposal groups meeting the following conditions into held-for-sale types: the non-current assets or disposal groups can be sold immediately in current circumstances according to the rules of selling this kind of assets in similar transactions or conventions of disposal group; highly possible to be sold, that is, resolution has been made for one sales plan and certain purchase commitment has been obtained and sales is anticipated to be completed within one year. If the Group loses control over its subsidiaries due to the sale of the investment in these subsidiaries, whether or not it retains part of the equity investment after the sale, the investment in subsidiaries to be sold satisfies the conditions for held-for-sale type. In some financial statements, the investment is divided into held-for-sale types, and all assets and liabilities of its subsidiaries are classified into held-for-sale types in the consolidated financial statements.
In the initial measurement or re-measurement of the non-current assets or disposal groups held for sale on the balance sheet date, the difference between the book value and the net value after the sales amount are deducted from the fair value (the book value is higher than the net value) is recognised as asset impairment loss. For the amount of the asset impairment loss recognized by the disposal group held for sale, the goodwill book value of disposal group shall be deducted first, then book value of disposal group shall be deducted according to the proportion of the book values of various non-current assets measured in the disposal group.
If the fair value of non-current assets or disposal groups held for sale on the balance sheet date is less than the net value of the sale expenses, the amount of previous write-down shall be restored and transferred back within the impairment loss of assets recognized after being classified as held for sale. The amount transferred shall be included in the current profits or losses. The book value of goodwill that has been deducted cannot be reversed.
Non-current assets held for sale and the non-current assets in the disposal group held for sale are not subject to depreciation or amortization. Interests and other expenses of liabilities in the disposal group held for sale continue to be recognized. As for all or part of the investment of the associate or joint venture classified as held for sale, the part classified as held for sale shall be accounted with the equity method, and the retained part (not classified as held for sale) shall continue to be accounted with the equity method; the equity method shall be stopped if the Group loses a significant impact on associates and joint ventures due to a sale.
When a non-current asset or disposal group is classified as held for sale, but later no longer meets the conditions for classification of held-for-sale types, the Group will stop classifying it as held for sale and measure it subject to the lower of the following two amounts:
| ① | The book value of the said asset or disposal group is deemed as the amount adjusted as per the depreciation, amortization or impairment that needs to be recognized on the assumption that it is not classified as held for sale; |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1) | The determination method and accounting treatment for expected credit losses on debt investments |
| | ¨ | Applicable | √ | Not applicable |
| 19. | Other creditor investments |
| (1) | The determination method and accounting treatment for expected credit losses on other creditor investments |
| | ¨ | Applicable | √ | Not applicable |
| (1) | The determination method and accounting treatment for expected credit losses on long-term receivables |
| | √ | Applicable | ¨ | Not applicable |
For lease receivables within long-term receivables, regardless of whether they contain significant financing components, the Group measures the provision for credit losses based on the expected credit loss amount equivalent to the entire lease term. Any increase or reversal in the provision for credit losses formed as a result is recognized as impairment loss or gain in the current period’s income statement.
| 21. | Long-term equity investment |
| | √ | Applicable | ¨ | Not applicable |
Long-term equity investment includes equity investment in subsidiaries, cooperative enterprises and joint ventures.
Long-term equity investment shall be initially measured as the initial investment cost when it is obtained. For the long-term equity investment obtained through business combination under the same control, the share of the book value of the equity of the merged party in the final controlling party’s consolidated financial statements obtained on the combination date shall be taken as the initial investment cost; the difference between the initial investment cost and the book value of the combination consideration shall be adjusted to the capital reserve (if it is insufficient to offset, the retained earnings shall be offset). Other comprehensive income before the merger date shall be accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when disposing of the investment. Shareholders’ equity recognized due to changes in Shareholders’ equity other than net profit and loss, other comprehensive income and profit distribution of the investee shall be transferred to the current profit and loss when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. For long-term equity investment obtained through a business combination not under the same control, the merger cost shall be used as the initial investment cost (if a business combination not under the same control is realized step by step through multiple transactions, the book value of the equity investment of the acquiree held before the purchase date shall be used. The sum of the new investment cost on the purchase date shall be the initial investment cost). Combination costs include the sum of the assets paid by the purchaser, the liabilities incurred or assumed, and the fair value of the equity securities issued. The other comprehensive income recognized by the equity method that is held before the purchase date is accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when disposing of the investment, as the investee removes net gains and losses, Shareholders’ equity confirmed by changes in other Shareholders’ equity other than other comprehensive income and profit distribution shall be transferred to the current profits and losses when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. The accumulated fair value changes of equity investments held prior to the date of acquisition, accounted for as financial instruments and recorded in other comprehensive income, are fully transferred to retained earnings upon adoption of the cost method for accounting. For long-term equity investments acquired through means other than business combinations, the initial investment cost is determined as follows: for investments acquired by paying cash, the actual purchase price, along with directly related expenses, taxes, and other necessary expenditures, are considered as the initial investment cost; for investments acquired through the issuance of equity securities, the fair value of the equity securities at the time of issuance is considered as the initial investment cost.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
In the event the Company can exert significant influence over the investee, the cost method shall be employed in some financial statements of the Company. Control refers to the control power over the investors. Through the control, the investor can obtain variable returns by participating in relevant activities of the investor and can wield influence upon the return amount by using the control power to the investor.
The price of a long-term equity investment measured by employing the cost method shall be included at its initial investment cost. If there are additional investments or disinvestments, the long-term equity investment cost shall be adjusted. The dividends or profits declared to be distributed by the investee shall be recognized as the current investment income.
For investees over which the Group has joint control or significant influence, long-term equity investments are accounted for using the equity method. Joint control refers to the control of a specific arrangement, whose activities have to be decided with the consensus by all participants sharing control rights, according to related agreements. Significant influence refers to the investor’s right of participation in the decisions of financial and operational policies of the investee, not including the right to control, or jointly control with other participants.
Where the initial cost of a long-term equity investment calculated with the equity method is more than the investing enterprise’ attributable share of the fair value of the invested entity’s identifiable net assets for the investment, it is included in the initial cost of the long-term equity investment. Where the initial cost of a long term equity investment is less than the investing enterprise’ attributable share of the fair value of the invested entity’s identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When the equity method is applied, after the investor obtains a long-term equity investment, it shall, in accordance with the attributable share of the net profits or losses and other comprehensive income proportions of the investee, recognize the investment profits or losses and other comprehensive income and adjust the book value of the long-term equity investment. Confirming the share of the net profit or loss of the investee is based on the fair value of the investee’s identifiable assets at the time of obtaining the investment. In accordance with the Group’s accounting policies and accounting periods and after the internal transaction gains and losses that occur between the joint ventures and affiliated businesses, the proportion that should be enjoyed by the investor shall be measured (but if the internal transaction losses are the asset impairment losses, the amount shall be fully confirmed), and recognized after the net profit of the investee is adjusted, except for the assets that are invested or sold to constitute businesses. The investing enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall share, and shall reduce the book value of the long-term equity investment correspondingly. The Group recognizes the net losses incurred by the investee, limiting the recognition to the carrying amount of the long-term equity investment and any other long-term equity interests that essentially represent a net investment in the investee. However, the Group is not limited to the extent of the loss to the carrying amount of the investment if it has an additional obligation to cover the losses. Where any change is made to the shareholder’s equity other than the net profits and losses, other comprehensive income, and profit distribution of the investee, the book value of the long-term equity investment shall be adjusted and included in the shareholder’s equity.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
When disposing a long-term equity investment, the balance between its book value and the actual purchase price shall be included in the current profits and losses. For the long-term equity investment accounted for using the equity method, if the equity method is terminated, the related comprehensive income calculated by the original equity method is calculated with the same accounting method the investee uses to directly dispose its related assets or liabilities. The Shareholder’ equity recognized due to the changes in other Shareholder’s equity of the investee is fully transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution; if the equity method is still adopted, the related comprehensive income calculated by the original equity method is put under accounting treatment on the same basis the investee disposing related assets or liabilities, and transferred to the current profit and loss in proportion. The Shareholder’ equity recognized due to the changes in other Shareholder’s equity of the investee is transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution.
| (1) | In case cost calculation model is adopted: |
The investment properties refer to the properties held for earning the rent or capital appreciation or for both of them, including the leased buildings.
The initial measurement of the investment properties shall be made at its cost. Subsequent expenditures relating to investment properties are included in the cost of the investment properties in the event that the economic benefits associated with the asset are likely to flow in and the cost can be reliably measured. Otherwise, it shall be included in the current profit and loss when actually incurred.
The Group takes the cost model for subsequent measurement of investment properties and provides depreciation or amortization using the depreciation methods applied to buildings and structures within fixed assets.
| | √ | Applicable | ¨ | Not applicable |
Fixed assets shall be recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. Subsequent expenditure regarding the fixed assets, if it meets the recognition conditions, is included in the cost of the fixed assets, and the carrying amount of the replaced portion is derecognized; otherwise, it is included in the current profit or loss.
The initial measurement of fixed assets shall be made at their cost. The costs for the acquisition of fixed assets include the buying price, relevant expenses of taxation, other expenses that may be directly assigned to such assets before making the fixed assets reach expected use conditions.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | | Annual | |
| | | Depreciation | | Depreciation | | | Residual | | | depreciation | |
| Category | | method | | period (year) | | | value rate | | | rate | |
| Houses and buildings | | Straight-line method | | | 20-35 | | | | 5 | % | | | 2.71-4.75% | |
| Machinery and equipment | | Straight-line method | | | 5-10 | | | | 5 | % | | | 9.5-19% | |
| Transportation equipment | | Straight-line method | | | 5-10 | | | | 5 | % | | | 9.5-19% | |
| Electronic equipment and tool appliances | | Straight-line method | | | 5 | | | | 5 | % | | | 19% | |
The Group shall, at least at the end of each year, take a check on the useful life, expected net salvage value, and the depreciation method of the fixed assets, and adjust them when necessary.
| (3) | Basis of recognition, valuation method and depreciation method for fixed assets under finance lease |
| ¨ | Applicable | √ | Not applicable |
| 24. | Construction in progress |
| √ | Applicable | ¨ | Not applicable |
The cost of work in progress is determined based on the actual construction expenses incurred, including necessary construction expenses and other related costs incurred during the construction period.
When work in progress reaches the predetermined usable state, it is transferred to fixed assets and long-term prepaid expenses.
| √ | Applicable | ¨ | Not applicable |
Borrowing costs are recognized in the current period’s income statement.
| √ | Applicable | ¨ | Not applicable |
The productive biological assets refer to biological assets held for the purpose of producing agricultural products, rendering services, or leasing, including economic forests. The initial measurement shall be made to the productive biological assets at its cost. For self-generated productive biological assets, the cost includes necessary expenditures such as fertilizer costs, labor expenses, and allocated indirect costs incurred before reaching the predetermined production and operational objectives.
Productive biological assets are depreciated with the straight-line depreciation method over their useful lives from the date when they reach their intended production and operation purposes.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The service life, estimated residual value rate, and annual depreciation rate for different types of productive biological assets are as follows:
| | | | | Estimated | | | Annual | |
| | | Estimated | | net residual | | | depreciation | |
| Category | | service life | | value rate | | | rate | |
| Mature persimmon trees | | 20 years | | | 5 | % | | | 4.75 | % |
The service life and estimated residual value of productive biological assets are determined based on historical experience. The Group is required to recheck the service life, expected net residual value, and depreciation method of productive biological assets at the end of the year, and any change of them will be treated as accounting estimate. Disposal consideration amount from sale, inventory loss, death or damage of productive biological assets shall be included in current profits and losses after deducting the book value and related taxes.
Impairment
The Group shall inspect productive biological assets at least at the end of each annual period. If there is conclusive evidence that due to natural disasters, plant diseases and insect pests, or changes in market demand, the recoverable amount of the productive biological assets is lower than their carrying amount, the difference between the recoverable amount and the carrying amount is recognized as a provision for impairment of biological assets and recorded as a current period loss.
Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
| ¨ | Applicable | √ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
On the lease commencement date, the Group recognizes the right to use the leased assets that can be used during the lease term and measures it at cost. The cost of right-of-use assets includes: the initial measurement amount of lease liabilities; lease payments made by the lessee at or before the lease commencement date; initial direct costs incurred by the lessee; estimated costs to dismantle and remove the leased asset or restore the site on which the leased asset is located to the condition specified in the lease agreement. If the Group re-measures the lease liability due to changes in lease payments, the carrying amount of the right-of-use asset is adjusted accordingly. The Group uses the straight-line method to depreciate the right-of-use assets subsequently. Where it is reasonably certain that ownership of the leased assets will be obtained at the end of the lease term, the Group depreciates the leased assets over their remaining useful lives. If the ownership of the leased asset can not be reasonably confirmed on the lease term expiry, the accrual depreciation of the Group shall be conducted within the shorter of two periods, namely the lease term and the remaining service life of lease asset.
| (1) | Valuation method, service life and impairment test |
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Intangible assets are recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. The cost is used for initial measurement. However, if the fair value of the intangible assets acquired through business combination not under the same control can be reliably measured, such asses are individually recognized as intangible assets and measured at fair value.
The useful life of intangible assets is determined according to the period in which they can bring economic benefits to the Group. If it is impossible to foresee whether the period in which economic benefits can be brought to the Group, such assets are deemed as intangible assets.
The service lives of various intangible assets are as follows:
| Category | | Service life | | Amortization method |
| Land use right | | 40 years | | Straight-Line method of amortization |
| Software | | 5 years | | Straight-Line method of amortization |
| Patent right and non-patent technology | | 10 years | | Straight-Line method of amortization |
| Sales network | | 10 years | | Straight-Line method of amortization |
The acquired land use rights obtained by the Group are usually accounted for as intangible assets. With respect to the buildings and structures that are self-developed and self-constructed, the related land use rights and the buildings are accounted for as intangible assets and fixed assets, respectively. In the case of purchased land and buildings, the paid prices are distributed between the land use rights and the buildings. Where it is difficult to allocate reasonably, all of such costs are disposed as fixed assets.
Intangible assets with limited service life shall be amortized using straight-line method in service life. At the end of each year, the Group shall verify the estimated service lives and amortization methods of the intangible assets with limited service life and make adjustment when needed.
| (2) | Accounting policy for expenditures of internal research and development |
| √ | Applicable | ¨ | Not applicable |
The expenditures for internal research and development projects of the Group are classified into research expenditures and development expenditures. The expenditure occurred during the research stage shall be included in the profits/losses of current period when it occurs. The expenditure at the stage of development shall be capitalized only if the following conditions are met simultaneously: technically feasible to complete the intangible assets so that they can be used or sold; having the intention to use and sell the intangible assets; the ways for economic benefits of intangible assets, including proving that the market exists for the products manufactured by such intangible assets, or that the intangible assets have own market, and proving that the serviceability of intangible assets if they are used internally; having sufficient technical and financial resources and other resource supports to complete the development of such intangible assets and having the ability to use or sell such intangible asset; the expenditure attributable to the development stage of such intangible asset can be measured reliably. The development expenditure not meeting the conditions above is included in the current profits and losses when it occurs.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 30. | Impairment of long-term assets |
| √ | Applicable | ¨ | Not applicable |
For impairment of assets other than inventory, deferred taxes, and financial assets, the Group determines the impairment with the following methods:
As of the balance sheet date, if there are indications of impairment of assets, the Group will estimate their recoverable amounts and perform impairment testing; for goodwill formed due to business combinations and intangible assets that have not reached the usable condition, impairment testing will be conducted at least annually regardless of whether there are indications of impairment.
The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of the assets minus the disposal expenses and the present value of the expected future cash flow of the assets. Generally, the Group estimates the recoverable amount based on single assets. Where it is not possible to estimate the recoverable amount of single assets, the recoverable amount of the asset group to which the asset belongs is recognized. The recognition of an asset group is based on whether the major cash inflow generated by the asset group is independent of the cash inflows of other assets or asset groups.
When the recoverable amount of an asset or asset group is lower than its carrying amount, the Group reduces its carrying amount to the recoverable amount, include the write-down amount in the current profit and loss, and make the corresponding provision for asset impairment.
The Group shall, at the end of each year, examine the consumptive biological assets and productive biological assets. If any well-established evidence indicates that the realizable net value of any consumptive biological asset or the recoverable amount of any productive biological asset is lower than its book value as a result of natural disaster, plant diseases and insect pests, animal disease or change of market demand, the enterprise shall, based on the difference between the realizable net value or the recoverable amount and the relevant book value, make provision for the loss on decline in value of or for the impairment of the biological asset and shall recognize it as current losses.
If the factors affecting the impairment of the expendable biological asset have disappeared, the amount of the written-down shall be restored and reversed within the amount of the original provision for the decline in value, and the reversed amount is recognized in the current profits and losses. Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
For the test of goodwill impairment, it shall, as of the purchasing day, apportion the carrying value of the business reputation formed by business combination to the relevant asset groups by a reasonable method. Where it is difficult to do so, it shall be apportioned to the relevant combinations of asset groups. The related asset group or combination of asset groups shall be the asset group or combination of asset groups that can benefit from the synergy effect of enterprise merger, and shall be no greater than the reporting segments determined by the Group.
When making an impairment test on the relevant asset groups or combination of asset groups containing goodwill, if any evidence shows that the impairment of asset groups or combinations of asset groups is possible, the Company shall first make an impairment test on the asset groups or combinations of asset groups not containing business reputation, calculate the recoverable amount, and recognize the corresponding impairment loss. Then perform impairment tests on the related asset group or portfolio of asset groups containing goodwill and compare its book value with the recoverable amount. If the recoverable amount is lower than the book value, the amount of impairment loss shall be apportioned to the book value of goodwill of the corresponding asset groups or portfolio of asset groups in the first place. Then according to the proportion of the book value of other assets, excluding the goodwill, with respect to the corresponding asset groups or portfolio of asset groups, the book value of the said assets shall be deducted.
Once the assets impairment loss above is confirmed, it shall not be reversed in the future accounting periods.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 31. | Long-term deferred expenses |
| √ | Applicable | ¨ | Not applicable |
The store decoration and improvement expenses can be divided into two categories: the first category includes expenses for the decoration and improvement of operating and office premises before opening a new store, and the second category includes expenses for secondary (or over) decoration and improvement of already opened stores. The expenses for the decoration and improvement of a new store are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (10 years) and the lease term. The expenses for secondary (or over) decoration and improvement of already opened stores are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (5 years) and the remaining lease term. At the end of each year, the remaining service life of deferred expenses is reviewed. If a deferred expense item no longer provides future benefits in subsequent accounting periods, the remaining unamortized balance of that item is recognized as a current period loss.
| (1) | Recognition method for contract liabilities |
| √ | Applicable | ¨ | Not applicable |
The Group shall list the contract liabilities in the balance sheet according to the relationship between performance obligations and customer payment.
The contract liabilities refer to obligations to transfer goods or services to customers for which consideration has been received or is receivable from the customer before transferring the promised goods or services.
Employee compensation refers to the remuneration or compensation, except for share payment, offered by the Group for the purpose of acquiring the services provided by the employees or terminating employment relationships. Employee remuneration mainly includes short-term salaries, post-employment welfare, dismission welfare and other long-term employee welfare. Welfare provided by the Group for employees’ spouses, children and dependents, family members of deceased employees and other beneficiaries is also part of employee salaries.
| (1) | Accounting treatment method of short-term remuneration |
| √ | Applicable | ¨ | Not applicable |
The Company confirms the actually occurred short-term salaries as liabilities during the accounting period that the staff provides service for the Company, and accounts them into profits and losses of the current period or relevant asset costs.
| (2) | Accounting treatment method for after-service benefits |
| √ | Applicable | ¨ | Not applicable |
Post-employment welfare (defined contribution plans)
The Group’s employees participate in pension insurance and unemployment insurance managed by the local government. The corresponding expenses are recognized as relevant asset costs or current-period expenses when they are incurred.
| (3) | Accounting treatment method for severance benefits |
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Severance benefits
When providing dismissal welfare to employees, the Group shall early confirm the employee salaries generated from dismiss welfare as liability and include it into current profits and losses under the following two situations: the enterprise cannot withdraw the dismissal welfare generated from plan for termination of labor relationship or layoff proposal; the enterprise confirms relevant cost and expense related to the recombination of dismiss welfare payment.
| (4) | Accounting arrangement method for other long-term employee’s welfare |
| ¨ | Applicable | √ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
On the lease commencement date, the present value of lease payments not yet paid is recognized as lease liability, except for short-term leases and leases of low-value assets. The lease payments include fixed payments and the variable lease payments subtracted by lease incentives, variable lease payments based on an index or rate, and payments that are expected to be made based on the residual value guarantee; it also includes the exercise price of purchase options or the payments required to exercise the termination options, provided that the Group reasonably determines that it will exercise the option or reflects that the Group will exercise the termination option during the lease term.
When calculating the present value of lease payments, the Group uses the implicit interest rate of the lease as the discount rate; if the implicit interest rate of the lease cannot be determined, the Lessee’s incremental borrowing rate shall be used as the discount rate. The Group calculates the interest expense of the lease liabilities in each period of the lease term based on the fixed periodic interest rate and includes it into the current profits and losses, unless otherwise stipulated to be included in the cost of related assets. Variable lease payments that are not included in the measurement of lease liabilities are included in the current profits and losses when they are actually incurred, unless otherwise stipulated to be included in the cost of related assets.
After the lease commencement date, the Group increases the carrying amount of the lease liability when recognizing interest and decreases it when paying lease payments. When there is a change in the substantially fixed payments, a change in the estimated payments for residual value guarantees, a change in the index or rate used to determine lease payments, or a change in the assessment or exercise of purchase options, renewal options, or termination options, the Group re-measures the lease liability using the present value of the revised lease payments.
| √ | Applicable | ¨ | Not applicable |
Except for contingent consideration and contingent liabilities assumed in a business combination under common control, when the obligations related to contingent matters meet the following conditions, they are recognized as estimated liabilities by the Group:
| (1) | This obligation is the current obligation of the Group; |
| (2) | It is likely to cause any economic benefit to flow out of the Group as a result of performance of the obligation; |
| (3) | The amount of the obligation can be measured reliably. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Estimated liabilities are initially measured in accordance with the best estimate of the expenditure required to perform the relevant current obligations, taking into account factors such as risks, uncertainties and time value of money associated with contingent events. The Company shall check the book value of the estimated debts on each balance sheet date. Where there is any exact evidence indicating that the book value cannot really reflect the current best estimate, the Company shall adjust the book value in accordance with the current best estimate.
| √ | Applicable | ¨ | Not applicable |
Share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment. Equity-settled share-based payment refers to a transaction settled by the Group with shares or other equity instruments as the consideration for obtaining services.
Equity-settled share-based payment in exchange for services provided by employees is calculated at the fair value of the equity instruments granted to employees. For equity instrument that are exercisable immediately after being granted, the relevant costs or expenses are recognized based on fair value on the grant date, increasing the capital surplus. For equity instrument that can only be exercised after a specified service period or upon achievement of specified performance conditions, during the service period, for each balance sheet date within the waiting period, the services acquired during the period are recognized as related costs or expenses, increasing the capital surplus, based on the best estimation of the number of equity instruments expected to be exercised, using the fair value on the grant date. The fair value of equity instruments is determined based on the ex-right closing price on the grant date.
Share-based payments that are not ultimately exercised due to non-satisfaction of non-market conditions and/or service period conditions are not recognized as costs or expenses. If market conditions or non-exercisable conditions are specified in the share-based payment agreement, the share-based payment is considered to be exercisable as long as all other performance conditions and/or service period conditions are met, regardless of whether the market conditions or non-exercisable conditions are satisfied.
If the terms of equity-settled share-based payments are modified, at least the obtained services are recognized as if the terms were not modified. In addition, any modification that increases the fair value of the granted equity instrument, or a change in favor of the employee on the modification date, recognizes an increase in the acquisition of services.
If the terms of equity-settled share-based payments are canceled, it will be treated as an accelerated exercise on the cancellation date and the unconfirmed amount will be immediately recognized. If the employees or other parties are to meet non-vesting conditions but they do not meet the conditions in vesting period, the Company will cancel the equity-settled share-based payment as the treatment. However, if a new equity instrument is granted to an employee, and on the granting date, it is determined that the new equity instrument granted is used to replace the canceled equity instrument, the granted replacement equity instrument shall be treated in the same way as the modifications of the original equity instrument terms and conditions are treated.
| 37. | Preference shares, perpetual capital securities and other financial instruments |
| ¨ | Applicable | √ | Not applicable |
| (1) | Accounting policy for income recognition and measurement |
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Revenues from contracts with customers
The Group confirms the incomes while performing the obligations in the contract, namely obtaining control right of relevant commodities or services from customers. Obtaining control of the related goods or services refers to one can direct the use of the goods or provision of services and obtain almost all economic benefits from the goods.
Sales contract
The sales contract between the Group and the client generally includes only the performance obligations of goods transfer. The Group, under normal conditions, recognizes revenue at the point in time when the customer obtains control of the related goods, which is usually the point of delivery as specified in contract. This recognition is based on the comprehensive consideration of the following factors: the present right to receive payment for the goods, the transfer of the primary risks and rewards associated with ownership of the goods, the transfer of legal ownership of the goods, the physical transfer of the goods, and the customer’s acceptance of the goods.
Provision of service contract
In the service contracts between the Group and its customers, which usually include provisions for display services, warehousing services, maintenance, and other performance obligations, the Group recognizes revenue based on the progress of performance during a specific period. This is because the customer simultaneously receives and consumes the economic benefits from the Group’s performance, and the Group has the right to invoice for the cumulative amount of completed performance during the entire contract period, treating it as a performance obligation fulfilled during a certain period. Revenue is recognized based on the progress of performance, except where the progress of performance cannot be reasonably determined. The Group determines the progress of performance for providing services based on the time schedule. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
Construction contract
The construction contracts between the Group and customers usually include obligations for construction and decoration works. As the customers have control over the construction assets during the performance period, the Group recognizes revenue based on the progress of performance, except when the progress cannot be reasonably determined. The Group determines the progress of providing services based on the input method. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
Variable consideration
Some contracts between the Group and customers include arrangements for reward points, forming variable consideration. The Group determines the best estimate of variable consideration based on either the expected value or the most likely amount to be realized. However, the transaction price that includes variable consideration does not exceed the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur, once the related uncertainty is resolved.
Sales return terms
For sales with sales return provisions, when the Group transfers control of the relevant goods to the customer, revenue is recognized based on the amount expected to be entitled for transferring the goods to the customer. The expected amount to be refunded due to sales returns is recognized as a provision for expected liabilities. Simultaneously, an asset is recognized for the expected cost of goods to be returned, which is calculated as the difference between the book value of the goods to be returned and the estimated costs (including the value impairment) associated with returning the goods. The net amount is recorded as a receivable for return cost. The cost is then recognized by deducting the net amount from the book value of the transferred goods. On each balance sheet date, the Group reassesses the future sales return situation and re-measures the aforementioned assets and liabilities.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Reward points program
The Group grants reward points to customers when selling goods or providing services. Customers can use these points to redeem free or discounted goods or services. The reward points program provides significant rights to customers, which are recognized by the Group as a separate performance obligation. Revenue is allocated based on the relative proportion of the standalone selling price of goods or services provided and the reward points and is recognized when customers obtain control over the points or when the points expire.
Main responsible person/agent
When the Group acquires goods from third parties and subsequently transfers them to customers, the Group exercises control over the goods, making it the primary obligor. Revenue is recognized based on the total consideration received or receivable. Otherwise, the Group is an agent, and the revenue shall be recognized based on the amount of commission or handling fee that is expected to be charged, and such amount shall be determined based on the net amount of the total consideration received or receivable after deducting the prices payable to other related parties or according to the established commission amount or proportion.
| (2) | Different accounting policies for revenue recognition due to different business models adopted by similar businesses |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
Governmental subsidies are recognized when they meet the conditions attached to and can be received. Where the governmental subsidiaries are monetary assets, they are measured according to the amount received or receivable. If the governmental subsidies are non-monetary assets, they shall be measured at their fair value. If their fair value cannot be obtained in a reliable way, they shall be measured at the nominal amount.
Government subsidies used for purchasing or forming long-term assets are recognized as government grants related to assets when the fundamental conditions for obtaining the subsidies are met, as specified in government documents. If the government documents do not provide clear guidance, grants that are based on the condition of purchasing or forming long-term assets are considered as government grants related to assets, while others are recognized as government grants related to revenue.
The Group recognizes received government grants based on their total amount.
Where the governmental subsidy related to the proceeds is used to compensate relevant costs or losses in the later period, the subsidy is recognized as deferred proceeds when acquired, and accounted into profits and losses of the current period during the period of recognition; where it is used to compensate the occurred costs or losses, it is directly into profits and losses of the current period directly.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Government subsidies related to assets shall be recognized as deferred income, which shall be included in profits and losses by stages according to a reasonable and systematic method within the service life of the relevant assets (but the government subsidies measured according to the nominal amount shall be directly included in the current profits and losses). If the relevant assets are sold, transferred, scrapped or damaged before the end of the service life, the undistributed balance of relevant deferred income shall be transferred into the profits and losses of the current period of asset disposal.
| 41. | Deferred tax assets/deferred tax liabilities |
| √ | Applicable | ¨ | Not applicable |
Regarding the temporary difference between the book value and tax base of assets and liabilities on the balance sheet date and of the item that is not recognized as an asset and liability but whose tax base can be determined in accordance with the tax law, the deferred income tax of the Group is recorded using the balance sheet liability method.
All taxable temporary differences are recognized as deferred tax liabilities,
| (1) | Except when the taxable temporary differences arise from the following transactions: the initial recognition of business reputation, and the initial recognition of assets or liabilities arising from the following transactions which are simultaneously featured by the following: the transaction is not business combination, and at the time of transaction, the accounting profits will not be affected, nor will the taxable amount or the deductible loss be affected. |
| (2) | The deferred income tax liabilities arising from the taxable temporary differences related to the investments of subsidiaries, joint ventures and associates are recognized unless the time of the reverse of temporary differences can be controlled, and the temporary differences are unlikely to be reversed in the excepted future. |
As for any deductible temporary difference, and deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible temporary difference, and deductible loss or tax deduction to be likely obtained. Unless:
| (1) | Temporary differences that are deductible arise from transactions that are not business combinations and do not affect accounting profits or taxable income or deductible losses. |
| (2) | As for the deductible temporary difference of taxable relevant to the investment of subsidiaries, joint ventures and associates, the corresponding deferred income tax assets can be recognized when it can simultaneously meet the following the conditions: the temporary difference is likely to reverse, and the amount of the taxable can be obtained to offset the deductible temporary difference at a high possibility in the future. |
According to the tax law, on the balance sheet date, the deferred income tax assets and the deferred income liabilities shall be measured by the Group in accordance with the applicable tax rate during the period of recovering the assets as estimated or paying off the abilities, and it shall reflect the effect of the income tax of the recovering assets as estimated or the way of paying off the liabilities on the balance sheet date.
On the balance sheet date, the Group rechecks book value of deferred income tax assets of the Group. If it is unlikely to obtain sufficient taxable income taxes to offset the benefit of the deferred income tax assets, the book value of the deferred income tax assets shall be written down. On the balance sheet date, the Group reassesses the unrecognized deferred income tax assets and recognizes the deferred income tax assets within the limits that it is probable that sufficient taxable income is available for all or part of the deferred income tax assets.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
If the following conditions are met simultaneously, the Company will present and report the deferred income tax assets and the deferred income tax liabilities at a net amount after offsetting: the Company has the legal right to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount with regard to taxes levied from the same taxpayer or different taxpayers with the same tax collection and management department, but the taxpayer involved intends to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount or obtain the assets and satisfy the liabilities simultaneously within every period of reversal of significant deferred income tax assets and deferred income tax liabilities.
| (1) | Accounting processing approach of business leasing |
| ¨ | Applicable | √ | Not applicable |
| (2) | Accounting treatment methods for financing lease |
| ¨ | Applicable | √ | Not applicable |
| (3) | Determination methods and accounting treatment for leases under the new leasing standard |
| √ | Applicable | ¨ | Not applicable |
On the commencement date of the contract, the Group evaluates whether the contract is a lease or includes a lease. If one party in the contract transfers the right to control the use of one or more identified assets for a certain period of time in exchange for consideration, the contract is a lease or includes a lease.
As lessee
In addition to short-term and low-value asset leases, the Group’s accounting treatment for lease recognition of right-of-use assets and lease liabilities can be found in Note V, 28, and Note V, 34 of this section.
Short-term leases and leases of low-value assets
Leases that have a lease term of no more than 12 months from the lease commencement date and do not include a purchase option are classified as short-term leases by the Group. Leases where the value of the underlying leased asset, when it is new and does not exceed RMB40,000, are classified as low-value asset leases. If the Group sublets or anticipates subleasing leased assets, the original lease is not recognized as a low-value asset lease. The Group chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and low-value asset leases. Costs or expenses related to the leased asset are recognized over the lease term using the straight-line method or another systematic and rational method.
As lessor
The lease for which all risks and rewards related to the ownership of the leased asset are substantially transferred on the commencement date of lease is a finance lease, and the other leases are an operating lease. When the Group acts as a sublease lessor, it classifies subleases based on the right of use assets generated from the original lease. If a contract contains both lease and non-lease components, the Group allocates the consideration for the contract to each component based on their relative standalone prices.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
As a lessor of finance lease
On the commencement date of the lease term, the Group recognizes the receivable financing leasing payments for financing leases and terminates the recognition of financing leasing assets. When the Group initially measures the receivable financing leasing payments, the net lease investment shall be taken as the entry value of the receivable financing lease payments. The net lease investment is the sum of the present value of lease payments not yet received and the unguaranteed residual value discounted at the lease’s implicit rate, including initial direct costs. The Group calculates and recognizes the interest income for each period of the lease term at a fixed periodic interest rate. The variable lease payments obtained by the Group that are not included in the measurement of net lease investments are recognized in the current period’s profit and loss when actually incurred.
As an operating lessor
The rental income from operating leases is recognized as revenue on a straight-line basis or another systematic and rational method over the lease term. Variable lease payments not included in the measurement of lease receivables are recognized as revenue when they become due. The initial direct costs are capitalized and amortized over the lease term on the same basis as rental income, and are recognized as expenses in each period.
43. Other significant accounting policies and accounting estimates
| | √ | Applicable | ¨ | Not applicable |
(1) Fair value measurement
The Group measures equity instruments investments at fair value on each balance sheet date. The fair value is a price received by the market participants from selling an asset or paid by them for transferring a liability during orderly transaction at the measurement date.
For the assets and liabilities measured or disclosed at fair value in the financial statements, the level of fair value to which they belong is determined according to the lowest-level input value that is significant to the fair value measurement as a whole: The first level input valve is that the input value that can be obtained on measurement date and not adjusted quoted price of same assets or liabilities in active market; second level is the input value that can be directly or indirectly observed by relevant assets or liabilities except from first-level input value; third level is the input value that can not be observed by relevant assets or liabilities.
On each balance sheet date, the Group reassesses the assets and liabilities that are recognized in the financial statements to be consistently measured at fair value to determine whether to shift between levels of fair value measurement.
(2) Share buy-backs
The consideration and transaction costs are paid for repurchasing equity instruments to reduce shareholders’ equity. Apart from share-based payments, the issuance (including refinancing), buy-back, sale, or cancellation of equity instruments are accounted for as changes in equity.
(3) Distribution of profits
The cash dividends of the Company are recognized as liabilities after approval by the Shareholders’ Meeting.
(4) Significant accounting estimates
In line with historical experience and other factors including the reasonable anticipation for future events, the Group shall make continuous evaluation for main accounting estimates and assumptions.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Impairment of financial instruments
The Group uses the expected credit loss model to evaluate the impairment of financial instruments.It requires significant judgment and estimation, and taking into account all reasonable and based information, including forward-looking information for the application of the expected credit loss model. In making these judgments and estimates, the Group combines historical repayment data with factors such as economic policies, macroeconomic indicators, industry risks, and other factors to assess the expected changes in credit risk of the debtors. Differences in estimates may have an impact on the provision for Impairment. A provision for impairment may not be equal to the actual amount of impairment losses in the future.
Impairment of non-current assets other than financial assets (goodwill)
On the income statement date, the Group judges whether there are any signs of possible impairment of non-current assets other than financial assets. For intangible assets with uncertain useful life, in addition to the annual impairment test, when there is any indication of impairment, the impairment test is also carried out. Other non-current assets excluding financial assets are tested for impairment when there is an indication that the carrying amount is not recoverable. When the book value of an asset or asset group is higher than the recoverable amount, that is, the higher of the net amount remained after the disposal expenses are deducted from the fair value and the present value of the estimated future cash flow, it indicates that impairment has occurred. The net amount after the fair value deducts the disposal expenses is determined by reference to the sales agreement price of the similar assets in the fair trade or the observable market price deducts the incremental cost directly attributable to the disposal of the assets. When estimating the present value of future cash flow, the Management must estimate the estimated future cash flow of the asset or asset group and select an appropriate discount rate to determine the present value of future cash flow. Refer to Note VII, 74 of this section for details.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. It requires that the present value of the future cash flow of the asset group or portfolio of asset groups allocated with goodwill be estimated. When estimating the present value of future cash flows, the Group needs to estimate the cash flows generated by future asset groups or combinations of asset groups, and select an appropriate discount rate to determine the present value of future cash flows. Refer to Note VII, 30 of this section for details.
Fair value of non-listed equity investments
Valuation of non-listed equity investments is performed using the market approach model, based on assumptions not supported by observable market prices or rates. This requires the Group to make estimates regarding credit risk, volatility, discount rates, liquidity discount, and the selection of comparable companies under the market approach, thereby involving uncertainties.
Deferred tax asset
Deferred income tax assets shall be recognized for all unused deductible losses to the extent that it is probable that there will be sufficient taxable income to offset the deductible losses. This requires the Management to use substantial judgments to estimate the time and amount of future taxable income and adopt the tax planning strategies to determine the amount of deferred income tax assets that should be recognized.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Reward points
The Group estimates a reasonable selling price for reward points separately, taking into account all relevant information, including the ability of customers to redeem reward points for free goods or enjoy discounts on goods, as well as the likelihood of customers exercising their redemption rights in order to allocate the consideration under the contracts. When estimating the likelihood of customers exercising their redemption rights, the Group conducts a comprehensive analysis based on historical data on point redemptions, current point redemption activities, and considerations of customer behavior and market trends in the future. The Group reassesses the estimated redemption rate of reward points at least on each balance sheet date and calculates the amount of revenue to be recognized and the amount of balances related to reward points based on the results of the reassessment.
Assessment of constraints on variable consideration
When estimating variable consideration, the Group considers all information reasonably available, including historical, current, and forecasted information, to estimate the range of possible amounts of consideration that may occur and their respective probabilities within a reasonable range. The transaction price including the variable consideration shall not exceed the amount that the accumulated recognized income is likely not to have a significant reversal when the relevant uncertainty is eliminated. When assessing the elimination of uncertainty related to variable consideration, the Group considers the likelihood of revenue reversal and the proportion of the amount that is not reasonably expected to be significant when determining whether cumulative revenue already recognized may be subject to a significant reversal. On each balance sheet date, the Group reassesses the contingent consideration amount, including reassessing the estimates related to contingent consideration, to reflect the circumstances existing at the end of the reporting period and any changes that occurred during the reporting period.
Incremental borrowing rate for lessee
For leases where the lease interest rate cannot be determined, the Group takes the incremental borrowing rate of the lessee as the discount rate to calculate the present value of lease payments. When determining the incremental borrowing rate, the Group considers observable rates in the economic environment as the reference basis and makes adjustments based on its own circumstances, the nature of the leased asset, the lease term, and the lease liability amount to derive the applicable incremental borrowing rate.
44. Changes in significant accounting policies and accounting estimate
| (1) | Significant accounting policy changes |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Significant accounting estimate changes |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Adjustments to the financial statements related to the first-time adoption of new accounting standards or interpretations, applicable from 2022 or later |
| | ¨ | Applicable | √ | Not applicable |
45. Others
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
VI. Taxes
1. Main tax categories and tax rates
Main tax categories and tax rates
| | √ | Applicable | ¨ | Not applicable |
| Type of tax | | Taxation basis | | Tax rate |
| VAT | | Taxable income | | 13%, 9%, 6%, 5%, 0% |
| Urban maintenance and construction tax | | Actually paid turnover tax | | 7%, 5% |
| Corporate Income Tax | | Taxable income | | 25%, 20%, 16.5%,15%, 8.25%, 0% |
| Housing property tax | | Housing property original value, rental income | | 1.2%, 12% |
| Extra charges for education and local extra charges for education | | Actually paid turnover tax | | 3%, 2% |
Note 1: Sales of consumables, vegetables, some meat, poultry, eggs, and other items are subject to tax exemption policies; the VAT rate for warehousing services and other ancillary services is 6%; the VAT rate for rental income is 9%, and if a simplified collection method is applicable, the collection rate is 5%; the VAT rate for taxable sales of fruits, seafood, some dry goods, grains, edible oils, dairy products, and other agricultural products is 9%, and the VAT rate for taxable sales of other goods is 13%.
Note 2: Self-use properties are taxed based on a certain percentage of the original value of the property, with a tax rate of 1.2%; rental properties are taxed based on rental income, with a tax rate of 12%.
Explanations shall be disclosed for different taxpayers for tax rate of enterprise income tax
| | √ | Applicable | ¨ | Not applicable |
| Name of taxpayer | | Income
tax rate | |
| | | (%) | |
| Chongqing Yonghui Superstores Co., Ltd. | | | 15 | |
| Guizhou Yonghui Superstores Co., Ltd. | | | 15 | |
| Yunnan Yonghui Superstores Co., Ltd. | | | 15 | |
| Guangxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Logistics Co., Ltd. | | | 15 | |
| Xizang Yonghui Superstores Co., Ltd. | | | 15 | |
| Guansu Yonghui Superstores Co., Ltd. | | | 15 | |
| Qinghai Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Yunjin Technology Co., Ltd. | | | 15 | |
| Sichuan Yonghui Store Co., Ltd. | | | 15 | |
| Chengdu Yonghui Business Development Co., Ltd. | | | 15 | |
| Shaanxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | | 15 | |
| Ningxia Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Qinghe Business Factoring (Chongqing) Co., Ltd. | | | 15 | |
| Guizhou Yonghui Logistics Co., Ltd. | | | 15 | |
| Beijing Yonghui Technology Co., Ltd. | | | 15 | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | | 0 | |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | | 0 | |
| Yonghui Holdings Co., Ltd. | | | 16.5, 8.25 | |
| LOHAS Life International Business Co., Ltd. | | | 16.5 | |
| Ningbo Xinzhi Investment Co., Ltd. | | | 20 | |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | | 20 | |
| Shanghai Yinjie International Trade Co., Ltd. | | | 20 | |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | | 20 | |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | | 20 | |
| Hainan Fuli Supply Chain Management Co., Ltd. | | | 20 | |
| Hubei Fuhan Supply Chain Management Co., Ltd. | | | 20 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of taxpayer | | Income
tax rate | |
| | | (%) | |
| Ningbo Xinguan Investment Co., Ltd. | | | 20 | |
| Hebei Yuanxiaoji Technology Development Co., Ltd. | | | 20 | |
| Fujian Yonghui Commercial Co., Ltd. | | | 20 | |
| Fujian Yonghui Import and Export Trade Co., Ltd. | | | 20 | |
| Xiangxin Investment Fund Management Co., Ltd. | | | 20 | |
| Sichuan Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Beijing Fujing Supply Chain Management Co., Ltd. | | | 20 | |
| Chongqing Fuping Supply Chain Management Co., Ltd. | | | 20 | |
| Shanghai Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Zhejiang Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Shaanxi Fuping Supply Chain Management Co., Ltd. | | | 20 | |
| Anhui Fuwan Supply Chain Management Co., Ltd. | | | 20 | |
| Xinjiang Fuchi Supply Chain Management Co., Ltd. | | | 20 | |
2. Tax preference
| | √ | Applicable | ¨ | Not applicable |
Note 1: According to the Announcement on Extending the VAT Preferential Policies for Cultural and Educational Products by the Ministry of Finance and the State Taxation Administration (CS [2021] No. 10), value added tax on wholesale and retail sales of books is exempted from January 1, 2021 to December 31, 2023.
Note 2: According to the Announcement on Exemption of VAT on Vegetable Circulation Link issued by the Ministry of Finance and the State Taxation Administration (CS [2011] No. 137), VAT on vegetable circulation link has been exempted since January 1, 2012.
Note 3: According to the Notice on Exempting VAT on Certain Fresh Meat and Egg Products in Agricultural Product Wholesale and Retail by the Ministry of Finance and the State Taxation Administration (CS [2012] No. 75), value added tax on certain fresh meat and egg products sold by taxpayers engaged in agricultural product wholesale and retail is exempted from October 1, 2012.
Note 4: Subsidiary companies of the Company, including Chongqing Yonghui Superstores Co., Ltd., Guizhou Yonghui Superstores Co., Ltd., Yunnan Yonghui Superstores Co., Ltd., Guangxi Yonghui Superstores Co., Ltd., Yonghui Logistics Co., Ltd., Xizang Yonghui Superstores Co., Ltd., Gansu Yonghui Superstores Co., Ltd., Qinghai Yonghui Superstores Co., Ltd., Sichuan Yonghui Superstores Co., Ltd., Chengdu Yonghui Commercial Development Co., Ltd., Shaanxi Yonghui Superstores Co., Ltd., Fuping Yunshang Supply Chain Management Co., Ltd., Ningxia Yonghui Superstores Co., Ltd., and Guizhou Yonghui Logistics Co., Ltd., enjoy preferential enterprise income tax policies, with enterprise income tax being levied at a rate of 15% from January 1, 2011 to December 31, 2030 according to the relevant provisions of the Ministry of Finance, General Administration of Customs, and the State Taxation Administration regarding deepening the implementation of tax policies related to the development of the Western Development Strategy (CS [2011] No. 58), Announcement on Enterprise Income Tax Issues Concerning the Implementation of the Western Development Strategy by the State Taxation Administration (State Taxation Administration Announcement No. 12 of 2012), and Announcement on Extending Enterprise Income Tax Policies for the Western Development Strategy (Ministry of Finance Announcement No. 23 of 2020).
Note 5: The subsidiary companies, Fuping Yonghui Modern Agriculture Development Co., Ltd., and Gansu Minxian Yonghui Agriculture Development Co., Ltd. are eligible for the preferential policy of exempting corporate income tax on primary agricultural products processing and production in accordance with the relevant provisions in Article 86 of the Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China (State Council Order No. 512).
Note 6: Subsidiary companies of the Company, including Ningbo Xinzhi Investment Co., Ltd., Ruilingtong Marketing Services (Shanghai) Co., Ltd., Shanghai Yinjie International Trade Co., Ltd., Chongqing Boyuan Xunke Technology Co., Ltd., Chongqing Fuping Supply Chain Management Co., Ltd., Yunnan Fuping Yunshang Supply Chain Management Co., Ltd., Hainan Fuli Supply Chain Management Co., Ltd., Hubei Fuhan Supply Chain Management Co., Ltd., Ningbo Xinguan Investment Co., Ltd., and Hebei Yuanxiaoji Technology Development Co., Ltd, Fujian Yonghui Commercial Co., Ltd., Fujian Yonghui Import and Export Trade Co., Ltd., Xiangxin Investment Fund Management Co., Ltd., Sichuan Yunfu Supply Chain Management Co., Ltd., Beijing Fujing Supply Chain Management Co., Ltd, Shanghai Yunfu Supply Chain Management Co., Ltd., Zhejiang Yunfu Supply Chain Management Co., Ltd., Shaanxi Fuping Supply Chain Management Co., Ltd., Anhui Fuwan Supply Chain Management Co., Ltd., and Xinjiang Fuchi Supply Chain Management Co., Ltd., enjoy preferential enterprise income tax policies according to the Announcement of the State Taxation Administration on Matters Concerning the Implementation of Supportive Tax Policies for the Development of Small and Micro-profit Enterprises and Individuals (Announcement No. 8 of the State Taxation Administration in 2021). For small and micro-profit enterprises, 12.5% of the annual taxable income not exceeding RMB1 million is deducted and taxed at a rate of 20%. According to the Announcement of the Ministry of Finance and State Administration of Taxation on Further Implementation of Preferential Policies for Small and Micro Enterprises Income Tax (Announcement No. 13 of 2022 of the Ministry of Finance and the State Administration of Taxation), for small and micro-profit enterprises with an annual taxable income exceeding RMB1 million but not exceeding RMB3 million, a reduction of 25% shall be included in the taxable income, and the enterprise income tax shall be paid at a rate of 20%.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Note 7: The subsidiary companies of the Company are subject to the two-tier profit tax system as announced in the 2017 Policy Address, in accordance with the 2018 Inland Revenue (Amendment) (No. 3) Bill of the Hong Kong Special Administrative Region Government. The two-tier profit tax system applies to taxable years starting on or after April 1, 2018. For the first HKD2 million of assessable profits of a corporation, the tax rate will be reduced to 8.25%. Any profits thereafter will continue to be taxed at 16.5%. The two-tier profit tax system will benefit eligible enterprises with assessable profits, regardless of their size. To ensure that eligible enterprises are mainly small and medium-sized enterprises, only one related enterprise can be nominated for the benefits. The subsidiary company, Yonghui Holdings Limited, meets the above requirements and will be subject to the two-tier tax rates of 8.25% and 16.5%. The sub-subsidiary, LOHAS Life International Business, will be subject to the tax rate of 16.5%.
Note 8: In accordance with the “Management Measures for the Recognition of High-tech Enterprises” (GKFH [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise Recognition” (GKFH [2016] No. 195) regulations, Yonghui Yunjin Technology Co., Ltd. was approved and certified as a high-tech enterprise on October 12, 2022, by the Chongqing Municipal Science and Technology Bureau, Chongqing Municipal Finance Bureau, and Chongqing Municipal Taxation Bureau of the State Taxation Administration, and obtained the “High-tech Enterprise Certificate” (Number: GR202251100313). The qualification is valid for 3 years, and the preferential period for enterprise income tax is from January 1, 2022 to December 31, 2024. During the qualification period, the company is entitled to enjoy the preferential policy of paying enterprise income tax at a reduced rate of 15%.
Note 9: In accordance with the “Management Measures for the Recognition of High-tech Enterprises” (GKFH [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise Recognition” (GKFH [2016] No. 195) regulations, Beijing Yonghui Technology Co., Ltd. was approved and certified as a high-tech enterprise on November 2, 2022, by the Beijing Municipal Science and Technology Bureau, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau of the State Taxation Administration, and obtained the “High-tech Enterprise Certificate” (Number: GR202211002597). The qualification is valid for 3 years, and the preferential period for enterprise income tax is from January 1, 2022 to December 31, 2024. During the qualification period, the company is entitled to enjoy the preferential policy of paying enterprise income tax at a reduced rate of 15%.
3. Others
| | ¨ | Applicable | √ | Not applicable |
VII. Notes to Items of Consolidated Financial Statements
1. Monetary funds
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Cash in hand | | | 79,642,654.48 | | | | 72,596,557.48 | |
| Bank deposit | | | 6,968,854,377.60 | | | | 8,462,314,974.49 | |
| Other monetary funds | | | 567,443,680.14 | | | | 628,216,208.25 | |
| Total | | | 7,615,940,712.22 | | | | 9,163,127,740.22 | |
| Including: total amount of deposit abroad | | | 28,101,300.32 | | | | 17,321,750.74 | |
Other disclosures
| (1) | The year-end cash mainly represents the sales funds not yet deposited in banks by each store at year-end. |
| (2) | The funds held overseas at year-end represent funds held overseas by the subsidiaries Yonghui Holdings Co., Ltd., Yonghui Japan Co., Ltd., and LOHAS Life International Business Co., Ltd. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | As of December 31, 2022, the restricted cash balance of the Group amounted to RMB114,492,314.03 (2021: RMB452,918,396.74), see Note VII, 83. |
| (4) | Interest income is derived from bank current deposits at the prevailing interest rate. The term of fixed-term fixed deposits is determined based on the cash needs of the Group, and interest income is earned at the corresponding interest rate of the bank fixed deposits. |
| (5) | Other cash and cash equivalents, excluding deposits, mainly consist of on-hold funds, including card swipe income from POS machines at the stores, card swiping income from bank card payments via the APP, and balances in APP accounts such as WeChat, which have not yet been transferred to the bank accounts of the Group. |
2. Loans and advances
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Total amount of loans and advances | | | 895,062,185.85 | | | | 814,617,180.15 | |
| Among which: | | | | | | | | |
| 1. Amount of loans and advances due within one year | | | 863,287,777.35 | | | | 621,955,079.39 | |
| Less: Provision for loan losses due within one year | | | 45,216,735.85 | | | | 53,148,824.03 | |
| Net value of loans and advances due within one year | | | 818,071,041.50 | | | | 568,806,255.36 | |
| 2. Amount of loans and advances due after one year | | | 92,460,829.15 | | | | 249,554,238.37 | |
| Less: Provision for loan losses due after one year | | | 15,469,684.80 | | | | 3,743,313.58 | |
| Net value of loans and advances due after one year | | | 76,991,144.35 | | | | 245,810,924.79 | |
Note: The loans and advances represent corporate loans and advances, consumer credit, etc. provided by Yonghui Small Loans Co., Ltd., a sub-subsidiary of the Group.
The changes in the provision for loan losses are as follows:
| | | | | | Provision | | | Provision | | | | |
| | | Opening | | | made in this | | | written-off in | | | Closing | |
| | | balance | | | year | | | this year | | | balance | |
| Year 2022 | | | 56,892,137.61 | | | | 45,246,646.85 | | | | 41,452,363.81 | | | | 60,686,420.65 | |
| Year 2021 | | | 55,332,450.51 | | | | 75,322,082.56 | | | | 73,762,395.46 | | | | 56,892,137.61 | |
| 3. | Trading financial assets |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Financial assets measured at fair value with changes included in current profits and losses | | | 890,826,719.10 | | | | 1,560,917,920.71 | |
| Among which: | | | | | | | | |
| Equity instrument investment | | | 413,458,695.23 | | | | 1,234,713,554.16 | |
| Fund products | | | 477,368,023.87 | | | | 326,204,366.55 | |
| Total | | | 890,826,719.10 | | | | 1,560,917,920.71 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | √ | Applicable | ¨ | Not applicable |
Trading financial assets mainly consist of fund products, stocks, asset management products, and wealth management products purchased during the year.
| 4. | Derivative financial assets |
| | ¨ | Applicable | √ | Not applicable |
| (1) | Category of notes receivable |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Notes receivable secured by the company at the end of period. |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Undue closing notes receivable before balance sheet date that endorsed or discounted by the Company |
| | ¨ | Applicable | √ | Not applicable |
| (4) | Notes adjusted by the Company to accounts receivable due to default of the drawer at the end of period |
| | ¨ | Applicable | √ | Not applicable |
| (5) | Classification and disclosure by bad debt provision |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| | ¨ | Applicable | √ | Not applicable |
| (6) | Provision for bad debts |
| | ¨ | Applicable | √ | Not applicable |
| (7) | Notes receivable actually verified and canceled of current period |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance |
| Factoring receivable | | | 715,364,593.55 | | | | 1,477,389,559.46 |
| Less: bad debt provision | | | 76,237,912.99 | | | | 65,934,194.43 |
| Total | | | 639,126,680.56 | | | | 1,411,455,365.03 |
| Note: | The balance of accounts receivable from factoring is formed by the sub-subsidiary Yonghui Qinghe Commercial Factoring (Chongqing) Co., Ltd. engaging in factoring business. |
| (1) | Disclosure by category |
| | | December 31, 2022 |
| | | | | | | | | Bad debt | | | |
| Items | | Amount | | | Ratio | | | provision | | | Net amount |
| | | | | | % | | | | | | |
| Accounts receivable from factoring with recourse | | | 715,364,593.55 | | | | 100.00 | | | | 76,237,912.99 | | | | 639,126,680.56 |
| | | December 31, 2021 |
| | | | | | | | | Bad debt | | | |
| Items | | Amount | | | Ratio | | | provision | | | Net amount |
| | | | | | % | | | | | | |
| Accounts receivable from factoring with recourse | | | 1,477,389,559.46 | | | | 100.00 | | | | 65,934,194.43 | | | | 1,411,455,365.03 |
| (2) | Provisioned for, recovered or reversed bad debt of current term |
Unit: Yuan Currency: RMB
| | | Allowance for |
| | | doubtful |
| Items | | accounts |
| January 1, 2022 | | | 65,934,194.43 |
| Provision made in this year | | | 12,734,502.35 |
| Provision written-off in this year | | | 2,430,783.79 |
| December 31, 2022 | | | 76,237,912.99 |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book |
| Aging | | balance |
| Within 1 year | | | 513,809,042.91 |
| Sub-total within one year | | | 513,809,042.91 |
| 1-2 years | | | 30,520,920.71 |
| 2-3 years | | | 37,491,593.67 |
| Over 3 years | | | 21,016,298.88 |
| Total | | | 602,837,856.17 |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Classification and disclosure by bad debt provision |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance |
| | | Book balance | | | Bad debt provision | | | | | | Book balance | | | Bad debt provision | | | |
| | | | | | | | | | | | Proportion | | | | | | | | | | | | | | | Proportion | | | |
| | | | | | | | | | | | of bad-debt | | | | | | | | | | | | | | | of bad-debt | | | |
| Category | | Amount | | | Proportion | | | Amount | | | provision | | | Carrying value | | | Amount | | | Proportion | | | Amount | | | provision | | | Carrying value |
| | | | | | (%) | | | | | | (%) | | | | | | | | | (%) | | | | | | (%) | | | |
| Provision made on an individual basis | | | 1,894,322.62 | | | | 0.31 | | | | 1,894,322.62 | | | | 100.00 | | | | | | | | 1,894,322.62 | | | | 0.36 | | | | 1,894,322.62 | | | | 100.00 | | | | |
| Provision made on a collective basis | | | 600,943,533.55 | | | | 99.69 | | | | 70,332,602.42 | | | | 11.70 | | | | 530,610,931.13 | | | | 530,137,127.24 | | | | 99.64 | | | | 53,136,897.40 | | | | 10.02 | | | | 477,000,229.84 |
| Among which: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | | 334,400,257.07 | | | | 55.48 | | | | 33,922,557.08 | | | | 10.14 | | | | 300,477,699.99 | | | | 371,214,525.69 | | | | 69.77 | | | | 25,335,691.17 | | | | 6.83 | | | | 345,878,834.52 |
| Supplier service fees and rentals | | | 174,574,704.04 | | | | 28.96 | | | | 31,212,180.54 | | | | 17.88 | | | | 143,362,523.50 | | | | 129,366,361.61 | | | | 24.31 | | | | 25,256,896.17 | | | | 19.52 | | | | 104,109,465.44 |
| Construction payment | | | 11,117,786.51 | | | | 1.84 | | | | 4,389,356.94 | | | | 39.48 | | | | 6,728,429.57 | | | | 6,467,449.86 | | | | 1.22 | | | | 2,313,422.16 | | | | 35.77 | | | | 4,154,027.70 |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from affiliated parties | | | 80,850,785.93 | | | | 13.41 | | | | 808,507.86 | | | | 1.00 | | | | 80,042,278.07 | | | | 23,088,790.08 | | | | 4.34 | | | | 230,887.90 | | | | 1.00 | | | | 22,857,902.18 |
| Total | | | 602,837,856.17 | | | | / | | | | 72,226,925.04 | | | | / | | | | 530,610,931.13 | | | | 532,031,449.86 | | | | / | | | | 55,031,220.02 | | | | / | | | | 477,000,229.84 |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance |
| | | | | | | | | Proportion | | | |
| | | Book | | | Bad debt | | | of bad-debt | | | Reasons for |
| Name | | balance | | | provision | | | provision | | | provision |
| | | | | | | | | (%) | | | |
| SHANGHAI MATEY TRADE CO., LTD | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100.00 | | | Expected not to be recovered |
| Total | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100.00 | | | / |
Explanation for individual bad debt provision:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| √ | Applicable | ¨ | Not applicable |
Combined provision items: Combination 1
Unit: Yuan Currency: RMB
| | | Closing balance |
| | | | | | | | | Proportion of |
| | | Account | | | Bad debt | | | bad-debt |
| Name | | receivable | | | provision | | | provision |
| | | | | | | | | (%) |
| Within 1 year | | | 433,501,439.52 | | | | 23,341,632.62 | | | | 5.38 |
| 1-2 years | | | 30,117,159.96 | | | | 8,522,466.85 | | | | 28.30 |
| 2-3 years | | | 37,476,091.85 | | | | 18,661,938.80 | | | | 49.80 |
| Over 3 years | | | 18,998,056.29 | | | | 18,998,056.29 | | | | 100.00 |
| Total | | | 520,092,747.62 | | | | 69,524,094.56 | | | | 13.37 |
Validation standards and specifications of combined bed-debt provision based:
| ¨ | Applicable | √ | Not applicable |
Combined provision items: Combination 2
Unit: Yuan Currency: RMB
| | | Closing balance |
| | | | | | | | | Proportion |
| | | Account | | | Bad debt | | | of bad-debt |
| Name | | receivable | | | provision | | | provision |
| | | | | | | | | (%) |
| Accounts receivable from affiliated parties | | | 80,850,785.93 | | | | 808,507.86 | | | | 1.00 |
| Total | | | 80,850,785.93 | | | | 808,507.86 | | | | 1.00 |
Validation standards and specifications of combined bed-debt provision based:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| ¨ | Applicable | √ | Not Applicable |
| (3) | Provision for bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered or | | | Charge-off or | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | Reversed | | | write-off | | | changes | | | balance | |
| Bad debt provision for accounts receivable | | | 55,031,220.02 | | | | 51,594,949.34 | | | | 7,156,327.86 | | | | 27,242,916.46 | | | | | | | | 72,226,925.04 | |
| Total | | | 55,031,220.02 | | | | 51,594,949.34 | | | | 7,156,327.86 | | | | 27,242,916.46 | | | | | | | | 72,226,925.04 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | √ | Not applicable |
| (4) | Accounts receivable actually written off in the current period |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Write-off | |
| Items | | amount | |
| Accounts receivable actually written off | | | 27,242,916.46 | |
Significant write-off of accounts receivable during the year
| ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of receivables:
| ¨ | Applicable | √ | Not applicable |
| (5) | Receivables with the closing balance ranked among the first five that are collected by the debtor |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Proportion in | | | | |
| | | | | | the total closing | | | Closing | |
| | | | | | balance of | | | balance of | |
| | | Closing | | | accounts | | | bad-debt | |
| Unit name | | balance | | | receivable | | | provision | |
| | | | | | (%) | | | | |
| Client I | | | 59,362,623.65 | | | | 9.85 | | | | 593,626.24 | |
| Client II | | | 41,382,712.70 | | | | 6.86 | | | | 2,437,045.97 | |
| Client III | | | 37,347,447.87 | | | | 6.20 | | | | 1,867,372.39 | |
| Client IV | | | 16,055,087.75 | | | | 2.66 | | | | 802,754.39 | |
| Client V | | | 14,489,642.29 | | | | 2.40 | | | | 144,896.42 | |
| Total | | | 168,637,514.26 | | | | 27.97 | | | | 5,845,695.41 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (6) | Receivables terminated to recognize due to financial assets transfer |
| ¨ | Applicable | √ | Not applicable |
| (7) | Amount of assets and liabilities formed by transfer and continuous involvement of receivables |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (1) | Advance payments listed according to aging |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| Aging | | Amount | | | Proportion | | | Amount | | | Proportion | |
| | | | | | (%) | | | | | | (%) | |
| Within 1 year | | | 1,160,134,121.11 | | | | 83.51 | | | | 1,615,621,832.61 | | | | 81.91 | |
| 1-2 years | | | 130,727,746.76 | | | | 9.41 | | | | 194,321,731.94 | | | | 9.85 | |
| 2-3 years | | | 37,574,616.93 | | | | 2.70 | | | | 85,736,781.60 | | | | 4.35 | |
| Over 3 years | | | 60,798,870.99 | | | | 4.38 | | | | 76,640,364.08 | | | | 3.89 | |
| Total | | | 1,389,235,355.79 | | | | 100.00 | | | | 1,972,320,710.23 | | | | 100.00 | |
Reasons for untimely settlement of advance payment that has aging of over one year and of significant amount:
Prepayments with an age of more than 1 year are mainly prepayment for goods.
| (2) | Prepayments for the top five ending balances categorized by prepayment object |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Proportion in | |
| | | | | | the total | |
| | | | | | closing | |
| | | Closing | | | balance of | |
| Unit name | | balance | | | prepayments | |
| | | | | | (%) | |
| Supplier I | | | 88,943,000.85 | | | | 6.40 | |
| Supplier II | | | 38,069,272.82 | | | | 2.74 | |
| Supplier III | | | 31,062,845.01 | | | | 2.24 | |
| Supplier IV | | | 27,304,025.99 | | | | 1.97 | |
| Supplier V | | | 26,171,757.27 | | | | 1.88 | |
| Total | | | 211,550,901.94 | | | | 15.23 | |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing | | | Opening | |
| Items | | balance | | | balance | |
| Interest receivable | | | 770,879.94 | | | | 201,536.05 | |
| Other receivables | | | 648,905,448.81 | | | | 742,167,792.38 | |
| Total | | | 649,676,328.75 | | | | 742,369,328.43 | |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Interest receivable
| (1) | Classification of interest receivable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing | | | Opening | |
| Items | | balance | | | balance | |
| Interest on small loans | | | 770,879.94 | | | | 201,536.05 | |
| Total | | | 770,879.94 | | | | 201,536.05 | |
| 1. | Significant overdue interest |
| ¨ | Applicable | √ | Not applicable |
| (2) | Significant overdue interest |
| ¨ | Applicable | √ | Not applicable |
| (3) | Provision for bad debts recognized |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (5) | Significant dividends receivable with more than one-year aging |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (6) | Provision for bad debts recognized |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Other receivables
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book | |
| Aging | | balance | |
| Within 1 year | | | 189,582,745.46 | |
| Sub-total within one year | | | 189,582,745.46 | |
| 1-2 years | | | 80,312,625.85 | |
| 2-3 years | | | 79,907,022.43 | |
| Over 3 years | | | 384,331,646.14 | |
| Total | | | 734,134,039.88 | |
| (8) | Classification by nature of payment |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book | | | Opening book | |
| Nature of payment | | balance | | | balance | |
| Various types of deposits and guarantees receivable | | | 562,493,581.63 | | | | 612,708,570.56 | |
| Purchases and store petty cash payments | | | 84,160,245.08 | | | | 110,940,830.98 | |
| Receivables from affiliated parties | | | 13,826,983.71 | | | | 13,288,531.51 | |
| Other receivables | | | 73,653,229.46 | | | | 75,357,211.29 | |
| Total | | | 734,134,039.88 | | | | 812,295,144.34 | |
| (9) | Provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Phase I | | | Phase II | | | Phase III | | | | |
| Bad debt provision | | Expected credit
loss over the
next 12 months | | | Expected credit
loss within the
whole duration
(no credit
impairment
occurred) | | | Expected credit
loss within the
whole duration
(credit
impairment
incurred) | | | Total | |
| Balance as at January 1, 2022 | | | 8,778,503.30 | | | | 777,990.75 | | | | 60,570,857.91 | | | | 70,127,351.96 | |
| Balance as of January 1, 2022 in the current period | | | | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -70,841.08 | | | | 70,841.08 | | | | | | | | | |
| – Transferred to Phase III | | | | | | | -611,473.09 | | | | 611,473.09 | | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Phase I | | | Phase II | | | Phase III | | | | |
| Bad debt provision | | Expected credit
loss over the
next 12 months | | | Expected credit
loss within the
whole duration
(no credit
impairment
occurred) | | | Expected credit loss within the
whole duration
(credit
impairment
incurred) | | | Total | |
| Provision of the current period | | | 6,258,407.30 | | | | 1,075,469.79 | | | | 14,898,867.48 | | | | 22,232,744.57 | |
| Provision reversed in current period | | | 4,691,877.08 | | | | | | | | | | | | 4,691,877.08 | |
| Charge-off of the current period | | | | | | | | | | | | | | | | |
| Write-off of the current period | | | | | | | | | | | 2,439,628.38 | | | | 2,439,628.38 | |
| Other changes | | | | | | | | | | | | | | | | |
| Balance as at December 31, 2022 | | | 10,274,192.44 | | | | 1,312,828.53 | | | | 73,641,570.10 | | | | 85,228,591.07 | |
Explanation of significant changes in the book value of other receivables with provision changes in the current period:
| ¨ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| ¨ | Applicable | √ | Not applicable |
| (10) | Provision for bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered | | | Charge-off or | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | or Reversed | | | write-off | | | changes | | | balance | |
| Bad-debt provision for other receivables | | | 70,127,351.96 | | | | 22,232,744.57 | | | | 4,691,877.08 | | | | 2,439,628.38 | | | | | | | | 85,228,591.07 | |
| Total | | | 70,127,351.96 | | | | 22,232,744.57 | | | | 4,691,877.08 | | | | 2,439,628.38 | | | | | | | | 85,228,591.07 | |
Significant reversal or recovery of bad-debt provision of current year is:
| ¨ | Applicable | √ | Not applicable |
| (11) | Other receivables actually verified and canceled of current period |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Write-off | |
| Items | | amount | |
| Other receivables actually written off | | | 2,439,628.38 | |
Where the other receivables written off is important:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Descriptions for verification and write-off of other receivables:
| ¨ | Applicable | √ | Not applicable |
| (12) | Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | | Proportion | | | | |
| | | | | | | | | | in total | | | | |
| | | | | | | | | | closing | | | Closing | |
| | | | | | | | | | balance | | | balance of | |
| | | | | Closing | | | | | of other | | | bad-debt | |
| Unit name | | Nature of receivable | | balance | | | Aging | | receivables | | | provision | |
| | | | | | | | | | (%) | | | | |
| Client I | | Various types of deposits and guarantees receivable | | | 54,750,000.00 | | | Over 3 years | | | 7.46 | | | | 547,500.00 | |
| Client II | | Various types of deposits and guarantees receivable | | | 24,000,000.00 | | | Over 3 years | | | 3.27 | | | | 240,000.00 | |
| Client III | | Other receivables | | | 16,972,427.96 | | | Over 3 years | | | 2.31 | | | | 16,972,427.96 | |
| Client IV | | Receivables from affiliated parties | | | 12,944,531.11 | | | 2-3 years | | | 1.76 | | | | 12,944,531.11 | |
| Client V | | Various types of deposits and guarantees receivable | | | 10,000,000.00 | | | 1-2 years | | | 1.36 | | | | 100,000.00 | |
| Total | | / | | | 118,666,959.07 | | | / | | | 16.16 | | | | 30,804,459.07 | |
| 1. | Accounts receivable involving governmental subsidies |
| ¨ | Applicable | √ | Not applicable |
| 2. | Other receivables with terminated confirmation due to financial assets transfer |
| ¨ | Applicable | √ | Not applicable |
| 3. | Amount of assets and liabilities formed through transfer of other accounts receivable and continuous involvement |
| ¨ | Applicable | √ | Not applicable |
| (13) | Receivables related to government subsidy |
| ¨ | Applicable | √ | Not applicable |
| (14) | Other receivables derecognized due to transfer of financial assets |
| ¨ | Applicable | √ | Not applicable |
| (15) | Capital and liabilities formed after other accounts receivable transfer and continuous involvement |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1) | Inventory classification |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| | | | | | Provision for | | | | | | | | Provision for | | | |
| | | | | | inventory | | | | | | | | inventory | | | |
| | | | | | | depreciation or | | | | | | | | | | depreciation or | | | | |
| | | | | | | provision for | | | | | | | | | | provision for | | | | |
| | | | | | | impairment | | | | | | | | | | impairment | | | | |
| | | | | | | of contract | | | | | | | | | | of contract | | | | |
| Item | | | Book balance | | | fulfilling costs | | | Carrying value | | | | Book balance | | | fulfilling costs | | | Carrying value | |
| Raw material | | | 8,304,623.79 | | | | | | 8,304,623.79 | | | | 6,493,421.17 | | | | | | 6,493,421.17 | |
| Inventory goods | | | 10,419,571,039.89 | | | | | | 10,419,571,039.89 | | | | 10,740,019,264.38 | | | | | | 10,740,019,264.38 | |
| Low-cost consumables | | | 38,713,833.46 | | | | | | 38,713,833.46 | | | | 44,978,521.31 | | | | | | 44,978,521.31 | |
| Total | | | 10,466,589,497.14 | | | | | | 10,466,589,497.14 | | | | 10,791,491,206.86 | | | | | | 10,791,491,206.86 | |
| (2) | Provision for inventory depreciation or provision for impairment of contract fulfilling costs |
| ¨ | Applicable | √ | Not applicable |
| (3) | Explanation for ending balance of inventories containing capitalized borrowing expense |
| ¨ | Applicable | √ | Not applicable |
| (4) | Explanation for the current amortization amount of contract performance cost |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (2) | Significant changes in the carrying value during the reporting period and the reasons |
| ¨ | Applicable | √ | Not applicable |
| (3) | Provision of impairment losses of contract assets of the current period |
| ¨ | Applicable | √ | Not applicable |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| 13. | Available-for-sale assets |
| ¨ | Applicable | √ | Not applicable |
| 14. | Non-current assets due within one year |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Finance lease receivable due within one year | | | 43,534,741.35 | | | | 41,563,339.26 | |
| Total | | | 43,534,741.35 | | | | 41,563,339.26 | |
End-of-year significant creditor investments and other creditor investments
| ¨ | Applicable | √ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Input tax to be certified | | | 1,267,353,243.41 | | | | 1,644,071,966.91 | |
| Input tax to be deducted | | | 187,562,364.10 | | | | 294,935,904.60 | |
| Advance income tax | | | 36,129,348.48 | | | | 44,161,141.25 | |
| Advance payment of other taxes | | | 2,801,052.91 | | | | 2,262,183.27 | |
| Total | | | 1,493,846,008.90 | | | | 1,985,431,196.03 | |
| ¨ | Applicable | √ | Not applicable |
| (2) | End-of-year significant creditor investments |
| ¨ | Applicable | √ | Not applicable |
| (3) | Impairment provision recognized |
| ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 17. | Other creditor investments |
| (1) | Other creditor investments |
| ¨ | Applicable | √ | Not applicable |
| (2) | End-of-year significant other creditor investments |
| ¨ | Applicable | √ | Not applicable |
| (3) | Impairment provision recognized |
| ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| 18. | Long-term receivables |
| (1) | Long-term receivables |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | | | | |
| | | | | | Bad debt | | | Carrying | | | | | | Bad debt | | | Carrying | | | Discount | |
| Items | | Book balance | | | provision | | | value | | | Book balance | | | provision | | | value | | | rate interval | |
| Finance lease outlay | | | 264,650,510.99 | | | | | | | | 264,650,510.99 | | | | 73,044,056.84 | | | | | | | | 73,044,056.84 | | | | 4.35%-4.90% | |
| Including: unrealized financing income | | | 62,304,995.06 | | | | | | | | 62,304,995.06 | | | | 17,551,350.54 | | | | | | | | 17,551,350.54 | | | | | |
| Total | | | 264,650,510.99 | | | | | | | | 264,650,510.99 | | | | 73,044,056.84 | | | | | | | | 73,044,056.84 | | | | / | |
| (2) | Provision for bad debts recognized |
| ¨ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| ¨ | Applicable | √ | Not applicable |
| (3) | Long-term derecognized receivables caused by transfer of financial assets |
| ¨ | Applicable | √ | Not applicable |
| (4) | Amount of assets and liabilities formed through transfer of long-term receivables and continuous involvement |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 19. | Long-term equity investments |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | Increase/decrease in the current period | |
| | | | | | | | | | | | | Investment | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | profit and loss | | | Other | | | | | | Distribution | | | | | | | | | | | | Closing | |
| | | | | | | | | | | | | recognized | | | comprehensive | | | | | | of cash | | | Provision of | | | | | | | | | balance of | |
| | | | | | | Increased | | | Decreased | | | with the | | | income | | | Other equity | | | dividends | | | impairment | | | | | | End of the | | | provision for | |
| Investee | | | Opening balance | | | investment | | | investment | | | equity method | | | adjustments | | | changes | | | or profits | | | losses | | | Others | | | period Balance | | | impairment | |
| I. Cooperative enterprises | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. | | | 156,722,946.25 | | | | | | | | | -108,103,528.11 | | | | | | | | | | | | | | | | | | 48,619,418.14 | | | | |
| Subtotal | | | 156,722,946.25 | | | | | | | | | -108,103,528.11 | | | | | | | | | | | | | | | | | | 48,619,418.14 | | | | |
| II. Joint ventures | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Zhongbai Holdings Group Co., Ltd. (“Zhongbai Group”) (Note 1) | | | 1,316,000,000.00 | | | | | | -872,723,474.48 | | | -54,542,383.42 | | | | | | 17,363,049.54 | | | | | | | | | | | | 406,097,191.64 | | | 169,731,374.09 | |
| Chengdu Hongqi Chain Co., Ltd. (“Hongqi Chain”) | | | 1,948,635,465.55 | | | | | | | | | 101,990,525.37 | | | | | | | | | -3,998,400.00 | | | | | | | | | 2,046,627,590.92 | | | | |
| Fujian OneBank Co., Ltd. (“OneBank”) | | | 603,152,265.98 | | | | | | | | | 9,633,586.03 | | | -866,721.55 | | | | | | | | | | | | | | | 611,919,130.46 | | | | |
| Xiangcun Gaokao Agricultural Co., Ltd. | | | 286,190,547.42 | | | | | | | | | -36,363,802.38 | | | | | | | | | | | | -196,826,745.04 | | | | | | 53,000,000.00 | | | 356,747,029.69 | |
| Fujian Minwei Industrial Co., Ltd. (Note 2) | | | 86,168,800.44 | | | | | | | | | 9,580,006.06 | | | | | | 10,825,936.22 | | | | | | | | | | | | 106,574,742.72 | | | | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 75,656,383.35 | | | | | | | | | -13,784,923.21 | | | | | | | | | | | | | | | | | | 61,871,460.14 | | | | |
| Beijing Friendship Messenger Trading Co., Ltd. | | | 51,851,641.23 | | | | | | | | | 34,331,932.13 | | | | | | | | | -24,300,000.00 | | | | | | | | | 61,883,573.36 | | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 20,309,611.38 | | | | | | | | | 10,842,346.87 | | | | | | | | | | | | | | | | | | 31,151,958.25 | | | | |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. (Note 3) | | | 13,857,400.41 | | | | | | -11,637,042.57 | | | -2,220,357.84 | | | | | | | | | | | | | | | | | | | | | | |
| 1233 International Supply Chain Management Co., Ltd. | | | 188,857,256.00 | | | | | | | | | 2,100,188.93 | | | | | | | | | | | | | | | | | | 190,957,444.93 | | | | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | | 10,836,515.42 | | | | | | | | | -1,326,034.96 | | | | | | | | | -1,700,000.00 | | | | | | | | | 7,810,480.46 | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | Increase/decrease in the current period | |
| | | | | | | | | | | | | Investment | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | profit and loss | | | Other | | | | | | Distribution | | | | | | | | | | | | Closing | |
| | | | | | | | | | | | | recognized | | | comprehensive | | | | | | of cash | | | Provision of | | | | | | | | | balance of | |
| | | | | | | Increased | | | Decreased | | | with the | | | income | | | Other equity | | | dividends | | | impairment | | | | | | End of the | | | provision for | |
| Investee | | | Opening balance | | | investment | | | investment | | | equity method | | | adjustments | | | changes | | | or profits | | | losses | | | Others | | | period Balance | | | impairment | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | | 5,533,813.74 | | | | | | | | | -432,535.35 | | | | | | | | | | | | | | | | | | 5,101,278.39 | | | 3,218,259.25 | |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | | 43,983.96 | | | | | | | | | -34,404.51 | | | | | | | | | | | | | | | | | | 9,579.45 | | | 4,062,445.92 | |
Fujian Enhui Technology Co., Ltd.
(Note 4) | | | 601,313.39 | | | | | | -601,313.39 | | | – | | | | | | | | | | | | | | | | | | | | | | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. | | | 9,135,462.60 | | | | | | | | | -1,177,840.90 | | | | | | | | | | | | | | | | | | 7,957,621.70 | | | | |
| Subtotal | | | 4,616,830,460.87 | | | | | | -884,961,830.44 | | | 58,596,302.82 | | | -866,721.55 | | | 28,188,985.76 | | | -29,998,400.00 | | | -196,826,745.04 | | | | | | 3,590,962,052.42 | | | 533,759,108.95 | |
| Total | | | 4,773,553,407.12 | | | | | | -884,961,830.44 | | | -49,507,225.29 | | | -866,721.55 | | | 28,188,985.76 | | | -29,998,400.00 | | | -196,826,745.04 | | | | | | 3,639,581,470.56 | | | 533,759,108.95 | |
Other disclosures
| Note 1: | In 2022, the Group reduced its stake in Zhongbai Group by 19.93% through the centralized trading platform of the Shenzhen Stock Exchange. At the same time, the Group transferred out RMB17,363,049.54 of other equity changes arising from the decrease in the Group’s share of net assets of Zhongbai Group according to the reduction ratio. |
|---|
| | |
|---|
| Note 2: | In 2022, the other third-party shareholders of Fujian Minwei Industrial Co., Ltd. fulfilled their capital injection obligations, resulting in an increase in the Group’s share of net assets of Minwei Industrial Co., Ltd. and an increase in capital surplus of RMB10,825,936.22. |
|---|
| | |
|---|
| Note 3: | In 2022, the Group signed a stock transfer agreement with 4Paradigm (Beijing) Technology Co., Ltd., transferring 40% of the shares of Fanshiyun (Beijing) Retail Technology Co., Ltd. held by the Group for a cash consideration of RMB16,489,443.67. After the transfer, the Group no longer holds any equity interest in the Fanshiyun (Beijing) Retail Technology Co., Ltd. |
|---|
| | |
| Note 4: | In 2022, the Group signed a stock transfer agreement with a third-party individual, transferring 40% of the shares of Fujian Enhui Technology Co., Ltd. held by the Group for a cash consideration of RMB601,300.00. After the transfer, the Group no longer holds any equity interest in Fujian Enhui Technology Co., Ltd. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 20. | Other equity instrument investments |
| (1) | Other equity instrument investments |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Non-trading equity instrument investments |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 21. | Other non-current financial assets |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Financial assets measured at fair value with changes included in current profits and losses | | | 3,918,000,000.00 | | | | 4,100,000,000.00 | |
| Total | | | 3,918,000,000.00 | | | | 4,100,000,000.00 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Measurement model for investment properties
| (1) | Investment properties measured at cost |
Unit: Yuan Currency: RMB
| Items | | Houses and
buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 397,840,556.69 | | | | 397,840,556.69 | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 397,840,556.69 | | | | 397,840,556.69 | |
| II. Accumulated depreciation and amortization | | | | | | | | |
| 1. Opening balance | | | 75,899,172.91 | | | | 75,899,172.91 | |
| 2. Increase in current period | | | 10,807,004.14 | | | | 10,807,004.14 | |
| (1) Depreciation or amortization | | | 10,807,004.14 | | | | 10,807,004.14 | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 86,706,177.05 | | | | 86,706,177.05 | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 311,134,379.64 | | | | 311,134,379.64 | |
| 2. Opening book value | | | 321,941,383.78 | | | | 321,941,383.78 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Investment properties consisting of a partial lease of Yonghui Urban Life Plaza and Dongzhan Commercial Building.
| (2) | Investment properties without certificate of title |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Fixed assets | | | 4,114,413,404.13 | | | | 4,646,074,375.37 | |
| Total | | | 4,114,413,404.13 | | | | 4,646,074,375.37 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Fixed assets
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Houses and | | | Machinery and | | | Means of | | | Electronic | | | Tools and | | | | |
| Items | | buildings | | | equipment | | | transport | | | equipment | | | instruments | | | Total | |
| I. Original Book Value: | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 2,769,217,003.06 | | | | 2,702,087,509.26 | | | | 306,755,873.81 | | | | 1,023,025,559.28 | | | | 2,243,642,296.23 | | | | 9,044,728,241.64 | |
| 2. Increase in current period | | | 278,057,656.44 | | | | 71,652,666.27 | | | | 3,126,089.81 | | | | 51,321,058.94 | | | | 71,711,747.48 | | | | 475,869,218.94 | |
| (1) Purchase | | | 6,138,710.04 | | | | 22,998,474.53 | | | | 2,864,974.77 | | | | 38,918,192.20 | | | | 31,751,573.81 | | | | 102,671,925.35 | |
| (2) Transferred from work in progress | | | 271,918,946.40 | | | | 48,654,191.74 | | | | 261,115.04 | | | | 12,402,866.74 | | | | 39,960,173.67 | | | | 373,197,293.59 | |
| 3. Decrease in current period | | | | | | | 200,770,549.33 | | | | 4,606,155.04 | | | | 145,989,967.96 | | | | 224,428,669.17 | | | | 575,795,341.50 | |
| (1) Disposal or scrapping | | | | | | | 200,770,549.33 | | | | 4,606,155.04 | | | | 145,989,967.96 | | | | 224,428,669.17 | | | | 575,795,341.50 | |
| (2) Other decrease | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Closing balance | | | 3,047,274,659.50 | | | | 2,572,969,626.20 | | | | 305,275,808.58 | | | | 928,356,650.26 | | | | 2,090,925,374.54 | | | | 8,944,802,119.08 | |
| II. Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 526,570,265.59 | | | | 1,633,414,303.72 | | | | 73,042,396.25 | | | | 716,646,404.64 | | | | 1,411,556,321.00 | | | | 4,361,229,691.20 | |
| 2. Increase in current period | | | 80,755,089.91 | | | | 308,221,249.61 | | | | 16,275,093.31 | | | | 157,476,700.38 | | | | 271,517,658.11 | | | | 834,245,791.32 | |
| (1) Depreciation | | | 80,755,089.91 | | | | 308,221,249.61 | | | | 16,275,093.31 | | | | 157,476,700.38 | | | | 271,517,658.11 | | | | 834,245,791.32 | |
| 3. Decrease in current period | | | | | | | 145,561,040.92 | | | | 3,269,321.27 | | | | 122,057,847.22 | | | | 182,573,296.91 | | | | 453,461,506.32 | |
| (1) Disposal or scrapping | | | | | | | 145,561,040.92 | | | | 3,269,321.27 | | | | 122,057,847.22 | | | | 182,573,296.91 | | | | 453,461,506.32 | |
| 4. Closing balance | | | 607,325,355.50 | | | | 1,796,074,512.41 | | | | 86,048,168.29 | | | | 752,065,257.80 | | | | 1,500,500,682.20 | | | | 4,742,013,976.20 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Houses and
buildings | | | Machinery and
equipment | | | Means of
transport | | | Electronic
equipment | | | Tools and
instruments | | | Total | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | | | | | 18,498,545.45 | | | | 112,407.73 | | | | 5,564,730.20 | | | | 13,248,491.69 | | | | 37,424,175.07 | |
| 2. Increase in current period | | | | | | | 28,611,183.64 | | | | 67,260.57 | | | | 5,908,014.04 | | | | 18,149,916.20 | | | | 52,736,374.45 | |
| (1) Addition | | | | | | | 28,611,183.64 | | | | 67,260.57 | | | | 5,908,014.04 | | | | 18,149,916.20 | | | | 52,736,374.45 | |
| 3. Decrease in current period | | | | | | | 898,957.33 | | | | 463.46 | | | | 202,146.80 | | | | 684,243.18 | | | | 1,785,810.77 | |
| (1) Disposal or scrapping | | | | | | | 898,957.33 | | | | 463.46 | | | | 202,146.80 | | | | 684,243.18 | | | | 1,785,810.77 | |
| 4. Closing balance | | | | | | | 46,210,771.76 | | | | 179,204.84 | | | | 11,270,597.44 | | | | 30,714,164.71 | | | | 88,374,738.75 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Closing book value | | | 2,439,949,304.00 | | | | 730,684,342.03 | | | | 219,048,435.45 | | | | 165,020,795.02 | | | | 559,710,527.63 | | | | 4,114,413,404.13 | |
| 2. Opening book value | | | 2,242,646,737.47 | | | | 1,050,174,660.09 | | | | 233,601,069.83 | | | | 300,814,424.44 | | | | 818,837,483.54 | | | | 4,646,074,375.37 | |
| (2) | Temporary idle fixed assets |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Fixed assets acquired from financing lease |
| | ¨ | Applicable | √ | Not applicable |
| (4) | Fixed assets leased out through operating leases |
| | ¨ | Applicable | √ | Not applicable |
| (5) | Fixed assets without certificate of title |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Carrying value | | | Reasons for failure to get
the certificates of title |
| Factories and office buildings of Guizhou Yonghui Logistics Center | | | 279,553,312.80 | | | Processing |
| Shijiazhuang Minxin Square Housing Property | | | 157,096,064.83 | | | Processing |
| Rail interface of the underground passage at Nanqiaosi Station, Chongqing Xuanhui Real Estate | | | 26,526,361.18 | | | The Group only has the right to use without ownership. |
| Office building of Fuping Yonghui Modern Agriculture Development Co., Ltd. | | | 8,934,654.08 | | | Processing |
Property rights certificates for Shijiazhuang Minxin Square and Fuping Yonghui Modern Agricultural Development Co., Ltd. office buildings have been obtained prior to the approval date of the financial statements.
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Disposal of fixed asset
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 24. | Construction in progress |
Itemized list
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Construction in progress | | | 383,281,366.61 | | | | 410,335,149.87 | |
| Total | | | 383,281,366.61 | | | | 410,335,149.87 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Construction in progress
| (1) | Construction in progress |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| | | | | | Impairment | | | Carrying | | | | | | Impairment | | | Carrying | |
| Items | | Book balance | | | provision | | | value | | | Book balance | | | provision | | | value | |
| Store decoration | | | 80,602,137.56 | | | | | | | | 80,602,137.56 | | | | 126,818,264.09 | | | | | | | | 126,818,264.09 | |
| Guizhou Logistics Park Industrial Park | | | 15,101,940.23 | | | | | | | | 15,101,940.23 | | | | 171,652,726.33 | | | | | | | | 171,652,726.33 | |
| Information technology upgrade project | | | | | | | | | | | | | | | 5,627,818.78 | | | | | | | | 5,627,818.78 | |
| Yonghui Northeast Warehousing Center Construction Project | | | 174,399,580.98 | | | | | | | | 174,399,580.98 | | | | 87,151,397.84 | | | | | | | | 87,151,397.84 | |
| Fujian Yonghui Warehousing Center for New Business Format | | | 71,301,530.89 | | | | | | | | 71,301,530.89 | | | | 19,084,942.83 | | | | | | | | 19,084,942.83 | |
| Phase II of Sichuan Pengzhou Industrial Park | | | 41,876,176.95 | | | | | | | | 41,876,176.95 | | | | | | | | | | | | | |
| Total | | | 383,281,366.61 | | | | | | | | 383,281,366.61 | | | | 410,335,149.87 | | | | | | | | 410,335,149.87 | |
| (2) | Changes of major work in progress in the current period |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| | | | | | | | | | | | Amount of | | | Other | | | | | | Proportion of | | | | | | | | | Including: | | | | | | | |
| | | | | | | | | | | | transferred | | | decreased | | | | | | accumulative | | | | | | Accumulated | | | amount of | | | Interest | | | | |
| | | | | | | | | Increase in | | | fixed assets of | | | amount | | | | | | total project | | | | | | amount of | | | capitalization | | | capitalization | | | | |
| | | | | | Opening | | | current | | | current | | | of current | | | Closing | | | investment in | | | Project | | | interest | | | of current | | | rate in the | | | Source of | |
| Items | | Budget amount | | | balance | | | period | | | period | | | period | | | balance | | | the budget | | | progress | | | capitalization | | | interest | | | current period | | | funds | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (%) | | | | | | | | | | | | | | | | (%) | | | | | |
| Yonghui Northeast Warehousing Center Construction Project | | | 238,177,616.79 | | | | 87,151,397.84 | | | | 87,248,183.14 | | | | | | | | | | | | 174,399,580.98 | | | | 73 | | | | 99 | | | | | | | | | | | | | | | | Self-funded | |
| Guizhou Logistics Park Industrial Park | | | 374,710,200.00 | | | | 171,652,726.33 | | | | 125,596,541.43 | | | | 282,147,327.53 | | | | | | | | 15,101,940.23 | | | | 79 | | | | 99 | | | | | | | | | | | | | | | | Self-funded | |
| Nantong Logistics Park Warehousing Center Building No. 8 | | | 93,971,619.92 | | | | 16,330,275.23 | | | | 34,678,899.10 | | | | | | | | | | | | 51,009,174.33 | | | | 54 | | | | 97 | | | | | | | | | | | | | | | | Self-funded | |
| Phase II of Sichuan Pengzhou Industrial Park | | | 311,482,500.00 | | | | | | | | 43,348,929.02 | | | | | | | | 1,472,752.07 | | | | 41,876,176.95 | | | | 14 | | | | 43 | | | | | | | | | | | | | | | | Self-funded | |
| Total | | | 1,018,341,936.71 | | | | 275,134,399.40 | | | | 290,872,552.69 | | | | 282,147,327.53 | | | | 1,472,752.07 | | | | 282,386,872.49 | | | | / | | | | / | | | | | | | | | | | | / | | | | / | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
(3) Provision of impairment losses of construction in progress in current period
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Project materials
(4) Construction materials
| | ¨ | Applicable | √ | Not applicable |
25. Productive biological assets
(1) Productive biological assets measured at cost
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Planting industry | | | | |
| | | Immature | | | | |
| Items | | persimmon trees | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 11,627,554.75 | | | | 11,627,554.75 | |
| 2. Increase in current period | | | 1,100,141.87 | | | | 1,100,141.87 | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 12,727,696.62 | | | | 12,727,696.62 | |
| II. Accumulated depreciation | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 12,727,696.62 | | | | 12,727,696.62 | |
| 2. Opening book value | | | 11,627,554.75 | | | | 11,627,554.75 | |
(2) Productive biological assets measured at fair value
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
26. Oil and gas assets
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
27. Right-of-use assets
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Houses and buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 33,841,230,291.30 | | | | 33,841,230,291.30 | |
| 2. Increase in current period | | | 1,760,502,823.69 | | | | 1,760,502,823.69 | |
| (1) Increase | | | 1,760,502,823.69 | | | | 1,760,502,823.69 | |
| 3. Decrease in current period | | | 3,113,711,297.51 | | | | 3,113,711,297.51 | |
| (1) Disposal | | | 3,113,711,297.51 | | | | 3,113,711,297.51 | |
| 4. Closing balance | | | 32,488,021,817.48 | | | | 32,488,021,817.48 | |
| II. Accumulated depreciation | | | | | | | | |
| 1. Opening balance | | | 11,541,579,488.39 | | | | 11,541,579,488.39 | |
| 2. Increase in current period | | | 2,165,542,154.48 | | | | 2,165,542,154.48 | |
| (1) Addition | | | 2,165,542,154.48 | | | | 2,165,542,154.48 | |
| 3. Decrease in current period | | | 1,196,189,721.34 | | | | 1,196,189,721.34 | |
| (1) Disposal | | | 1,196,189,721.34 | | | | 1,196,189,721.34 | |
| 4. Closing balance | | | 12,510,931,921.53 | | | | 12,510,931,921.53 | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | 332,489,443.37 | | | | 332,489,443.37 | |
| 2. Increase in current period | | | 314,554,050.92 | | | | 314,554,050.92 | |
| (1) Addition | | | 314,554,050.92 | | | | 314,554,050.92 | |
| 3. Decrease in current period | | | 87,678,090.15 | | | | 87,678,090.15 | |
| (1) Disposal | | | 87,678,090.15 | | | | 87,678,090.15 | |
| 4. Closing balance | | | 559,365,404.14 | | | | 559,365,404.14 | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 19,417,724,491.81 | | | | 19,417,724,491.81 | |
| 2. Opening book value | | | 21,967,161,359.54 | | | | 21,967,161,359.54 | |
28. Intangible assets
(1) Intangible asset
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Land use | | | Patent | | | Non-patented | | | | | | | | | | |
| Items | | right | | | rights | | | technologies | | | Software | | | Sales network | | | Total | |
| I. Original book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 646,504,068.17 | | | | 159,739.89 | | | | 31,193,166.14 | | | | 1,487,304,658.03 | | | | 124,688,679.24 | | | | 2,289,850,311.47 | |
| 2. Increase in current period | | | 38,360,000.00 | | | | | | | | | | | | 37,630,453.46 | | | | | | | | 75,990,453.46 | |
| (1) Purchase | | | 38,360,000.00 | | | | | | | | | | | | 25,548,924.33 | | | | | | | | 63,908,924.33 | |
| (2) Internal R&D | | | | | | | | | | | | | | | 12,081,529.13 | | | | | | | | 12,081,529.13 | |
| 3. Decrease in current period | | | | | | | | | | | | | | | 1,759,427.68 | | | | | | | | 1,759,427.68 | |
| (1) Disposal | | | | | | | | | | | | | | | 1,759,427.68 | | | | | | | | 1,759,427.68 | |
| 4. Closing balance | | | 684,864,068.17 | | | | 159,739.89 | | | | 31,193,166.14 | | | | 1,523,175,683.81 | | | | 124,688,679.24 | | | | 2,364,081,337.25 | |
| II. Accumulated amortization | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 145,732,710.98 | | | | 42,996.66 | | | | 6,838,228.82 | | | | 536,015,394.99 | | | | 30,662,338.04 | | | | 719,291,669.49 | |
| 2. Increase in current period | | | 14,085,871.98 | | | | 13,713.76 | | | | 6,109,963.71 | | | | 259,746,658.95 | | | | 6,499,979.55 | | | | 286,456,187.95 | |
| (1) Addition | | | 14,085,871.98 | | | | 13,713.76 | | | | 6,109,963.71 | | | | 259,746,658.95 | | | | 6,499,979.55 | | | | 286,456,187.95 | |
| 3. Decrease in current period | | | | | | | | | | | | | | | 1,752,557.02 | | | | | | | | 1,752,557.02 | |
| (1) Disposal | | | | | | | | | | | | | | | 1,752,557.02 | | | | | | | | 1,752,557.02 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Land use | | | Patent | | | Non-patented | | | | | | | | | | |
| Items | | right | | | rights | | | technologies | | | Software | | | Sales network | | | Total | |
| 4. Closing balance | | | 159,818,582.96 | | | | 56,710.42 | | | | 12,948,192.53 | | | | 794,009,496.92 | | | | 37,162,317.59 | | | | 1,003,995,300.42 | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | | | | | | | | | | | | | | | | | 45,123,333.33 | | | | 45,123,333.33 | |
| 2. Increase in current period | | | | | | | | | | | | | | | | | | | 1,140,000.00 | | | | 1,140,000.00 | |
| (1) Addition | | | | | | | | | | | | | | | | | | | 1,140,000.00 | | | | 1,140,000.00 | |
| 3. Decrease in current period | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) Disposal | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Closing balance | | | | | | | | | | | | | | | | | | | 46,263,333.33 | | | | 46,263,333.33 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Closing book value | | | 525,045,485.21 | | | | 103,029.47 | | | | 18,244,973.61 | | | | 729,166,186.89 | | | | 41,263,028.32 | | | | 1,313,822,703.50 | |
| 2. Opening book value | | | 500,771,357.19 | | | | 116,743.23 | | | | 24,354,937.32 | | | | 951,289,263.04 | | | | 48,903,007.87 | | | | 1,525,435,308.65 | |
Intangible assets formed through internal research and development accounted for 6.66% of the balance of intangible assets at the end of the period
(2) Land usage right without certificate of title
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Reasons for failure to get |
| Items | | Carrying value | | | the certificates of title |
| Guizhou Logistics Park | | | 38,360,000.00 | | | In the process of handling |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
29. Development expenditures
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase in | | | | | | | | | | |
| | | | | | current period | | | Decrease in Current Period | | | | |
| | | | | | | | | | | | Transferred | | | | |
| | | | | | Internal | | | Recognized | | | into losses | | | | |
| | | Opening | | | development | | | as intangible | | | and profits in | | | Closing | |
| Items | | balance | | | expenses | | | assets | | | current period | | | balance | |
| Internal software development | | | | | | | 17,353,556.52 | | | | 6,453,710.35 | | | | | | | | 10,899,846.17 | |
| Total | | | | | | | 17,353,556.52 | | | | 6,453,710.35 | | | | | | | | 10,899,846.17 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1) | Original book value of goodwill |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase in | | | Decrease in | | | | |
| | | | | | the current | | | the current | | | | |
| | | | | | period | | | period | | | | |
| | | | | | Formed by | | | Provision of | | | | |
| Name of invested entity or | | Opening | | | business | | | impairment | | | Closing | |
| matter forming goodwill | | balance | | | merger | | | losses | | | balance | |
| Shanghai Dongzhan International Trade Co., Ltd. | | | 3,661,378.25 | | | | | | | | | | | 3,661,378.25 | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 305,456,779.92 | | | | | | | | | | | 305,456,779.92 | |
| Total | | | 309,118,158.17 | | | | | | | | | | | 309,118,158.17 | |
| (2) | Provision for goodwill impairment |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Name of invested | | | | | Increase in the | | | Decrease in the | | | | |
| entity or matter | | Opening | | | current period | | | current period | | | Closing | |
| forming goodwill | | balance | | | Provision | | | Disposal | | | balance | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| Total | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| (3) | Information about the asset group or portfolio of asset groups where goodwill is located |
| | ¨ | Applicable | √ | Not applicable |
| (4) | Explanation of the goodwill impairment testing process, key parameters (such as forecast period growth rate, stable period growth rate, profit margin, discount rate, and forecast period, etc., if applicable), and methods for recognizing goodwill impairment loss |
| | ¨ | Applicable | √ | Not applicable |
| (5) | Impact of goodwill impairment testing |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 31. | Long-term unamortized expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Amortization | | | | | | | | | | |
| | | | | | Increase in | | | amount in | | | | | | Provision of | | | | |
| | | Opening | | | current | | | current | | | Other | | | impairment | | | Closing | |
| Items | | balance | | | period | | | period | | | decreases | | | losses | | | balance | |
| Renovation costs of rented store | | | 3,438,297,085.80 | | | | 325,698,395.43 | | | | 667,291,716.71 | | | | 164,093,022.97 | | | | 69,950,490.22 | | | | 2,862,660,251.33 | |
| Decoration expenses for Nantong Logistics Park project | | | 31,696,061.52 | | | | 1,326,167.89 | | | | 5,789,259.24 | | | | | | | | | | | | 27,232,970.17 | |
| Decoration expenses for East China Logistics Park | | | 12,495,888.10 | | | | 91,965.24 | | | | 2,026,094.55 | | | | | | | | | | | | 10,561,758.79 | |
| Total | | | 3,482,489,035.42 | | | | 327,116,528.56 | | | | 675,107,070.50 | | | | 164,093,022.97 | | | | 69,950,490.22 | | | | 2,900,454,980.29 | |
Other notes:
The decrease in long-term prepaid expenses for the year is due to the closure of certain stores.
| 32. | Deferred tax assets/Deferred tax liabilities |
| (1) | Deferred income tax assets not offset |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| | | Deductible | | | | | | Deductible | | | | |
| | | temporary | | | Deferred | | | temporary | | | Deferred | |
| Items | | differences | | | tax asset | | | differences | | | tax asset | |
| Provision for impairment of assets | | | 1,022,982,930.42 | | | | 218,923,655.88 | | | | 986,612,162.81 | | | | 185,677,515.48 | |
| Unrealized profits in internal transaction | | | 28,258,325.26 | | | | 7,064,581.31 | | | | 40,622,102.73 | | | | 10,155,525.69 | |
| Deductible loss | | | 2,120,796,624.40 | | | | 489,896,401.87 | | | | 2,371,321,390.45 | | | | 545,288,112.14 | |
| Lease liabilities | | | 16,620,946,455.26 | | | | 3,444,682,630.04 | | | | 17,098,796,792.01 | | | | 3,560,224,981.50 | |
| Provision for impairment of credit | | | 224,021,895.98 | | | | 45,936,716.51 | | | | 191,562,369.81 | | | | 38,988,455.63 | |
| Estimated liabilities | | | 2,407,083.35 | | | | 361,062.50 | | | | 2,740,384.12 | | | | 505,635.62 | |
| Reward points program | | | 30,168,728.86 | | | | 6,319,559.03 | | | | 29,168,757.37 | | | | 5,847,123.91 | |
| Total | | | 20,049,582,043.53 | | | | 4,213,184,607.14 | | | | 20,720,823,959.30 | | | | 4,346,687,349.97 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Deferred income tax liabilities not offset |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| | | Temporary | | | | | | Temporary | | | | |
| | | taxable | | | Deferred | | | taxable | | | Deferred | |
| Items | | difference | | | tax liabilities | | | difference | | | tax liabilities | |
| Estimated value added of the assets in business combination not under same control | | | 502,024,923.43 | | | | 125,506,230.86 | | | | 684,761,996.23 | | | | 171,190,499.06 | |
| Profits and losses from changes in fair value | | | 668,222,799.20 | | | | 158,910,861.58 | | | | 1,074,164,007.75 | | | | 253,147,239.81 | |
| One-time deduction of fixed assets | | | 371,560,344.15 | | | | 70,400,175.07 | | | | 649,957,740.00 | | | | 126,104,146.83 | |
| Receivable from finance lease payments | | | 44,102,634.67 | | | | 9,986,264.27 | | | | 62,371,748.65 | | | | 14,661,750.15 | |
| Right-of-use assets | | | 13,186,384,240.43 | | | | 2,736,149,492.55 | | | | 14,043,209,983.69 | | | | 2,918,453,404.70 | |
| Total | | | 14,772,294,941.88 | | | | 3,100,953,024.33 | | | | 16,514,465,476.32 | | | | 3,483,557,040.55 | |
| (3) | Deferred income tax assets or liabilities listed with the net amount after being offset |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount not | | | | | | Amount not | | | | |
| | | Offset in | | | Closing Balance | | | Offset in | | | Closing Balance | |
| | | the Period of | | | of Offset | | | the Period of | | | of Offset | |
| | | Deferred Income | | | Deferred Income | | | Deferred Income | | | Deferred Income | |
| | | Tax Assets and | | | Tax Assets or | | | Tax Assets and | | | Tax Assets or | |
| Items | | Liabilities | | | Liabilities | | | Liabilities | | | Liabilities | |
| Deferred tax asset | | | 2,974,769,914.96 | | | | 1,238,414,692.18 | | | | 3,310,662,181.26 | | | | 1,036,025,168.71 | |
| Deferred tax liabilities | | | 2,974,769,914.96 | | | | 126,183,109.37 | | | | 3,310,662,181.26 | | | | 172,894,859.29 | |
| (4) | Details of unrecognized deferred tax assets |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Deductible temporary differences | | | 2,249,012,729.65 | | | | 1,919,864,334.95 | |
| Deductible loss | | | 7,981,292,888.03 | | | | 5,910,552,113.05 | |
| Total | | | 10,230,305,617.68 | | | | 7,830,416,448.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5) | Deductible losses of unconfirmed deferred income tax assets will be expired in the following listed year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Year | | Closing Balance | | | Opening Balance | | | Comments | |
| Year 2022 | | | | | | | 150,240,764.94 | | | | | |
| Year 2023 | | | 677,860,363.11 | | | | 641,389,976.35 | | | | | |
| Year 2024 | | | 1,433,451,155.15 | | | | 1,426,277,987.99 | | | | | |
| Year 2025 | | | 1,220,976,236.86 | | | | 1,274,737,823.74 | | | | | |
| Year 2026 | | | 2,400,282,148.31 | | | | 2,417,905,560.03 | | | | | |
| Year 2027 | | | 2,248,722,984.60 | | | | | | | | | |
| Total | | | 7,981,292,888.03 | | | | 5,910,552,113.05 | | | | / | |
Other disclosure:
| | ¨ | Applicable | √ | Not applicable |
| 33. | Other non-current assets |
| | ¨ | Applicable | √ | Not applicable |
| (1) | Classification of short-term borrowings |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | 6,528,480,368.69 | | | | 10,947,557,472.21 | |
| Total | | | 6,528,480,368.69 | | | | 10,947,557,472.21 | |
Descriptions for categories of short-term loans:
The Group had had no overdue short-term borrowings as of December 31, 2022 and December 31, 2021
| (2) | Overdue unliquidated short-term loans |
| | ¨ | Applicable | √ | Not applicable |
The significant overdue and unpaid short-term borrowings are as follows:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| 35. | Trading financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
| 36. | Derivative financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Category | | Closing balance | | | Opening balance | |
| Commercial acceptance bill | | | | | | | 33,000,000.00 | |
| Total | | | | | | | 33,000,000.00 | |
There is no unpaid mature notes payable at the end of this period.
| (1) | Presentation of accounts payable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Payment for goods | | | 12,155,435,663.28 | | | | 12,518,578,825.59 | |
| Total | | | 12,155,435,663.28 | | | | 12,518,578,825.59 | |
The Group had had no significant accounts payable with an aging of more than one year as of December 31, 2022 and December 31, 2021.
| (2) | Significant accounts payable with more than one-year aging |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (1) | Presentation of receivables in advance |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Advance payment of rent and other expenses from the lessee | | | 196,630,132.94 | | | | 199,815,968.65 | |
| Total | | | 196,630,132.94 | | | | 199,815,968.65 | |
| (2) | Significant accounts collected in advance with an aging of more than one year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Reason for outstanding | |
| Items | | Closing balance | | | payment or carry-over | |
| Prepaid rent from lessees | | | 23,493,165.89 | | | Services not yet provided | |
| Total | | | 23,493,165.89 | | | / | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (1) | Contractual liabilities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Advance payments from customers | | | 4,725,011,338.79 | | | | 4,168,427,116.82 | |
| Reward points program | | | 41,497,236.68 | | | | 42,813,907.80 | |
| Advance payment of supplier service fees | | | 60,091,972.32 | | | | 91,833,351.24 | |
| Total | | | 4,826,600,547.79 | | | | 4,303,074,375.86 | |
| (2) | Significant changes in the carrying value during the reporting period and the reasons |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 41. | Employee compensation payable |
| (1) | List of payrolls payable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase in the | | | Decrease in the | | | | |
| Items | | Opening balance | | | current period | | | current period | | | Closing balance | |
| I. Short-term payrolls | | | 624,061,025.89 | | | | 7,827,138,448.47 | | | | 7,784,181,127.22 | | | | 667,018,347.14 | |
| II. Post-employment benefits Interest – Provision for set deposits | | | 39,058,992.84 | | | | 789,037,553.24 | | | | 741,522,575.65 | | | | 86,573,970.43 | |
| III. Dismiss welfare | | | 2,165,732.45 | | | | 26,660,670.73 | | | | 24,103,834.55 | | | | 4,722,568.63 | |
| Total | | | 665,285,751.18 | | | | 8,642,836,672.44 | | | | 8,549,807,537.42 | | | | 758,314,886.20 | |
| (2) | List of short-term payroll |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase in the | | | Decrease in the | | | | |
| Items | | Opening balance | | | current period | | | current period | | | Closing balance | |
| I. Salaries, bonuses, allowances and subsidies | | | 569,420,279.38 | | | | 6,862,491,675.80 | | | | 6,828,917,569.42 | | | | 602,994,385.76 | |
| II. Employee services and benefits | | | 1,408,125.00 | | | | 287,300,825.88 | | | | 282,286,925.42 | | | | 6,422,025.46 | |
| III. Social Insurance | | | 24,862,699.39 | | | | 479,753,076.34 | | | | 480,908,115.09 | | | | 23,707,660.64 | |
| Include: medical insurance premiums | | | 19,608,001.18 | | | | 451,498,899.10 | | | | 450,416,202.56 | | | | 20,690,697.72 | |
| | | | | | Increase in the | | | Decrease in the | | | | |
| Items | | Opening balance | | | current period | | | current period | | | Closing balance | |
| Work injury insurance premium | | | 1,927,595.91 | | | | 19,963,860.77 | | | | 19,813,531.43 | | | | 2,077,925.25 | |
| Maternity insurance premiums | | | 3,327,102.30 | | | | 8,290,316.47 | | | | 10,678,381.10 | | | | 939,037.67 | |
| IV. Housing provident fund | | | 4,340,381.17 | | | | 158,432,206.22 | | | | 155,856,112.82 | | | | 6,916,474.57 | |
| V. Labor union expenditure and employee education expenses | | | 24,029,540.95 | | | | 39,160,664.23 | | | | 36,212,404.47 | | | | 26,977,800.71 | |
| Total | | | 624,061,025.89 | | | | 7,827,138,448.47 | | | | 7,784,181,127.22 | | | | 667,018,347.14 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | List of withdrawal and deposit plan |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase in the | | | Decrease in the | | | | |
| Items | | Opening balance | | | current period | | | current period | | | Closing balance | |
| 1. Basic endowment insurance | | | 36,800,432.33 | | | | 764,341,579.08 | | | | 717,170,487.04 | | | | 83,971,524.37 | |
| 2. Unemployment insurance premium | | | 2,258,560.51 | | | | 24,695,974.16 | | | | 24,352,088.61 | | | | 2,602,446.06 | |
| Total | | | 39,058,992.84 | | | | 789,037,553.24 | | | | 741,522,575.65 | | | | 86,573,970.43 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| VAT | | | 138,180,271.36 | | | | 96,701,387.72 | |
| Corporate Income Tax | | | 22,720,511.72 | | | | 40,140,539.85 | |
| Personal income tax | | | 15,330,684.42 | | | | 17,353,270.53 | |
| Urban maintenance and construction tax | | | 8,421,980.54 | | | | 11,040,529.90 | |
| Maintenance fees for river and sea embankments | | | 22,197,289.42 | | | | 20,081,784.29 | |
| Housing property tax | | | 3,417,321.03 | | | | 3,580,870.82 | |
| Education Surcharge | | | 6,991,849.55 | | | | 11,227,948.43 | |
| Others | | | 12,346,822.24 | | | | 2,723,685.92 | |
| Total | | | 229,606,730.28 | | | | 202,850,017.46 | |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Dividends payable | | | | | | | 12,000,000.00 | |
| Other payables | | | 1,899,603,590.71 | | | | 2,749,266,270.83 | |
| Total | | | 1,899,603,590.71 | | | | 2,761,266,270.83 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Interest payable
| (1) | Presentation by category |
| | ¨ | Applicable | √ | Not applicable |
Dividends payable
| (2) | Presentation by category |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Dividends to minority shareholders | | | | | | | 12,000,000.00 | |
| Total | | | | | | | 12,000,000.00 | |
Other payables
| (1). | Other payables listed by nature of payment |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Accrued expenses for store rent, electricity, freight, and other expenses | | | 1,016,060,791.93 | | | | 1,155,109,363.42 | |
| Equipment and engineering payments | | | 210,137,462.48 | | | | 588,253,490.87 | |
| Deposits and guarantees | | | 445,267,593.23 | | | | 471,705,601.32 | |
| Investment section | | | | | | | 246,944,000.00 | |
| Others | | | 228,137,743.07 | | | | 287,253,815.22 | |
| Total | | | 1,899,603,590.71 | | | | 2,749,266,270.83 | |
| (2). | Other significant payables with more than one-year aging |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Reason for outstanding | |
| Items | | Closing balance | | | payment or carry-over | |
| PARKnSHOP (China) Investment Co., Ltd. | | | 46,969,371.21 | | | Fund lending/borrowing | |
| Total | | | 46,969,371.21 | | | / | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 44. | Liabilities held for sale |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 45. | Non-current liabilities due within one year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Long-term borrowings due within one year | | | 141,246,585.00 | | | | 30,030,833.33 | |
| Lease liabilities due within 1 year | | | 1,870,617,070.60 | | | | 2,039,820,377.09 | |
| Total | | | 2,011,863,655.60 | | | | 2,069,851,210.42 | |
| 46. | Other current liabilities |
Other current liabilities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Amount of tax to be written off | | | 460,794,502.35 | | | | 390,433,950.39 | |
| Total | | | 460,794,502.35 | | | | 390,433,950.39 | |
The increases and reductions of short-term bonds payable:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1). | Classification of long-term loans |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | 2,070,085,001.67 | | | | 1,021,069,722.22 | |
| Total | | | 2,070,085,001.67 | | | | 1,021,069,722.22 | |
Other descriptions, including the interest rate range:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Increase and decrease of bonds payable (excluding the preference shares, perpetual capital securities and other financial instruments classified as financial liabilities) |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Explanation of conversion conditions and conversion time for convertible corporate bonds |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Description on other financial instruments classified as financial liabilities |
Basic information of Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Table of change in Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Descriptions of the other financial tools in financial liabilities:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Houses and buildings | | | 24,981,451,232.22 | | | | 26,866,381,468.91 | |
| Less: Lease liabilities due within one year | | | 1,870,617,070.60 | | | | 2,039,820,377.09 | |
| Total | | | 23,110,834,161.62 | | | | 24,826,561,091.82 | |
Itemized list
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Long-term accounts payable
| (1). | List of long-term payables according to nature of funds |
| | ¨ | Applicable | √ | Not applicable |
Special accounts payable
| (2). | Special payables categorized by nature of payment |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 51. | Long-term payroll payable |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Closing balance | | | Cause | |
| Pending Litigation and Arbitration | | | 3,628,259.35 | | | | 7,383,565.56 | | | Litigation involved | |
| Total | | | 3,628,259.35 | | | | 7,383,565.56 | | | / | |
Other descriptions, including the descriptions of relevant important assumptions and estimations of important accrued liabilities:
The year-end balance of contingent liabilities arises from disputes related to house lease and payment of goods.
Deferred income
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase in | | | Decrease in | | | | | | | |
| | | Opening | | | the current | | | the current | | | Closing | | | | |
| Items | | balance | | | period | | | period | | | balance | | | Cause | |
| Governmental subsidy | | | 118,370,289.79 | | | | | | | | 13,870,029.94 | | | | 104,500,259.85 | | | Received governmental subsidy related to assets | |
| Total | | | 118,370,289.79 | | | | | | | | 13,870,029.94 | | | | 104,500,259.85 | | | / | |
Items involved in governmental subsidies:
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| Liability item | | Opening balance | | | Newly increased
subsidy amount
in current
period | | | Amount of
non-operating
income included
in current
period | | | Amount
included in
other incomes in
current period | | | Other changes | | | Closing balance | | | Assets-related/
Income-related | |
| Yonghui Logistics Phase I Project Industrial Support Funds | | | 45,486,857.04 | | | | | | | | | | 1,421,464.32 | | | | | | | 44,065,392.72 | | | | Asset-related | |
| Chongqing Yonghui Urban Life Plaza Project | | | 31,113,216.34 | | | | | | | | | | 1,121,196.96 | | | | | | | 29,992,019.38 | | | | Asset-related | |
| Subsidy from Cuozhen Town People’s Government | | | 15,220,088.13 | | | | | | | | | | 502,113.48 | | | | | | | 14,717,974.65 | | | | Asset-related | |
| Yonghui Superstores Cold Chain Logistics Terminal Standardization Construction Project for 2017 | | | 2,600,000.58 | | | | | | | | | | 2,600,000.58 | | | | | | | | | | | Asset-related | |
| Shapingba District Treasury – Supply Chain Project Subsidies | | | 1,533,333.28 | | | | | | | | | | 799,999.38 | | | | | | | 733,333.90 | | | | Asset-related | |
| Fujian Yonghui Logistics Warehousing Center | | | 2,000,000.08 | | | | | | | | | | 399,999.96 | | | | | | | 1,600,000.12 | | | | Asset-related | |
| Refund of Yonghui Headquarters Construction Supporting Fees | | | 2,599,832.66 | | | | | | | | | | 93,687.60 | | | | | | | 2,506,145.06 | | | | Asset-related | |
| Pilot Project for Supply Chain System Construction | | | 1,481,666.74 | | | | | | | | | | 507,999.96 | | | | | | | 973,666.78 | | | | Asset-related | |
| Energy Management Center Project | | | 418,336.08 | | | | | | | | | | 418,336.08 | | | | | | | | | | | Asset-related | |
| Subsidies for Supply Chain System Construction | | | 1,233,333.30 | | | | | | | | | | 399,999.96 | | | | | | | 833,333.34 | | | | Asset-related | |
| Equipment Acquisition Subsidies | | | 408,000.00 | | | | | | | | | | 288,000.00 | | | | | | | 120,000.00 | | | | Asset-related | |
| Provincial Cold Chain Logistics Special Fund for 2017 | | | 479,999.92 | | | | | | | | | | 80,000.04 | | | | | | | 399,999.88 | | | | Asset-related | |
| Fund for the Construction of Important Product Traceability System | | | 295,501.26 | | | | | | | | | | 154,174.44 | | | | | | | 141,326.82 | | | | Asset-related | |
| Subsidy for Lugu Store Poverty Alleviation Project | | | 44,951.01 | | | | | | | | | | 28,387.18 | | | | | | | 16,563.83 | | | | Asset-related | |
| Supply Chain System Construction Project of Kunshan Bureau of Commerce | | | 2,000,000.00 | | | | | | | | | | 1,500,000.00 | | | | | | | 500,000.00 | | | | Asset-related | |
| Subsidy for Supply Chain System Construction Project of Nanjing Jiangbei New District Management Committee Finance Bureau | | | 1,445,999.94 | | | | | | | | | | 482,000.04 | | | | | | | 963,999.90 | | | | Asset-related | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Liability item | | Opening balance | | | Newly increased
subsidy amount
in current
period | | | Amount of
non-operating
income included
in current
period | | | Amount
included in
other incomes in
current period | | | Other changes | | | Closing balance | | | Assets-related/
Income-related | |
| Subsidy for Supply Chain System Construction Project of Fuzhou City | | | 5,333,333.40 | | | | | | | | | | 1,599,999.96 | | | | | | | 3,733,333.44 | | | | Asset-related | |
| Subsidy for Supply Chain System Construction Project of Nantong Town Financial Office, Minhou County | | | 3,351,790.07 | | | | | | | | | | 1,031,319.96 | | | | | | | 2,320,470.11 | | | | Asset-related | |
| Subsidy for Zhejiang Agricultural Product Supply Chain Construction | | | 1,324,049.96 | | | | | | | | | | 441,350.04 | | | | | | | 882,699.92 | | | | Asset-related | |
| Total | | | 118,370,289.79 | | | | | | | | | | 13,870,029.94 | | | | | | | 104,500,259.85 | | | | | |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 54. | Other non-current liabilities |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase/Decrease (+, -) | |
| | | Opening balance | | | New issue | | | Share
donation | | | Share
converted
from reserved
funds | | | Others | | | Subtotal | | | Closing balance | |
| Total number of shares | | | 9,075,036,993.00 | | | | | | | | | | | | | | | | | | | 9,075,036,993.00 | |
| 56. | Other equity instruments |
| (1). | Basic information of Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Table of change in Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
Other descriptions for change situations and reasons on increase and decrease of equity instruments in current period, and relevant accounting treatment basis:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing
balance | |
| Capital premium (share capital premium) | | | 3,372,208,364.38 | | | | | | | | | | | | 3,372,208,364.38 | |
| Other capital reserves | | | 903,936,447.42 | | | | 28,188,985.76 | | | | 12,211,255.70 | | | | 919,914,177.48 | |
| Total | | | 4,276,144,811.80 | | | | 28,188,985.76 | | | | 12,211,255.70 | | | | 4,292,122,541.86 | |
Other descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
| Note: | As stated in Note VII, 19 notes 1 and 2, the related matters resulted in an increase of RMB28,188,985.76 in capital reserves – Others. |
| | | |
| | | As stated in Note IX, 2, the aforementioned items resulted in a decrease of RMB12,211,255.70 in capital surplus – Others. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing
balance | |
| Equity incentive buyback | | | | | | 263,483,654.25 | | | | | | | 263,483,654.25 | |
| Total | | | | | | 263,483,654.25 | | | | | | | 263,483,654.25 | |
Other descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
On August 8, 2022, the Company held the 3rd meeting of the fifth Board of Directors and approved the Proposal on Repurchasing Shares through centralized bidding trading. It was decided to use own funds not exceeding RMB700 million to repurchase shares at a price not exceeding RMB5 per share, with the buyback period from August 8, 2022 to August 7, 2023. As of December 31, 2022, the Company has cumulatively bought back 85,604,728 shares through centralized bidding, accounting for 0.94% of the total share capital of the Company. The lowest transaction price was RMB2.86 per share, and the highest transaction price was RMB3.39 per share. The total amount paid for the buy-back was RMB263,483,654.25.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 59. | Other comprehensive income |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Amount
before income
tax in the
current period | | | Less: transferring
other comprehensive
income recorded in
the last period into
the profit and loss
of current period | | | Amount of current period
Less: transferring
other comprehensive
income recorded in
the last period into
the retained earnings
of current period | | | Less:
income tax
expense | | | Attributable to parent
company
after tax | | | Attributable
to minority
shareholders
after tax | | | Closing
balance | |
| I. Other comprehensive income that cannot be re-classified into profits and losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Other comprehensive income to be re-classified into profits and losses | | | 1,494,334.19 | | | | -1,054,073.47 | | | | | | | | | | | | | -1,054,073.47 | | | | | | | 440,260.72 | |
| Including: other comprehensive incomes that can be transferred into profit and loss under the equity method | | | 1,652,642.73 | | | | -866,721.55 | | | | | | | | | | | | | -866,721.55 | | | | | | | 785,921.18 | |
| Balance arising from the translation of foreign currency financial statements | | | -158,308.54 | | | | -187,351.92 | | | | | | | | | | | | | -187,351.92 | | | | | | | -345,660.46 | |
| Total of other comprehensive income | | | 1,494,334.19 | | | | -1,054,073.47 | | | | | | | | | | | | | -1,054,073.47 | | | | | | | 440,260.72 | |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| Statutory surplus reserve | | | 1,103,806,707.15 | | | | 9,468,553.39 | | | | | | | | 1,113,275,260.54 | |
| Total | | | 1,103,806,707.15 | | | | 9,468,553.39 | | | | | | | | 1,113,275,260.54 | |
Surplus reserves descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
| Note: | According to the Company Law and the article of associations, the statutory surplus reserve is appropriated by the Company by 10% of the net profit. The Company may stop appropriation if the accumulative balance of the statutory reserve fund has already accounted for over 50% of the Company’s registered capital. |
After appropriating the legal accumulation fund, the Company is allowed to appropriate any accumulation fund. Upon approval, the Company may convert its Discretionary Surplus Reserves to make good previous years’ losses or to increase the capital of the Company.
62. Undistributed profits
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Current period | | | Last period | |
| Undistributed profits at the end of last period before adjustment | | | -3,797,684,715.49 | | | | 3,886,681,562.18 | |
| Total opening undistributed profits during adjustment (increase is indicated by “+”, and decrease is indicated by “-”) | | | | | | | -3,484,049,730.53 | |
| Undistributed profits at the beginning of the year after adjustment | | | -3,797,684,715.49 | | | | 402,631,831.65 | |
| Add: net profit attributable to the owner of parent company in current period | | | -2,763,166,060.87 | | | | -3,943,871,849.80 | |
| Less: appropriation to statutory surplus reserves | | | 9,468,553.39 | | | | 82,842,151.71 | |
| Ordinary stock dividends payable | | | 181,500,739.86 | | | | 173,602,545.63 | |
| Undistributed profit at the end of the period | | | -6,751,820,069.61 | | | | -3,797,684,715.49 | |
63. Operating revenue and operating costs
(1). Operating revenue and costs
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of current period | | | Amount of last period | |
| Items | | Revenue | | | Cost | | | Revenue | | | Cost | |
| Main business | | | 84,128,127,095.62 | | | | 72,065,720,723.20 | | | | 84,957,828,262.31 | | | | 73,589,282,912.20 | |
| Other business | | | 5,962,692,300.52 | | | | 294,869,404.88 | | | | 6,104,066,049.82 | | | | 437,929,346.10 | |
| Total | | | 90,090,819,396.14 | | | | 72,360,590,128.08 | | | | 91,061,894,312.13 | | | | 74,027,212,258.30 | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Operating Revenue Deduction Statement |
Unit: ’0,000 Yuan Currency: RMB
| Items | | Current year | | | Specific deductions | | Last year | | | Specific deductions |
| Operating revenue amount | | | 9,009,081.94 | | | | | | 9,106,189.43 | | | |
| Total amount of deducted items from operating revenue | | | 21,709.14 | | | | | | 24,480.1 | | | |
| Percentage of total amount of items deducted from operating income to operating income (%) | | | 0.24 | | | | | | 0.27 | | | / |
| I. Non-core Business Income | | | | | | | | | | | | |
| 1. Other business income unrelated to normal operations. such as rental of fixed assets, intangible assets, packing materials, sale of materials, non-monetary asset exchanges using materials, income from entrusted management services, and other income included in the main operating income but unrelated to the normal operations of the listed company. | | | 17,688.57 | | | Sales revenue from waste paper and scraps: RMB176.4799 million, as well as trustee fee income of RMB0.4058 million | | | 19,154.75 | | | Sales revenue from waste paper and scraps: RMB190.8954 million, as well as trustee fee income of RMB0.6521 million |
| 2. Income from non-qualified financial business activities, such as interests income from funds borrowed; income generated from non-qualified financial businesses introduced in the current and previous fiscal years, such as guarantee, factoring, microloans, finance leasing, pawnbroking, etc., excluding finance leasing activities conducted for the purpose of selling main products. | | | | | | | | | | | | |
| 3. Income generated from new trade business in the current and previous fiscal years. | | | | | | | | | | | | |
| 4. Income generated from related-party transactions unrelated to the Company’s existing normal business operations. | | | 4,020.57 | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. | | | 5,325.35 | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. |
| 5. Income of subsidiary companies consolidated under the same control from the beginning of the period to the consolidation date. | | | | | | | | | | | | |
| 6. Income generated from business activities that have not formed or have difficulty forming a stable business model. | | | | | | | | | | | | |
| Subtotal of non-core business income | | | 21,709.14 | | | | | | 24,480.10 | | | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Current year | | | Specific deductions | | | Last year | | | Specific deductions | |
| II. Income without Substantive Commercial Nature | | | | | | | | | | | | | | | | |
| 1. Income generated from transactions or events that do not significantly change the future cash flow of the company in terms of risk, timing, or amount. | | | | | | | | | | | | | | | | |
| 2. Income generated from transactions without genuine business activities, such as false income realized through self-trading, and false income generated through the use of internet technology or other methods to construct transactions. | | | | | | | | | | | | | | | | |
| 3. Income generated from business activities with unfair transaction prices. | | | | | | | | | | | | | | | | |
| 4. Income generated from subsidiary companies or businesses acquired during the current fiscal year at unfair consideration or non-transaction methods. | | | | | | | | | | | | | | | | |
| 5. Income involved in non-standard audit opinions in the audit report. | | | | | | | | | | | | | | | | |
| 6. Income generated from other transactions or events without commercial rationality. | | | | | | | | | | | | | | | | |
| Subtotal of income without substantive commercial nature | | | | | | | | | | | | | | | | |
| III. Other Income Unrelated to or without Substantive Commercial Nature of the Core Business | | | | | | | | | | | | | | | | |
| Operating revenue after deductions | | | 8,987,372.80 | | | | | | | | 9,081,709.33 | | | | | |
| Note 1: | The deducted income in the current year, in addition to regular business income, includes sales revenue from waste paper and scraps: RMB176.4799 million (2021: RMB190.8954 million), as well as trustee fee income: RMB0.4058 million (2021: RMB0.6521 million). Yonghui Superstores Co., Ltd.’s main business includes the sale of fresh products, food supplies, clothing, and related promotional services, logistics and distribution, property purchase and rental, etc. The above-mentioned income is unrelated to the core business and is deducted. |
| Note 2: | The non-operating income deducted in the current year, which is unrelated to the existing normal operating business, generated from related-party transactions amounts to RMB40.2057 million (2021: RMB53.2535 million). This portion represents income obtained by the Group from providing financial shared services and information system services to affiliated parties, which are unrelated to the main business and therefore deducted. |
| Note 3: | The Group’s factoring and small loans business has been conducted since 2017 and is not a newly added non-financial business in the current and previous fiscal years, so the related income does not require deduction. |
| Note 4: | Apart from the above, the Group has no other non-core business income or income without substantive commercial nature that needs to be deducted. |
| (3). | Conditions of incomes generated by contract |
| | ¨ | Applicable | √ | Not applicable |
Explanation of revenue generated from contracts:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Description of performance obligations |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Description of allocating to the residual fulfillment obligations |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Urban maintenance and construction tax | | | 42,820,977.85 | | | | 49,944,537.60 | |
| Education Surcharge | | | 30,507,599.49 | | | | 39,580,546.58 | |
| Housing property tax | | | 27,787,249.03 | | | | 29,173,671.38 | |
| Land use tax | | | 6,435,328.01 | | | | 6,282,588.02 | |
| Stamp duty | | | 58,209,315.28 | | | | 50,995,772.71 | |
| Flood control fees | | | 28,281,587.08 | | | | 24,875,179.81 | |
| Others | | | 10,248,627.51 | | | | 12,087,922.01 | |
| Total | | | 204,290,684.25 | | | | 212,940,218.11 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 6,894,456,729.72 | | | | 7,046,857,303.99 | |
| Depreciation and amortization | | | 3,352,286,549.67 | | | | 3,552,285,375.38 | |
| Water and electricity fees and fuel expenses | | | 1,435,149,314.69 | | | | 1,379,250,486.39 | |
| Freight and warehousing service fees | | | 1,124,809,975.36 | | | | 1,235,941,963.87 | |
| Rent and property management fees | | | 646,063,414.92 | | | | 750,713,040.72 | |
| Business publicity expense | | | 523,708,654.82 | | | | 539,686,946.80 | |
| Cleaning fees | | | 459,319,319.85 | | | | 522,660,045.32 | |
| Low-cost consumables | | | 383,679,370.32 | | | | 489,632,689.54 | |
| Repair fees | | | 290,459,146.49 | | | | 342,255,794.69 | |
| Platform service fee | | | 324,353,724.68 | | | | 285,958,224.26 | |
| Office expenses such as car, travel, and communication expenses | | | 164,065,892.28 | | | | 192,986,250.12 | |
| Others | | | 251,385,598.09 | | | | 291,279,947.52 | |
| Total | | | 15,849,737,690.89 | | | | 16,629,508,068.60 | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 66. | Administrative expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 1,306,796,064.66 | | | | 1,197,805,771.55 | |
| Depreciation and amortization | | | 316,565,974.34 | | | | 307,727,664.43 | |
| Costs of wear and tear of commodities | | | 189,586,964.39 | | | | 212,270,303.09 | |
| Rent and property management fees | | | 23,359,209.11 | | | | 61,445,423.78 | |
| Office expenses such as car, travel, and communication expenses | | | 76,451,781.43 | | | | 124,038,919.26 | |
| Consulting, audit, legal, and other intermediary service expenses | | | 41,561,506.24 | | | | 73,524,424.83 | |
| Low-cost consumables | | | 30,102,567.07 | | | | 22,029,683.00 | |
| Equity incentives | | | | | | | 11,565,233.98 | |
| Others | | | 61,992,033.69 | | | | 145,048,567.96 | |
| Total | | | 2,046,416,100.93 | | | | 2,155,455,991.88 | |
| 67. | Research and development expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Employee compensation | | | 419,095,163.99 | | | | 385,006,006.42 | |
| Depreciation & Amortization | | | 35,174,423.30 | | | | 23,975,573.56 | |
| Office expenses such as car, travel, and communication expenses | | | 24,573,999.83 | | | | 17,892,281.13 | |
| Low-cost consumables | | | 886,829.36 | | | | 1,150,762.14 | |
| Others | | | 2,168,018.56 | | | | 82,844.96 | |
| Total | | | 481,898,435.04 | | | | 428,107,468.21 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Interest expense | | | 1,556,082,561.75 | | | | 1,677,039,950.99 | |
| Less: interest income | | | 201,725,230.95 | | | | 292,633,975.09 | |
| Exchange gains and losses | | | -2,057,174.07 | | | | 1,823,788.56 | |
| Service fees and others | | | 185,897,135.79 | | | | 165,463,912.02 | |
| Total | | | 1,538,197,292.52 | | | | 1,551,693,676.48 | |
Note: This year, interest expenses include interest expenditure on lease liabilities amounting to RMB1,257,899,530.25.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Governmental subsidy | | | 208,831,135.67 | | | | 178,841,982.84 | |
| Return of individual income tax withheld service changes withheld and remitted | | | 3,116,184.84 | | | | 4,615,700.99 | |
| Total | | | 211,947,320.51 | | | | 183,457,683.83 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Long-term equity investment income measured with equity method | | | -49,507,225.29 | | | | -49,185,860.49 | |
| Investment income for disposing long-term equity investment production | | | -28,804,251.10 | | | | 40,869,144.79 | |
| Investment income of trading financial assets during the holding period | | | -26,966,353.53 | | | | 132,419,255.68 | |
| Investment income of non-current financial assets during holding period | | | | | | | 67,910,214.00 | |
| Total | | | -105,277,829.92 | | | | 192,012,753.98 | |
| 71. | Income from net exposure hedging |
| | ¨ | Applicable | √ | Not applicable |
| 72. | Fair value changes in equity investments |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Sources generating income | | Amount of | | | Amount of | |
| from changes in fair value | | current period | | | last period | |
| Trading financial assets | | | -601,461,962.47 | | | | -642,061,075.16 | |
| Other non-current financial assets | | | 6,781,795.03 | | | | 263,534,314.84 | |
| Total | | | -594,680,167.44 | | | | -378,526,760.32 | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Bad debt loss of accounts receivable | | | 44,438,621.48 | | | | 28,433,783.51 | |
| Bad debt loss of other receivables | | | 17,540,867.49 | | | | 8,624,831.94 | |
| Bad debt losses on loans | | | 45,246,646.85 | | | | 75,322,082.56 | |
| Bad debt losses on factored receivables | | | 12,734,502.35 | | | | 45,049,155.91 | |
| Total | | | 119,960,638.17 | | | | 157,429,853.92 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| I. Bad-debt losses | | | | | | | | |
| II. Loss on inventory valuation or impairment loss of contract fulfilling costs | | | | | | | | |
| III. Impairment Loss on Long-term Equity Investments | | | 196,826,745.04 | | | | 325,569,066.62 | |
| IV. Impairment Loss on Investment Properties | | | | | | | | |
| V. Impairment losses on fixed assets | | | 52,736,374.45 | | | | 37,424,175.07 | |
| VI. Impairment Loss of Engineering Material | | | | | | | | |
| VII. Impairment Loss on Work in Progress | | | | | | | | |
| VIII. Impairment Loss of Productive Biological Asset | | | | | | | | |
| IX. Impairment Loss on Oil and Gas Assets | | | | | | | | |
| X. Impairment Loss on Intangible Assets | | | 1,140,000.00 | | | | 25,373,333.33 | |
| XI. Goodwill impairment loss | | | | | | | 117,669,866.54 | |
| XII. Others | | | | | | | | |
| XIII. Impairment Loss on Right- of-Use Assets | | | 314,554,050.92 | | | | 212,171,440.65 | |
| XIV. Impairment Loss on Long- term Prepaid Expenses | | | 69,950,490.22 | | | | 59,228,474.07 | |
| Total | | | 635,207,660.63 | | | | 777,436,356.28 | |
Other notes:
During the year, the Group recognized RMB69,950,490.22 of impairment losses on long-term prepaid expenses, RMB52,736,374.45 of impairment losses on fixed assets, and RMB314,554,050.92 of impairment losses on right-of-use assets. The impairment provisions were made due to the recoverable amounts being lower than the carrying amounts of the related leased store assets of the Group. Recoverable amounts are determined based on the higher of the present value of expected future cash flows and the fair value less disposal costs of the asset group. The asset group mainly consists of fixed assets of leased stores, right-of-use assets, and long-term prepaid expenses. An 11.0% discount rate (December 31, 2021: 12.5%) was used to determine the present value of expected future cash flows of the asset group.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 75. | Gains on disposal of assets |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Loss on disposal of fixed assets | | | -28,166,889.98 | | | | -52,848,517.31 | |
| Disposal loss on intangible assets | | | -13,017.82 | | | | -974.60 | |
| Gains on disposals of rights-of-use-assets | | | 363,888,069.30 | | | | 106,213,567.40 | |
| Total | | | 335,708,161.50 | | | | 53,364,075.49 | |
Non-operating income
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Amount included | |
| | | | | | | | | in the non- | |
| | | | | | | | | recurring profit | |
| | | Amount of | | | Amount of | | | and loss of the | |
| Items | | current period | | | last period | | | current period | |
| Compensation income | | | 192,231,769.01 | | | | 227,085,191.51 | | | | | |
| Cash overage | | | 857,859.48 | | | | 1,155,687.16 | | | | | |
| Accounts payable that can’t be paid | | | 82,100,945.92 | | | | 35,508,692.36 | | | | 82,100,945.92 | |
| Others | | | 56,902,735.11 | | | | 80,196,573.08 | | | | 56,902,735.11 | |
| Total | | | 332,093,309.52 | | | | 343,946,144.11 | | | | 139,003,681.03 | |
Governmental subsidies included in current profits and losses
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 77. | Non-operating expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Amount included | |
| | | | | | | | | in the non | |
| | | | | | | | | recurring profit | |
| | | Amount of | | | Amount of | | | and loss of the | |
| Items | | current period | | | last period | | | current period | |
| Total losses on disposal of non-current assets | | | 127,897,871.37 | | | | 133,781,977.67 | | | | 127,897,871.37 | |
| External donation | | | 2,598,649.60 | | | | 2,678,137.16 | | | | 2,598,649.60 | |
| Compensation and litigation expenses, etc | | | 108,549,070.21 | | | | 95,487,107.10 | | | | 108,549,070.21 | |
| Others | | | 13,741,763.02 | | | | 6,489,823.97 | | | | 13,741,763.02 | |
| Total | | | 252,787,354.20 | | | | 238,437,045.90 | | | | 252,787,354.20 | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Table of income tax expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Current income tax expenses | | | 30,300,421.54 | | | | 118,314,551.71 | |
| Deferred income tax expenses | | | -249,101,273.39 | | | | -345,808,571.15 | |
| Total | | | -218,800,851.85 | | | | -227,494,019.44 | |
| (2). | Adjustment of accounting profits and income tax expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | |
| Items | | current period | |
| Total profit | | | -3,218,475,794.40 | |
| Income tax expense calculated as per legal/applicable tax rate | | | -804,618,948.60 | |
| Impact on different applicable rates in subsidiary | | | 108,718,329.72 | |
| Impact on adjustment of income tax in last period | | | 983,902.42 | |
| Impact on nontaxable income | | | -69,784,596.70 | |
| Impact on nondeductible cost, expense and loss | | | 7,519,861.46 | |
| Impact on deductible loss of unrecognized assets from deferred income tax in the previous period | | | -19,621,745.62 | |
| Impact on deductible transient difference or deductible loss of unconfirmed assets from deferred income tax in the current period | | | 550,246,123.83 | |
| Profit/(Loss) attributable to Cooperative Enterprises and Joint Ventures | | | 7,756,221.64 | |
| Income tax expenses | | | -218,800,851.85 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 79. | Other comprehensive income |
| | √ | Applicable | ¨ | Not applicable |
See Note VII, 59 of Section IX for details
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
80. Cash flow statement items
| (1). | Other cash receipts relating to operating activities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Governmental subsidy | | | 198,077,290.57 | | | | 170,880,450.07 | |
| Interest income of bank deposit | | | 236,474,211.69 | | | | 327,484,533.35 | |
| Income from compensation, etc. | | | 192,231,769.01 | | | | 227,085,191.51 | |
| Deposits and guarantees, etc. | | | 67,761,561.38 | | | | 130,645,947.41 | |
| Cash overage | | | 857,859.48 | | | | 1,155,687.16 | |
| Collection of receivables | | | | | | | 127,452,500.09 | |
| Repayments of loans from small loan and factoring companies in Chongqing | | | 633,902,529.57 | | | | 1,959,038,319.55 | |
| Others | | | 56,902,735.11 | | | | 76,843,945.51 | |
| Total | | | 1,386,207,956.81 | | | | 3,020,586,574.65 | |
| (2). | Other cash payments relating to operating activities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Sales expenses, administrative expenses, and research and development expenses | | | 5,990,148,571.44 | | | | 6,530,210,224.44 | |
| Financial expenses – financial service fees | | | 185,897,135.79 | | | | 165,463,912.02 | |
| Expenditure on donation | | | 2,598,649.60 | | | | 2,678,137.16 | |
| Penalties, compensation, overdue fine and other non-operating expenses | | | 118,535,527.02 | | | | 98,348,671.72 | |
| Deposits and reserves, etc. | | | 26,438,008.09 | | | | 33,439,452.14 | |
| Payment of letters of guarantee and security for costs | | | | | | | 70,409,194.65 | |
| Total | | | 6,323,617,891.94 | | | | 6,900,549,592.13 | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Other cash received relating to investment activities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Financial products recovered | | | 1,942,083,905.78 | | | | 1,589,421,555.93 | |
| Receipt of investment income from financial management | | | 365,978,129.93 | | | | 131,898,172.96 | |
| Receipt of cash dividends from non-current financial assets during the holding period | | | | | | | 67,910,214.00 | |
| Redemption of fixed-term deposits | | | | | | | 685,906,973.39 | |
| Receipt of cash dividends from trading financial assets during the holding period | | | | | | | 521,082.72 | |
| Total | | | 2,308,062,035.71 | | | | 2,475,657,999.00 | |
| (4). | Other paid cash relating to investment activities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Purchase of bank wealth management, asset management, and trust products | | | 2,450,000,000.00 | | | | 1,966,236,083.15 | |
| Total | | | 2,450,000,000.00 | | | | 1,966,236,083.15 | |
| (5). | Other received cash relating to financing activities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Receipt of lease payments from finance leases | | | 54,280,019.15 | | | | 39,947,401.43 | |
| Total | | | 54,280,019.15 | | | | 39,947,401.43 | |
| (6). | Other paid cash relating to financing activities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Share buy-backs | | | 263,483,654.25 | | | | 1,160,116,610.88 | |
| Payment of employee’s withdrawal share | | | | | | | 215,833,173.64 | |
| Cash paid to acquire minority interests | | | 2,980,000.00 | | | | | |
| Payment of fixed rent for non-exempt lease contracts | | | 3,046,511,329.10 | | | | 3,104,100,299.39 | |
| Total | | | 3,312,974,983.35 | | | | 4,480,050,083.91 | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 81. | Supplementary information for cash flow statement |
| (1). | Supplementary data to cash flow statement |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Supplementary information | | Amount of current period | | | Amount of last period | |
| 1. Cash flows converted from net profits for business operation activities: | | | | | | | | |
| Net profit | | | -2,999,674,942.55 | | | | -4,494,578,709.02 | |
| Plus: provision for impairment of assets | | | 635,207,660.63 | | | | 777,436,356.28 | |
| Credit impairment loss | | | 119,960,638.17 | | | | 157,429,853.92 | |
| Depreciation of fixed assets, depreciation of oil & gas assets, and depreciation of productive biological assets | | | 834,245,791.32 | | | | 950,981,284.60 | |
| Amortization of right-of-use assets | | | 2,165,542,154.48 | | | | 2,227,949,432.01 | |
| Amortisation of intangibles | | | 286,456,187.95 | | | | 266,597,979.61 | |
| Depreciation and amortization of investment properties | | | 10,807,004.14 | | | | 10,807,004.14 | |
| Amortization of long-term deferred expenses | | | 675,107,070.50 | | | | 694,009,705.62 | |
| Losses on the disposal of fixed assets, intangible assets and other long-term assets (profit is indicated by “-”) | | | -335,708,161.50 | | | | -53,364,075.49 | |
| Loss on scrapping of fixed assets (profit is indicated by “-”) | | | 127,897,871.37 | | | | 133,781,977.67 | |
| Loss on changes in fair value (profit is indicated by “-”) | | | 594,680,167.44 | | | | 378,526,760.32 | |
| Financial expenses (profit is indicated by “-”) | | | 1,554,025,387.68 | | | | 1,673,329,175.64 | |
| Investment loss (profit is indicated by “-”) | | | 105,277,829.92 | | | | -192,012,753.98 | |
| Decrease in deferred income tax assets (increase is indicated by “-”) | | | -202,389,523.47 | | | | 98,170,557.73 | |
| Increase in deferred income tax liabilities (decrease is indicated by “-”) | | | -46,711,749.92 | | | | -443,979,128.88 | |
| Decrease of inventory (increase is indicated by “-”) | | | 324,901,709.72 | | | | 90,187,885.52 | |
| Decrease of operational receivables (increase is indicated by “-”) | | | 1,659,712,792.97 | | | | 2,520,064,591.49 | |
| Increase in operational payables (decrease is indicated by “-”) | | | 364,857,172.10 | | | | 1,048,368,445.30 | |
| Others | | | -10,114,723.73 | | | | -16,785,413.23 | |
| Net cash flow from operating activities | | | 5,864,080,337.22 | | | | 5,826,920,929.25 | |
| 2. Major investment and financing activities that do not involve cash receipts and payments: | | | | | | | | |
| Conversion of debts into capital | | | | | | | | |
| Convertible bonds due within one year | | | | | | | | |
| Fixed assets under financing lease | | | | | | | | |
| 3. Net change in cash and cash equivalents: | | | | | | | | |
| Closing balance of cash | | | 7,443,008,300.63 | | | | 8,643,661,498.06 | |
| Minus: opening balance of cash | | | 8,643,661,498.06 | | | | 10,587,979,162.31 | |
| Add: closing balance of cash equivalents | | | | | | | | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Supplementary information | | Amount of current period | | | Amount of last period | |
| Minus: opening balance of cash equivalents | | | | | | | | |
| Net increase in cash and cash equivalents | | | -1,200,653,197.43 | | | | -1,944,317,664.25 | |
| (2). | Net cash paid in current period and acquired from subsidiary |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Net cash received from disposal of subsidiaries during the current period |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount | |
| Cash or cash equivalents received for disposal of subsidiaries during the current period | | | 500,000.00 | |
| Less: cash and cash equivalents held by subsidiaries on the date of losing the control right | | | 278,926.71 | |
| Add: cash or cash equivalents received for disposal of subsidiaries in the last period | | | | |
| Net cash received from the disposal of subsidiaries | | | 221,073.29 | |
| (4). | Composition of cash and cash equivalents |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| I. Cash | | | 7,443,008,300.63 | | | | 8,643,661,498.06 | |
| Including: cash on hand | | | 79,642,654.48 | | | | 72,596,557.48 | |
| Bank deposit ready for payment at any time | | | 6,824,286,681.92 | | | | 8,302,138,878.64 | |
| Other monetary funds ready for payment at any time | | | 539,078,964.23 | | | | 268,926,061.94 | |
II. Cash equivalents Including: bond investments due in three months
III. Closing balance of cash and cash equivalents | | | 7,443,008,300.63 | | | | 8,643,661,498.06 | |
| Including: restricted cash and cash equivalents used by parent company or subsidiaries | | | 114,492,314.03 | | | | 452,918,396.74 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 82. | Notes to items in statement of changes in equity |
Description for adjustment on item name of “Others”, adjustment amount and other matters at the end of last year:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 83. | Assets with restricted ownership or right of use |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing book
value | | | Reason for
restriction | |
| Monetary funds | | | 114,492,314.03 | | | Deposit | |
| Total | | | 114,492,314.03 | | | / | |
Other notes:
As of December 31, 2022, cash and cash equivalents with a carrying value of RMB28,364,715.91 (December 31, 2021: RMB38,410,636.05) have been used as lease deposits.
As of December 31, 2022, cash and cash equivalents with a carrying value of RMB86,127,598.12 (December 31, 2021: RMB93,628,250.43) have been frozen due to litigation cases.
As of December 31, 2021, cash and cash equivalents with a carrying value of RMB320,879,510.26 have been held in a joint account for payment of equity purchase price of Chengdu Hongqi Chain Co., Ltd. by the Group.
| 84. | Foreign currency monetary items |
| (1). | Monetary items of foreign currency |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | | | | Closing balance | |
| | | of foreign | | | Conversion | | | converted | |
| Items | | currency | | | exchange rate | | | into RMB | |
| Monetary funds | | | – | | | | – | | | | | |
| Including: USD | | | 2,089,761.44 | | | | 7.1 | | | | 14,836,888.27 | |
| HKD | | | 18,729,777.48 | | | | 0.9 | | | | 16,939,959.94 | |
| GBP | | | 16,740.89 | | | | 7.95 | | | | 133,058.27 | |
| JPY | | | 33 | | | | 0.05 | | | | 1.63 | |
| EUR | | | 7,938.07 | | | | 6.99 | | | | 55,480.76 | |
| Account receivable | | | – | | | | – | | | | | |
| Wherein: JPY | | | 15,222,407.00 | | | | 0.05 | | | | 750,099.33 | |
| EUR | | | 2,475.58 | | | | 6.99 | | | | 17,302.32 | |
| AUD | | | 85,299.23 | | | | 4.71 | | | | 402,083.51 | |
| Accounts payable | | | – | | | | – | | | | | |
| Including: USD | | | 2,649,161.46 | | | | 7.1 | | | | 18,808,516.53 | |
| EUR | | | 745,728.01 | | | | 6.99 | | | | 5,212,042.21 | |
| AUD | | | 6,568.94 | | | | 4.71 | | | | 30,964.67 | |
| (2). | Descriptions of entities running businesses overseas: including description of main operating place, recording currency and selection basis, and the reason for change of recording currency of major entities running businesses overseas |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
86. Governmental subsidy
| (1). | Basic information of governmental subsidies |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Category | | Amount | | | Reported items | | Amount recorded
in current profits
and losses | |
| 1. Assets-related governmental subsidies Yonghui Logistics Phase I Project Industrial Support Funds | | | 44,065,392.72 | | | Deferred income | | | 1,421,464.32 | |
| Chongqing Yonghui Urban Life Plaza Project | | | 29,992,019.38 | | | Deferred income | | | 1,121,196.96 | |
| Subsidy from Cuozhen Town People’s Government | | | 14,717,974.65 | | | Deferred income | | | 502,113.48 | |
| Yonghui Superstores Cold Chain Logistics Terminal Standardization Construction Project for 2017 | | | | | | Deferred income | | | 2,600,000.58 | |
| Shapingba District Treasury – Supply Chain Project Subsidies | | | 733,333.90 | | | Deferred income | | | 799,999.38 | |
| Fujian Yonghui Logistics Warehousing Center | | | 1,600,000.12 | | | Deferred income | | | 399,999.96 | |
| Refund of Yonghui Headquarters Construction Supporting Fees | | | 2,506,145.06 | | | Deferred income | | | 93,687.60 | |
| Pilot Project for Supply Chain System Construction | | | 973,666.78 | | | Deferred income | | | 507,999.96 | |
| Energy Management Center Project | | | | | | Deferred income | | | 418,336.08 | |
| Subsidies for Supply Chain System Construction | | | 833,333.34 | | | Deferred income | | | 399,999.96 | |
| Equipment Acquisition Subsidies | | | 120,000.00 | | | Deferred income | | | 288,000.00 | |
| Provincial Cold Chain Logistics Special Fund for 2017 | | | 399,999.88 | | | Deferred income | | | 80,000.04 | |
| Fund for the Construction of Important Product Traceability System | | | 141,326.82 | | | Deferred income | | | 154,174.44 | |
| Subsidy for Lugu Store Poverty Alleviation Project | | | 16,563.83 | | | Deferred income | | | 28,387.18 | |
| Supply Chain System Construction Project of Kunshan Bureau of Commerce | | | 500,000.00 | | | Deferred income | | | 1,500,000.00 | |
| Subsidy for Supply Chain System Construction Project of Nanjing Jiangbei New District Management Committee Finance Bureau | | | 963,999.90 | | | Deferred income | | | 482,000.04 | |
| Subsidy for Supply Chain System Construction Project of Fuzhou City | | | 3,733,333.44 | | | Deferred income | | | 1,599,999.96 | |
| Subsidy for Supply Chain System Construction Project of Nantong Town Financial Office, Minhou County | | | 2,320,470.11 | | | Deferred income | | | 1,031,319.96 | |
| Income from subsidies for the Zhejiang agricultural product supply chain by the Finance Bureau of Binjiang District, Hangzhou | | | 882,699.92 | | | Deferred income | | | 441,350.04 | |
| 2. Income-related governmental subsidies Contribution award funds for enterprise operations in Lianjiang County, Fujian | | | 28,903,043.00 | | | Other incomes | | | 28,903,043.00 | |
| Support funds for the Western China Project in Chongqing | | | 8,976,824.00 | | | Other incomes | | | 8,976,824.00 | |
| Subsidies for skills training in Fujian | | | 8,274,400.00 | | | Other incomes | | | 8,274,400.00 | |
| Policy support funds for the Investment Promotion Service Center of Shijingshan District, Beijing in 2021 | | | 7,547,999.00 | | | Other incomes | | | 7,547,999.00 | |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Category | | Amount | | | Reported items | | Amount recorded
in current profits
and losses | |
| Subsidies provided by Yonghui for development in Ningbo | | | 7,520,508.00 | | | Other incomes | | | 7,520,508.00 | |
| Cold chain subsidies from the Port Logistics Office of the Chongqing Municipal People’s Government | | | 7,450,000.00 | | | Other incomes | | | 7,450,000.00 | |
| Support funds for the Yangpu District Electronic Industry Park in Shanghai | | | 7,152,000.00 | | | Other incomes | | | 7,152,000.00 | |
| Incentive projects for expanding the use of foreign investment by the Shenzhen Municipal Bureau of Commerce | | | 6,330,000.00 | | | Other incomes | | | 6,330,000.00 | |
| Project funds for the agricultural product supply chain system of the Zhengzhou Municipal Bureau of Commerce | | | 5,000,000.00 | | | Other incomes | | | 5,000,000.00 | |
| Incentives for promoting the development of headquarters economy by the Fuzhou Municipal Finance Bureau | | | 5,000,000.00 | | | Other incomes | | | 5,000,000.00 | |
| Subsidies for training in place of work in Sichuan | | | 4,546,025.98 | | | Other incomes | | | 4,546,025.98 | |
| Supply guarantee subsidies in Chongqing | | | 3,955,000.00 | | | Other incomes | | | 3,955,000.00 | |
| Financial Treasury Payment Center of Jiangbei District, Chongqing Support funds for industrial development | | | 6,344,700.00 | | | Other incomes | | | 6,344,700.00 | |
| Subsidies for employment stability in Chongqing | | | 3,137,070.00 | | | Other incomes | | | 3,137,070.00 | |
| Investment cooperation funds of Jiangbei District, Chongqing | | | 3,135,015.98 | | | Other incomes | | | 3,135,015.98 | |
| Investment and business cooperative agreement in Lianjiang County, Fujian | | | 3,103,797.00 | | | Other incomes | | | 3,103,797.00 | |
| Supply guarantee subsidies in Shanghai | | | 3,007,627.00 | | | Other incomes | | | 3,007,627.00 | |
| Subsidies for employment stability in Anhui | | | 2,580,313.72 | | | Other incomes | | | 2,580,313.72 | |
| Subsidies for skills training in Sichuan | | | 2,552,048.00 | | | Other incomes | | | 2,552,048.00 | |
| Social security subsidies in Chongqing | | | 2,283,285.58 | | | Other incomes | | | 2,283,285.58 | |
| Subsidies for employment stability in Fujian | | | 2,074,718.35 | | | Other incomes | | | 2,074,718.35 | |
| Other income-related governmental subsidies | | | 66,086,730.12 | | | Other incomes | | | 66,086,730.12 | |
| Total | | | 299,461,365.58 | | | | | | 208,831,135.67 | |
| (2). | Return of governmental subsidy |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
VIII. Change of Consolidation Scope
| 1. | Business combination not under the same control |
| | ¨ | Applicable | √ | Not applicable |
| 2. | Business combination under the same control |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 4. | Disposal of subsidiaries |
Whether the situation exists that control right is lost in the subsidiary investment by single disposal
| | √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| Name of Subsidiary | | Equity
disposal
price | | Equity
disposal
ratio
(%) | | Equity
disposal
approach | | Time point
of losing
control right | | Determination
basis of time
point of losing
control right | | Balance between
the disposal price
and the net assets
of the subsidiary
entitled in the
consolidated
financial statement
corresponding to
the disposal of the
investment | | Proportion
of residual
equities on the
date of losing
control right
(%) | | Book value of
the remaining
equity on the
date of losing
the control right | | Fair value of
the remaining
equity on the
date of losing
the control right | | Re-measurement
of the gains or
losses arising
from the
remaining equity
at fair value | | Methods and
main assumptions
for determining
the fair value
of the remaining
equity on the
date of loss
of control | | Original
subsidiary’s
equity investment
related other
comprehensive
income
transferred to
investment gains
and losses | |
| Xiamen Yonghui Yunchuang Technology Co., Ltd. | | 120 | | 100 | | Equity transfer | | November 30, 2022 | | Agreed date by the equity transfer agreement | | 20,206.89 | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | √ | Applicable | ¨ | Not applicable |
On November 30, 2022, Yonghui Yunchuang Technology Co., Ltd. entered into an agreement with a third party regarding the transfer of equity of Xiamen Yonghui Yunchuang Technology Co., Ltd. The agreement stipulates the transfer of 100% equity of Xiamen Yonghui Yunchuang Technology Co., Ltd. to the third party, with a transfer price of RMB1.2 million. From the date of the agreement, Yonghui Yunchuang Technology Co., Ltd. will no longer enjoy and assume the corresponding shareholder rights and obligations.
| 5. | Changes in the combination scope for other reasons |
Descriptions for change in combination ranges caused by other reasons (e.g. newly establishment of subsidiary, clearing of subsidiary, etc.), and relevant situations:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| IX. | Equity in Other Entities |
| (1). | Constitution of the enterprise group |
| | √ | Applicable | ¨ | Not applicable |
| | | Principal | | | | | | Shareholding | | | |
| | | Place of | | Registered | | Nature of | | ratio (%) | | | Acquisition |
| Name of Subsidiary | | Business | | address | | business | | Direct | | | Indirect | | | method |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Xiamen Yonghui Minsheng Superstores Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Xiamen Yonghui Commercial Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Fujian Strait Food Development Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Guangdong Yonghui Superstores Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | – | | | | 50 | | | Investment establishment |
| Fujian Yonghui Logistics Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Logistic distribution | | | 95 | | | | 5 | | | Investment establishment |
| Fujian Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Shenzhen Yonghui Superstores Co., Ltd. | | Shenzhen, Guangdong | | Shenzhen , Guangdong | | Commercial retail | | | – | | | | 50 | | | Investment establishment |
| Fujian Yonghui Import and Export Trade Co., Ltd. | | Pingtan, Fujian | | Pingtan, Fujian | | Commercial trade | | | – | | | | 100 | | | Investment establishment |
| Fujian Yongjin Trading Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | 49 | | | | 51 | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | Shareholding | | | |
| | | Place of | | Registered | | Nature of | | ratio (%) | | | Acquisition |
| Name of Subsidiary | | Business | | address | | business | | Direct | | | Indirect | | | method |
| Jiangxi Yonghui Superstores Co., Ltd. | | Nanchang, Jiangxi | | Nanchang, Jiangxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Chongqing Yonghui Superstores Co., Ltd. | | Chongqing | | Chongqing | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Yonghui Logistics Co., Ltd. | | Chongqing | | Chongqing | | Logistic distribution | | | 90 | | | | 10 | | | Investment establishment |
| Sichuan Yonghui Store Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Guizhou Yonghui Superstores Co., Ltd. | | Guiyang, Guizhou | | Guiyang, Guizhou | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Chengdu Yonghui Business Development Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Logistic distribution | | | 80 | | | | 20 | | | Investment establishment |
| Chongqing Xuanhui Real Estate Development Co., Ltd. | | Chongqing | | Chongqing | | Real estate | | | – | | | | 100 | | | Investment establishment |
| Shaanxi Yonghui Superstores Co., Ltd. | | Xi’an, Shaanxi | | Xi’an, Shaanxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | Fuping, Shaanxi | | Fuping, Shaanxi | | Food sales | | | 100 | | | | – | | | Investment establishment |
| Guansu Yonghui Superstores Co., Ltd. | | Lanzhou, Gansu | | Lanzhou, Gansu | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Qinghai Yonghui Superstores Co., Ltd. | | Xining, Qinghai | | Xining, Qinghai | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Baotou Yonghui Superstores Co., Ltd. | | Beijing | | Beijing | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Yonghui Yunjin Technology Co., Ltd. | | Chongqing | | Chongqing | | Technical service | | | 100 | | | | – | | | Investment establishment |
| Yonghui Holdings Co., Ltd. | | Hong Kong | | Hong Kong | | Investment | | | 100 | | | | – | | | Investment establishment |
| Chongqing Yonghui Small Loan Co., Ltd. | | Chongqing | | Chongqing | | Commercial loan | | | – | | | | 100 | | | Investment establishment |
| Yonghui Qinghe Business Factoring (Chongqing) Co., Ltd. | | Chongqing | | Chongqing | | Commercial factoring | | | – | | | | 100 | | | Investment establishment |
| LOHAS Life International Business Co., Ltd. | | Hong Kong | | Hong Kong | | Commercial trade | | | – | | | | 100 | | | Investment establishment |
| Xiangxin Investment Fund Management Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Investment | | | 100 | | | | – | | | Investment establishment |
| Yonghui Japan Co., Ltd. | | Japan | | Japan | | Commercial trade | | | – | | | | 80 | | | Investment establishment |
| Ningbo Xinguan Investment Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Ningbo Xinzhi Investment Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Information technology | | | 100 | | | | – | | | Investment establishment |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Engineering construction | | | 60 | | | | – | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | Shareholding | | | |
| | | Place of | | Registered | | Nature of | | ratio (%) | | | Acquisition |
| Name of Subsidiary | | Business | | address | | business | | Direct | | | Indirect | | | method |
| Tianjin Yonghui Superstores Co., Ltd. | | Tianjin | | Tianjin | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Fujian Hechuang Project Supervision Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Engineering construction | | | – | | | | 60 | | | Investment establishment |
| Ningbo Yicun Yipin Investment Partnership Enterprise (Limited Partnership) | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Ningbo Xinzi Investment Partnership Enterprise (Limited Partnership) | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Investment | | | – | | | | 100 | | | Investment establishment |
| Anhui Yonghui Superstores Co., Ltd. | | Hefei, Anhui | | Hefei, Anhui | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Anhui Yonghui Logistics Co., Ltd. | | Feidong, Anhui | | Feidong, Anhui | | Logistic distribution | | | 100 | | | | – | | | Investment establishment |
| Jiangsu Yonghui Superstores Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Zhejiang Yonghui Superstores Co., Ltd. | | Hangzhou, Zhejiang | | Hangzhou, Zhejiang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Jiangsu Yonghui Business Management Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Ningbo Yonghui Superstores Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| East China Yonghui Logistics Co., Ltd. | | Kunshan, Jiangsu | | Kunshan, Jiangsu | | Logistic distribution | | | 100 | | | | – | | | Investment establishment |
| Jiaxing Yonghui Superstores Co., Ltd. | | Jiaxing, Zhejiang | | Jiaxing, Zhejiang | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Henan Yonghui Superstores Co., Ltd. | | Zhengzhou, Henan | | Zhengzhou, Henan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Shanxi Yonghui Superstores Co., Ltd. | | Taiyuan, Shanxi | | Taiyuan, Shanxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Heilongjiang Yonghui Superstores Co., Ltd. | | Harbin, Heilongjiang | | Harbin, Heilongjiang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Jilin Yonghui Superstores Co., Ltd. | | Changchun, Jilin | | Changchun, Jilin | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Liaoning Yonghui Superstores Co., Ltd. | | Shenyang, Liaoning | | Shenyang, Liaoning | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Liaoning Yonghui Logistics Co., Ltd. | | Shenyang, Liaoning | | Shenyang, Liaoning | | Logistic distribution | | | – | | | | 100 | | | Investment establishment |
| Songyuan Yonghui Superstores Co., Ltd. | | Songyuan, Jilin | | Songyuan, Jilin | | Commercial retail | | | – | | | | 55 | | | Investment establishment |
| Shanghai Yonghui Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Shanghai Baoshan Yonghui Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Shanghai Yonghui Yangpu Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| Shanghai Songjiang Yonghui Superstores Co., Ltd. | | Shanghai | | Shanghai | | Commercial retail | | | – | | | | 100 | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | Shareholding | | | |
| | | Place of | | Registered | | Nature of | | ratio (%) | | | Acquisition |
| Name of Subsidiary | | Business | | address | | business | | Direct | | | Indirect | | | method |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | Fuping, Shaanxi | | Fuping, Shaanxi | | Commercial trade | | | 100 | | | | – | | | Investment establishment |
| Xizang Yonghui Superstores Co., Ltd. | | Lhasa, Xizang | | Lhasa, Xizang | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Guizhou Yonghui Logistics Co., Ltd. | | Guiyang, Guizhou | | Guiyang, Guizhou | | Logistic distribution | | | 100 | | | | – | | | Investment establishment |
| Chengde Yonghui Renhe Superstores Co., Ltd. | | Chengde, Hebei | | Chengde, Hebei | | Commercial retail | | | – | | | | 51 | | | Investment establishment |
| Hebei Yonghui Superstores Co., Ltd. | | Shijiazhuang, Hebei | | Shijiazhuang, Hebei | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | Minxian, Gansu | | Minxian, Gansu | | Food sales | | | – | | | | 51 | | | Investment establishment |
| Shandong Yonghui Superstores Co., Ltd. | | Jinan, Shandong | | Jinan, Shandong | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Fuzhou Dongzhan International Trade Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial trade | | | – | | | | 100 | | | Investment establishment |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | Shanghai | | Shanghai | | Business services | | | – | | | | 57 | | | Investment establishment |
| Guangdong PARK&YH Superstores Co., Ltd. | | Shenzhen, Guangdong | | Shenzhen, Guangdong | | Commercial retail | | | 50 | | | | – | | | Investment establishment |
| Beijing Yonghui Superstores Co., Ltd. | | Beijing | | Beijing | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Hubei Yonghui Zhongbai Superstores Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Commercial retail | | | 55 | | | | – | | | Investment establishment |
| Yunnan Yonghui Superstores Co., Ltd. | | Kunming, Yunnan | | Kunming, Yunnan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Ningxia Yonghui Superstores Co., Ltd. | | Yinchuan, Ningxia | | Yinchuan, Ningxia | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Hunan Yonghui Superstores Co., Ltd. | | Changsha, Hunan | | Changsha, Hunan | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Guangxi Yonghui Superstores Co., Ltd. | | Nanning, Guangxi | | Nanning, Guangxi | | Commercial retail | | | 100 | | | | – | | | Investment establishment |
| Beijing Yonghui Commercial Co., Ltd. | | Beijing | | Beijing | | Commercial retail | | | – | | | | 100 | | | Consolidation not under the same control |
| Shanghai Dongzhan International Trade Co., Ltd. | | Shanghai | | Shanghai | | Commercial trade | | | 100 | | | | – | | | Consolidation not under the same control |
| Shanghai Yinjie International Trade Co., Ltd. | | Shanghai | | Shanghai | | Commercial trade | | | – | | | | 100 | | | Consolidation not under the same control |
| Guangzhou PARK&YH Superstores Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | – | | | | 48.34 | | | Consolidation not under the same control |
| Jiangmen ParknShop Supermarket Co., Ltd. | | Jiangmen, Guangdong | | Jiangmen, Guangdong | | Commercial retail | | | – | | | | 48.34 | | | Consolidation not under the same control |
| Dongguan DG Mall Supermarket Co., Ltd. | | Dongguan, Guangdong | | Dongguan, Guangdong | | Commercial retail | | | – | | | | 48.34 | | | Consolidation not under the same control |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | Shareholding | | | |
| | | Place of | | Registered | | Nature of | | ratio (%) | | | Acquisition |
| Name of Subsidiary | | Business | | address | | business | | Direct | | | Indirect | | | method |
| Yonghui Yunchuang Technology Co., Ltd. | | Shanghai, China | | Shanghai, China | | Business services | | | 46.6 | | | | — | | | Consolidation not under the same control |
| Fujian Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Shenzhen Yonghui Yunchuang Technology Co., Ltd. | | Shenzhen, Guangdong | | Shenzhen, Guangdong | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Guangdong Yonghui Yunchuang Technology Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Fujian Yunwang Technology Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | — | | | | 27.96 | | | Consolidation not under the same control |
| Chongqing Yonghui Yunchuang Technology Co., Ltd. | | Chongqing, China | | Chongqing, China | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Sichuan Yonghui Yunchuang Technology Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Fuzhou Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Beijing Yonghui Yunchuang Technology Co., Ltd. | | Beijing, China | | Beijing, China | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Beijing Huichuang Youpin Technology Co., Ltd. | | Beijing, China | | Beijing, China | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Jiangsu Yonghui Yunchuang Technology Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Zhejiang Yonghui Yunchuang Technology Co., Ltd. | | Hangzhou, Zhejiang | | Hangzhou, Zhejiang | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Anhui Yonghui Yunchuang Technology Co., Ltd. | | Hefei, Anhui | | Hefei, Anhui | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Ningbo Yonghui Yunchuang Technology Co., Ltd. | | Ningbo, Zhejiang | | Ningbo, Zhejiang | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Xiamen Yongyun Technology Co., Ltd. | | Xiamen, Fujian | | Xiamen, Fujian | | Commercial retail | | | — | | | | 27.96 | | | Consolidation not under the same control |
| Shanghai Yonghui Yunchuang Technology Co., Ltd. | | Shanghai, China | | Shanghai, China | | Technical service | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Jiangxi Yonghui Yunchuang Zhongcheng Technology Co., Ltd. | | Nanchang, Jiangxi | | Nanchang, Jiangxi | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Henan Yonghui Yunchuang Technology Co., Ltd. | | Zhengzhou, Henan | | Zhengzhou, Henan | | Commercial retail | | | — | | | | 46.6 | | | Consolidation not under the same control |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | — | | | Consolidation under the same control |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | Shareholding | | | |
| | | Place of | | Registered | | Nature of | | ratio (%) | | | Acquisition |
| Name of Subsidiary | | Business | | address | | business | | Direct | | | Indirect | | | method |
| Fujian Yonghui Culture Media Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Business services | | | 100 | | | | — | | | Consolidation under the same control |
| Fujian Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | — | | | Consolidation under the same control |
| Hubei Fuhan Supply Chain Management Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Jiangsu Yunfu Supply Chain Management Co., Ltd. | | Nanjing, Jiangsu | | Nanjing, Jiangsu | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Shandong Fuping Supply Chain Management Co., Ltd. | | Weifang, Shandong | | Weifang, Shandong | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Jiangxi Fuping Supply Chain Management Co., Ltd. | | Nanchang, Jiangxi | | Nanchang, Jiangxi | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Shaanxi Fuping Supply Chain Management Co., Ltd. | | Weinan, Shaanxi | | Weinan, Shaanxi | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Hainan Fuli Supply Chain Management Co., Ltd. | | Sanya, Hainan | | Sanya, Hainan | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Anhui Fuwan Supply Chain Management Co., Ltd. | | Hefei, Anhui | | Hefei, Anhui | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Zhuhai Fuyue Supply Chain Management Co., Ltd. | | Zhuhai, Guangdong | | Zhuhai, Guangdong | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Hebei Fuji Supply Chain Management Co., Ltd. | | Shijiazhuang, Hebei | | Shijiazhuang, Hebei | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Xinjiang Fuchi Supply Chain Management Co., Ltd. | | Aksu, Xinjiang | | Aksu, Xinjiang | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Guangdong Fuyue Supply Chain Management Co., Ltd. | | Guangzhou, Guangdong | | Guangzhou, Guangdong | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Zhejiang Yunfu Supply Chain Management Co., Ltd. | | Hangzhou, Zhejiang | | Hangzhou, Zhejiang | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Fuzhou Fuping Supply Chain Management Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Shanghai Yunfu Supply Chain Management Co., Ltd. | | Shanghai | | Shanghai | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Sichuan Yunfu Supply Chain Management Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Beijing Fujing Supply Chain Management Co., Ltd. | | Beijing, China | | Beijing, China | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Chongqing Fuping Supply Chain Management Co., Ltd. | | Chongqing, China | | Chongqing, China | | Food sales | | | — | | | | 100 | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | Shareholding | | | |
| | | Place of | | Registered | | Nature of | | ratio (%) | | | Acquisition |
| Name of Subsidiary | | Business | | address | | business | | Direct | | | Indirect | | | method |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | Kunming, Yunnan | | Kunming, Yunnan | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Henan Yunfu Supply Chain Management Co., Ltd. | | Zhengzhou, Henan | | Zhengzhou, Henan | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Baotou Yonghui Commercial Co., Ltd. | | Baotou, Inner Mongolia | | Baotou, Inner Mongolia | | Commercial retail | | | 100 | | | | — | | | Investment establishment |
| Beijing Yonghui Technology Co., Ltd. | | Beijing | | Beijing | | Commercial retail | | | 100 | | | | — | | | Investment establishment |
| Fujian Yuntong Supply Chain Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | — | | | Investment establishment |
| Fujian Yongyuehui Business Management Co., Ltd. | | Fuzhou, Fujian | | Fuzhou, Fujian | | Commercial retail | | | 100 | | | | — | | | Investment establishment |
| Chongqing Fuyu Supply Chain Management Co., Ltd. | | Chongqing | | Chongqing | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Hebei Yuanxiaoji Technology Development Co., Ltd. | | Shijiazhuang, Hebei | | Shijiazhuang, Hebei | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Guizhou Fuping Supply Chain Management Co., Ltd. | | Guiyang, Guizhou | | Guiyang, Guizhou | | Food sales | | | — | | | | 100 | | | Investment establishment |
| Guangxi Fuyue Supply Chain Management Co., Ltd. | | Nanning, Guangxi | | Nanning, Guangxi | | Commercial retail | | | — | | | | 100 | | | Investment establishment |
| Zhangzhou Yonghui Digital Business Co., Ltd. | | Zhangzhou, Fujian | | Zhangzhou, Fujian | | Commercial retail | | | 100 | | | | — | | | Investment establishment |
| Sichuan Huipeng E-commerce Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | 100 | | | | — | | | Investment establishment |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
None
Basis on being controllable of the invested company with half or less voting rights as well as on being uncontrollable of the invested company but with half or more voting rights:
Although the Group only holds less than 50% of the equity interest in Guangdong ParknShop Yonghui Superstores Co., Ltd (“Guangdong ParknShop”) and its subsidiaries, Guangdong ParknShop is a Sino-foreign joint venture where the highest governing body is the Board of Directors, consisting of six directors. The Group has the right to appoint the chairman and two additional directors. Major operational decisions require approval by more than half (including half) of the directors. If the attending directors reach a consensus of equal number of approvals and rejections, the Board of Directors shall vote again on the resolution, and all attending directors shall vote according to the chairman’s voting result. Therefore, the Group considers it as a subsidiary. Although the Group’s ownership of only 46.60% of the equity in Yunchuang and its subsidiaries, Yunchuang is a Sino-foreign joint venture operating enterprise with the Board of Directors as its highest governing body. The Board of Directors consists of seven members, and the Group has the authority to appoint four directors. With major operational decisions requiring approval by a majority of the directors, the Group recognizes Yunchuang as its subsidiary.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The control basis on important structured bodies within the consolidation scope:
None
Basis for determining whether the company is an agent or a bailor:
None
Other notes:
None
| (2). | Important non-wholly-owned subsidiaries |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | Profit and loss | | | | Closing | |
| | | | Shareholding | | | attributable to | | Dividends | | balance of | |
| | | | ratio of | | | minority | | assigned to | | equity of | |
| | | | minority | | | shareholders | | shareholders | | minority | |
| | Name of Subsidiary | | shareholders | | | in this term | | in this term | | shareholders | |
| | Guangdong PARK&YH Superstores Co., Ltd. | | | 50.00 | | | -104,382,320.58 | | | | | 29,705,522.76 | |
| | Yonghui Yunchuang Technology Co., Ltd. | | | 53.40 | | | -104,285,933.29 | | | | | 147,404,147.44 | |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Main financial information of important non-wholly-owned subsidiaries |
| | √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Closing balance | | Opening balance | |
| Name of Subsidiary | | Current
assets | | Non-
current
asset | | Total
assets | | Current
liabilities | | Non-
current
liabilities | | Total
liabilities | | Current
assets | | Non-
current
asset | | Total
assets | | Current
liabilities | | Non-
current
liabilities | | Total
liabilities | |
| Guangdong PARK&YH Superstores Co., Ltd. | | 160,277.73 | | 115,117.50 | | 275,395.23 | | 198,303.39 | | 107,230.68 | | 305,534.07 | | 308,898.72 | | 137,390.21 | | 446,288.93 | | 336,801.95 | | 118,772.88 | | 455,574.83 | |
| Yonghui Yunchuang Technology Co., Ltd. | | 473,131.38 | | 1,429.82 | | 474,561.20 | | 485,379.89 | | | | 485,379.89 | | 1,304,316.32 | | 10,919.17 | | 1,315,235.48 | | 1,318,720.85 | | 650.87 | | 1,319,371.72 | |
| | | Amount of current period | | | Amount of last period | |
| Name of Subsidiary | | Operating
revenue | | | Net profit | | | Total comprehensive
income | | | Cash flow
from
operating
activities | | | Operating
revenue | | | Net profit | | | Total
comprehensive
income | | | Cash flow
from
operating
activities | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 367,224.90 | | | | -20,852.95 | | | | -20,852.95 | | | | 12,974.60 | | | | 491,479.87 | | | | -50,309.91 | | | | -50,309.91 | | | | 38,292.31 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 3,694.32 | | | | -6,682.45 | | | | -6,682.45 | | | | -10,246.41 | | | | 47,492.91 | | | | -37,921.76 | | | | -37,921.76 | | | | -15,874.79 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Important limitations on using Group’s assets and paying off liabilities of the Group |
| ¨ | Applicable | √ | Not applicable |
| (5). | Financial support and other support provided to the structured entities that are included in the combined financial statement |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| 2. | Transactions controlling the subsidiaries in case of equity shares change of subsidiaries |
| √ | Applicable | ¨ | Not applicable |
| (1). | Description on changes in equity of subsidiaries |
| √ | Applicable | ¨ | Not applicable |
In the current year, the company acquired 27.03% equity of its subsidiary, Fuping Yonghui Modern Agricultural Development Co., Ltd., for a price of RMB2.98 million. After the acquisition, the Company’s equity stake in Fuping Yonghui Modern Agricultural Development Co., Ltd. reached 100%. Due to the acquisition of the minority shareholder’s equity, the Company reduced its capital surplus by RMB12.2113 million and increased minority shareholders’ equity by RMB9.2313 million.
| (2). | Influences of transactions on minority equity and equity attributable to the parent company |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Fuping Yonghui Modern
Agricultural Development
Co., Ltd. | |
| Purchase cost/disposal consideration | | | | |
| – Cash | | | 2,980,000.00 | |
| – Fair value of the non-cash assets | | | | |
| Total purchase cost/disposal consideration | | | 2,980,000.00 | |
| Less: subsidiary’s net asset shares calculated according to the ratio of acquired/disposed equities | | | -9,231,255.70 | |
| Difference | | | 12,211,255.70 | |
| Including: adjusting capital reserves | | | 12,211,255.70 | |
| Adjusting surplus reserves | | | | |
| Adjusting undistributed profits | | | | |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| 3. | Equities in Cooperative Enterprises and Joint Ventures |
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Important cooperative enterprises and joint ventures |
| √ | Applicable | ¨ | Not applicable |
| Names of | | | | | | | | | | | Accounting treatment method for investment in |
| cooperative | | Principal | | | | | | Shareholding | | | cooperative |
| enterprises and | | Place of | | Registered | | Nature of | | ratio (%) | | | enterprises and |
| joint ventures | | Business | | address | | business | | Direct | | | Indirect | | | joint ventures |
| Zhongbai Holdings Group Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Commercial retail | | | | | | | 9.93 | | | Equity method |
| Fujian OneBank Limited | | Pingtan, Fujian | | Pingtan, Fujian | | Finance | | | 27.50 | | | | | | | Equity method |
| Chengdu Hongqi Chain Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | 21.00 | | | | | | | Equity method |
Description on the difference between the shareholding ratio in cooperative enterprises or joint ventures and voting right:
None
Basis on holding a voting right below 20% but having significant influence, or holding a voting right above 20% but having no significant influence:
| Note 1: | According to the provisions of the Articles of Association of Zhongbai Group, there are seven non-independent directors in the board of directors of Zhongbai Group, and the Company holds two seats among them. Therefore, the Management of the Group thinks that it can exert significant influence over Zhongbai Group, making Zhongbai a joint venture of the Company. |
| (2). | Main financial information of important cooperative enterprises |
| ¨ | Applicable | √ | Not applicable |
| (3). | Main financial information of important joint ventures |
| √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Closing balance/amount of
current period | | | Opening balance/incurred amount of
last period | |
| | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | |
| Current assets | | | 393,673.03 | | | | 2,075,525.95 | | | | 450,903.44 | | | | 339,288.92 | | | | 1,598,749.58 | | | | 352,949.30 | |
| Non-current asset | | | 863,912.20 | | | | 514,048.51 | | | | 368,337.76 | | | | 906,842.45 | | | | 244,685.24 | | | | 399,596.68 | |
| Total assets | | | 1,257,585.23 | | | | 2,589,574.46 | | | | 819,241.20 | | | | 1,246,131.37 | | | | 1,843,434.82 | | | | 752,545.98 | |
| Current liabilities | | | 716,965.87 | | | | 1,136,457.10 | | | | 334,535.49 | | | | 673,669.54 | | | | 663,308.91 | | | | 291,713.11 | |
| Non-current liabilities | | | 258,968.46 | | | | 1,230,607.54 | | | | 69,651.59 | | | | 258,339.07 | | | | 960,804.04 | | | | 92,441.67 | |
| Total liabilities | | | 975,934.33 | | | | 2,367,064.64 | | | | 404,187.08 | | | | 932,008.61 | | | | 1,624,112.95 | | | | 384,154.78 | |
| Minority interests | | | 6,255.09 | | | | | | | | | | | | 6,742.83 | | | | | | | | | |
| Shareholders’ equity attributable to the parent company | | | 275,395.81 | | | | 222,509.82 | | | | 415,054.12 | | | | 307,379.93 | | | | 219,321.87 | | | | 368,391.20 | |
| Net asset share calculated as per shareholding ratio | | | 27,346.80 | | | | 61,190.20 | | | | 87,161.36 | | | | 91,783.65 | | | | 60,313.51 | | | | 77,362.15 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Closing balance/amount of
current period | | | Opening balance/incurred amount of
last period | |
| | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | |
| Adjustments | | | 13,262.92 | | | | 1.72 | | | | 117,501.40 | | | | 39,460.25 | | | | 1.72 | | | | 117,501.40 | |
| – Goodwill | | | | | | | | | | | | | | | | | | | | | | | | |
| – Unrealized profits in internal transaction | | | | | | | | | | | | | | | | | | | | | | | | |
| – Others | | | 13,262.92 | | | | 1.72 | | | | 117,501.40 | | | | 39,460.25 | | | | 1.72 | | | | 117,501.40 | |
| Book value on equity investment of joint ventures | | | 40,609.72 | | | | 61,191.92 | | | | 204,662.76 | | | | 131,243.90 | | | | 60,315.23 | | | | 194,863.55 | |
| Fair value of equity investment of joint ventures with public offer | | | 41,203.96 | | | | | | | | 160,792.80 | | | | 101,879.42 | | | | | | | | 151,939.20 | |
| Operating revenue | | | 1,219,740.63 | | | | 55,833.48 | | | | 1,002,008.89 | | | | 1,233,055.37 | | | | 31,265.79 | | | | 935,107.08 | |
| Net profit | | | -31,346.30 | | | | 3,503.12 | | | | 48,566.92 | | | | -1,314.16 | | | | 517.41 | | | | 48,069.62 | |
| Net profits under discontinued operations | | | | | | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income | | | | | | | -315.17 | | | | | | | | | | | | 197.98 | | | | | |
| Total comprehensive income | | | -31,346.30 | | | | 3,187.95 | | | | 48,566.92 | | | | -1,314.16 | | | | 715.39 | | | | 48,069.62 | |
| Annual dividend received from joint ventures | | | | | | | | | | | 399.84 | | | | 1,016.76 | | | | | | | | 4,512.48 | |
| (4). | Financial information summary of unimportant cooperative enterprises and joint ventures |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | Closing
balance/
amount of
current period | | | Opening
balance/
incurred
amount of
last period | |
| Cooperative enterprises: | | | | | | |
| Total book value of investment | | | 48,619,418.14 | | | | 156,722,946.25 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | | |
| – Net profit | | | -108,103,528.11 | | | | -384,544,289.20 | |
| – Other comprehensive income | | | | | | | | |
| – Total comprehensive income | | | -108,103,528.11 | | | | -384,544,289.20 | |
| Joint ventures: | | | | | | | | |
| Total book value of investment | | | 526,318,139.40 | | | | 749,042,729.34 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | | |
| – Net profit | | | 1,514,574.84 | | | | 18,014,831.28 | |
| – Other comprehensive income | | | | | | | -5,669.98 | |
| – Total comprehensive income | | | 1,514,574.84 | | | | 18,009,161.30 | |
| (5). | Description on significant limitations of the ability to transfer funds to the Company by cooperative enterprises and joint ventures |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (6). | Excess loss occurred to cooperative enterprises and joint ventures |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
Names of
cooperative
enterprises and
joint ventures | | Accumulated unrecognized losses accumulated
in the previous
period | | | Unconfirmed losses this term (or net profit shared this term) | | | Accumulated
unconfirmed
losses at the end
of term | |
Fuzhou Yijiu San
San Bean
Products
Co., Ltd. | | | 4,442,354.61 | | | | 2,594,167.55 | | | | 7,036,522.16 | |
Shanghai Xuanhui
Business Service
Technology
Co., Ltd. | | | 1,043,783.69 | | | | -927,499.58 | | | | 116,284.11 | |
| Total | | | 5,486,138.30 | | | | 1,666,667.97 | | | | 7,152,806.27 | |
Other disclosures
| (7). | Unconfirmed commitment related to cooperative enterprise investment |
| ¨ | Applicable | √ | Not applicable |
| (8). | Contingent liability related to cooperative enterprise or joint venture investment |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| 5. | Equity in structured entities not included in the consolidated financial statement |
Description on the structured main body that is not included in the combined financial statement:
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| X. | Risks Related to Financial Instruments |
| √ | Applicable | ¨ | Not applicable |
| 1. | Classification of financial instruments |
The primary financial instruments of the Group include cash and cash equivalents, loans and advances, trading financial assets, factored receivables, accounts receivable, other receivables, other current assets, non-current assets due within one year, long-term receivables, other non-current financial assets, borrowings, accounts payable, notes payable, other payables, non-current liabilities due within one year, and lease liabilities. Details of the financial instruments are disclosed in the relevant notes. The risks associated with these financial instruments and the risk management policies adopted by the Group to mitigate these risks are described below. The Management of the Group manages and monitors these risk exposures to ensure that the risks are kept within limits.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The book values of various financial instruments on the balance sheet date are as follows:
Financial assets in 2022
| | | Financial assets | | | | | | |
| | | measured at fair | | | | | | |
| | | value with changes | | Financial assets | | | | |
| | | included in current | | measured at | | | | |
| Items | | profits and losses | | | amortized costs | | | | Total | |
| Monetary funds | | | | | 7,615,940,712.22 | | | | 7,615,940,712.22 | |
| Loans and advances | | | | | 895,062,185.85 | | | | 895,062,185.85 | |
| Trading financial assets | | 890,826,719.10 | | | | | | | 890,826,719.10 | |
| Factoring receivable | | | | | 639,126,680.56 | | | | 639,126,680.56 | |
| Account receivable | | | | | 530,610,931.13 | | | | 530,610,931.13 | |
| Other receivables | | | | | 649,676,328.75 | | | | 649,676,328.75 | |
| Non-current assets due within one year | | | | | 43,534,741.35 | | | | 43,534,741.35 | |
| Long-term receivables | | | | | 264,650,510.99 | | | | 264,650,510.99 | |
| Other non-current financial assets | | 3,918,000,000.00 | | | | | | | 3,918,000,000.00 | |
| Total | | 4,808,826,719.10 | | | 10,638,602,090.85 | | | | 15,447,428,809.95 | |
Financial assets as of 2021
| | | Financial assets | | | | | | |
| | | measured at fair | | | | | | |
| | | value with changes | | Financial assets | | | | |
| | | included in current | | measured at | | | | |
| Items | | profits and losses | | amortized costs | | | Total | |
| Monetary funds | | | | | 9,163,127,740.22 | | | | 9,163,127,740.22 | |
| Loans and advances | | | | | 814,617,180.15 | | | | 814,617,180.15 | |
| Trading financial assets | | 1,560,917,920.71 | | | | | | | 1,560,917,920.71 | |
| Factoring receivable | | | | | 1,411,455,365.03 | | | | 1,411,455,365.03 | |
| Account receivable | | | | | 477,000,229.84 | | | | 477,000,229.84 | |
| Other receivables | | | | | 742,369,328.43 | | | | 742,369,328.43 | |
| Non-current assets due within one year | | | | | 41,563,339.26 | | | | 41,563,339.26 | |
| Long-term receivables | | | | | 73,044,056.84 | | | | 73,044,056.84 | |
| Other non-current financial assets | | 4,100,000,000.00 | | | | | | | 4,100,000,000.00 | |
| Total | | 5,660,917,920.71 | | | 12,723,177,239.77 | | | | 18,384,095,160.48 | |
Financial liabilities
| | | Financial liabilities | | | Financial liabilities | |
| | | measured at | | | measured at | |
| | | amortized cost | | | amortized cost | |
| Items | | in 2022 | | | as of 2021 | |
| Short-term loans | | | 6,528,480,368.69 | | | | 10,947,557,472.21 | |
| Notes payable | | | | | | | 33,000,000.00 | |
| Accounts payable | | | 12,155,435,663.28 | | | | 12,518,578,825.59 | |
| Other payables | | | 883,542,798.78 | | | | 1,606,156,907.41 | |
| Non-current liabilities due within one year | | | 2,011,863,655.60 | | | | 2,069,851,210.42 | |
| Long-term borrowings | | | 2,070,085,001.67 | | | | 1,021,069,722.22 | |
| Lease liabilities | | | 23,110,834,161.62 | | | | 24,826,561,091.82 | |
| Total | | | 46,760,241,649.64 | | | | 53,022,775,229.67 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 2. | Risks of financial instruments |
The Group faces various risks related to financial instruments in its day-to-day activities, primarily credit risk, liquidity risk, and market risk (including exchange rate risk, interest rate risk, and commodity price risk). The Group’s primary financial instruments include cash and cash equivalents, loans and advances, accounts receivable financing, equity investments, creditor investments, borrowings, accounts payable, long-term accounts receivable, notes payable, and accounts payable, among others. The risks associated with these financial instruments and the risk management strategies adopted by the Group to mitigate these risks are described below.
The Board of Directors is responsible for establishing the risk management framework for the Group, formulating risk management policies and guidelines, and overseeing the implementation of risk management measures. The Group has established risk management policies to identify and analyze the risks it faces. These risk management policies provide specific guidelines for managing various aspects of risk, including market risk, credit risk, and liquidity risk. The Group periodically assesses the market environment and changes in its business activities to determine whether updates are required for the risk management policies and systems. The risk management for the Group is conducted by the Risk Management Committee in accordance with the policies approved by the Board of Directors. The Risk Management Committee identifies, evaluates, and mitigates relevant risks through close cooperation with other business departments within the Group. The Group’s internal audit department conducts regular audits of risk management controls and procedures, and reports the audit findings to the Group’s Audit Committee.
The Group diversifies its investment and business portfolio appropriately to mitigate financial instrument risks. It also reduces risks concentrated in a single industry, specific geographical area, or specific counterparties by developing corresponding risk management policies.
Credit risk
The Group only trades with recognized third party with good reputation. According to the Group’s policy, credit checks are conducted on all customers who request credit transactions. Furthermore, the Group continuously monitors the balance of accounts receivable to ensure it does not face significant bad debt risks. For transactions not settled in the functional currency of the relevant operating unit, the Group does not provide credit terms unless specifically approved by the Group’s credit control department.
As the counterparties for cash and fund product transactions are reputable banks with high credit ratings, the credit risk associated with these financial instruments is low.
The Group’s other financial assets include creditor investments, accounts receivable, other receivables, and long-term receivables. The credit risk of these financial assets arises from the default of counterparties, and the maximum exposure to risk is equal to the carrying amount of these instruments.
The maximum credit risk exposure to the Group on each balance sheet date is the total amount receivable from customers, net of impairment allowances.
Since the Group only trades with recognized and reputable third parties, no collateral is required. Credit risk concentrations are managed based on customers/counterparties, geographical areas, and industries. As of December 31, 2022, the Group has exposed to specific credit risk concentration, as 27.97% (December 31, 2021: 26.81%) of the Group’s accounts receivable is derived from the top five customers with the largest outstanding balances.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Criteria for determining a significant increase in credit risk
The Group assesses on each balance sheet date whether there has been a significant increase in credit risk of the relevant financial instruments since initial recognition. When determining whether there is a significant increase in credit risk after initial recognition, the Group considers obtaining reasonable and supportable information without incurring unnecessary additional costs or efforts. This includes qualitative and quantitative analysis based on the Group’s historical data, external credit risk ratings, and forward-looking information. Based on a single financial instrument or a combination of financial instruments with similar credit risk characteristics, the Group compares the default risk of financial instruments on the balance sheet date with the default risk on the initial recognition date to determine the change of the default risk of financial instruments during the expected duration of the financial instruments.
When the following qualitative criteria are triggered, the Group considers that there has been a significant increase in credit risk for financial instruments:
| · | The qualitative criteria primarily include significant adverse changes in the debtor’s business or financial condition |
and the occurrence of credit-impaired assets on the watchlist.
To determine if credit impairment has occurred, the Group applies criteria consistent with its internal credit risk management objectives, considering both quantitative and qualitative indicators. The Group considers the following factors primarily when assessing whether a debtor has incurred credit impairment:
| (1) | The issuer or debtor experiences significant financial difficulties; |
| (2) | The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.; |
| (3) | The creditor, due to economic or contractual considerations relating to the debtor’s financial difficulties, grants the debtor concessions that would not otherwise be made; |
| (4) | The debtor is likely to become bankrupt or carry out other financial reorganizations; |
| (5) | The financial difficulties of the issuer or the debtor cause the disappearance of active market for the financial asset; |
| (6) | For a financial asset that has been purchased at a substantial discount or an original financial asset, the discount has reflected the fact that a credit loss has occurred. |
Credit impairment of financial instrument may be caused by the joint action of multiple events, instead of an individually identifiable event.
Parameters for measuring expected credit losses
On the view of whether the credit risk has increased significantly and whether the credit impairment has occurred, the Group measures the impairment reserve for different assets with the expected credit loss of 12 months or the whole duration. Key parameters for measurement of expected credit losses include the probability of default, loss given default and exposure at default. Considering the quantitative analysis and forward-looking information of historical statistical data (such as counterparty rating, guarantee method and collateral type, repayment method, etc.), the Group established models of the probability of default, loss given default and exposure at default. The following definitions will be used:
| (1) | The probability of default refers to the possibility that the debtor will be unable to fulfill its repayment obligations over the next 12 months or throughout the remaining duration. The Group’s default probability is adjusted based on the universal model results, added with forward-looking information reflect the debtor’s default probability in the current macroeconomic environment; |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Loss given default refers to the Group’s expectation of the loss degree in exposure at default. According to the types of counterparties, the way and priority of recourse, and the different collateral, loss given default is also different. The default loss rate is the percentage of risk exposure loss at default, calculated on the basis of the next 12 months or the whole duration; |
| (3) | Default risk exposure refers to the amount that the Group shall be paid when default occurs over the next 12 months or throughout the remaining duration. |
The assessment of a significant increase in credit risk and the calculation of expected credit loss both involve forward-looking information. Through the analysis of historical data, the Group identifies the key economic indicators that affect the credit risk and expected credit loss of various business types.
The impact of these economic indicators on the probability of default and loss given default is different for different business types. In this process, the Group refers to authoritative forecast values and, based on the results, predicts these economic indicators and determines their impact on default probability and default loss rate.
The Group’s maximum risk exposure and year-end classification by credit risk grade for financial assets are as follows:
Year 2022
| | | Expected credit | | | | | | | | | | | | | |
| | | loss over the | | | | | | | | | | | | | |
| | | next 12 months | | | Expected credit losses for the whole duration | | | | |
| Items | | Phase I | | | Phase II | | | Phase III | | | Simplified
method | | | Total | |
| Monetary funds | | | 7,615,940,712.22 | | | | | | | | | | | | | | | | 7,615,940,712.22 | |
| Loans and advances | | | 832,505,385.27 | | | | 13,507,856.52 | | | | 49,048,944.06 | | | | | | | | 895,062,185.85 | |
| Factoring receivable | | | 544,341,433.50 | | | | 872,322.41 | | | | 93,912,924.65 | | | | | | | | 639,126,680.56 | |
| Account receivable | | | | | | | | | | | | | | | 530,610,931.13 | | | | 530,610,931.13 | |
| Other receivables | | | 649,063,146.88 | | | | 613,181.87 | | | | | | | | | | | | 649,676,328.75 | |
| Non-current assets due within one year | | | | | | | | | | | | | | | 43,534,741.35 | | | | 43,534,741.35 | |
| Long-term receivables | | | | | | | | | | | | | | | 264,650,510.99 | | | | 264,650,510.99 | |
| Total | | | 9,641,850,677.87 | | | | 14,993,360.80 | | | | 142,961,868.71 | | | | 838,796,183.47 | | | | 10,638,602,090.85 | |
Year 2021
| | | Expected credit | | | | | | | | | | | | | |
| | | loss over the | | | | | | | | | | | | | |
| | | next 12 months | | | Expected credit losses for the whole duration | | | | |
| Items | | Phase I | | | Phase II | | | Phase III | | | Simplified
method | | | Total | |
| Monetary funds | | | 9,163,127,740.22 | | | | | | | | | | | | | | | | 9,163,127,740.22 | |
| Loans and advances | | | 788,569,705.76 | | | | 19,168,132.97 | | | | 6,879,341.42 | | | | | | | | 814,617,180.15 | |
| Factoring receivable | | | 1,406,455,554.61 | | | | 361,602.66 | | | | 4,638,207.76 | | | | | | | | 1,411,455,365.03 | |
| Account receivable | | | | | | | | | | | | | | | 477,000,229.84 | | | | 477,000,229.84 | |
| Other receivables | | | 740,716,016.18 | | | | 1,653,312.25 | | | | | | | | | | | | 742,369,328.43 | |
| Non-current assets due within one year | | | | | | | | | | | | | | | 41,563,339.26 | | | | 41,563,339.26 | |
| Long-term receivables | | | | | | | | | | | | | | | 73,044,056.84 | | | | 73,044,056.84 | |
| Total | | | 12,098,869,016.77 | | | | 21,183,047.88 | | | | 11,517,549.18 | | | | 591,607,625.94 | | | | 12,723,177,239.77 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Liquidity risk
The Group uses a cyclical liquidity planning tool to manage the risk of funding shortfalls. The tool is associated with both the maturity date of its financial instruments and the estimated cash flows generated by the Group’s operations.
The Group’s objective is to maintain a balance between the continuity and flexibility of financing by utilizing various means of financing, such as bank loan. As of December 31, 2022, 41.51% (2021: 43.76%) of the Group’s debts mature within one year.
The maturity period of financial liabilities based on non-discounted contractual cash flows is analyzed as follows:
Year 2022
| Items | | Within 1 year | | | 1-5 years | | | Over 5 years | | | Total | |
| Short-term loans | | 6,640,025,704.86 | | | | | | | | | 6,640,025,704.86 | |
| Accounts payable | | 12,155,435,663.28 | | | | | | | | | 12,155,435,663.28 | |
| Other payables | | 883,542,798.78 | | | | | | | | | 883,542,798.78 | |
| Non-current liabilities due within one year | | 3,156,364,767.06 | | | | | | | | | 3,156,364,767.06 | |
| Long-term borrowings | | | | | 2,132,721,309.72 | | | | | | 2,132,721,309.72 | |
| Lease liabilities | | | | | 11,564,660,391.39 | | | 18,476,009,160.08 | | | 30,040,669,551.47 | |
| Total | | 22,835,368,933.98 | | | 13,697,381,701.11 | | | 18,476,009,160.08 | | | 55,008,759,795.17 | |
Year 2021
| Items | | Within 1 year | | | 1-5 years | | | Over 5 years | | | Total | |
| Short-term loans | | 11,040,698,472.22 | | | | | | | | | 11,040,698,472.22 | |
| Notes payable | | 33,000,000.00 | | | | | | | | | 33,000,000.00 | |
| Accounts payable | | 12,518,578,825.59 | | | | | | | | | 12,518,578,825.59 | |
| Other payables | | 1,606,156,907.41 | | | | | | | | | 1,606,156,907.41 | |
| Non-current liabilities due within one year | | 3,348,205,509.27 | | | | | | | | | 3,348,205,509.27 | |
| Long-term borrowings | | | | | 1,118,859,527.78 | | | | | | 1,118,859,527.78 | |
| Lease liabilities | | | | | 12,831,809,551.57 | | | 22,743,509,411.50 | | | 35,575,318,963.07 | |
| Total | | 28,546,639,714.49 | | | 13,950,669,079.35 | | | 22,743,509,411.50 | | | 65,240,818,205.34 | |
Market risk
Interest rate risks
The Group’s bank borrowings are fixed-rate, so the Group does not face the risk of market interest rate fluctuations.
Exchange rate risk
The Group is exposed to transactional currency risk. Such risks are caused by sales or purchases made by business units in currencies other than their functional currencies. The Group focuses its main business throughout China, which are settled in RMB. Therefore, the Group faces a low risk of currency fluctuations.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Equity instrument investment price risk
The equity instrument investment price risk refers to the risk of a decrease in the fair value of equity securities due to changes in stock index levels and individual security values. As of December 31, 2022, the Group has exposed to equity instrument investment price risk due to certain individual equity instrument investments classified at fair value through profit or loss and whose changes are recognized in the current period. The listed equity instrument investments held by the Group or its subsidiaries are listed on stock exchanges in Shenzhen and the United States and are measured at market quotations on the balance sheet date.
The market stock indices of the following stock exchanges, as well as their respective highest and lowest closing points during the year, are as follows:
| | | End of Year | | | Year 2022 | | | At the End | | | Year 2021 | |
| Items | | 2022 | | | Max./min. | | | of 2021 | | | Max./min. | |
| Shenzhen-A Stock Index | | | 2,067 | | | | 2,645/1,833 | | | | 2,530 | | | | 2,571/2,130 | |
| USA-NASDAQ Index | | | 10,466 | | | | 15,623/10,213 | | | | 15,645 | | | | 31,085/22,745 | |
The following table demonstrates the sensitivity of the Group’s net profit and other comprehensive income after tax to a 5% change in the fair value of equity instrument investments (based on the carrying value on the balance sheet date), assuming all other variables remain constant.
Year 2022
| | | | | | | | | Increase/ | | | Increase/ | |
| | | Carrying value | | | | | | (Decrease) | | | (Decrease) | |
| | | of equity | | | Increase/ | | | in other | | | in total | |
| | | instrument | | | (Decrease) in | | | comprehensive | | | shareholders’ | |
| Items | | investments | | | net profit | | | income after tax | | | equity | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | 206,295,359.14 | | | 10,314,767.96/ -10,314,767.96 | | | | | | 10,314,767.96/ -10,314,767.96 | |
Year 2021
| | | | | | | | | Increase/ | | | | |
| | | Carrying value | | | | | | (Decrease) | | | Increase in total | |
| | | of equity | | | Net income | | | in other | | | shareholders’ | |
| | | instrument | | | increase/ | | | comprehensive | | | equity/ | |
| Items | | investments | | | (Decrease) | | | income after tax | | | (Decrease) | |
| Shenzhen-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | 487,156,170.27 | | | 18,268,356.38/ -18,268,356.38 | | | | | | 18,268,356.38/ -18,268,356.38 | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | 733,589,445.29 | | | 36,679,472.26/ -36,679,472.26 | | | | | | 36,679,472.26/ -36,679,472.26 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group’s primary objective of capital management is to ensure the Group’s ability to continue as a going concern and maintain healthy capital ratios to support business development and maximize shareholder value.
The Group manages its capital structure and makes adjustments based on the economic situation and changes in the risk characteristics of the relevant assets. To maintain or adjust the capital structure, the Group may adjust the distribution of profits to shareholders, return capital to shareholders, or issue new shares. Capital management objectives, policies, or procedures have not changed for the year 2022 and 2021.
The Group manages capital using the debt-to-equity ratio, which has been 87.7% as of December 31, 2022 (December 31, 2021: 84.5%). The Management of the Group believes that this ratio meets the requirements for capital management.
| XI. | Disclosure of Fair Value |
| 1. | Closing fair value of assets and liabilities measured at fair value |
| √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Closing fair value | |
| | | Primary fair | | | Secondary | | | | | | | |
| | | value | | | fair value | | | Tertiary fair value | | | | |
| Items | | calculation | | | calculation | | | calculation | | | Total | |
| I. Continuous fair value calculation | | | | | | | | | | | | |
| (I) Trading financial assets | | 683,663,383.01 | | | | | | 207,163,336.09 | | | 890,826,719.10 | |
| 1. Financial assets measured at fair value and booked into current profits and losses | | 683,663,383.01 | | | | | | 207,163,336.09 | | | 890,826,719.10 | |
| (1) Debt instrument investment | | | | | | | | | | | | |
| (2) Equity instrument investment | | 206,295,359.14 | | | | | | 207,163,336.09 | | | 413,458,695.23 | |
| (3) Fund products | | 477,368,023.87 | | | | | | | | | 477,368,023.87 | |
| 2. Financial assets that are specified to be measured at fair value and whose changes are booked into current profits and losses | | | | | | | | | | | | |
| (1) Debt instrument investment | | | | | | | | | | | | |
| (2) Equity instrument investment | | | | | | | | | | | | |
| (II) Other creditors’ investments | | | | | | | | | | | | |
| (III) Investment in other equity instruments | | | | | | | | | | | | |
| (IV) Investment properties | | | | | | | | | | | | |
| 1. The right to use land for lease | | | | | | | | | | | | |
| 2. Buildings for lease | | | | | | | | | | | | |
| 3. Land use right held and transferred after preparation for increment | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Closing fair value | |
| | | Primary fair | | | Secondary | | | | | | | |
| | | value | | | fair value | | | Tertiary fair value | | | | |
| Items | | calculation | | | calculation | | | calculation | | | Total | |
| (V) Biological assets | | | | | | | | | | | | |
| 1. Consumable biological assets | | | | | | | | | | | | |
| 2. Productive biological assets | | | | | | | | | | | | |
| (VI) Other non-current financial assets | | | | | | | | 3,918,000,000.00 | | | 3,918,000,000.00 | |
| Total assets measured at fair value continuously | | 683,663,383.01 | | | | | | 4,125,163,336.09 | | | 4,808,826,719.10 | |
The Group recognizes the transfer between levels based on the occurrence date of the events that cause the transfer between levels.
The Management has assessed cash and cash equivalents, loans and advances, accounts receivable financing, accounts receivable, and accounts payable, among others, and determined that due to their short remaining terms, their fair values are approximately equal to their carrying amounts.
The Financial Department of the Group is led by the Financial Manager and is responsible for formulating policies and procedures for fair value measurement of financial instruments. The Financial Manager reports directly to the Chief Financial Officer. On each balance sheet date, the financial department analyzes the value changes of financial instruments and determines the main input values applicable to the valuation. Valuations require approval from the Chief Financial Officer.
Fair value refers to the amount at which both parties to a transaction who are familiar with the condition exchange their assets or clear off their debts under fair conditions instead of the amount induced by forced selling or liquidation. The following methods and assumptions are used to estimate the fair values. Long-term receivables, long and short-term borrowings, etc., are valued at fair value using the discounted cash flow method, using the market yield of other financial instruments with similar contractual terms, credit risks, and remaining maturities as the discount rate. On December 31, 2022, the Group assessed the self-non-compliance risk of borrowings, both long-term and short-term, as not significant.
Listed equity instrument investments are valued at market quotations. Non-listed equity instruments are measured at fair value using market approach, based on unobservable market prices or rates assumptions. The Group determines comparable listed companies based on industry, scale, leverage, and strategy, and calculates appropriate market multiples, such as price-earnings multiples, for each selected comparable listed company. Adjustments are made by giving consideration to specific facts and circumstances of the entity, including liquidity and scale differences with the comparable listed companies. The Group believes that the fair value and its changes estimated using valuation techniques are reasonable and represent the most appropriate values as of the balance sheet date.
| 2. | Basis for determination of market price for measurement of fair value of the first level on an ongoing concern or not |
| √ | Applicable | ¨ | Not applicable |
For financial instruments traded in active markets, the Group determines their fair value based on their active market quotations;
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 3. | For continuous and discontinuous secondary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| √ | Applicable | ¨ | Not applicable |
For financial instruments not traded in active markets, the Group determines their fair value with the aid of valuation techniques;
| 4. | For continuous and discontinuous tertiary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| √ | Applicable | ¨ | Not applicable |
| Equity | | | | | | | | |
| instrument | | Fair value at the | | Valuation | | Unobservable | | Range interval |
| investment | | end of the year | | techniques | | Inputs | | (weighted average) |
| Dalian Wanda Commercial Management Group Co., Ltd. | | In 2022: 4,118,000,000.00 | | Market approach | | Price-earnings ratio, liquidity discount | | Lower price- earnings ratio, higher liquidity discount, and lower fair value |
| | | In 2021: 4,100,000,000.00 | | Market approach | | Price-earnings ratio, liquidity discount | | Lower price- earnings ratio, higher liquidity discount, and lower fair value |
| 5. | Continuous tertiary fair value calculating projects, adjustment information among book values at term start and term end as well as sensitivity analysis on unobserved parameters |
| √ | Applicable | ¨ | Not applicable |
| | Opening balance | | | Other changes | | | Transferred-out from level 3 | | | Current gains or losses are recognized in profit or loss | | Closing balance | | Changes in unrealized gains or losses on assets held at the end of the year that are recognized in profit or loss |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Trading financial assets | | | | | | | | | | | | | | | |
| Financial assets measured at fair value with changes included in current profits and losses | | | | | | | | | | | | | | | |
| Equity instrument investment | | 13,967,938.60 | | | 193,195,397.49 | | | | | | | | 207,163,336.09 | | |
| Other non-current financial assets | | 4,100,000,000.00 | | | -200,000,000.00 | | | | | | 18,000,000.00 | | 3,918,000,000.00 | | 18,000,000.00 |
| | | 4,113,967,938.60 | | | -6,804,602.51 | | | | | | 18,000,000.00 | | 4,125,163,336.09 | | 18,000,000.00 |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 6. | For continuous fair value calculating items, the transfer reasons and the policy of determining the transfer time point shall be described if transferring occurs among levels in the term |
| | ¨ | Applicable | √ | Not applicable |
| 7. | Estimate technology change occurred in the current year and change reasons |
| | ¨ | Applicable | √ | Not applicable |
| 8. | Financial asset not measured in fair value and fair value of financial liabilities |
| √ | Applicable | ¨ | Not applicable |
The following is a comparison of the carrying value and fair value of various categories of financial instruments, excluding lease liabilities and financial instruments with minimal differences between carrying value and fair value:
| | | Carrying value | | | Fair value | |
| Financial liabilities | | | | | | |
| Long-term borrowings | | 2,070,085,001.67 | | | 2,047,178,067.23 | |
| | ¨ | Applicable | √ | Not applicable |
XII. Affiliated Parties and Transactions
| 1. | Parent company of the Company |
| | ¨ | Applicable | √ | Not applicable |
| 2. | Subsidiaries of the Company |
For details on the Company’s subsidiaries, please refer to the notes
| √ | Applicable | ¨ | Not applicable |
For details of subsidiaries, please refer to Section IX.1. Equity in subsidiaries.
| 3. | Cooperative enterprises and joint ventures of the Company |
See Note for significant cooperative enterprises and joint ventures of the Company
| √ | Applicable | ¨ | Not applicable |
For details of important cooperative enterprises and joint venture, please refer to section IX. 3. Equities in Cooperative Enterprises and Joint Ventures
The information of other cooperative enterprises and joint ventures that have related-party transaction with the Company in this term, or had related-party transaction with the Company at earlier term and have formed balances
| √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Names of cooperative enterprises and
joint ventures | | Relation to the Company |
| Yonghui Fresh Food Development Co., Ltd. | | The Group’s shareholding ratio of 32.33% |
| Zhongbai Holdings Group Co., Ltd. | | The Group’s shareholding ratio of 9.93% |
| Fujian OneBank Limited | | The Group’s shareholding ratio of 27.50% |
| Chengdu Hongqi Chain Co., Ltd. | | The Group’s shareholding ratio of 21.00% |
| Xiangcun Gaokao Agricultural Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | The Group’s shareholding ratio of 42.00% |
| Beijing Friendship Messenger Trading Co., Ltd. | | The Group’s shareholding ratio of 30.00% |
| Fujian Minwei Industrial Co., Ltd. | | The Group’s shareholding ratio of 17.59% |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 30.00% |
| 1233 International Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 40.00% |
| Fuzhou Yunchuang Life Information Technology Co., Ltd. | | The Group’s shareholding ratio of 15.84% |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | The Group’s shareholding ratio of 15.53% |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | The Group’s shareholding ratio of 15.84% |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | The Group’s shareholding ratio of 4.24% |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | The Group’s shareholding ratio of 18.64% |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. | | The Group’s shareholding ratio of 49.00% |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| 4. | Other affiliated parties |
| √ | Applicable | ¨ | Not applicable |
| Name of other affiliated parties | | Relationship of other affiliated parties
with the Company |
| Tencent Technology (Shenzhen) Co., Ltd | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Shenzhen Tencent Computer System Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Guangdong Mannings Chain Commercial Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| Mannings (Chongqing) Health Products Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| Mannings Chain Commercial (Beijing) Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| Mannings Daily Necessities Commercial (Shanghai) Co., Ltd. | | Subsidiaries of Dairy Co., Ltd., which holds 21.08% equity of the Company |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of other affiliated parties | | Relationship of other affiliated parties
with the Company |
| Beijing Jingdong Century Trade Co., Ltd. | | Enterprise holding an 8.11% equity interest in the Company |
| Suqian Hanbang Investment Management Co., Ltd. | | Enterprise holding a 5.27% equity interest in the Company |
| Beijing Jingbangda Trading Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.38% equity in the Company |
| JD.COM INTERNATIONAL LIMITED | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.38% equity in the Company |
| Dada Group Limited | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.38% equity in the Company |
| Beijing Jingdong 360 Degrees E-Commerce Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.38% equity in the Company |
| Beijing Jingdong Century Information Technology Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.38% equity in the Company |
| Chengdu Jingdong Century Trading Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.38% equity in the Company |
| Jiangsu Jingdong Information Technology Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.38% equity in the Company |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 9.72% equity interest in the Company |
| Fujian Xuanhui Yongjia Business Operation Management Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 9.72% equity interest in the Company |
| Xuancheng Xuanhui Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 9.72% equity interest in the Company |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of other affiliated parties | | Relationship of other affiliated parties
with the Company |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 9.72% equity interest in the Company |
| Sanming Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 9.72% equity interest in the Company |
| Sanming Xuanhui Business Operation Management Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 9.72% equity interest in the Company |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 9.72% equity interest in the Company |
| Zhang Xuansong | | Natural person holding an 9.72% equity interest in the Company |
| Zhang Xuanning | | Natural person holding 8.20% equity of the Company |
| Songyuan Rongtong Real Estate Development Co., Ltd. | | Minority shareholder of the Company’s sub-subsidiary |
| Fuping County Qijin Ecological Agriculture Technology Development Co., Ltd. | | Original minority shareholder of the Company’s subsidiary |
| PARKnSHOP (China) Investment Co., Ltd. | | Minority shareholder of the Company’s subsidiary |
| Fuzhou Shouyao Construction Labor Engineering Co., Ltd. | | Minority shareholder of the Company’s subsidiary |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Original cooperative enterprise of the Company |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. | | Original cooperative enterprise of the Company |
| Quanzhou Lixia Business Management Co., Ltd. | | Original cooperative enterprise of the Company |
| Jiangsu Shenguo Technology Co., Ltd. | | Original cooperative enterprise of the Company |
| Fujian Enhui Technology Co., Ltd. | | Original cooperative enterprise of the Company |
| Directors, Supervisors, Chief Financial Officer, and Board Secretary | | Key Management Staff |
| 5. | Affiliated transactions |
| (1). | Related transactions for purchasing and selling commodities and providing and accepting labor service |
Table for goods procurement/labor service acceptance
| √ | Applicable | ¨ | Not applicable |
| Unit: Yuan Currency: RMB |
| |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Commodity purchase | | | 2,105,500,249.94 | | | | 2,804,850,064.28 | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Commodity purchase | | | 593,897,060.08 | | | | 525,754,592.90 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Commodity purchase | | | 602,816,315.71 | | | | 713,546,399.67 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | | Amount of
last period | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Commodity purchase | | | 1,027,468,818.31 | | | | 306,258,789.30 | |
| Zhanjiang Guolian Aquatic Development Co., Ltd. and its subsidiaries | | Commodity purchase | | | | | | | 166,981,811.67 | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | 36,607.52 | | | | | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Commodity purchase | | | 46,846,888.78 | | | | | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Commodity purchase | | | 53,239,419.68 | | | | 81,413,682.49 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Commodity purchase | | | 19,241,251.01 | | | | 22,227,655.29 | |
| Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | 47,647,616.10 | | | | 70,007,310.80 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Commodity purchase | | | 9,857,019.24 | | | | 12,307,206.55 | |
| Fujian Enhui Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | | | | | 1,106,696.90 | |
| Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | Commodity purchase | | | 441,674.33 | | | | 39,706.03 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Commodity purchase | | | | | | | 24,238.13 | |
| Dada Group Limited and its subsidiaries | | Labor service acceptance | | | 427,634,887.75 | | | | | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 206,339,930.69 | | | | 171,466,331.56 | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 106,055,596.48 | | | | 104,621,610.61 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 53,420,539.84 | | | | 89,987,622.18 | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Labor service acceptance | | | 24,551,286.93 | | | | 19,848,270.70 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 5,832,616.83 | | | | 20,869,727.37 | |
| Fujian Enhui Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | | | | | 6,385,244.66 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 6,286,109.86 | | | | 1,160,850.41 | |
| Beijing Jingbangda Trading Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 596,261.58 | | | | 743,631.65 | |
| Quanzhou Lixia Business Management Co., Ltd. | | Labor service acceptance | | | | | | | 516,042.69 | |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. | | Labor service acceptance | | | | | | | 207,547.16 | |
| Chengdu Hongqi Chain Co., Ltd. | | Labor service acceptance | | | 427,308.47 | | | | 167,484.67 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 476,151.68 | | | | 294,466.32 | |
| Jiangsu Shenguo Technology Co., Ltd. | | Labor service acceptance | | | | | | | 256,072.21 | |
| Shenzhen Tencent Computer System Co., Ltd. | | Labor service acceptance | | | 1,886,792.45 | | | | | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 300.00 | | | | | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 105.66 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Acquisition of fixed assets | | | 13,507,804.63 | | | | 16,054,746.77 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Acquisition of fixed assets | | | 27,595.46 | | | | | |
| PARKnSHOP (China) Investment Co., Ltd. | | Usage fee for funds | | | 2,148,661.82 | | | | 2,262,239.54 | |
Table for goods sale/labor service rendering
| | √ | Applicable | ¨ | Not applicable |
| Unit: Yuan Currency: RMB |
| | | | | | | | | |
| | | Content of related | | Amount of | | | Amount of | |
| Affiliated parties | | transaction | | current period | | | last period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Sales of goods | | | 150,093,850.59 | | | | 686,337,847.76 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Sales of goods | | | 55,182,325.71 | | | | 107,842,574.21 | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Sales of goods | | | | | | | 295,412.84 | |
| Fujian Enhui Technology Co., Ltd. and its subsidiaries | | Sales of goods | | | | | | | 19,127,024.66 | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Sales of goods | | | | | | | 2,921,108.08 | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Sales of goods | | | 52,176,092.90 | | | | 619,277.31 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Sales of goods | | | 12,710,597.41 | | | | 594,561.79 | |
| Tencent Technology (Shenzhen) Co., Ltd | | Sales of goods | | | 495,611.37 | | | | | |
| Fujian OneBank Limited | | Sales of goods | | | 4,969.91 | | | | 14,511.50 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Provision of labor services | | | 21,318,264.78 | | | | 9,766,268.00 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Provision of labor services | | | 11,277,391.86 | | | | 34,487,987.75 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Provision of labor services | | | 5,465,952.11 | | | | 4,075,471.69 | |
| Fujian OneBank Limited | | Provision of labor services | | | 1,504,481.80 | | | | | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Provision of labor services | | | 405,823.11 | | | | 1,633,582.83 | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Provision of labor services | | | | | | | 782,028.88 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Provision of labor services | | | 36,658.55 | | | | 67,254.74 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Provision of labor services | | | 152,169.96 | | | | 143,136.67 | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | Provision of labor services | | | 58,912.41 | | | | 184,395.73 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | Provision of labor services | | | 127,358.49 | | | | | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Provision of labor services | | | | | | | 604,752.84 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Provision of labor services | | | 117,924.53 | | | | 1,500,856.67 | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Provision of labor services | | | 94,339.62 | | | | 7,722.32 | |
| Tencent Technology (Shenzhen) Co., Ltd | | Provision of labor services | | | 47,305.54 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | | Amount of
last period | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Provision of labor services | | | 4,943.09 | | | | | |
| Fujian OneBank Limited | | Interest income | | | 14,301,348.84 | | | | 17,890,879.20 | |
| Fujian Minwei Industrial Co., Ltd. | | Interest income | | | 3,278,939.00 | | | | 4,761,423.13 | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | Interest income | | | | | | | 2,167,190.75 | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | Interest income | | | 3,144,280.00 | | | | 3,412,085.71 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Interest income | | | 6,121,111.00 | | | | 1,225,366.89 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Interest income | | | 531,666.05 | | | | 563,696.18 | |
Affiliated transaction description on purchase and sale of goods, supply and labor service acceptance
| | ¨ | Applicable | √ | Not applicable |
| (2). | Related entrusted management/contracting and mandatory management/outsourcing conditions |
Table for trustee management and contracting of the Company:
| | ¨ | Applicable | √ | Not applicable |
Description of the condition of affiliated trusteeship/contracting
| | ¨ | Applicable | √ | Not applicable |
List of entrusted management/outsource cases of the Company
| | ¨ | Applicable | √ | Not applicable |
Description on affiliated management/contracting condition
| | ¨ | Applicable | √ | Not applicable |
The Company is the lessor:
| | √ | Applicable | ¨ | Not applicable |
| Unit: Yuan Currency: RMB |
| |
| Name of lessee | | Type of leased assets | | Confirmed leasing
income in current
period | | | Confirmed leasing
income in previous
period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse leasing | | | 21,820,885.81 | | | | 22,520,068.71 | |
| 1233 International Supply Chain Management Co., Ltd. | | Commercial land – Fuzhou MIXC | | | 4,318,987.78 | | | | 3,310,861.36 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | Commercial land – Chongqing Xuanhui Real Estate Company | | | 983,749.64 | | | | 609,430.07 | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | Commercial land – Guanghua Avenue Store, Wenjiang, Chengdu | | | 230,603.70 | | | | 319,790.77 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Company as the Leasee:
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | Simplified rental fees for | Variable lease payments not | | | | | | | | | | | | | | | | |
| | | | | short-term leases and | included in the measurement | | | | | | | | | | | | | | | | |
| | | | | low-value asset leases | of lease liabilities | | | | | | Interest expense on lease | | | | | | |
| | | | | (if applicable) | | (if applicable) | | | Rent paid | | | liabilities assumed | | Increased right-of-use assets | |
| | | | | Amount of | | Amount of | | Amount of | | Amount of | | | Amount of | | | Amount of | | | Amount of | | | Amount of | | Amount of | | Amount of | |
| Name of Lessor | | Type of leased assets | | current period | | last period | | current period | | last period | | | current period | | | last period | | | current period | | | last period | | current period | | last period | |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Commercial land – Pucheng Xinghua Store | | | | | | | | | | | 2,689,318.80 | | | 2,689,318.80 | | | 1,105,949.88 | | | 1,179,910.87 | | | | | | |
| Zhang Xuansong | | Commercial land – Daru Shijia Store | | | | | | | | | | | 5,957,905.36 | | | 5,792,439.76 | | | 1,345,709.01 | | | 1,557,931.51 | | | | | | |
| Zhang Xuansong | | Office building – Zuohai Office Building | | | | | | | | | | | 3,368,808.68 | | | 841,625.71 | | | 35,474.94 | | | 36,425.95 | | | | | | |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Commercial land –Fuzhou Minhou Nantong Branch Store | | | | | | | | | | | 908,708.28 | | | 908,708.28 | | | 1,153,594.70 | | | 1,142,155.79 | | | | | | |
| Sanming Xuanhui Property Development Co., Ltd. | | Commercial land –Yongjia Tiandi Store | | | | | | | | | | | 730,514.28 | | | 730,514.28 | | | 924,483.60 | | | 915,423.08 | | | | | | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Commercial land and office building –Park Store | | | | | | | | | | | 3,250,455.43 | | | 3,405,768.02 | | | 929,005.04 | | | 1,041,788.46 | | | 1,722,158.32 | | | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Commercial land – Quangang Yongjia Store, Quanzhou | | | | | | | | | | | 1,998,451.32 | | | 1,998,451.32 | | | 1,227,399.86 | | | 1,263,437.40 | | | | | | |
| Yonghui Fresh Food Supply Chain Management Co., Ltd. | | Warehouse Leasing –Beijing Logistics Warehouse | | 5,174,311.92 | | | | | | | | | 5,174,311.92 | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Supply Chain Management Co., Ltd. | | Warehouse Leasing –Shaanxi Logistics Warehouse | | 595,369.67 | | 503,179.99 | | | | | | | 595,369.67 | | | 503,179.99 | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Descriptions of affiliated leases condition
| | √ | Applicable | ¨ | Not applicable |
Since January 1, 2021, the Company has been adopting the new leasing standard. Under the new standard, for non-exempt lease contracts, the Company no longer recognizes lease expenses on the balance sheet. Lease expenses for exempt contracts are recognized using the straight-line method.
| (4). | Related-party guarantee |
The Company as the guarantor
| | ¨ | Applicable | √ | Not applicable |
The Company as the guaranteed party
| | ¨ | Applicable | √ | Not applicable |
Description of affiliated guarantee
| | ¨ | Applicable | √ | Not applicable |
| (5). | Fund inter-bank lending for affiliated parties |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Affiliated | | Lending | | | | | | | | |
| parties | | amount | | | Starting date | | Due date | | Explanation | |
| Borrowings PARKnSHOP (China) Investment Co., Ltd. | | | 46,250,000.00 | | | May 9, 2019 | | May 8, 2023 | | | Borrowings | |
| Affiliated | | Lending | | | | | | | |
| parties | | amount | | | Starting date | | Due date | | Explanation |
| Lendings Fujian Minwei Industrial Co., Ltd. | | | 53,900,000.00 | | | May 31, 2022 | | December 31, 2023 | | Factoring funds |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 25,971,389.79 | | | December 4, 2022 | | June 14, 2023 | | Factoring funds |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | 200,000,000.00 | | | January 4, 2022 | | June 30, 2022 | | Factoring funds |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 438,876.40 | | | November 22, 2022 | | November 21, 2023 | | Group borrowings |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (a) | In the year 2021, Fujian Minwei Industrial Co., Ltd. obtained factoring loans from the Group with a total amount of RMB61,900,000.00, with an annual interest rate of 8.50%, maturing within 2022. In the year 2022, an extension of RMB53,900,000.00 was granted, with an annual interest rate of 8.50%, maturing on December 31, 2023. |
| (b) | In the year 2021, Fujian Xingyuan Agricultural and Animal Husbandry Technology Co, Ltd. obtained factoring loans from the Group with a total amount of RMB35,000,000.00, with an annual interest rate of 12.00%, maturing within 2022. In the year 2022, an extension of RMB25,971,389.79 was granted, with an annual interest rate of 12.00%, maturing on June 14, 2023. |
| (c) | In the current year, Yonghui Fresh Food Development Co., Ltd. and its subsidiaries obtained factoring loans from the Group, totaling RMB200,000,000.00 with an annual interest rate of 7.00%. The loans started on January 4, 2022 and were settled on June 30, 2022. (In 2021, factoring loans were obtained, totaling RMB100,000,000.00, with an annual interest rate of 7.00%. The loans started on October 26, 2021 and were settled on December 30, 2021). |
| (d) | In the year 2022, Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries borrowed funds from the Group, totaling RMB438,876.40 with an annual interest rate of 4.875%. The loans, started on November 22, 2022, will mature on November 21, 2023. The remaining amount of RMB11,729,000.00 will mature on February 24, 2024. |
| (6). | Assets transferring and debt restructuring of affiliated parties |
| | ¨ | Applicable | √ | Not applicable |
| (7). | Remuneration for key management personnel |
| | √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Remuneration for key management personnel | | | 2,364.79 | | | | 3,509.50 | |
| (8). | Other related transactions |
| | ¨ | Applicable | √ | Not applicable |
| 6. | Receivables and payables of affiliated parties |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| | | | | Closing balance | | | Opening balance | |
| Items | | Affiliated parties | | Book balance | | | | Bad debt provision | | | Book balance | | | | Bad debt provision | |
| Account receivable | | Dada Group Limited and its subsidiaries | | | 59,362,623.65 | | | | 593,626.24 | | | | | | | | | |
| Account receivable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 764,445.10 | | | | 7,644.45 | | | | 1,914,602.52 | | | | 19,146.03 | |
| Account receivable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 1,432,130.81 | | | | 14,321.31 | | | | 4,442,427.43 | | | | 44,424.27 | |
| Account receivable | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | | | | | | | | | 9,884,452.60 | | | | 98,844.53 | |
| Account receivable | | Jiangsu Jingdong Information Technology Co., Ltd. | | | 284,794.41 | | | | 2,847.94 | | | | 249,643.22 | | | | 2,496.43 | |
| Account receivable | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 4,516,540.92 | | | | 45,165.41 | | | | 6,058,292.95 | | | | 60,582.93 | |
| Account receivable | | Chengdu Hongqi Chain Co., Ltd. and its subsidiaries | | | | | | | | | | | 18,750.00 | | | | 187.50 | |
| Account receivable | | Beijing Jingdong Century Trade Co., Ltd. | | | 14,489,642.29 | | | | 144,896.42 | | | | 514,380.89 | | | | 5,143.81 | |
| Other receivables | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 12,944,531.11 | | | | 12,944,531.11 | | | | 11,942,088.70 | | | | 119,420.89 | |
| Other receivables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 200,000.00 | | | | 2,000.00 | | | | 100,000.00 | | | | 1,000.00 | |
| Other receivables | | Fujian OneBank Limited | | | 389,579.34 | | | | 3,895.79 | | | | 434,591.63 | | | | 4,345.92 | |
| Other receivables | | Dada Group Limited and its subsidiaries | | | 110,000.00 | | | | 1,100.00 | | | | | | | | | |
| Other receivables | | Beijing Jingdong Century Trade Co., Ltd. | | | 100,000.00 | | | | 1,000.00 | | | | 150,000.00 | | | | 1,500.00 | |
| Other receivables | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 82,500.00 | | | | 825.00 | | | | 514,601.18 | | | | 5,146.01 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing balance | | | Opening balance | |
| | | | | | | | Bad debt | | | | | | Bad debt | |
| Items | | Affiliated parties | | Book balance | | | provision | | | Book balance | | | provision | |
| Other receivables | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | | 373.26 | | | | 3.73 | | | | 100,000.00 | | | | 1,000.00 | |
| Other receivables | | Fujian Xuanhui Real Estate Development Co., Ltd. and its subsidiaries | | | | | | | | | | | 47,250.00 | | | | 472.5 | |
| Prepaid accounts | | Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 88,942,276.95 | | | | | | | | 118,118,547.54 | | | | | |
| Prepaid accounts | | Beijing Friendship Messenger Trading Co., Ltd. | | | 24,965,052.97 | | | | | | | | 71,637,166.57 | | | | | |
| Prepaid accounts | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 6,726,802.12 | | | | | | | | | | | | | |
| Prepaid accounts | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | | | | | | | | | 827,917.11 | | | | | |
| Prepaid accounts | | Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | | 495,345.17 | | | | | | | | | | | | | |
| Prepaid accounts | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | | | | | | | | | 6,031,628.92 | | | | | |
| Prepaid accounts | | Fujian Lingyu Jinhua Brand Management Co., Ltd. | | | 55,296.26 | | | | | | | | 155,296.26 | | | | | |
| Prepaid accounts | | Tencent Cloud Computing (Beijing) Co., Ltd. | | | | | | | | | | | 17,964.72 | | | | | |
| Prepaid accounts | | Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | | 254,734.86 | | | | | | | | 43,304.42 | | | | | |
| Prepaid accounts | | Dada Group Limited and its subsidiaries | | | 115,422.46 | | | | | | | | | | | | | |
| Prepaid accounts | | Origin Country Network Technology (Shanghai) Co., Ltd. | | | 67,800.10 | | | | | | | | | | | | | |
| Prepaid accounts | | Shanghai Xuanhui Business Service Technology Co., Ltd. | | | 16,249.99 | | | | | | | | | | | | | |
| Prepaid accounts | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 12,032.40 | | | | | | | | 242.92 | | | | | |
| Prepaid accounts | | Fujian Xuanhui Real Estate Development Co., Ltd. | | | | | | | | | | | 120,266.10 | | | | | |
| Prepaid accounts | | Shenzhen Tencent Computer System Co., Ltd. | | | 2,052,547.17 | | | | | | | | 50,000.00 | | | | | |
| Factoring receivable | | Fujian Minwei Industrial Co., Ltd. | | | 25,935,974.23 | | | | 7,780,792.27 | | | | 58,099,555.36 | | | | 580,995.55 | |
| Factoring receivable | | Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 24,069,912.36 | | | | 7,179,682.94 | | | | 30,185,604.58 | | | | 301,856.05 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | Closing book | | | Opening book | |
| Project name | | Affiliated parties | | balance | | | balance | |
| Notes payable | | Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | | | | | 33,000,000.00 | |
| Accounts payable | | Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | 158,782,785.61 | | | | 286,827,632.90 | |
| Accounts payable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 150,674,367.43 | | | | 104,997,669.53 | |
| Accounts payable | | Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | | 3,714,327.94 | | | | 9,263,911.27 | |
| Accounts payable | | Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | | 389,777.13 | | | | 5,789,907.83 | |
| Accounts payable | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | | | | | 491,723.42 | |
| Accounts payable | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 2,927,831.08 | | | | 2,316,644.04 | |
| Accounts payable | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | 3,685,311.72 | | | | 5,459,248.10 | |
| Accounts payable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 11,753.14 | | | | 820,154.49 | |
| Accounts payable | | Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | | 114,477.03 | | | | | |
| Accounts payable | | Origin Country Network Technology (Shanghai) Co., Ltd. | | | 55,305.33 | | | | | |
| Accounts payable | | Fuping County Qijin Ecological Agriculture Technology Development Co., Ltd. | | | | | | | 13,474.86 | |
| Accounts payable | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 3,447.15 | | | | 45,196.69 | |
| Other payables | | Dada Group Limited and its subsidiaries | | | 52,983,951.82 | | | | | |
| Other payables | | PARKnSHOP (China) Investment Co., Ltd. | | | 46,969,371.21 | | | | 46,897,027.13 | |
| Other payables | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | 20,144,212.34 | | | | 32,051,174.31 | |
| Other payables | | Shanghai Xuanhui Business Service Technology Co., Ltd. | | | 20,158,019.37 | | | | 19,917,251.43 | |
| Other payables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 25,143,631.86 | | | | 10,344,983.99 | |
| Other payables | | Songyuan Rongtong Real Estate Development Co., Ltd. | | | 1,778,060.52 | | | | 1,778,060.52 | |
| Other payables | | Chengdu Hongqi Chain Co., Ltd. and its subsidiaries | | | 200,000.00 | | | | 160,000.00 | |
| Other payables | | Tencent Cloud Computing (Beijing) Co., Ltd. | | | 1,204,212.55 | | | | 1,204,212.55 | |
| Other payables | | Zhang Xuansong | | | 1,880,742.05 | | | | 1,880,742.05 | |
| Other payables | | Fujian Xuanhui Real Estate Development Co., Ltd. and its subsidiaries | | | 1,369,579.07 | | | | 2,161,422.15 | |
| Other payables | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 81,150.66 | | | | 41,649.54 | |
| Other payables | | Mannings (Chongqing) Health Products Co., Ltd. | | | | | | | 30,000.00 | |
| Other payables | | Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | | | | | | 66,150.00 | |
| Other payables | | Beijing Jingbangda Trading Co., Ltd. and its subsidiaries | | | | | | | 8,706.63 | |
| Other payables | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 1,640,383.21 | | | | | |
| Contract liabilities | | Fujian Enhui Technology Co., Ltd. and its subsidiaries | | | | | | | 1,865,081.22 | |
| Contract liabilities | | Beijing Jingdong Century Trade Co., Ltd. | | | | | | | 242,624.90 | |
| Contract liabilities | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | | | | | 1,115,657.81 | |
| Contract liabilities | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 2,017.92 | | | | 631,407.85 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing book | | | Opening book | |
| Project name | | Affiliated parties | | balance | | | balance | |
| Contract liabilities | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 4,038,766.18 | | | | 158,362.93 | |
| Contract liabilities | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | 878,866.62 | | | | | |
| Contract liabilities | | Dada Group Limited and its subsidiaries | | | 40,902.40 | | | | | |
| Contract liabilities | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its
subsidiaries | | | 3,965.56 | | | | 4,338.32 | |
| Advance payment | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its
subsidiaries | | | 8,172.80 | | | | 53,481.73 | |
| Advance payment | | Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | | | | | | 94,500.00 | |
| Advance payment | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 1,103,310.75 | | | | | |
| Lease liabilities | | Fujian Xuanhui Real Estate Development Co., Ltd. | | | 57,161,386.37 | | | | 46,117,005.45 | |
| Lease liabilities | | Zhang Xuansong | | | 28,202,639.31 | | | | 29,770,869.55 | |
| Lease liabilities | | Fuzhou Xuanhui Property Development Co., Ltd. | | | 38,507,138.00 | | | | 24,023,367.54 | |
| Lease liabilities | | Yonghui (Pucheng) Real Estate Development Co., Ltd. | | | 27,827,132.10 | | | | 23,834,992.60 | |
| Lease liabilities | | Sanming Xuanhui Property Development Co., Ltd. | | | 30,643,982.21 | | | | 19,252,212.34 | |
| 7. | Commitment of affiliated parties |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Deposition of monetary funds of affiliated parties
| Items | | Affiliated parties | | Closing balance | | | Opening balance | |
| Bank deposit | | Fujian OneBank Limited | | | 800,300,903.35 | | | | 651,099,553.50 | |
XIII. Share-based Payment
| 1. | Overall condition of share-based payment |
| | ¨ | Applicable | √ | Not applicable |
| 2. | Condition of equity-settled share-based payment |
| | ¨ | Applicable | √ | Not applicable |
| 3. | Condition of cash-settled share-based payment |
| | ¨ | Applicable | √ | Not applicable |
| 4. | Condition of modification and termination of share-based payment |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| XIV. | Commitments and Contingencies |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Important contingencies existed on the balance sheet date |
| | ¨ | Applicable | √ | Not applicable |
| (2). | The descriptions shall be given to significant contingencies which do not require separate disclosure by the Company: |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| XV. | Events Occurring after the Balance Sheet Date |
| 1. | Important non-adjusting events |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| 4. | Description of other events occurring after the balance sheet date |
| | ¨ | Applicable | √ | Not applicable |
| XVI. | Other Important Matters |
| 1. | Correction of accounting error at earlier stage |
| (1). | Retrospective restatement |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Prospective application |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Non-monetary assets exchange |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Other assets replacements |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Determination basis and accounting policy of reporting division |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Financial information of report segments |
| | ¨ | Applicable | √ | Not applicable |
| (3). | The Company shall explain the reason if there is no report segment or it can not disclose the total assets and total balance in the report segments. |
| | √ | Applicable | ¨ | Not applicable |
Excluding the retail business, the Group does not operate any other business that has a significant impact on its operational results. The products sold by the Group have similar characteristics and bear similar risks and returns. Therefore, the Group’s operating activities belong to a single business segment. As the Group operates its business only in one region, with the majority of its revenue and assets located within the territory of China, the Group is not required to disclose segment data.
| | ¨ | Applicable | √ | Not applicable |
| 7. | Other significant transactions and matters having effect on investor’s decision |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| XVII. | Notes to Major Items of Parent Company’s Financial Statements |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Aging | | Closing book balance | |
| Within 1 year | | | 75,576,047.68 | |
| Sub-total within one year | | | 75,576,047.68 | |
| 1-2 years | | | 894,402.56 | |
| 2-3 years | | | 250,621.82 | |
| Over 3 years | | | 213,526.58 | |
| Total | | | 76,934,598.64 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Classified disclosure by bad-debt provision method |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| | | | Book balance | | | | Bad debt provision | | | | | | | | Book balance | | | | Bad debt provision | | | | | |
| | | | | | | | | | | | | | | | Proportion | | | | | | | | | | | | | | | | | | | | Proportion | | | | | |
| | | | | | | | | | | | | | | of bad-debt | | | | Carrying | | | | | | | | | | | | | | | | of bad-debt | | | | Carrying | |
| Category | | | Amount | | | | Proportion | | | | Amount | | | | provision | | | | value | | | | Amount | | | | Proportion | | | | Amount | | | | provision | | | | value | |
| | | | | | | | (%) | | | | | | | | (%) | | | | | | | | | | | | (%) | | | | | | | | (%) | | | | | |
| Provision made on a collective basis | | | 76,934,598.64 | | | | 100.00 | | | | 4,196,611.60 | | | | 5.45 | | | | 72,737,987.04 | | | | 39,592,218.51 | | | | 100.00 | | | | 2,683,304.53 | | | | 6.78 | | | | 36,908,913.98 | |
| Among which: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | | 73,228,760.38 | | | | 95.18 | | | | 3,676,899.99 | | | | 5.02 | | | | 69,551,860.39 | | | | 37,884,060.51 | | | | 95.69 | | | | 2,249,862.80 | | | | 5.94 | | | | 35,634,197.71 | |
| Supplier service fees and rentals | | | 2,280,236.00 | | | | 2.97 | | | | 505,455.59 | | | | 22.17 | | | | 1,774,780.41 | | | | 1,307,581.84 | | | | 3.30 | | | | 429,435.97 | | | | 32.84 | | | | 878,145.87 | |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from affiliated parties | | | 1,425,602.26 | | | | 1.85 | | | | 14,256.02 | | | | 1.00 | | | | 1,411,346.24 | | | | 400,576.16 | | | | 1.01 | | | | 4,005.76 | | | | 1.00 | | | | 396,570.40 | |
| Total | | | 76,934,598.64 | | | | / | | | | 4,196,611.60 | | | | / | | | | 72,737,987.04 | | | | 39,592,218.51 | | | | / | | | | 2,683,304.53 | | | | / | | | | 36,908,913.98 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | √ | Applicable | ¨ | Not applicable |
Combined provision items: Combination 1
Unit: Yuan Currency: RMB
| | | | Closing balance | |
| | | | | | | | | | | | Proportion | |
| | | Account | | | | Bad debt | | | | of bad-debt | |
| Name | | | receivable | | | | provision | | | | provision | |
| | | | | | | | | | | | (%) | |
| Within 1 year | | | 74,550,876.27 | | | | 3,727,543.81 | | | | 5.00 | |
| 1-2 years | | | 493,971.71 | | | | 123,492.93 | | | | 25.00 | |
| 2-3 years | | | 250,621.82 | | | | 117,792.26 | | | | 47.00 | |
| Over 3 years | | | 213,526.58 | | | | 213,526.58 | | | | 100.00 | |
| Total | | | 75,508,996.38 | | | | 4,182,355.58 | | | | | |
Validation standards and specifications of combined bed-debt provision based:
| | ¨ | Applicable | √ | Not applicable |
Combined provision items: Combination 2
Unit: Yuan Currency: RMB
| | | | Closing balance | |
| | | | | | | | | | | | Proportion | |
| | | Account | | | | Bad debt | | | | of bad-debt | |
| Name | | | receivable | | | | provision | | | | provision | |
| | | | | | | | | | | | (%) | |
| Accounts receivable from affiliated parties | | | 1,425,602.26 | | | | 14,256.02 | | | | 1.00 | |
| Total | | | 1,425,602.26 | | | | 14,256.02 | | | | 1.00 | |
Validation standards and specifications of combined bed-debt provision based:
| | ¨ | Applicable | √ | Not applicable |
If bad debt provision is provided based on the expected credit loss general model, please refer to the disclosure of other receivables:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Situation of the provision of bad debts |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | Opening balance | | | Provision | | | Provision Recovered or Reversed | | | Charge-off or write-off | | | Other changes | | | Closing balance | |
| | | | | | | | | | | | | |
| Category | | | | | | | | | | | | |
| Bad-debt provision for accounts receivable | | | 2,683,304.53 | | | | 2,040,056.79 | | | | | | | 526,749.72 | | | | | | | 4,196,611.60 | |
| Total | | | 2,683,304.53 | | | | 2,040,056.79 | | | | | | | 526,749.72 | | | | | | | 4,196,611.60 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (4). | Receivables actually verified and cancelled in the current period |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | |
| Items | | Write-off amount |
| Accounts receivable actually written off | | 526,749.72 |
Significant write-off of accounts receivable during the year
| | ¨ | Applicable | √ | Not applicable |
| (5). | Receivables of first five companies with the greatest amount of closing amount (categorizing by debtor) |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Proportion in | | | | |
| | | | | | the total closing | | | | |
| | | | | | balance of | | | | |
| | | | | | accounts | | | Closing balance of | |
| Unit name | | Closing balance | | | receivable | | | bad-debt provision | |
| | | | | | | | (%) | | | | | |
| Client I | | | 37,347,447.87 | | | | 48.54 | | | | 1,867,372.39 | |
| Client II | | | 7,610,689.08 | | | | 9.89 | | | | 380,534.45 | |
| Client III | | | 4,439,672.54 | | | | 5.77 | | | | 221,983.63 | |
| Client IV | | | 2,970,340.48 | | | | 3.86 | | | | 148,517.02 | |
| Client V | | | 1,161,706.39 | | | | 1.52 | | | | 58,085.33 | |
| Total | | | 53,529,856.36 | | | | 69.58 | | | | 2,676,492.82 | |
| (6). | Accounts receivable ceased to be recognized due to the transfer of financial assets |
| | ¨ | Applicable | √ | Not applicable |
| (7). | Transferred receivables and capital and liabilities formed after continuous involvement |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Itemized list
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | | Closing balance | | | | Opening balance | |
| Dividends receivable | | | | | | | 18,000,000.00 | |
| Other receivables | | | 11,153,838,335.49 | | | | 43,463,029,538.77 | |
| Total | | | 11,153,838,335.49 | | | | 43,481,029,538.77 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Interest receivable
| (1). | Classification of interest receivable |
| | ¨ | Applicable | √ | Not applicable |
| 1. | Significant dividend receivable of more than 1 year |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Significant overdue interest |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Provision of bad debts |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Item (or Invested Company) | | Closing balance | | | Opening balance | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | | | 18,000,000.00 | |
| Total | | | | | 18,000,000.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 1. | Significant dividend receivable of more than 1 year |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Significant dividend receivable of more than 1 year |
| | ¨ | Applicable | √ | Not applicable |
| (6). | Provision of bad debts |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Other receivables
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Aging | | Closing book balance | |
| Within 1 year | | | 11,101,750,690.94 | |
| Sub-total within one year | | | 11,101,750,690.94 | |
| 1-2 years | | | 10,615,888.36 | |
| 2-3 years | | | 12,335,754.05 | |
| Over 3 years | | | 46,269,309.38 | |
| Total | | | 11,170,971,642.73 | |
| (2). | Classification of other accounts payable according to the nature of payment |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | Closing book | | | | Opening book | |
| Nature of payment | | | balance | | | | balance | |
| Various types of deposits and guarantees receivable | | | 65,722,463.55 | | | | 64,738,198.89 | |
| Purchases and store petty cash payments | | | 4,644,790.40 | | | | 5,816,136.09 | |
| Receivables from affiliated parties | | | 13,377,404.37 | | | | 12,382,088.70 | |
| Other receivables | | | 6,105,429.08 | | | | 4,392,480.71 | |
| Intra-group receivables | | | 11,081,121,555.33 | | | | 43,378,902,174.91 | |
| Total | | | 11,170,971,642.73 | | | | 43,466,231,079.30 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Provision of bad debts |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | Phase I | | | | Phase II | | | | Phase III | | | | | |
| Bad debt provision | | | Expected
credit loss
over the next
12 months | | | | Expected credit
loss within the
whole duration (no
credit impairment
occurred) | | | | Expected credit
loss within the
whole duration
(credit impairment
incurred) | | | | Total | |
| Balance as at January 1, 2022 | | | 879,652.86 | | | | 543,274.03 | | | | 1,778,613.64 | | | | 3,201,540.53 | |
| Balance as of January 1, 2022 in the current period | | | | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -67,839.49 | | | | 67,839.49 | | | | | | | | | |
| – Transferred to Phase III | | | | | | | -300,740.15 | | | | 300,740.15 | | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | | | | | | |
| Provision of the current period | | | 5,205.04 | | | | 267,069.76 | | | | 14,422,937.11 | | | | 14,695,211.91 | |
| Provision reversed in current period | | | | | | | | | | | | | | | | |
| Charge-off of the current period | | | | | | | 763,445.20 | | | | 763,445.20 | | | | | |
| Write-off of the current period | | | | | | | | | | | | | | | | |
| Other changes | | | | | | | | | | | | | | | | |
| Balance as at December 31, 2022 | | | 817,018.41 | | | | 577,443.13 | | | | 15,738,845.70 | | | | 17,133,307.24 | |
| | Explanation of significant changes in the book value of other receivables with provision changes in the current period: |
| | | | | |
| | ¨ | Applicable | √ | Not applicable |
| | Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period: |
| | | | | |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Situation of the provision of bad debts |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered | | | Charge-off | | | Closing | | | Other | |
| Category | | balance | | | Provision | | | or Reversed | | | or write-off | | | balance | | | changes | |
| Bad-debt provision for other receivables | | | 3,201,540.53 | | | | 14,695,211.91 | | | | | | | | 763,445.20 | | | | | | | | 17,133,307.24 | |
| Total | | | 3,201,540.53 | | | | 14,695,211.91 | | | | | | | | 763,445.20 | | | | | | | | 17,133,307.24 | |
| | Significant reversal or recovery of bad-debt provision of current year is: |
| | | | | |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5). | Other receivables actually verified and cancelled of current year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Write-off amount |
| Other receivables actually written off | | 763,445.20 |
Where the other receivables written off is important:
| | ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of other receivables:
| | ¨ | Applicable | √ | Not applicable |
| (6). | Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | | | | Proportion in | | | |
| | | | | | | | | | | | total closing | | | Closing balance |
| | | | | | | | | | | balance of other | | | of bad-debt |
| Unit name | | Nature of receivable | | | Closing balance | | | Aging | | | receivables | | | provision |
| | | | | | | | | | | | (%) | | | |
| Client I | | Intra-group receivables | | | 2,050,287,662.28 | | | Within 1 year | | | 18.35 | | | |
| Client II | | Intra-group receivables | | | 977,195,623.50 | | | Within 1 year | | | 8.75 | | | |
| Client III | | Intra-group receivables | | | 759,872,711.66 | | | Within 1 year | | | 6.80 | | | |
| Client IV | | Intra-group receivables | | | 686,017,870.68 | | | Within 1 year | | | 6.14 | | | |
| Client V | | Intra-group receivables | | | 672,964,718.85 | | | Within 1 year | | | 6.02 | | | |
| Total | | / | | | 5,146,338,586.97 | | | / | | | 46.06 | | | |
| (7). | Accounts receivable involving governmental subsidies |
| | ¨ | Applicable | √ | Not applicable |
| (8). | Other receivables with terminated confirmation due to financial assets transfer |
| | ¨ | Applicable | √ | Not applicable |
| (9). | Amount of assets and liabilities formed through transfer of other accounts receivable and continuous involvement |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 3. | Long-term equity investment |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Closing balance | | | | | | | | | Opening balance | | | | |
| | | | | | Impairment | | | | | | | | | Impairment | | | | |
| Items | | Book balance | | | provision | | | Carrying value | | | Book balance | | | provision | | | Carrying value | |
| Investment in subsidiaries | | | 8,533,363,770.99 | | | | | | | | 8,533,363,770.99 | | | | 8,480,383,770.99 | | | | | | | | 8,480,383,770.99 | |
| Investment in cooperative enterprises and joint ventures | | | 3,561,969,941.27 | | | | 356,747,029.69 | | | | 3,205,222,911.58 | | | | 3,893,487,057.12 | | | | 250,959,537.39 | | | | 3,642,527,519.73 | |
| Total | | | 12,095,333,712.26 | | | | 356,747,029.69 | | | | 11,738,586,682.57 | | | | 12,373,870,828.11 | | | | 250,959,537.39 | | | | 12,122,911,290.72 | |
| (1). | Investment in subsidiaries |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Investee | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | | | Depreciation
provision accrued
in current period | | | Closing balance of
provision for
impairment | |
| Fujian Yonghui Superstores Co., Ltd. | | | 800,000,000.00 | | | | | | | | | 800,000,000.00 | | | | | | | |
| Chongqing Yonghui Superstores Co., Ltd. | | | 714,400,000.00 | | | | | | | | | 714,400,000.00 | | | | | | | |
| Beijing Yonghui Superstores Co., Ltd. | | | 600,000,000.00 | | | | | | | | | 600,000,000.00 | | | | | | | |
| Liaoning Yonghui Superstores Co., Ltd. | | | 600,000,000.00 | | | | | | | | | 600,000,000.00 | | | | | | | |
| Sichuan Yonghui Store Co., Ltd. | | | 1,000,000,000.00 | | | | | | | | | 1,000,000,000.00 | | | | | | | |
| Jilin Yonghui Superstores Co., Ltd. | | | 300,000,000.00 | | | | | | | | | 300,000,000.00 | | | | | | | |
| Shanghai Yonghui Superstores Co., Ltd. | | | 300,000,000.00 | | | | | | | | | 300,000,000.00 | | | | | | | |
| Anhui Yonghui Superstores Co., Ltd. | | | 285,080,000.00 | | | | | | | | | 285,080,000.00 | | | | | | | |
| Fujian Yonghui Logistics Co., Ltd. | | | 285,000,000.00 | | | | | | | | | 285,000,000.00 | | | | | | | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 370,000,000.00 | | | | | | | | | 370,000,000.00 | | | | | | | |
| Guizhou Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | 200,000,000.00 | | | | | | | |
| Hebei Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | 200,000,000.00 | | | | | | | |
| Jiangsu Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | 200,000,000.00 | | | | | | | |
| Zhejiang Yonghui Superstores Co., Ltd. | | | 120,000,000.00 | | | | | | | | | 120,000,000.00 | | | | | | | |
| Chengdu Yonghui Business Development Co., Ltd. | | | 104,000,000.00 | | | | | | | | | 104,000,000.00 | | | | | | | |
| Yonghui Logistics Co., Ltd. | | | 90,000,000.00 | | | | | | | | | 90,000,000.00 | | | | | | | |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | | 89,521,504.19 | | | | | | | | | 89,521,504.19 | | | | | | | |
| Henan Yonghui Superstores Co., Ltd. | | | 80,860,000.00 | | | | | | | | | 80,860,000.00 | | | | | | | |
| Shanghai Dongzhan International Trade Co., Ltd. | | | 59,210,296.00 | | | | | | | | | 59,210,296.00 | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Investee | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | | | Depreciation
provision accrued
in current period | | | Closing balance of
provision for
impairment | |
| Hubei Yonghui Zhongbai Superstores Co., Ltd. | | 55,000,000.00 | | | | | | | | | | 55,000,000.00 | | | | | | | |
| Fujian Strait Food Development Co., Ltd. | | 53,000,000.00 | | | | | | | | | | 53,000,000.00 | | | | | | | |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | 50,000,000.00 | | | | | | | | | | 50,000,000.00 | | | | | | | |
| Anhui Yonghui Logistics Co., Ltd. | | 50,000,000.00 | | | | | | | | | | 50,000,000.00 | | | | | | | |
| Shandong Yonghui Superstores Co., Ltd. | | 50,000,000.00 | | | | | | | | | | 50,000,000.00 | | | | | | | |
| Xiamen Yonghui Minsheng Superstores Co., Ltd. | | 41,670,000.00 | | | | | | | | | | 41,670,000.00 | | | | | | | |
| Hunan Yonghui Superstores Co., Ltd. | | 40,000,000.00 | | | | | | | | | | 40,000,000.00 | | | | | | | |
| Fujian Yonghui Commercial Co., Ltd. | | 37,398,045.18 | | | | | | | | | | 37,398,045.18 | | | | | | | |
| Jiangsu Yonghui Business Management Co., Ltd. | | 30,000,000.00 | | | | | | | | | | 30,000,000.00 | | | | | | | |
| Fujian Yonghui Culture Media Co., Ltd. | | 28,256,090.88 | | | | | | | | | | 28,256,090.88 | | | | | | | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | 28,030,000.00 | | | 2,980,000.00 | | | | | | | 31,010,000.00 | | | | | | | |
| Yonghui Holdings Co., Ltd. | | 25,277,999.95 | | | | | | | | | | 25,277,999.95 | | | | | | | |
| Ningbo Yonghui Superstores Co., Ltd. | | 20,000,000.00 | | | | | | | | | | 20,000,000.00 | | | | | | | |
| Guangxi Yonghui Superstores Co., Ltd. | | 60,000,000.00 | | | | | | | | | | 60,000,000.00 | | | | | | | |
| Xiamen Yonghui Commercial Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Jiangxi Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Shaanxi Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Shanxi Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Heilongjiang Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Xiangxin Investment Fund Management Co., Ltd. | | 11,500,000.00 | | | | | | | | | | 11,500,000.00 | | | | | | | |
| Yunnan Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Ningxia Yonghui Superstores Co., Ltd. | | 60,000,000.00 | | | | | | | | | | 60,000,000.00 | | | | | | | |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | 9,000,000.00 | | | | | | | | | | 9,000,000.00 | | | | | | | |
| Fujian Yongjin Trading Co., Ltd. | | 4,900,000.00 | | | | | | | | | | 4,900,000.00 | | | | | | | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | 200,000,000.00 | | | | | | | | | | 200,000,000.00 | | | | | | | |
| Guizhou Yonghui Logistics Co., Ltd. | | 50,000,000.00 | | | | | | | | | | 50,000,000.00 | | | | | | | |
| Yonghui Yunjin Technology Co., Ltd. | | 500,000,000.00 | | | | | | | | | | 500,000,000.00 | | | | | | | |
| Xizang Yonghui Superstores Co., Ltd. | | 20,000,000.00 | | | | | | | | | | 20,000,000.00 | | | | | | | |
| Guansu Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Qinghai Yonghui Superstores Co., Ltd. | | 20,000,000.00 | | | | | | | | | | 20,000,000.00 | | | | | | | |
| Beijing Yonghui Technology Co., Ltd. | | 10,000,000.00 | | | | | | | | | | 10,000,000.00 | | | | | | | |
| Fujian Yuntong Supply Chain Co., Ltd. | | 100,000,000.00 | | | | | | | | | | 100,000,000.00 | | | | | | | |
| Fujian Yongyuehui Business Management Co., Ltd. | | 100,000,000.00 | | | | | | | | | | 100,000,000.00 | | | | | | | |
| East China Yonghui Logistics Co., Ltd. | | | | | 50,000,000.00 | | | | | | | 50,000,000.00 | | | | | | | |
| Yonghui Yunchuang Technology Co., Ltd. | | 338,279,834.79 | | | | | | | | | | 338,279,834.79 | | | | | | | |
| Total | | 8,480,383,770.99 | | | 52,980,000.00 | | | | | | | 8,533,363,770.99 | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Investment in cooperative enterprises and joint ventures |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase/decrease in the current period | |
| Investment unit | | Opening balance | | Increased
investment | | | Decreased
investment | | | Investment
profit and loss
recognized with
the equity
method | | | Other
comprehensive
revenue adjustment |
| | Other equity
changes | | | Distribution
of cash
dividends or
profits | | | Provision of
impairment
losses | | | Others | | | Closing balance | | | Closing
balance of
provision for
impairment | |
| I. Cooperative enterprises Yonghui Fresh Food Development Co., Ltd. | | | 156,722,946.25 | | | | | | | | -108,103,528.11 | | | | | | | | | | | | | | | | | | 48,619,418.14 | | | | |
| Subtotal | | | 156,722,946.25 | | | | | | | | -108,103,528.11 | | | | | | | | | | | | | | | | | | 48,619,418.14 | | | | |
| II. Joint ventures | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Zhongbai Holdings Group Co., Ltd. | | | 220,361,681.23 | | | | | -215,345,265.93 | | | -5,016,415.30 | | | | | | | | | | | | | | | | | | | | | | |
| Chengdu Hongqi Chain Co., Ltd. | | | 1,948,635,465.55 | | | | | | | | 101,990,525.37 | | | | | | | | | -3,998,400.00 | | | | | | | | | 2,046,627,590.92 | | | | |
| Zhanjiang Guolian Aquatic Products Co., Ltd | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fujian OneBank Limited | | | 603,152,265.98 | | | | | | | | 9,633,586.03 | | | -866,721.55 | | | | | | | | | | | | | | | 611,919,130.46 | | | | |
| Xiangcun Gaokao Agricultural Co., Ltd. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fujian Minwei Industrial Co., Ltd. | | | 286,190,547.42 | | | | | | | | -36,363,802.38 | | | | | | | | | | | | 196,826,745.04 | | | | | | 53,000,000.00 | | | 356,747,029.69 | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 86,168,800.44 | | | | | | | | 9,580,006.06 | | | | | | 10,825,936.22 | | | | | | | | | | | | 106,574,742.72 | | | | |
| Beijing Friendship Messenger Trading. Co., Ltd | | | 66,419,903.84 | | | | | | | | -11,930,851.04 | | | | | | | | | | | | | | | | | | 54,489,052.80 | | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 51,851,641.23 | | | | | | | | 34,331,932.13 | | | | | | | | | -24,300,000.00 | | | | | | | | | 61,883,573.36 | | | | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | | 20,309,611.38 | | | | | | | | 10,842,346.87 | | | | | | | | | | | | | | | | | | 31,151,958.25 | | | | |
| Fanshiyun (Beijing) Retail Technology Co., Ltd. | | | 13,857,400.41 | | | | | -11,637,042.57 | | | -2,220,357.84 | | | | | | | | | | | | | | | | | | | | | | |
| 1233 International Supply Chain Management Co., Ltd. | | | 188,857,256.00 | | | | | | | | 2,100,188.93 | | | | | | | | | | | | | | | | | | 190,957,444.93 | | | | |
| Subtotal | | | 3,485,804,573.48 | | | | | -226,982,308.50 | | | 112,947,158.83 | | | -866,721.55 | | | 10,825,936.22 | | | -28,298,400.00 | | | 196,826,745.04 | | | | | | 3,156,603,493.44 | | | 356,747,029.69 | |
| Total | | | 3,642,527,519.73 | | | | | -226,982,308.50 | | | 4,843,630.72 | | | -866,721.55 | | | 10,825,936.22 | | | -28,298,400.00 | | | 196,826,745.04 | | | | | | 3,205,222,911.58 | | | 356,747,029.69 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 4. | Operating revenues and operating costs |
| (1). | Operating revenue and costs |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of current period | | | Amount of last period | |
| Items | | Revenue | | | Cost | | | Revenue | | | Cost | |
| Main business | | | 7,611,241,236.24 | | | | 6,968,231,428.63 | | | | 7,358,310,070.68 | | | | 6,808,157,965.86 | |
| Other business | | | 599,683,767.74 | | | | 11,908,124.52 | | | | 583,321,768.28 | | | | 34,047,723.99 | |
| Total | | | 8,210,925,003.98 | | | | 6,980,139,553.15 | | | | 7,941,631,838.96 | | | | 6,842,205,689.85 | |
| (2). | Conditions of incomes generated by contract |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Description of performance obligations |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Description of allocating to the residual fulfillment obligations |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Long-term equity investment income measured with cost method | | | 370,500,000.00 | | | | 929,000,000.00 | |
| Long-term equity investment income measured with equity method | | | 4,843,630.72 | | | | -23,048,225.04 | |
| Investment income for disposing long-term equity investment production | | | -1,716,557.39 | | | | 42,413,884.07 | |
| Investment income of trading financial assets during the holding period | | | | | | | 521,082.72 | |
| Investment income of holding trading financial assets | | | -45,127,381.37 | | | | 342,553.95 | |
| Investment income from non-current financial assets during the holding period | | | | | | | 67,910,214.00 | |
| Total | | | 328,499,691.96 | | | | 1,017,139,509.70 | |
| | ¨ | Applicable | √ | Not applicable |
XVIII. Supplementary Information
| 1. | Detailed statement of current non-recurring profit and loss |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| Items | | Amount | | | Explanation | |
| Gains and losses on disposal of non-current assets | | | 179,006,039.03 | | | | | |
| Government grants included in current profits and losses (excluding the government grants closely related to the Company’s business operations and government grants based on standard quota or quantitative amounts according to unified national standards) | | | 211,947,320.51 | | | | | |
| Gains or losses attributable to change in fair value for held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, and derivative financial liabilities; and investment income from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other creditor investments, excluding the effective hedging business related to the normal operation of the Company | | | -621,646,520.97 | | | | | |
| Trustee fee income from entrusted operation | | | 405,823.11 | | | | | |
| Other non-operating income and expenditures except the items above | | | 14,114,198.20 | | | | | |
| Other profit and loss items conforming to the definition of non-recurring profit and loss | | | 42,062,517.15 | | | | | |
| Less: income tax impact amount | | | 21,264,863.45 | | | | | |
| Minority equity impact amounts | | | 2,643,883.73 | | | | | |
| Total | | | -198,019,370.15 | | | | | |
The causes for non-recurring profits and losses defined by the Company in accordance with the definitions in Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 1: Explanatory Announcement – Non-Recurring Profit and Loss and the items of non-recurring profit and loss listed in Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 1: Explanatory Announcement – Non-Recurring Profit and Loss and defined as items of recurrent profit and loss shall be explained.
| | ¨ | Applicable | √ | Not applicable |
| 2. | Returns on equity and earnings per share |
| | √ | Applicable | ¨ | Not applicable |
| | Weighted
average
return on | | | Earnings per share | |
| Profits during the reporting period | | equity | | | Basic EPS | | | Diluted EPS | |
| | | (%) | | | | | | | |
| Net profits attributable to the Company’s ordinary shareholders | | | -30.21 | | | | -0.30 | | | | -0.30 | |
| Net profits attributable to the Company’s ordinary shareholders after the deduction of the non-recurring profits and losses | | | -28.05 | | | | -0.28 | | | | -0.28 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 3. | Accounting data difference arising from foreign and domestic accounting standards |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
Chairman: Zhang Xuansong
Approved by the Board of Directors and submitted on April 27, 2023
Revision Information
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 3. | For the year ended December 31, 2023 |
Section X Financial Reports
| | √ | Applicable | ¨ | Not applicable |
Audit Report
AYHM (2024) SZi No. 70018406_B01
Yonghui Superstores Co., Ltd.
All Shareholders of Yonghui Superstores Co., Ltd.:
We have audited the financial statements of Yonghui Superstores Co., Ltd., which comprise of the consolidated and the company’s balance sheet as of December 31, 2023, the consolidated and the company’s income statement, statement of changes in equity, and cash flow statement for the year then ended, and the notes to the relevant financial statements.
We think that the accompanying financial statements of Yonghui Superstores Co., Ltd. have been prepared in accordance with the CASBE and fairly present the consolidated and the company’s financial position of Yonghui Superstores Co., Ltd. as of December 31, 2023, and the consolidated and the company’s financial performance and cash flows for the year then ended.
| II. | Basis for Formation of Audit Opinions |
We have conducted our audit in accordance with the Auditing Standards for CPAs in China. In the “Responsibilities of CPAs for Auditing Financial Statements” of this report, our responsibilities under these standards are further elaborated. In accordance with China Certified Public Accountant Auditing Standards, we are independent of the Yonghui Superstores Co., Ltd. and have performed other duties about occupational ethics. We believe that the audit evidence we obtained is sufficient and appropriate, which provides a reasonable basis for our audit opinions.
Key matters are the matters that we believe are the most significant to the audit of the financial statements for the current period based on our professional judgment. These matters were addressed in the context of the audit of the financial statements as a whole and the formation of our audit opinions, and we do not give separate opinions on these matters. We have described in how we addressed each of the following matters in the audit, as a background to this description.
We have fulfilled our responsibilities as described in the section “CPAs’ responsibilities for the audit of financial statements” of this report, including those responsibilities related to the key audit matters. Accordingly, our audit work includes performing audit procedures designed to respond to the assessed risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the following key audit matters, provide a basis for our audit opinion on the financial statements as a whole.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Key audit matters: | | How the matter was addressed in our audit: |
| | | |
| Recognition of supplier income |
| |
Yonghui Superstores Co., Ltd. reported RMB4,932,182 thousand of other operating revenue for the year 2023, mainly obtained from suppliers. Yonghui Superstores Co., Ltd. recognizes income from suppliers based on the contractual or supplementary agreement amounts when providing the corresponding services and obtaining the right to collect payments. These arrangements vary in nature and scale, including storage service fees charged to suppliers, display-related service fees, and various service-related fees associated with assisting suppliers in conducting marketing activities. Due to the significant contribution of supplier income to Yonghui Superstores Co., Ltd.’s profits and the increasing frequency and complexity of transactions with suppliers, there is inherent risk of inaccurate recognition of income or improper allocation to accounting periods. Therefore, we have determined the recognition of supplier income as a key audit matter. Relevant information is disclosed in the audit report of Note III, 21 “Revenue from contracts with customers”, Note III, 28 “Significant accounting judgments and estimates”, and Note V, 44 “Operating revenue and costs” of the financial statements. | | Our audit procedures include: (1) Understanding management’s accounting policies and key internal control measures related to the recognition of supplier income, and testing and evaluating the effectiveness of relevant internal control design and operation; (2) Testing general controls and key application controls of the information system with the assistance of internal information technology experts, including evaluating whether the information technology system operates as designed and the integrity and accuracy of the data transfer between information technology systems; (3) Examining the terms and conditions stipulated in the various types of standard contract agreements signed with suppliers to assess the appropriateness of the accounting treatment for the recognition of supplier income; (4) Selecting samples to perform detailed testing of various types of supplier income recognized by the Company, including verifying the supporting documents such as supplier contracts, invoices, supplier statements, and financial vouchers for the recognition of supplier income; (5) Performing the external confirmation procedure, comparing the results with the amounts recorded in the Company’s books, and performing alternative procedures for suppliers giving no response. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Key audit matters: | | How the matter was addressed in our audit: |
| | | |
| Provision for impairment loss on long-term equity investments |
| |
As of December 31, 2023, Yonghui Superstores Co., Ltd. had a carrying amount of RMB3,231,665 thousand for long-term equity investments, with an impairment provision of RMB968,582 thousand. This provision is made for long-term equity investments where the recoverable amount is lower than their carrying amount. Due to the significance of long-term equity investments to the financial statements as a whole, and the management’s significant judgments and estimates involved in the provision for impairment loss on long-term equity investments. Therefore, we have identified the provision for impairment loss on long-term equity investments made by Yonghui Superstores Co., Ltd. as a key audit matter. Relevant information is disclosed in the audit report of Note III, 10 “Long-term equity investments”, Note III, 17 “Impairment of assets”, Note III, 28 “Significant accounting judgments and estimates”, and Note V, 12 “Long-term equity investments” of the financial statements. | | Our audit procedures include: (1) Understanding and assessing the design and effectiveness of internal controls related to the impairment testing of long-term equity investments; (2) Conducting interviews with the Management of Yonghui Superstores Co., Ltd. to understand their investment intentions, the implementation of strategic cooperation, and the expectations of the cooperation, and viewing documents such as board resolutions related to the investment; (3) Discussing with management the basis for assessing indicators of impairment of long-term equity investments, obtaining financial statements of the investee companies, analyzing their financial information, and evaluating the reasonableness of management’s judgments regarding indicators of impairment of long-term equity investments; (4) Evaluating the independence, professional competence, and objectivity of the external valuation experts hired by the management, communicating with the management, external valuation experts, and internal valuation experts to evaluate key parameters of valuation. With the assistance of internal valuation experts, evaluate the methods, assumptions, and reasonableness of estimates used to evaluate the present value of expected future cash flows and the fair value of assets net of disposal costs in accordance with the requirements of the CASBE; (5) Evaluating the disclosure of impairment provisions for long-term equity investments in the financial statements to determine compliance with the requirements of the CASBE. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Key audit matters: | | How the matter was addressed in our audit: |
| | | |
| Provision for impairment loss on store asset groups |
| |
The store asset groups primarily include long-term assets, such as fixed assets, long-term prepaid expenses, and right-of-use assets. As of December 31, 2023, the carrying amount of these assets has totaled RMB20,040,187 thousand, with impairment provision totaled RMB684,500 thousand. This provision is made for store asset groups where the recoverable amount is lower than their carrying amount. Due to the significance of store asset groups to the financial statements as a whole, and the management’s significant judgments and estimates involved in the provision for impairment loss on store asset groups, therefore, we have identified the provision for impairment loss on store asset groups made by Yonghui Superstores Co., Ltd. as a key audit matter. Relevant information is disclosed in Note III, 12 “Fixed assets”, Note III, 25 “Leases”, Note III, 17 “Impairment of assets”, Note III, 18 “Long-term prepaid expenses”, Note III, 28 “Significant accounting judgments and estimates”, Note V, 15 “Fixed assets”, Note V, 18 “Right-of-use assets”, Note V, 21 “Long-term prepaid expenses”. | | Our audit procedures include: (1) Understanding and assessing the design and effectiveness of internal controls related to impairment testing of store assets; (2) Discussing with management the basis for judging the indicators of impairment of the store asset groups and evaluate whether management’s judgment on the indicators of impairment of the store asset groups is reasonable; (3) Communicating with management and internal valuation experts to evaluate key parameters of valuation; with assistance from internal valuation experts, assessing the appropriateness of the methods, assumptions, and estimates used to discount the projected future cash flows of asset groups based on the requirements of the CASBE; (4) Evaluating whether the disclosures related to impairment of store asset groups in the financial statements comply with the requirements of the CASBE. |
The Management of Yonghui Superstores Co., Ltd. is responsible for other information. Other information includes information covered in the annual report, but not financial statements and our audit reports.
Our audit opinions on the financial statements exclude other information and we do not publish any form of verification conclusions on other information.
In combination with our audit of financial statements, it is our responsibility to read other information, and in this process, consider whether other information to the financial statements or the situation we learned in the process of auditing is materially inconsistent or seems to have material misstatement.
Based on the work we have done, we should report the fact if we are certain that other information is materially misreported. In this respect, we have nothing to report.
| V. | Responsibilities of the Management and the Governance for Financial Statements |
The Management is responsible for preparing financial statements in accordance with the CASBE and fairly presenting the financial statements, as well as designing, implementing, and maintaining a system of internal control necessary to make sure the financial statements are free from material misstatement, whether due to fraud or error.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
During the preparation of the financial statements, the management is responsible for assessing the ability of Yonghui Superstores Co., Ltd. to continue as a going concern, disclosing any relevant matters related to going concern (if applicable), and applying the going concern assumption, unless it intends to liquidate, cease operations, or has no other realistic option.
The governance level is responsible for overseeing the financial reporting process of Yonghui Superstores Co., Ltd.
| VI. | Responsibilities of CPAs for Auditing Financial Statements |
Our objective is to obtain reasonable assurance for that the financial statements are free of material misstatements due to fraud or errors and to issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that audits conducted according to audit standards will always identify a material misstatement that exists. A misstatement may be caused by fraud or errors and it is usually considered “material” when it is reasonably expected that the misstatement would, either individually or aggregately, affect the user’s economic decisions based on the financial statements.
In the process of auditing according to the auditing standards, we have applied our professional judgment and maintained professional skepticism. Meanwhile, we have also carried out the following work:
| (1) | Identifying and assessing risks of material misstatement of financial statements due to fraud or errors; designing and implementing audit procedures to address these risks; obtaining adequate and appropriate audit evidence as a basis for issuing audit opinions. As fraud may involve collusion, forgery, willful omission, false statements, or overriding internal control, the risk of failing to identify material misstatements due to fraud is higher than that due to errors. |
| (2) | Understanding the internal control relevant to the audit in order to design audit procedures that are appropriate. |
| (3) | Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management. |
| (4) | Reaching a conclusion on the appropriateness of the Management’s use of continuing operation assumption. Meanwhile, based on the audit evidence obtained, a conclusion may be obtained on whether there may be major uncertainties in matters or circumstances leading to major doubts about the continuing operation ability of the Yonghui Superstores Co., Ltd. If we conclude a significant uncertainty, we shall, as required by the auditing standards, draw the attention of users of the financial statements to the relevant disclosures in the audit report; if the disclosure is insufficient, we shall give a modified opinion. Our conclusions are based on information available as of the audit report date. However, future matters or conditions may lead to an inability of Yonghui Superstores Co., Ltd. to continue as a going concern. |
| (5) | Evaluating the overall presentation, structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
| (6) | Obtaining sufficient and appropriate audit evidence regarding the financial information of entities or business activities within Yonghui Superstores Co., Ltd. in order to express an audit opinion on the financial statements. We are responsible for guiding, supervising, and executing the Group’s audit, and bearing all liabilities for our audit opinions. |
We communicated with the Governance on planned audit coverage, scheduling, and major audit findings, including the internal control defects deserving attention which were identified in the audit.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
We also provided a statement to the Governance on compliance with ethical requirements related to independence and discussed with them all relationships and other matters that may reasonably be considered to affect our independence, as well as associated preventive actions (where applicable).
From the matters that we communicated with the Governance, we decided which were the most important to the audit of the current financial statements and therefore constituted key audit matters. We shall describe these matters in the audit report, unless the public disclosure of these matters is prohibited by laws and regulations, or in rare cases, if reasonably expected, the negative consequences of communicating a matter in an audit report outweigh the benefits in the public interest, we shall determine that the matter should not be communicated in the audit report.
AYHM (2024) SZi No. 70018406_B01
Yonghui Superstores Co., Ltd.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Balance Sheet
December 31, 2023
Prepared by: Yonghui Superstores Co., Ltd.
Unit: Yuan Currency: RMB
| Items | | Notes | | December 31,
2023 | | | December 31,
2022 | |
| Current assets: | | | | | | | | | | |
| Monetary funds | | | | | 5,839,069,618.08 | | | | 7,615,940,712.22 | |
| Loans and advances (short-term) | | | | | 537,340,391.79 | | | | 818,071,041.50 | |
| Trading financial assets | | | | | 735,971,777.07 | | | | 890,826,719.10 | |
| Notes receivable | | | | | | | | | | |
| Factoring receivable | | | | | 68,688,964.38 | | | | 639,126,680.56 | |
| Account receivable | | | | | 421,742,480.93 | | | | 530,610,931.13 | |
| Receivables financing | | | | | | | | | | |
| Advance payments | | | | | 1,185,220,271.68 | | | | 1,389,235,355.79 | |
| Other receivables | | | | | 563,971,664.48 | | | | 649,676,328.75 | |
| Including: interests receivable | | | | | 941,391.67 | | | | 770,879.94 | |
| Dividends receivable | | | | | | | | | | |
| Inventories | | | | | 8,268,982,538.27 | | | | 10,466,589,497.14 | |
| Assets held for sale | | | | | | | | | | |
| Non-current assets due within one year | | | | | 49,380,092.40 | | | | 43,534,741.35 | |
| Other current assets | | | | | 1,365,370,529.47 | | | | 1,493,846,008.90 | |
| Total current assets | | | | | 19,035,738,328.55 | | | | 24,537,458,016.44 | |
| Non-current assets: | | | | | | | | | | |
| Loans and advances | | | | | 20,568,200.17 | | | | 76,991,144.35 | |
| Debt investment | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | |
| Long-term receivables | | | | | 227,393,410.57 | | | | 264,650,510.99 | |
| Long-term equity investment | | | | | 3,231,665,078.02 | | | | 3,639,581,470.56 | |
| Investment in other equity instruments | | | | | | | | | | |
| Other non-current financial assets | | | | | 3,651,480,119.24 | | | | 3,918,000,000.00 | |
| Investment properties | | | | | 300,148,229.00 | | | | 311,134,379.64 | |
| Fixed assets | | | | | 3,842,169,544.96 | | | | 4,114,413,404.13 | |
| Construction in progress | | | | | 240,333,156.71 | | | | 383,281,366.61 | |
| Productive biological assets | | | | | 12,091,311.79 | | | | 12,727,696.62 | |
| Right-of-use assets | | | | | 17,033,171,909.36 | | | | 19,417,724,491.81 | |
| Intangible assets | | | | | 1,037,948,337.18 | | | | 1,313,822,703.50 | |
| Development expenses | | | | | | | | | 10,899,846.17 | |
| Goodwill | | | | | 3,661,378.25 | | | | 3,661,378.25 | |
| Long-term deferred expenses | | | | | 2,302,495,702.63 | | | | 2,900,454,980.29 | |
| Deferred tax asset | | | | | 1,113,173,093.71 | | | | 1,238,414,692.18 | |
| Other non-current assets | | | | | | | | | | |
| Total non-current assets | | | | | 33,016,299,471.59 | | | | 37,605,758,065.10 | |
| Total assets | | | | | 52,052,037,800.14 | | | | 62,143,216,081.54 | |
| Current liabilities: | | | | | | | | | | |
| Short-term loans | | | | | 5,130,220,089.04 | | | | 6,528,480,368.69 | |
| Trading financial liabilities | | | | | | | | | | |
| Notes payable | | | | | | | | | | |
| Accounts payable | | | | | 9,816,260,354.84 | | | | 12,155,435,663.28 | |
| Accounts collected in advance | | | | | 106,067,963.44 | | | | 196,630,132.94 | |
| Contract liabilities | | | | | 4,850,841,586.20 | | | | 4,826,600,547.79 | |
| Payroll payable | | | | | 602,858,043.72 | | | | 758,314,886.20 | |
| Taxes payable | | | | | 245,448,868.97 | | | | 229,606,730.28 | |
| Other payables | | | | | 1,725,134,598.87 | | | | 1,899,603,590.71 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | December 31,
2023 | | | December 31,
2022 | |
| Including: interests payable | | | | | | | | | | |
| Dividends payable | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | 1,792,351,864.19 | | | | 2,011,863,655.60 | |
| Other current liabilities | | | | | 457,882,012.38 | | | | 460,794,502.35 | |
| Total current liabilities | | | | | 24,727,065,381.65 | | | | 29,067,330,077.84 | |
| Non-current liabilities: | | | | | | | | | | |
| Long-term borrowings | | | | | 349,889,789.58 | | | | 2,070,085,001.67 | |
| Bonds payable | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Lease liabilities | | | | | 20,781,462,184.01 | | | | 23,110,834,161.62 | |
| Long-term accounts payable | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | |
| Estimated liabilities | | | | | 37,797,080.80 | | | | 7,383,565.56 | |
| Deferred income | | | | | 99,470,899.92 | | | | 104,500,259.85 | |
| Deferred tax liabilities | | | | | 74,683,702.79 | | | | 126,183,109.37 | |
| Other non-current liabilities | | | | | 46,931,643.83 | | | | | |
| Total non-current liabilities | | | | | 21,390,235,300.93 | | | | 25,418,986,098.07 | |
| Total liabilities | | | | | 46,117,300,682.58 | | | | 54,486,316,175.91 | |
| Equity (or shareholders’ equity): | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | 9,075,036,993.00 | | | | 9,075,036,993.00 | |
| Other equity instruments | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Capital reserves | | | | | 4,315,325,163.65 | | | | 4,292,122,541.86 | |
| Less: Treasury shares | | | | | 488,768,297.30 | | | | 263,483,654.25 | |
| Other comprehensive income | | | | | 5,073,713.42 | | | | 440,260.72 | |
| Special reserves | | | | | | | | | | |
| Surplus reserves | | | | | 1,132,840,649.96 | | | | 1,113,275,260.54 | |
| General risk reserves | | | | | | | | | | |
| Undistributed profits | | | | | -8,100,437,582.18 | | | | -6,751,820,069.61 | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | | | 5,939,070,640.55 | | | | 7,465,571,332.26 | |
| Minority interests | | | | | -4,333,522.99 | | | | 191,328,573.37 | |
| Total equity (or shareholders’ equity) | | | | | 5,934,737,117.56 | | | | 7,656,899,905.63 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | 52,052,037,800.14 | | | | 62,143,216,081.54 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Balance Sheet of the Parent Company
December 31, 2023
Prepared by: Yonghui Superstores Co., Ltd.
Unit: Yuan Currency: RMB
| Items | | Notes | | December 31,
2023 | | | December 31,
2022 | |
| Current assets: | | | | | | | | | | |
| Monetary funds | | | | | 4,092,150,003.46 | | | | 3,783,211,358.85 | |
| Trading financial assets | | | | | | | | | 253,755,385.82 | |
| Notes receivable | | | | | | | | | | |
| Account receivable | | | | | 69,717,307.96 | | | | 72,737,987.04 | |
| Receivables financing | | | | | | | | | | |
| Advance payments | | | | | 49,071,202.87 | | | | 64,776,716.71 | |
| Other receivables | | | | | 10,036,094,493.61 | | | | 11,153,838,335.49 | |
| Including: interests receivable | | | | | | | | | | |
| Dividends receivable | | | | | | | | | | |
| Inventories | | | | | 328,866,754.44 | | | | 368,298,463.42 | |
| Assets held for sale | | | | | | | | | | |
| Non-current assets due within one year | | | | | | | | | 6,357,530.82 | |
| Other current assets | | | | | 49,920,265.13 | | | | 69,830,506.40 | |
| Total current assets | | | | | 14,625,820,027.47 | | | | 15,772,806,284.55 | |
| Non-current assets: | | | | | | | | | | |
| Debt investment | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | |
| Long-term receivables | | | | | 2,642,385.68 | | | | 1,531,345.04 | |
| Long-term equity investment | | | | | 11,570,623,447.32 | | | | 11,738,586,682.57 | |
| Investment in other equity instruments | | | | | | | | | | |
| Other non-current financial assets | | | | | 3,651,480,119.24 | | | | 3,918,000,000.00 | |
| Investment properties | | | | | | | | | | |
| Fixed assets | | | | | 324,426,598.97 | | | | 346,607,781.14 | |
| Construction in progress | | | | | 3,237,965.73 | | | | 3,998,093.26 | |
| Productive biological assets | | | | | | | | | | |
| Right-of-use assets | | | | | 631,471,105.03 | | | | 567,549,059.54 | |
| Intangible assets | | | | | 137,208,365.14 | | | | 206,431,930.89 | |
| Development expenses | | | | | | | | | | |
| Goodwill | | | | | | | | | | |
| Long-term deferred expenses | | | | | 51,082,303.52 | | | | 72,494,628.86 | |
| Deferred tax asset | | | | | 14,687,600.10 | | | | 126,706,236.37 | |
| Other non-current assets | | | | | | | | | | |
| Total non-current assets | | | | | 16,386,859,890.73 | | | | 16,981,905,757.67 | |
| Total assets | | | | | 31,012,679,918.20 | | | | 32,754,712,042.22 | |
| Current liabilities: | | | | | | | | | | |
| Short-term loans | | | | | 1,901,562,910.56 | | | | 1,828,480,368.69 | |
| Trading financial liabilities | | | | | | | | | | |
| Notes payable | | | | | 2,350,000,000.00 | | | | 3,500,000,000.00 | |
| Accounts payable | | | | | 283,173,469.95 | | | | 371,341,837.03 | |
| Accounts collected in advance | | | | | 3,775,967.04 | | | | 108,195,847.09 | |
| Contract liabilities | | | | | 837,046,681.71 | | | | 439,087,861.62 | |
| Payroll payable | | | | | 62,935,418.83 | | | | 60,595,465.25 | |
| Taxes payable | | | | | 36,463,845.96 | | | | 12,100,931.30 | |
| Other payables | | | | | 7,607,743,154.26 | | | | 6,757,386,210.90 | |
| Including: interests payable | | | | | | | | | | |
| Dividends payable | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | 108,725,795.87 | | | | 261,631,905.17 | |
| Other current liabilities | | | | | 78,767,719.45 | | | | 40,849,231.73 | |
| Total current liabilities | | | | | 13,270,194,963.63 | | | | 13,379,669,658.78 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | December 31,
2023 | | | December 31,
2022 | |
| Non-current liabilities: | | | | | | | | | | |
| Long-term borrowings | | | | | 349,889,789.58 | | | | 2,070,085,001.67 | |
| Bonds payable | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Lease liabilities | | | | | 647,779,325.305 | | | | 59,114,586.21 | |
| Long-term accounts payable | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | |
| Estimated liabilities | | | | | 2,383,510.52 | | | | | |
| Deferred income | | | | | 2,133,333.48 | | | | 3,733,333.44 | |
| Deferred tax liabilities | | | | | | | | | | |
| Other non-current liabilities | | | | | | | | | | |
| Total non-current liabilities | | | | | 1,002,185,958.88 | | | | 2,632,932,921.32 | |
| Total liabilities | | | | | 14,272,380,922.51 | | | | 16,012,602,580.10 | |
| Equity (or shareholders’ equity): | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | 9,075,036,993.00 | | | | 9,075,036,993.00 | |
| Other equity instruments | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | |
| Capital reserves | | | | | 4,173,624,245.73 | | | | 4,150,421,623.94 | |
| Less: Treasury shares | | | | | 488,768,297.30 | | | | 263,483,654.25 | |
| Other comprehensive income | | | | | 5,403,581.79 | | | | 785,921.18 | |
| Special reserves | | | | | | | | | | |
| Surplus reserves | | | | | 1,132,840,649.96 | | | | 1,113,275,260.54 | |
| Undistributed profits | | | | | 2,842,161,822.51 | | | | 2,666,073,317.71 | |
| Total equity (or shareholders’ equity) | | | | | 16,740,298,995.69 | | | | 16,742,109,462.12 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | 31,012,679,918.20 | | | | 32,754,712,042.22 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Income Statement
January – December of 2023
Unit: Yuan Currency: RMB
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| I. Total operating income | | | | | | | 78,642,171,577.01 | | | | 90,090,819,396.14 | |
| Including: operating income | | | | | | | 78,642,171,577.01 | | | | 90,090,819,396.14 | |
| II. Total operating cost | | | | | | | 80,366,333,652.98 | | | | 92,481,130,331.71 | |
| Including: operating cost | | | | | | | 61,939,819,460.98 | | | | 72,360,590,128.08 | |
| Taxes and surcharges | | | | | | | 217,915,039.24 | | | | 204,290,684.25 | |
| Selling expenses | | | | | | | 14,680,133,439.44 | | | | 15,849,737,690.89 | |
| Administrative expenses | | | | | | | 1,887,145,956.28 | | | | 2,046,416,100.93 | |
| Research and development expenses | | | | | | | 318,267,251.93 | | | | 481,898,435.04 | |
| Financial expenses | | | | | | | 1,323,052,505.11 | | | | 1,538,197,292.52 | |
| Including: interest expenses | | | | | | | 1,280,427,957.39 | | | | 1,556,082,561.75 | |
| Interest income | | | | | | | 114,344,551.59 | | | | 201,725,230.95 | |
| Plus: other income | | | | | | | 185,516,402.55 | | | | 211,947,320.51 | |
| Investment income (loss is indicated by “-”) | | | | | | | 396,293,929.52 | | | | -105,277,829.92 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | | | 109,227,298.46 | | | | -49,507,225.29 | |
| Income from fair value variation (loss is indicated by “-”) | | | | | | | -76,342,984.38 | | | | -594,680,167.44 | |
| Credit impairment losses (loss is indicated by “-”) | | | | | | | -88,874,262.99 | | | | -119,960,638.17 | |
| Assets impairment losses (loss is indicated by “-”) | | | | | | | -523,083,152.30 | | | | -635,207,660.63 | |
| Gains from disposal of assets (loss is indicated by “-”) | | | | | | | 354,869,200.66 | | | | 335,708,161.50 | |
| III. Operating profits (loss is indicated by “-”) | | | | | | | -1,475,782,942.91 | | | | -3,297,781,749.72 | |
| Plus: non-operating income | | | | | | | 281,697,218.81 | | | | 332,093,309.52 | |
| Less: Non-operating expenses | | | | | | | 167,332,285.51 | | | | 252,787,354.20 | |
| IV. Total profit (total loss is indicated by “-”) | | | | | | | -1,361,418,009.61 | | | | -3,218,475,794.40 | |
| Less: income tax expense | | | | | | | 103,312,444.81 | | | | -218,800,851.85 | |
| V. Net profit (net loss is indicated by “-”) | | | | | | | -1,464,730,454.42 | | | | -2,999,674,942.55 | |
| (I) Classified by business continuity | | | | | | | | | | | | |
| 1. Net profit from continuous operation (net loss is indicated by “-”) | | | | | | | -1,464,730,454.42 | | | | -2,999,674,942.55 | |
| 2. Net profit from discontinued operations (net loss is indicated by “-”) | | | | | | | | | | | | |
| (II) Classified by ownership | | | | | | | | | | | | |
| 1. Net profit attributable to the owners of the Parent Company (net loss is indicated by “-”) | | | | | | | -1,329,052,123.15 | | | | -2,763,166,060.87 | |
| 2. Minority interest income (net loss is indicated by “-”) | | | | | | | -135,678,331.27 | | | | -236,508,881.68 | |
| VI. After-tax Net Amount of Other | | | | | | | | | | | | |
| Comprehensive Income | | | | | | | 4,633,452.70 | | | | -1,054,073.47 | |
| (I) Net amount of other comprehensive income after tax attributable to the owners of the parent company | | | | | | | 4,633,452.70 | | | | -1,054,073.47 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| 1. Other comprehensive income not allowed to be re-classified into profit and loss | | | | | | | | | | | | |
| (1) Changes caused by re-measurement and re-definition of benefit plan | | | | | | | | | | | | |
| (2) Other comprehensive income that cannot be converted into profits or losses under the equity method | | | | | | | | | | | | |
| (3) Fair value changes of other equity instrument investment | | | | | | | | | | | | |
| (4) Fair value changes of enterprise own credit risk | | | | | | | | | | | | |
| 2. Other comprehensive income to be re-classified into profit and loss | | | | | | | 4,633,452.70 | | | | -1,054,073.47 | |
| (1) Other comprehensive income that can be converted into losses and profits under the equity method | | | | | | | 4,617,660.61 | | | | -866,721.55 | |
| (2) Fair value changes of other creditor investments | | | | | | | | | | | | |
| (3) Amount of financial assets re-classified and included in other comprehensive income | | | | | | | | | | | | |
| (4) Provision for credit depreciation of other creditor investments | | | | | | | | | | | | |
| (5) Cash flow hedging reserves | | | | | | | | | | | | |
| (6) Balance arising from the translation of foreign currency financial statements | | | | | | | 15,792.09 | | | | -187,351.92 | |
| (7) Others | | | | | | | | | | | | |
| (II) After-tax net amount of other comprehensive income attributable to minority shareholders | | | | | | | | | | | | |
| VII. Total comprehensive income | | | | | | | -1,460,097,001.72 | | | | -3,000,729,016.02 | |
| (I) Total comprehensive income attributable to the owners of the Parent Company | | | | | | | -1,324,418,670.45 | | | | -2,764,220,134.34 | |
| (II) Total comprehensive income attributable to minority shareholders | | | | | | | -135,678,331.27 | | | | -236,508,881.68 | |
| VIII. Earnings per share: | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | -0.15 | | | | -0.30 | |
| (II) Diluted EPS (RMB/share) | | | | | | | -0.15 | | | | -0.30 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Income Statement of the Parent Company
January – December of 2023
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| I. Operation Revenue | | | | | | | 7,447,031,228.55 | | | | 8,210,925,003.98 | |
| Less: operating cost | | | | | | | 6,070,197,288.81 | | | | 6,980,139,553.15 | |
| Taxes and surcharges | | | | | | | 19,823,758.15 | | | | 17,334,970.29 | |
| Selling expenses | | | | | | | 854,547,418.06 | | | | 747,841,716.78 | |
| Administrative expenses | | | | | | | 418,844,944.42 | | | | 330,019,925.77 | |
| Research and development expenses | | | | | | | 38,217,367.30 | | | | 66,849,711.16 | |
| Financial expenses | | | | | | | 37,052,654.49 | | | | 156,371,051.26 | |
| Including: interest expenses | | | | | | | 123,055,275.74 | | | | 264,418,567.28 | |
| Interest income | | | | | | | 101,533,826.47 | | | | 129,443,760.54 | |
| Plus: other income | | | | | | | 2,422,990.18 | | | | 2,929,253.13 | |
| Investment income (loss is indicated by “-”) | | | | | | | 696,480,214.76 | | | | 328,499,691.96 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | | | 157,469,685.74 | | | | 4,843,630.72 | |
| Income from fair value variation (loss is indicated by “-”) | | | | | | | 225,225.22 | | | | -50,678,149.10 | |
| Credit impairment losses (loss is indicated by “-”) | | | | | | | -2,721,219.73 | | | | -16,735,268.70 | |
| Assets impairment losses (loss is indicated by “-”) | | | | | | | -402,120,466.63 | | | | -203,165,895.73 | |
| Gains from disposal of assets (loss is indicated by “-”) | | | | | | | -18,608,735.35 | | | | 14,600,352.14 | |
| II. Operating profit (loss is indicated by “-”) | | | | | | | 284,025,805.77 | | | | -12,181,940.73 | |
| Plus: non-operating income | | | | | | | 28,237,843.98 | | | | 15,205,506.64 | |
| Less: Non-operating expenses | | | | | | | 4,591,119.26 | | | | 3,815,865.97 | |
| III. Total profit (total loss is indicated by “-”) | | | | | | | 307,672,530.49 | | | | -792,300.06 | |
| Less: income tax expense | | | | | | | 112,018,636.27 | | | | -95,477,833.92 | |
| IV. Net profit (net loss is indicated by “-”) | | | | | | | 195,653,894.22 | | | | 94,685,533.86 | |
| (I) Net profit from continuous operation (net loss is indicated by “-”) | | | | | | | 195,653,894.22 | | | | 94,685,533.86 | |
| (II) Net profit from discontinued operation (net loss is indicated by “-”) | | | | | | | | | | | | |
| V. After-tax net amount of other comprehensive income | | | | | | | 4,617,660.61 | | | | -866,721.55 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | | | | | | | | | | | | |
| 1. Changes caused by re-measurement of defined benefit plan | | | | | | | | | | | | |
| 2. Other comprehensive income that cannot be converted into profit or loss under the equity method | | | | | | | | | | | | |
| 3. Fair value changes of other equity instrument investment | | | | | | | | | | | | |
| 4. Fair value changes of enterprise’s own credit risk | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| (II) Other comprehensive income to be reclassified to profit or loss | | | | | | | 4,617,660.61 | | | | -866,721.55 | |
| 1. Other comprehensive income that can be converted into gains and losses under the equity method | | | | | | | 4,617,660.61 | | | | -866,721.55 | |
| 2. Fair value changes of other creditor investments | | | | | | | | | | | | |
| 3. Amount of financial assets re-classified and included in other comprehensive income | | | | | | | | | | | | |
| 4. Provision for credit impairment of other creditor investments | | | | | | | | | | | | |
| 5. Cash flow hedge reserve | | | | | | | | | | | | |
| 6. Balance arising from the translation of foreign currency financial statements | | | | | | | | | | | | |
| 7. Others | | | | | | | | | | | | |
| VI. Total comprehensive income | | | | | | | 200,271,554.83 | | | | 93,818,812.31 | |
| VII. Earnings per share (EPS): | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | | | | | | |
| (II) Diluted EPS (RMB/share) | | | | | | | | | | | | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Cash Flow Statement
January – December of 2023
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 86,093,033,346.57 | | | | 98,815,495,414.75 | |
| Tax refunds received | | | | | | | 1,349,881.04 | | | | 264,494,708.10 | |
| Other cash received relating to operating activities | | | | | | | 1,523,904,449.11 | | | | 1,386,207,956.81 | |
| Subtotal of cash inflows from operating activities | | | | | | | 87,618,287,676.72 | | | | 100,466,198,079.66 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 67,980,948,223.48 | | | | 78,820,511,875.02 | |
| Cash paid to and on behalf of employees | | | | | | | 8,107,662,483.38 | | | | 8,529,341,409.46 | |
| Cash paid for taxes | | | | | | | 1,104,738,793.64 | | | | 928,646,566.02 | |
| Other cash paid relating to operating activities | | | | | | | 5,856,057,221.39 | | | | 6,323,617,891.94 | |
| Subtotal of cash outflows from operating activities | | | | | | | 83,049,406,721.89 | | | | 94,602,117,742.44 | |
| Net cash flow from operating activities | | | | | | | 4,568,880,954.83 | | | | 5,864,080,337.22 | |
| I. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 421,011,225.76 | | | | 1,218,210,833.38 | |
| Cash received from investment income | | | | | | | 159,535,200.00 | | | | 29,998,400.00 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 15,544,463.48 | | | | 9,776,709.58 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | | | | | 16,218,914.55 | | | | 221,073.29 | |
| Other cash received relating to investment activities | | | | | | | 2,693,007,904.03 | | | | 2,308,062,035.71 | |
| Subtotal of cash inflows from investment activities | | | | | | | 3,305,317,707.82 | | | | 3,566,269,051.96 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 671,445,532.92 | | | | 1,203,678,434.13 | |
| Cash paid for investment | | | | | | | 17,386,837.66 | | | | | |
| Net cash paid for the acquisition of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash paid relating to investment activities | | | | | | | 2,360,000,000.00 | | | | 2,450,000,000.00 | |
| Subtotal of cash outflows from investment activities | | | | | | | 3,048,832,370.58 | | | | 3,653,678,434.13 | |
| Net cash flow from investment activities | | | | | | | 256,485,337.24 | | | | -87,409,382.17 | |
| II. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors | | | | | | | 240,000.00 | | | | | |
| Including: cash received by subsidiaries from absorbing minority shareholder’s investment | | | | | | | 240,000.00 | | | | | |
| Cash received from borrowings | | | | | | | 6,200,000,000.00 | | | | 10,920,000,000.00 | |
| Other cash received relating to financing activities | | | | | | | 79,951,033.98 | | | | 54,280,019.15 | |
| Subtotal of cash inflows from financing activities | | | | | | | 6,280,191,033.98 | | | | 10,974,280,019.15 | |
| Cash paid for debt repayment | | | | | | | 9,429,100,000.00 | | | | 14,161,100,000.00 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 241,422,898.08 | | | | 482,219,907.57 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| Including: dividend and profit paid by subsidiaries to minority shareholders | | | | | | | 59,518,467.07 | | | | | |
| Other cash paid relating to financing activities | | | | | | | 3,181,615,084.55 | | | | 3,312,974,983.35 | |
| Subtotal of cash outflows from financing activities | | | | | | | 12,852,137,982.63 | | | | 17,956,294,890.92 | |
| Net cash flow from financing activities | | | | | | | -6,571,946,948.65 | | | | -6,982,014,871.77 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | 208,556.62 | | | | 4,690,719.29 | |
| V. Net increase in cash and cash equivalents | | | | | | | -1,746,372,099.96 | | | | -1,200,653,197.43 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 7,443,008,300.63 | | | | 8,643,661,498.06 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 5,696,636,200.67 | | | | 7,443,008,300.63 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Cash Flow Statement of the Parent Company
January – December of 2023
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 8,422,435,530.57 | | | | 8,565,804,570.16 | |
| Tax refunds received | | | | | | | | | | | | |
| Other cash received relating to operating activities | | | | | | | 112,250,538.77 | | | | 184,492,850.93 | |
| Subtotal of cash inflows from operating activities | | | | | | | 8,534,686,069.34 | | | | 8,750,297,421.09 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 5,721,347,711.24 | | | | 6,197,364,913.69 | |
| Cash paid to and on behalf of employees | | | | | | | 650,193,236.79 | | | | 502,720,974.99 | |
| Cash paid for taxes | | | | | | | 49,394,595.10 | | | | 26,833,236.99 | |
| Other cash paid relating to operating activities | | | | | | | 365,122,036.98 | | | | 404,435,523.44 | |
| Subtotal of cash outflows from operating activities | | | | | | | 6,786,057,580.11 | | | | 7,131,354,649.11 | |
| Net cash flow from operating activities | | | | | | | 1,748,628,489.23 | | | | 1,618,942,771.98 | |
| II. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 402,243,885.66 | | | | 226,982,308.50 | |
| Cash received from investment income | | | | | | | 515,235,200.00 | | | | 398,798,400.00 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 247,266.14 | | | | 317,597.90 | |
| Net cash received from the disposal of subsidiaries and other business entities Other cash received relating to investment activities | | | | | | | 143,258,311.64 | | | | 3,722,784,778.98 | |
| Subtotal of cash inflows from investment activities | | | | | | | 1,060,984,663.44 | | | | 4,348,883,085.38 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 48,891,860.84 | | | | 114,047,582.10 | |
| Cash paid for investment | | | | | | | 203,986,837.66 | | | | 52,980,000.00 | |
| Net cash paid for the acquisition of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash paid relating to investment activities | | | | | | | | | | | | |
| Subtotal of cash outflows from investment activities | | | | | | | 252,878,698.50 | | | | 167,027,582.10 | |
| Net cash flow from investment activities | | | | | | | 808,105,964.94 | | | | 4,181,855,503.28 | |
| III. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors | | | | | | | | | | | | |
| Cash received from borrowings | | | | | | | 2,950,000,000.00 | | | | 6,220,000,000.00 | |
| Other cash received relating to financing activities | | | | | | | 8,101,885.18 | | | | 6,908,362.50 | |
| Subtotal of cash inflows from financing activities | | | | | | | 2,958,101,885.18 | | | | 6,226,908,362.50 | |
| Cash paid for debt repayment | | | | | | | 4,729,100,000.00 | | | | 10,861,100,000.00 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 63,294,760.36 | | | | 440,113,532.33 | |
| Other cash paid relating to financing activities | | | | | | | 388,179,938.43 | | | | 419,071,524.12 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | Year 2023 | | | Year 2022 | |
| Subtotal of cash outflows from financing activities | | | | | | | 5,180,574,698.79 | | | | 11,720,285,056.45 | |
| Net cash flow from financing activities | | | | | | | -2,222,472,813.61 | | | | -5,493,376,693.95 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | | | | | | |
| V. Net increase in cash and cash equivalents | | | | | | | 334,261,640.56 | | | | 307,421,581.31 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 3,726,159,392.19 | | | | 3,418,737,810.88 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 4,060,421,032.75 | | | | 3,726,159,392.19 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Statement of Changes in Equity
January – December of 2023
Unit: Yuan Currency: RMB
| | | Year 2023 |
| | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | |
| | | Paid-in capital | | Other equity
instruments | | | | Less: | | Other | | | | | | General | | | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | Capital | | Treasury | | comprehensive | | Special | | Surplus | | risk | | Undistributed | | | | | | Minority | | |
| Items | | stock) | | stock | | bonds | | Others | | reserves | | shares | | income | | reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | Total equity |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,292,122,541.86 | | 263,483,654.25 | | 440,260.72 | | | | 1,113,275,260.54 | | | | -6,751,820,069.61 | | | | 7,465,571,332.26 | | 191,328,573.37 | | 7,656,899,905.63 |
| Plus: Changes in accounting policies Correction of previous errors Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,292,122,541.86 | | 263,483,654.25 | | 440,260.72 | | | | 1,113,275,260.54 | | | | -6,751,820,069.61 | | | | 7,465,571,332.26 | | 191,328,573.37 | | 7,656,899,905.63 |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | 23,202,621.79 | | 225,284,643.05 | | 4,633,452.70 | | | | 19,565,389.42 | | | | -1,348,617,512.57 | | | | -1,526,500,691.71 | | -195,662,096.36 | | -1,722,162,788.07 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 4,633,452.70 | | | | | | | | -1,329,052,123.15 | | | | -1,324,418,670.45 | | -135,678,331.27 | | -1,460,097,001.72 |
| (II) Capital paid in and reduced by owners | | | | | | | | | | 23,202,621.79 | | 225,284,643.05 | | | | | | | | | | – | | | | -202,082,021.26 | | -465,298.02 | | -202,547,319.28 |
| 1. Ordinary shares paid in by owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | 23,202,621.79 | | 225,284,643.05 | | | | | | | | | | | | | | -202,082,021.26 | | -465,298.02 | | -202,547,319.28 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 19,565,389.42 | | | | -19,565,389.42 | | | | | | -59,518,467.07 | | -59,518,467.07 |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 19,565,389.42 | | | | -19,565,389.42 | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | -59,518,467.07 | | -59,518,467.07 |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,315,325,163.65 | | 488,768,297.30 | | 5,073,713.42 | | | | 1,132,840,649.96 | | | | -8,100,437,582.18 | | | | 5,939,070,640.55 | | -4,333,522.99 | | 5,934,737,117.56 |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Year 2022 |
| | | | | | | | | | | Equity attributable to parent company | | | | | | | | | | | | |
| | | Paid-in capital | | Other equity
instruments | | | | Less: | | Other | | | | | | General | | | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | Capital | | Treasury | | comprehensive | | Special | | Surplus | | risk | | Undistributed | | | | | | Minority | | |
| Items | | stock) | | stock | | bonds | | Others | | reserves | | shares | | income | | reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | Total equity |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,276,144,811.80 | | | | 1,494,334.19 | | | | 1,103,806,707.15 | | | | -3,797,684,715.49 | | | | 10,658,798,130.65 | | 418,606,199.35 | | 11,077,404,330.00 |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,276,144,811.80 | | | | 1,494,334.19 | | | | 1,103,806,707.15 | | | | -3,797,684,715.49 | | | | 10,658,798,130.65 | | 418,606,199.35 | | 11,077,404,330.00 |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | 15,977,730.06 | | 263,483,654.25 | | -1,054,073.47 | | | | 9,468,553.39 | | | | -2,954,135,354.12 | | | | -3,193,226,798.39 | | -227,277,625.98 | | -3,420,504,424.37 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | -1,054,073.47 | | | | | | | | -2,763,166,060.87 | | | | -2,764,220,134.34 | | -236,508,881.68 | | -3,000,729,016.02 |
| (II) Capital paid in and reduced by owners | | | | | | | | | | 15,977,730.06 | | 263,483,654.25 | | | | | | | | | | | | | | -247,505,924.19 | | 9,231,255.70 | | -238,274,668.49 |
| 1. Ordinary shares paid in by owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | 15,977,730.06 | | 263,483,654.25 | | | | | | | | | | | | | | -247,505,924.19 | | 9,231,255.70 | | -238,274,668.49 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 9,468,553.39 | | | | -190,969,293.25 | | | | -181,500,739.86 | | | | -181,500,739.86 |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 9,468,553.39 | | | | -9,468,553.39 | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | -181,500,739.86 | | | | -181,500,739.86 | | | | -181,500,739.86 |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,292,122,541.86 | | 263,483,654.25 | | 440,260.72 | | | | 1,113,275,260.54 | | | | -6,751,820,069.61 | | | | 7,465,571,332.26 | | 191,328,573.37 | | 7,656,899,905.63 |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Statement of Changes in Equity of the Parent Company
January – December of 2023
Unit: Yuan Currency: RMB
| | | Year 2023 |
| | | Paid-in capital | | Other equity
instruments | | | | Less: | | Other | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | Capital | | Treasury | | comprehensive | | Special | | Surplus | | Undistributed | | |
| Items | | stock) | | stock | | bonds | | Others | | reserves | | shares | | income | | reserves | | reserves | | profits | | Total equity |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,150,421,623.94 | | 263,483,654.25 | | 785,921.18 | | | | 1,113,275,260.54 | | 2,666,073,317.71 | | 16,742,109,462.12 |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,150,421,623.94 | | 263,483,654.25 | | 785,921.18 | | | | 1,113,275,260.54 | | 2,666,073,317.71 | | 16,742,109,462.12 |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | 23,202,621.79 | | 225,284,643.05 | | 4,617,660.61 | | | | 19,565,389.42 | | 176,088,504.80 | | -1,810,466.43 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 4,617,660.61 | | | | | | 195,653,894.22 | | 200,271,554.83 |
| (II) Capital paid in and reduced by owners | | | | | | | | | | 23,202,621.79 | | 225,284,643.05 | | | | | | | | | | -202,082,021.26 |
| 1. Ordinary shares paid in by owners | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | - |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | 23,202,621.79 | | 225,284,643.05 | | | | | | | | | | -202,082,021.26 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 19,565,389.42 | | -19,565,389.42 | | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 19,565,389.42 | | -19,565,389.42 | | |
| 2. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | |
| 3. Others | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,173,624,245.73 | | 488,768,297.30 | | 5,403,581.79 | | | | 1,132,840,649.96 | | 2,842,161,822.51 | | 16,740,298,995.69 |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Year 2022 |
| | | Paid-in capital | | Other equity
instruments | | | | | | Other | | | | | | | | |
| | | (or capital | | Preferred | | Perpetual | | | | | | Less: Treasury | | comprehensive | | Special | | Surplus | | Undistributed | | |
| Items | | stock) | | stock | | bonds | | Others | | Capital reserves | | shares | | income | | reserves | | reserves | | profits | | Total equity |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,135,238,517.71 | | | | 1,652,642.73 | | | | 1,103,806,707.15 | | 2,762,357,077.10 | | 17,078,091,937.69 |
| Plus: Changes in accounting policies | | | | | | | | | | | | | | | | | | | | | | |
| Correction of previous errors | | | | | | | | | | | | | | | | | | | | | | |
| Others | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,135,238,517.71 | | | | 1,652,642.73 | | | | 1,103,806,707.15 | | 2,762,357,077.10 | | 17,078,091,937.69 |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | 15,183,106.23 | | 263,483,654.25 | | -866,721.55 | | | | 9,468,553.39 | | -96,283,759.39 | | -335,982,475.57 |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | -866,721.55 | | | | | | 94,685,533.86 | | 93,818,812.31 |
| (II) Capital paid in and reduced by owners | | | | | | | | | | 15,183,106.23 | | 263,483,654.25 | | | | | | | | | | -248,300,548.02 |
| 1. Ordinary shares paid in by owners | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amounts of share-based payments recognized in equity | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | 15,183,106.23 | | 263,483,654.25 | | | | | | | | | | -248,300,548.02 |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 9,468,553.39 | | -190,969,293.25 | | -181,500,739.86 |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | 9,468,553.39 | | -9,468,553.39 | | |
| 2. Distribution to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | -181,500,739.86 | | -181,500,739.86 |
| 3. Others | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capitalized capital reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capitalized surplus reserves (or capital stock) | | | | | | | | | | | | | | | | | | | | | | |
| 3. Surplus reserve to make up for losses | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in defined benefit plans carried forward into retained income | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income carried forward into the retained income | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | |
| 2. Amount used for the period | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,150,421,623.94 | | 263,483,654.25 | | 785,921.18 | | | | 1,113,275,260.54 | | 2,666,073,317.71 | | 16,742,109,462.12 |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
III. Company Profile
1. Company Overview
| | √ | Applicable | ¨ | Not applicable |
Yonghui Superstores Co., Ltd. (“the Company”), established on August 13, 2009, is a limited liability company registered in Fujian Province, People’s Republic of China, with a long-term operating period. The Company’s issued common shares, denominated in RMB, are listed on the Shanghai Stock Exchange. The Company is headquartered at No. 436 West 2nd Ring Middle Road, Fuzhou City, Fujian Province.
The main business activities of the Company and its subsidiaries (the “Group”) include the sale of fresh products, food supplies, clothing, and related promotional services, logistics distribution, real estate property acquisition, construction and leasing, etc.
The financial statements were reported upon the approval by the resolution of the Board of Directors on April 25, 2024. According to Articles of Association of the Company, the financial statements would be submitted to the shareholders’ meeting for review.
The consolidation scope of the consolidated financial statements is determined based on control. For changes in the current year, please refer to Section VIII, Change of Consolidation Scope and Section IX, Equity in Other Entities.
2. Scope of Consolidated Financial Statements
| | √ | Applicable | ¨ | Not applicable |
As of December 31, 2023, the Company had owned 112 subsidiary companies, with an decrease of 17 compared to the previous year in the number of entities included in the consolidation scope. The consolidation scope increased by 2 newly established companies and decreased by 16 companies due to cancellation and 3 companies due to transfer.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The financial statements were prepared in accordance with the CASBE: Basic Standards promulgated by the Ministry of Finance and the specific accounting standards, application guidelines, explanations and other regulations (collectively referred to as “Accounting Standards for Business Enterprises”) issued and revised thereafter. Furthermore, this financial statement also discloses financial information in accordance with the No. 15 Rules for the Disclosure of Information of the Companies that Offer Securities to the Public – General Provisions on Financial Statement.
2. Going concern
| | √ | Applicable | ¨ | Not applicable |
The financial statements were listed on a going concern basis.
Except for certain financial instruments, the financial statements were prepared in accordance with the historical cost as the basis for measurement. If the asset decreases in value, the provision for impairment of assets should be made according to relevant regulations.
V. Significant Accounting Policy and Estimate
Specific accounting policies and accounting estimates presentation:
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group has formulated specific accounting policies and estimates based on its actual production and operational characteristics, mainly reflected in the provision for bad debts of receivables, inventory valuation methods, depreciation of fixed assets, amortization of intangible assets, capitalization criteria for research and development expenses, amortization of long-term prepaid expenses, recognition of deferred tax assets, provision for impairment of long-term assets, and revenue recognition and measurement.
1. Statement on Compliance with CASBE
The financial statements comply with the requirements of the CASBEASBE, providing a true and complete reflection of the financial position of the Company and the Group as of December 31, 2023, as well as their operating performance and cash flows for the year 2023.
2. Accounting period
The fiscal year of the Group adopts the Gregorian calendar year, that is, every year from January 1 to December 31.
3. Operating cycle
| | √ | Applicable | ¨ | Not applicable |
Business cycle of the Group is 12 months.
4. Recording currency
The recording currency adopted by the Company and its domestic subsidiaries and currency used for preparing the financial statements are RMB. The overseas subsidiary companies of the Company determine their functional currency based on the primary economic environment in which they operate and convert it to RMB when preparing financial statements. Unless otherwise specified, the monetary unit in the financial statements is RMB.
5. Significance criteria determination methods and selection basis
| | √ | Applicable | ¨ | Not applicable |
| Items | | Significance criteria |
| Significant accounts receivable with single provision for bad debt reserves | | Over RMB10,000 thousand |
| Significant provision reversals or reversals of bad debt reserves for receivables | | Over RMB10,000 thousand |
| Actual write-off of significant accounts receivable | | Over RMB10,000 thousand |
| Significant construction in progress | | Budget exceeding RMB80,000 thousand |
| Significant other payables | | Over RMB10,000 thousand |
| Significant non-wholly-owned subsidiaries | | Subsidiaries’ net assets account for 10% of the Group’s net assets |
| Significant capitalized research and development projects | | Over RMB10,000 thousand |
| Important cooperative enterprises and joint ventures | | Investee companies account for 10% of the Group’s net assets |
| Long-term equity investments with significant impairment provisions established. | | Impairment provisions account for 5% of the carrying amount of long-term equity investments |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
6. Accounting method for business combination under and not under the same control
| | √ | Applicable | ¨ | Not applicable |
Business combination is divided into business combination under and not under same control.
Business combination under same control
For the business combination under same control, the assets and liabilities that the combing party obtains from the combined party, except from the adjustments made due to difference of accounting policies, shall be measured on the basis of the book value of the combined party in the consolidated financial statement of the final controller on the combination date. The difference between the book value of consideration paid and the book value of net assets acquired in a business combination is adjusted to capital reserves. If the capital reserves are insufficient, it is adjusted against retained earnings.
Business combination under same control that is realized by several transactions
In some financial statements, the book value shares of the net assets of the combined party in the consolidated financial statement of the final controller calculated based on the shareholding ratio on the combination date shall be deemed as the initial investment costs of the investment. For the balance between the initial investment costs, the book value of the investment held before the combination plus the book value of the consideration newly paid before the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted.
In consolidated financial statements, for the assets and liabilities of the acquiree obtained by the acquirer in the acquisition, in addition to the adjustment made due to difference of accounting policy, they shall be measured at the book value on the acquisition date in the consolidated financial statement of the final controller. For the balance between the sum of the book value of the investment held before the combination and the book value of the consideration newly paid on the combination date and the book value of net assets obtained in the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted. For the long-term equity investment held by the combining party before it obtained the control over the combined party, changes in relevant profits and losses, other comprehensive incomes and other owner’s equities recognized from the later one of the date when the original equity is obtained and the date when the combining party and the combined party are under the final control of the same party to the combination date shall respectively be used to offset the retained income at the beginning period of the comparative statement or profits and losses of current period.
Business combination not under the same control
Business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination. In a business combination not under the same control, the party which obtains the control on other combining enterprise(s) on the acquisition date is the acquirer, and other combining enterprise(s) is(are) the acquiree. Acquisition date refers to the date on which the acquirer actually obtains the control on the acquiree.
Under the non-common control condition, acquiree’s identifiable assets, liability and contingent liabilities acquired from the business combination shall be measured at fair value on the acquisition date.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is greater than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference is recognized as goodwill and subsequently measured at cost less accumulated impairment losses. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the identifiable assets, liabilities, the fair value of and contingent liabilities, the fair value of merger consideration paid (or the fair value of equity securities issued), and the fair value of equity held by the acquiree before the acquisition date shall be rechecked at first. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is still less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference shall be included in the current profits and losses.
In cases of step-by-step acquisition of businesses under common control, for long-term equity investments held by the acquiring party before the acquisition date, they are remeasured at fair value on the acquisition date. The difference between fair value and the book value is recognized in the current period’s income statement. For the other comprehensive income of the acquired party’s long-term equity investments held before the acquisition date accounted for under the equity method, the accounting treatment is based on the same basis as the direct disposal of the relevant assets or liabilities of the invested entity. Other changes in equity, other than net income, other comprehensive income, and profit distribution, are treated as income in the period to which the acquisition date belongs.
| 7. | Criteria for determining control and preparation method for consolidated financial statements |
| | √ | Applicable | ¨ | Not applicable |
The combination scope of the consolidated financial statements is determined on the basis of control, including the financial statements Company and all of its subsidiaries. Subsidiaries refer to the entities controlled by the Company (including the detachable parts of the Company and the invested companies, the structured entities controlled by the Company, and so on). An investor has control over an investee when it has the following three elements: the investor has the rights over the investee, the investor is entitled to variable returns through its involvement with the investee, and the investor has the ability to use its rights to affect the returns from the investee.
The accounting policies and accounting period adopted by the subsidiaries and the Company is not the same. In the preparation of the consolidated financial statements, the consolidated financial statements of the subsidiaries shall be properly adjusted in accordance with the accounting policies and accounting period of the Company. Assets, liabilities, equity, income, expenses and cash flows generated by all transactions between subsidiaries of the Group are fully offset at the time of the merger.
Where the loss shared by minority shareholders in a subsidiary exceeds the share enjoyed by minority shareholders in the subsidiary’s shareholder’s equity at the beginning of the period, the balance shall be written down with the minority shareholders’ equity.
For subsidiaries acquired through business combination not under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement from the date when the Group acquires the control right to the date when it terminates the control right. In the process of preparing consolidated financial statements, the financial statements of the subsidiary company shall be adjusted on the basis of the fair values of the identifiable assets, liabilities and contingent liabilities determined on the acquisition date.
For subsidiaries acquired through business combination under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement at the beginning of combination. During the preparation of consolidated financial statement, relevant items of financial statement of last year shall be adjusted and they will be regarded as reporting entities for consolidated statement and always exist since the control of final controller.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Where changes in relevant facts and circumstances result in changes to one or more of the control elements, the Group will reassess whether or not to control the investee.
In the circumstance of not losing the control, changes in minority shareholders’ equity are taken as an equity transaction.
8. Accounting method for joint venture arrangement and joint operation
| | √ | Applicable | ¨ | Not applicable |
Joint arrangement refers to the arrangement jointly controlled by two or more participants. The Group’s joint arrangements are classified as Cooperative Enterprises.
Joint venture refers to the Group only enjoying the right of joint venturing arrangement over the net assets.
The Group shall carry out accounting treatment for the investment of joint ventures in accordance with the provisions on the equity method of accounting for long-term equity investment.
9. Determination of cash and cash equivalents
Cash refers to the Group’s cash on hand and deposits that can be used for payment at any time; cash equivalents refer to the cash held by the Group with short maturity, strong liquidity, and easy conversion to a known amount and the investment of low value changing risks.
10. Foreign currency business and the translation of foreign currency financial statement
| | √ | Applicable | ¨ | Not applicable |
The Group shall translate the amount of a foreign currency transaction into its functional currency.
For foreign currency transactions, the foreign currency amount is initially recognized by using the spot exchange rate as of the transaction date to translate it into the functional currency amount. The foreign currency monetary items on the balance sheet date shall be translated at the spot exchange rate on the balance sheet date. The resulting converted difference between the settlement and monetary items shall be treated as profit or loss in the current period, except for the difference arising from the special borrowings of foreign currency relating to the acquisition and construction of assets eligible for capitalization is disposed as per the principle of borrowing costs capitalization. The foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be changed. Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rate on the date when the fair value is determined. The resulting difference shall be recognized in the current profit or loss or other comprehensive income based on the nature of the non-monetary items.
For overseas operations, the Group translates the financial statements from their functional currency to RMB: for assets and liabilities in the balance sheet, the spot exchange rate as of the balance sheet date is used, while for equity items other than “undistributed profit”, the exchange rate as of the transaction date is used. For income and expense items in the income statement, the average exchange rate during the period is used for translation (unless the exchange rate fluctuations make it inappropriate, in which case the spot exchange rate as of the transaction date is used). The translation differences in the foreign currency financial statements obtained with the above-mentioned conversion method are recognized as other comprehensive income. In disposing of overseas operations, other comprehensive income related to the overseas operations shall be transferred to the disposal of current profits and losses, the partial disposal shall be calculated based on the disposal proportion.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The foreign currency cash flow and cash flow of overseas subsidiary shall be translated at the spot exchange rate on the date when the cash flow occurs. The influence of exchange rate fluctuation on cash shall be separately presented as an adjustment item in the cash flow statement.
11. Financial instruments
| | √ | Applicable | ¨ | Not applicable |
Financial instruments refer to the contracts under which the financial assets of an enterprise are formed and the financial liability or right instruments of any other entity are formed.
Recognition and derecognition of financial instruments
A financial asset or financial liability shall be recognized when the Group becomes a party of financial instrument contract.
A financial asset (or part of it, or a portion of a group of similar financial assets) is derecognized when the following conditions are met, that is, it is written off from its account and balance sheet:
| (1) | The right to receive cash flow of financial assets expires; |
| (2) | Transferred the right to receive cash flows from financial assets is transferred, or assumed the obligation to pay the full amount of cash flows to third parties in time under the “pass-through agreement”; and (a) substantially transferred the almost all the risks and rewards of financial assets ownership, or (b) abandoned the control over the financial assets, although all the risks and rewards were substantially transferred or retained. |
Where the responsibility for a financial liability has been fulfilled, revoked or expired, the financial liability will be derecognized. Where the current financial liability is replaced by another financial liability of the same creditor on virtually different terms, or the terms of the current liability are substantially modified, such replacement or modification shall be disposed for derecognition of the original liability and recognition of new liabilities, and the difference shall be included in the current profit and loss.
Financial asset bought and sold by regular means shall be recognized and derecognized in accordance with accounting at the transaction date. The conventional method of buying and selling financial assets refer to the delivery of financial assets according to the contractual terms, with the contracts specifying the delivery dates determined by regulations or market conventions. The trading day is the date on which the Group promises to buy or sell financial assets.
Classification and measurement of financial assets
At the time of initial recognition, the financial assets of the Group are classified as follows according to the Group’s business model of managing financial assets and contractual cash flow characteristics of financial assets: financial assets measured at fair value with changes included in current profits and losses, financial assets measured at amortized cost.
In initial recognition, financial assets shall be measured at fair value, but the accounts receivable arising from the sale of goods or provision of services exclude significant financing elements or do not take into account the financing elements of less than one year, and the initial measurement shall be carried out according to the transaction price.
For the financial assets measured at fair value with changes included in the current profits and losses, the transaction expenses thereof are directly recorded into the profits and losses of the current period; for other categories of financial assets, the transaction expenses thereof are included into the initially recognized amount.
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Subsequent measurement of financial assets depends on their classification:
Financial assets measured at amortized costs
Financial assets that meet the following conditions simultaneously and are classified as financial assets measured at amortized cost: the business mode for managing the financial assets is to collect the contractual cash flows; as stipulated in the contract terms of the financial assets, the cash flow generated on a specific date is only the payment for principal and interest based on the amount of outstanding principal. Actual interest method is adopted for determining interest income of such financial assets, the profits and losses that arise when such financial assets are terminated, amortized or depreciated, shall be recorded into the profits and losses of the current period.
Financial assets measured at fair value with changes included in current profits and losses
The Company classifies the financial assets above other than those measured at amortized cost as financial assets measured at fair value with changes included in current profits and losses. For such financial assets, the fair value is used for subsequent measurement, with all changes in fair value included in the current profits and losses.
Classification and measurement of financial liabilities
The financial liabilities of the Group are initially classified as financial liabilities measured at amortized cost. The transaction costs related to financial liabilities measured at amortized cost are included in their initially recognized amounts.
Subsequent measurement of financial liabilities depends on their classification:
Financial liabilities measured at amortised cost
These financial liabilities are calculated with the actual interest rate method with reference to the amortized cost for subsequent measurement.
Impairment of financial instruments
The group recognizes impairment losses and establishes provisions for expected credit losses on financial assets measured at amortized cost and lease receivables.
For accounts receivable without significant financing components, the Group measures the loss provision based on the expected credit loss amount within the whole duration by using the simplified measurement method.
For lease receivables, the Group chooses to apply a simplified measurement approach, measuring the loss provision based on the expected credit loss amount equivalent to the entire lease term.
For financial assets other than those using simplified measurement method, the Group assesses whether the credit risk has increased significantly since the initial recognition on each balance sheet date. If the credit risk does not increase significantly after initial recognition and is in the first stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the next 12 months, and calculates the interest income according to the book balance and the actual interest rate; if the credit risk has increased significantly since the initial recognition, but the credit depreciation has not occurred and the credit risk is in the second stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the book balance and the actual interest rate; if credit depreciation occurs after initial recognition and the credit risk is in the third stage, the Group measures the loss reserves according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the amortization cost and the actual interest rate. For financial instruments with low credit risk on the balance sheet date, the Group assumes that its credit risk has not increased significantly since initial recognition.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group assesses the expected credit loss of financial instruments based on individual and collective assessments. Considering the credit risk characteristics of different customers, the Group assesses the expected credit loss of receivables on the basis of aging combination.
For disclosures regarding the criteria for determining a significant increase in credit risk, definition of incurred credit-impaired assets, and assumptions for measuring expected credit losses, please refer to Note XII, 1.
The factors reflected by the methods applied by the Group to measure the expected credit loss of financial assets include: unbiased probability weighted average amount determined by evaluating a series of possible results, the time value of money, and reasonable and evidence-based information about past events, current situation and forecast of future economic situation which can be obtained on the balance sheet date without expending unnecessary extra cost or efforts.
If the Group no longer reasonably expects the cash flow of the financial asset contract to be recovered in whole or in part, the book balance of the financial asset shall be directly written down.
Transfer of financial assets
In the event that the Group has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. In case it has retained nearly all of the risks and rewards associated with the ownership of the financial asset, the financial asset shall not be derecognized.
In the event the Group has neither transferred nor retained almost all the risks and rewards of ownership of financial assets, the following cases shall be considered: if the control of the financial assets is abandoned, the financial assets are derecognized and the assets and liabilities are recognized; if the financial assets are controlled, the relevant financial assets are recognized according to the extent to which they continue to be involved in the transferred financial assets, and the related liabilities are recognized accordingly.
In case it continues to be involved by transferring the financial assets and providing financial guarantee, the assets resulted in are recognized according to any one of the book value of the financial assets and the financial guarantee amount, whichever is lower. The amount of financial guarantee refers to the highest amount of repayment to be demanded among the considerations received.
12. Notes receivable
Recognition method and accounting treatment method for expected credit loss of notes receivable
| | ¨ | Applicable | √ | Not applicable |
13. Accounts receivable
Recognition method and accounting treatment method for expected credit loss of accounts receivable.
| | √ | Applicable | ¨ | Not applicable |
For accounts receivable, regardless of whether there is a significant financing component, the Group always measures its loss provision based on the amount equivalent to the expected credit loss during the entire duration.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
When individual financial assets cannot be assessed for expected credit losses on a reasonable cost basis, the Group classifies receivables into various portfolios based on their credit risk characteristics. Expected credit losses are then calculated on a portfolio basis, and the determination of the portfolio is based on the following criteria:
Accounts receivable portfolio 1: Receivables for sales proceeds, supplier service fees, rent, project payments, and other amounts.
Accounts receivable portfolio 2: Receivables from affiliated parties
Accounts receivable portfolio 3: Intra-group receivables.
For accounts receivable divided into the portfolio, the Group prepares a comparison table between the aging/days overdue of accounts receivable and the expected credit loss rate in the whole duration to calculate the expected credit loss by referring to the experience of historical credit loss and combining the current situation and the forecast of future economic situation.
14. Receivables financing
| | ¨ | Applicable | √ | Not applicable |
15. Other receivables
Recognition method and accounting treatment method of expected credit loss of other receivables
| | √ | Applicable | ¨ | Not applicable |
Other receivables are segmented into several portfolios based on their credit risk characteristics. The determination of portfolio composition for other receivables is as follows:
Other receivables portfolio 1: Receivables for various types of deposits, guarantees, purchases, and store reserve funds.
Other receivables portfolio 2: Receivables from related parties.
Other receivables portfolio 3: Other receivables.
Other receivables portfolio 4: Intra-group receivables.
For other receivables, factored receivables, loans granted, and advances that are grouped together, the Group calculates the expected credit losses based on default risk exposure and the expected credit loss rate over the next 12 months or the entire lease term.
16. Inventories
| | √ | Applicable | ¨ | Not applicable |
Inventory categories, cost allocation methods for issues, inventory counting system, devaluation methods for low-value consumables and packaging materials
| | √ | Applicable | ¨ | Not applicable |
The inventories include raw materials, finished goods, and low-value consumables.
The initial measurement of inventory shall be made at its cost. The costs of the inventory include purchasing cost, processing cost and other costs. The outgoing inventory is valued at actual cost using the weighted average method, while processed inventory is valued at actual cost using the weighted average method. Amortization method is adopted for the amortization of low priced and easily worn articles and packing materials.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The perpetual inventory system is used as the inventory taking method.
Confirmation criteria and accrual methods of inventory depreciation reserves
| | √ | Applicable | ¨ | Not applicable |
The cost or the net realizable value, whichever is lower, is calculated on the balance sheet date. When the inventory cost is higher than its NRV, inventory reserves shall be made, and shall be included in the current profits and losses. The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. When providing for inventory write-down, it is done based on the category of inventory.
Categories and determination basis for recognizing provision for inventory impairment based on a group approach, and determination basis of net realizable value for different categories of inventory
| | ¨ | Applicable | √ | Not applicable |
Calculation method and determination basis of net realizable value for each age combination based on the age of inventory
| | ¨ | Applicable | √ | Not applicable |
17. Contract assets
Recognition methods and standards for contract assets
| | ¨ | Applicable | √ | Not applicable |
Recognition method and accounting treatment method of expected credit loss of contract assets
| | ¨ | Applicable | √ | Not applicable |
| 18. | Recognition criteria and accounting treatment for classifying non-current assets held for sale or disposal group as held for sale |
| | √ | Applicable | ¨ | Not applicable |
Criteria for classifying as held-for-sale non-current assets or disposal group and accounting treatment method
| | √ | Applicable | ¨ | Not applicable |
The Group mainly classifies it into the held-for-sale category by selling (including non-monetary assets exchange with commercial substance, the same below) instead of continuing to use a non-current asset or disposal group to recover its book value.
The aforementioned non current assets do not include investment properties which are subsequently measured by fair value model, biological assets which are measured by net amount of fair value minus selling expenses, assets formed by employee compensation, financial assets, deferred income tax assets and rights arising from insurance contracts.
Disposal group refers to a group of assets that are disposed together through sale or other means in a transaction, and the liabilities directly related to these assets transferred in the transaction. The disposal group includes goodwill acquired in business combination under specific circumstances.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Company divides the non-current assets or disposal groups meeting the following conditions into held-for-sale types: the non-current assets or disposal groups can be sold immediately in current circumstances according to the rules of selling this kind of assets in similar transactions or conventions of disposal group; highly possible to be sold, that is, resolution has been made for one sales plan and certain purchase commitment has been obtained and sales is anticipated to be completed within one year. If the Group loses control over its subsidiaries due to the sale of the investment in these subsidiaries, whether or not it retains part of the equity investment after the sale, the investment in subsidiaries to be sold satisfies the conditions for held-for-sale type. In some financial statements, the investment is divided into held-for-sale types, and all assets and liabilities of its subsidiaries are classified into held-for-sale types in the consolidated financial statements.
In the initial measurement or re-measurement of the non-current assets or disposal groups held for sale on the balance sheet date, the difference between the book value and the net value after the sales amount are deducted from the fair value (the book value is higher than the net value) is recognised as asset impairment loss. For the amount of the asset impairment loss recognized by the disposal group held for sale, the goodwill book value of disposal group shall be deducted first, then book value of disposal group shall be deducted according to the proportion of the book values of various non-current assets measured in the disposal group.
If the fair value of non-current assets or disposal groups held for sale on the balance sheet date is less than the net value of the sale expenses, the amount of previous write-down shall be restored and transferred back within the impairment loss of assets recognized after being classified as held for sale. The amount transferred shall be included in the current profits or losses. The book value of goodwill that has been deducted cannot be reversed.
Determination criteria and reporting method for discontinued operations
| | ¨ | Applicable | √ | Not applicable |
19. Long-term equity investment
| | √ | Applicable | ¨ | Not applicable |
Long-term equity investment includes equity investment in subsidiaries, cooperative enterprises and joint ventures.
Long-term equity investment shall be initially measured as the initial investment cost when it is obtained. For the long-term equity investment obtained through business combination under the same control, the share of the book value of the equity of the merged party in the final controlling party’s consolidated financial statements obtained on the combination date shall be taken as the initial investment cost; the difference between the initial investment cost and the book value of the combination consideration shall be adjusted to the capital reserve (if it is insufficient to offset, the retained earnings shall be offset). Other comprehensive income before the merger date shall be accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when disposing of the investment. Shareholders’ equity recognized due to changes in Shareholders’ equity other than net profit and loss, other comprehensive income and profit distribution of the investee shall be transferred to the current profit and loss when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. For long-term equity investment obtained through a business combination not under the same control, the merger cost shall be used as the initial investment cost (if a business combination not under the same control is realized step by step through multiple transactions, the book value of the equity investment of the acquiree held before the purchase date shall be used. The sum of the new investment cost on the purchase date shall be the initial investment cost). Combination costs include the sum of the assets paid by the purchaser, the liabilities incurred or assumed, and the fair value of the equity securities issued. The other comprehensive income recognized by the equity method that is held before the purchase date is accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when disposing of the investment, as the investee removes net gains and losses, Shareholders’ equity confirmed by changes in other Shareholders’ equity other than other comprehensive income and profit distribution shall be transferred to the current profits and losses when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. The accumulated fair value changes of equity investments held prior to the date of acquisition, accounted for as financial instruments and recorded in other comprehensive income, are fully transferred to retained earnings upon adoption of the cost method for accounting. For long-term equity investments acquired through means other than business combinations, the initial investment cost is determined as follows: for investments acquired by paying cash, the actual purchase price, along with directly related expenses, taxes, and other necessary expenditures, are considered as the initial investment cost; for investments acquired through the issuance of equity securities, the fair value of the equity securities at the time of issuance is considered as the initial investment cost.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
In the event the Company can exert significant influence over the investee, the cost method shall be employed in some financial statements of the Company. Control refers to the control power over the investors. Through the control, the investor can obtain variable returns by participating in relevant activities of the investor and can wield influence upon the return amount by using the control power to the investor.
The price of a long-term equity investment measured by employing the cost method shall be included at its initial investment cost. If there are additional investments or disinvestments, the long-term equity investment cost shall be adjusted. The dividends or profits declared to be distributed by the investee shall be recognized as the current investment income.
For investees over which the Group has joint control or significant influence, long-term equity investments are accounted for using the equity method. Joint control refers to the control of a specific arrangement, whose activities have to be decided with the consensus by all participants sharing control rights, according to related agreements. Significant influence refers to the investor’s right of participation in the decisions of financial and operational policies of the investee, not including the right to control, or jointly control with other participants.
Where the initial cost of a long-term equity investment calculated with the equity method is more than the investing enterprise’ attributable share of the fair value of the invested entity’s identifiable net assets for the investment, it is included in the initial cost of the long-term equity investment. Where the initial cost of a long term equity investment is less than the investing enterprise’ attributable share of the fair value of the invested entity’s identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When the equity method is applied, after the investor obtains a long-term equity investment, it shall, in accordance with the attributable share of the net profits or losses and other comprehensive income proportions of the investee, recognize the investment profits or losses and other comprehensive income and adjust the book value of the long-term equity investment. Confirming the share of the net profit or loss of the investee is based on the fair value of the investee’s identifiable assets at the time of obtaining the investment. In accordance with the Group’s accounting policies and accounting periods and after the internal transaction gains and losses that occur between the joint ventures and affiliated businesses, the proportion that should be enjoyed by the investor shall be measured (but if the internal transaction losses are the asset impairment losses, the amount shall be fully confirmed), and recognized after the net profit of the investee is adjusted, except for the assets that are invested or sold to constitute businesses. The investing enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall share, and shall reduce the book value of the long-term equity investment correspondingly. The Group recognizes the net losses incurred by the investee, limiting the recognition to the carrying amount of the long-term equity investment and any other long-term equity interests that essentially represent a net investment in the investee. However, the Group is not limited to the extent of the loss to the carrying amount of the investment if it has an additional obligation to cover the losses. Where any change is made to the shareholder’s equity other than the net profits and losses, other comprehensive income, and profit distribution of the investee, the book value of the long-term equity investment shall be adjusted and included in the shareholder’s equity.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
When disposing a long-term equity investment, the balance between its book value and the actual purchase price shall be included in the current profits and losses. For the long-term equity investment accounted for using the equity method, if the equity method is terminated, the related comprehensive income calculated by the original equity method is calculated with the same accounting method the investee uses to directly dispose its related assets or liabilities. The Shareholder’ equity recognized due to the changes in other Shareholder’s equity of the investee is fully transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution; if the equity method is still adopted, the related comprehensive income calculated by the original equity method is put under accounting treatment on the same basis the investee disposing related assets or liabilities, and transferred to the current profit and loss in proportion. The Shareholder’ equity recognized due to the changes in other Shareholder’s equity of the investee is transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution.
20. Investment properties
(1) In case cost calculation model is adopted:
The investment properties refer to the properties held for earning the rent or capital appreciation or for both of them, including the leased buildings.
The initial measurement of the investment properties shall be made at its cost. Subsequent expenditures relating to investment properties are included in the cost of the investment properties in the event that the economic benefits associated with the asset are likely to flow in and the cost can be reliably measured. Otherwise, it shall be included in the current profit and loss when actually incurred.
The Group takes the cost model for subsequent measurement of investment properties and provides depreciation or amortization using the depreciation methods applied to buildings and structures within fixed assets.
21. Fixed assets
(1) Recognition criteria
| | √ | Applicable | ¨ | Not applicable |
Fixed assets shall be recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. Subsequent expenditure regarding the fixed assets, if it meets the recognition conditions, is included in the cost of the fixed assets, and the carrying amount of the replaced portion is derecognized; otherwise, it is included in the current profit or loss.
The initial measurement of fixed assets shall be made at their cost. The costs for the acquisition of fixed assets include the buying price, relevant expenses of taxation, other expenses that may be directly assigned to such assets before making the fixed assets reach expected use conditions.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
(2) Depreciation method
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | | Annual | |
| | | Depreciation | | Depreciation | | | Residual | | | depreciation | |
| Category | | method | | period (year) | | | value rate | | | rate | |
| Houses and buildings | | Straight-line method | | | 20-35 | | | | 5 | % | | | 2.71-4.75% | |
| Machinery and equipment | | Straight-line method | | | 5-10 | | | | 5 | % | | | 9.5-19% | |
| Transportation equipment | | Straight-line method | | | 5-10 | | | | 5 | % | | | 9.5-19% | |
| Electronic equipment and tool appliances | | Straight-line method | | | 5 | | | | 5 | % | | | 19 | % |
The Group shall, at least at the end of each year, take a check on the useful life, expected net salvage value, and the depreciation method of the fixed assets, and adjust them when necessary.
22. Construction in progress
| | √ | Applicable | ¨ | Not applicable |
The cost of work in progress is determined based on the actual construction expenses incurred, including necessary construction expenses and other related costs incurred during the construction period.
When work in progress reaches the predetermined usable state, it is transferred to fixed assets and long-term prepaid expenses. The standards are as follows:
| Category | Criteria for carrying forward fixed assets |
| | |
| Houses and buildings | Actual commencement of use |
| | |
| Machinery and equipment | Completion of installation and commissioning |
| | |
| Electronic equipment | Actual commencement of use or completion of
installation and commissioning |
| | |
| Means of transport | Obtaining the vehicle driving license |
| | |
| Tools and machinery | Actual commencement of use or completion of
installation and commissioning |
23. Borrowing costs
| | √ | Applicable | ¨ | Not applicable |
Borrowing costs are recognized in the current period’s income statement.
24. Biological assets
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
The productive biological assets refer to biological assets held for the purpose of producing agricultural products, rendering services, or leasing, including economic forests. The initial measurement shall be made to the productive biological assets at its cost. For self-generated productive biological assets, the cost includes necessary expenditures such as fertilizer costs, labor expenses, and allocated indirect costs incurred before reaching the predetermined production and operational objectives.
Productive biological assets are depreciated with the straight-line depreciation method over their useful lives from the date when they reach their intended production and operation purposes.
The service life, estimated residual value rate, and annual depreciation rate for different types of productive biological assets are as follows:
| | | | | Estimated | | | Annual | |
| | | Estimated | | net residual | | | depreciation | |
| Category | | service life | | value rate | | | rate | |
| Mature persimmon trees | | 20 years | | | 5 | % | | | 4.75 | % |
The service life and estimated residual value of productive biological assets are determined based on historical experience. The Group is required to recheck the service life, expected net residual value, and depreciation method of productive biological assets at the end of the year, and any change of them will be treated as accounting estimate. Disposal consideration amount from sale, inventory loss, death or damage of productive biological assets shall be included in current profits and losses after deducting the book value and related taxes.
Impairment
The Group shall inspect productive biological assets at least at the end of each annual period. If there is conclusive evidence that due to natural disasters, plant diseases and insect pests, or changes in market demand, the recoverable amount of the productive biological assets is lower than their carrying amount, the difference between the recoverable amount and the carrying amount is recognized as a provision for impairment of biological assets and recorded as a current period loss.
Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
| | ¨ | Applicable | √ | Not applicable |
| (1) | Useful life and its determination basis, estimation methods, amortization methods, or review procedures |
| | √ | Applicable | ¨ | Not applicable |
Intangible assets are recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. The cost is used for initial measurement. However, if the fair value of the intangible assets acquired through business combination not under the same control can be reliably measured, such asses are individually recognized as intangible assets and measured at fair value.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
The useful life of intangible assets is determined according to the period in which they can bring economic benefits to the Group. If it is impossible to foresee whether the period in which economic benefits can be brought to the Group, such assets are deemed as intangible assets.
The straight-line method is used for amortizing intangible assets within their useful life, which is determined as follows:
| Category | Service life | Determination basis |
| | | |
| Land use right | 40 years | Term of land-use right |
| Software | 5 years | The shorter of the contract period and the estimated useful life |
| Patent right and non-patent technology | 10 years | The shorter of the term of patent rights or the estimated useful life |
| Sales network | 10 years | Expected service life |
The acquired land use rights obtained by the Group are usually accounted for as intangible assets. With respect to the buildings and structures that are self-developed and self-constructed, the related land use rights and the buildings are accounted for as intangible assets and fixed assets, respectively. In the case of purchased land and buildings, the paid prices are distributed between the land use rights and the buildings. Where it is difficult to allocate reasonably, all of such costs are disposed as fixed assets.
Intangible assets with limited service life shall be amortized using straight-line method in service life. At the end of each year, the Group shall verify the estimated service lives and amortization methods of the intangible assets with limited service life and make adjustment when needed.
| (2) | Scope of capitalization for research and development (R&D) expenditures and the related accounting treatment methods |
| | √ | Applicable | ¨ | Not applicable |
The expenditures for internal research and development projects of the Group are classified into research expenditures and development expenditures. The expenditure occurred during the research stage shall be included in the profits/losses of current period when it occurs. The expenditure at the stage of development shall be capitalized only if the following conditions are met simultaneously: technically feasible to complete the intangible assets so that they can be used or sold; having the intention to use and sell the intangible assets; the ways for economic benefits of intangible assets, including proving that the market exists for the products manufactured by such intangible assets, or that the intangible assets have own market, and proving that the serviceability of intangible assets if they are used internally; having sufficient technical and financial resources and other resource supports to complete the development of such intangible assets and having the ability to use or sell such intangible asset; the expenditure attributable to the development stage of such intangible asset can be measured reliably. The development expenditure not meeting the conditions above is included in the current profits and losses when it occurs.
| 27. | Impairment of long-term assets |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
For impairment of assets other than inventory, deferred taxes, and financial assets, the Group determines the impairment with the following methods:
As of the balance sheet date, if there are indications of impairment of assets, the Group will estimate their recoverable amounts and perform impairment testing; for goodwill formed due to business combinations and intangible assets that have not reached the usable condition, impairment testing will be conducted at least annually regardless of whether there are indications of impairment.
The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of the assets minus the disposal expenses and the present value of the expected future cash flow of the assets. Generally, the Group estimates the recoverable amount based on single assets. Where it is not possible to estimate the recoverable amount of single assets, the recoverable amount of the asset group to which the asset belongs is recognized. The recognition of an asset group is based on whether the major cash inflow generated by the asset group is independent of the cash inflows of other assets or asset groups.
When the recoverable amount of an asset or asset group is lower than its carrying amount, the Group reduces its carrying amount to the recoverable amount, include the write-down amount in the current profit and loss, and make the corresponding provision for asset impairment.
If the factors affecting the impairment of the expendable biological asset have disappeared, the amount of the written-down shall be restored and reversed within the amount of the original provision for the decline in value, and the reversed amount is recognized in the current profits and losses. Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
For the impairment test of goodwill, the carrying value of goodwill formed from business combinations is allocated to the relevant asset group or portfolio of asset groups using a reasonable method from the acquisition date onwards. The related asset group or combination of asset groups shall be the asset group or combination of asset groups that can benefit from the synergy effect of enterprise merger, and shall be no greater than the reporting segments determined by the Group.
If the carrying value of the asset group or portfolio of asset groups containing goodwill exceeds their recoverable amount, the impairment loss is first allocated to reduce the carrying value of goodwill in the asset group or portfolio of asset groups. The remaining impairment loss is then allocated proportionately to reduce the carrying value of the other assets in the asset group or portfolio of asset groups based on their respective proportion of the carrying value, excluding goodwill.
Once the assets impairment loss above is confirmed, it shall not be reversed in the future accounting periods.
| 28. | Long-term deferred expenses |
| | √ | Applicable | ¨ | Not applicable |
The store decoration and improvement expenses can be divided into two categories: the first category includes expenses for the decoration and improvement of operating and office premises before opening a new store, and the second category includes expenses for secondary (or over) decoration and improvement of already opened stores. The expenses for the decoration and improvement of a new store are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (10 years) and the lease term. The expenses for secondary (or over) decoration and improvement of already opened stores are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (5 years) and the remaining lease term. At the end of each year, the remaining service life of deferred expenses is reviewed. If a deferred expense item no longer provides future benefits in subsequent accounting periods, the remaining unamortized balance of that item is recognized as a current period loss.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
The Group shall list the contract liabilities in the balance sheet according to the relationship between performance obligations and customer payment.
The contract liabilities refer to obligations to transfer goods or services to customers for which consideration has been received or is receivable from the customer before transferring the promised goods or services.
It refers to various forms of compensation or remuneration, other than share-based payments, given by the Company, to obtain services from employees or in connection with the termination of employment. Employee remuneration mainly includes short-term salaries, post-employment welfare, dismission welfare and other long-term employee welfare. Welfare provided by the Group for employees’ spouses, children and dependents, family members of deceased employees and other beneficiaries is also part of employee salaries.
| (1) | Accounting treatment method of short-term remuneration |
| | √ | Applicable | ¨ | Not applicable |
The Company confirms the actually occurred short-term salaries as liabilities during the accounting period that the staff provides service for the Company, and accounts them into profits and losses of the current period or relevant asset costs.
| (2) | Accounting treatment method for after-service benefits |
| | √ | Applicable | ¨ | Not applicable |
Post-employment welfare (defined contribution plans)
The Group’s employees participate in pension insurance and unemployment insurance managed by the local government. The corresponding expenses are recognized as relevant asset costs or current-period expenses when they are incurred.
| (3) | Accounting treatment method for severance benefits |
| | √ | Applicable | ¨ | Not applicable |
Severance benefits
When providing dismissal welfare to employees, the Group shall early confirm the employee salaries generated from dismiss welfare as liability and include it into current profits and losses under the following two situations: the enterprise cannot withdraw the dismissal welfare generated from plan for termination of labor relationship or layoff proposal; the enterprise confirms relevant cost and expense related to the recombination of dismiss welfare payment.
| (4) | Accounting arrangement method for other long-term employee’s welfare |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
Except for contingent consideration and contingent liabilities assumed in a business combination under common control, when the obligations related to contingent matters meet the following conditions, they are recognized as estimated liabilities by the Group:
| (1) | This obligation is the current obligation of the Group; |
| (2) | It is likely to cause any economic benefit to flow out of the Group as a result of performance of the obligation; |
| (3) | The amount of the obligation can be measured reliably. |
Estimated liabilities are initially measured in accordance with the best estimate of the expenditure required to perform the relevant current obligations, taking into account factors such as risks, uncertainties and time value of money associated with contingent events. The Company shall check the book value of the estimated debts on each balance sheet date. Where there is any exact evidence indicating that the book value cannot really reflect the current best estimate, the Company shall adjust the book value in accordance with the current best estimate.
| | √ | Applicable | ¨ | Not applicable |
Share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment. Equity-settled share-based payment refers to a transaction settled by the Group with shares or other equity instruments as the consideration for obtaining services.
Equity-settled share-based payment in exchange for services provided by employees is calculated at the fair value of the equity instruments granted to employees. For equity instrument that are exercisable immediately after being granted, the relevant costs or expenses are recognized based on fair value on the grant date, increasing the capital surplus. For equity instrument that can only be exercised after a specified service period or upon achievement of specified performance conditions, during the service period, for each balance sheet date within the waiting period, the services acquired during the period are recognized as related costs or expenses, increasing the capital surplus, based on the best estimation of the number of equity instruments expected to be exercised, using the fair value on the grant date. The fair value of equity instruments is determined based on the ex-right closing price on the grant date.
Share-based payments that are not ultimately exercised due to non-satisfaction of non-market conditions and/or service period conditions are not recognized as costs or expenses. If market conditions or non-exercisable conditions are specified in the share-based payment agreement, the share-based payment is considered to be exercisable as long as all other performance conditions and/or service period conditions are met, regardless of whether the market conditions or non-exercisable conditions are satisfied.
If the terms of equity-settled share-based payments are modified, at least the obtained services are recognized as if the terms were not modified. In addition, any modification that increases the fair value of the granted equity instrument, or a change in favor of the employee on the modification date, recognizes an increase in the acquisition of services.
If the terms of equity-settled share-based payments are canceled, it will be treated as an accelerated exercise on the cancellation date and the unconfirmed amount will be immediately recognized. If the employees or other parties are to meet non-vesting conditions but they do not meet the conditions in vesting period, the Company will cancel the equity-settled share-based payment as the treatment. However, if a new equity instrument is granted to an employee, and on the granting date, it is determined that the new equity instrument granted is used to replace the canceled equity instrument, the granted replacement equity instrument shall be treated in the same way as the modifications of the original equity instrument terms and conditions are treated.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 33. | Preference shares, perpetual capital securities and other financial instruments |
| | ¨ | Applicable | √ | Not applicable |
| (1) | Accounting policies for revenue recognition and measurement disclosed based on the type of business |
| | √ | Applicable | ¨ | Not applicable |
Revenues from contracts with customers
The Group confirms the incomes while performing the obligations in the contract, namely obtaining control right of relevant commodities or services from customers. Obtaining control of the related goods or services refers to one can direct the use of the goods or provision of services and obtain almost all economic benefits from the goods.
Sales contract
The sales contract between the Group and the client generally includes only the performance obligations of goods transfer. The Group, under normal conditions, recognizes revenue at the point in time when the customer obtains control of the related goods, which is usually the point of delivery as specified in contract. This recognition is based on the comprehensive consideration of the following factors: the present right to receive payment for the goods, the transfer of the primary risks and rewards associated with ownership of the goods, the transfer of legal ownership of the goods, the physical transfer of the goods, and the customer’s acceptance of the goods.
Provision of service contract
In the service contracts between the Group and its customers, which usually include provisions for display services, warehousing services, maintenance, and other performance obligations, the Group recognizes revenue based on the progress of performance during a specific period. This is because the customer simultaneously receives and consumes the economic benefits from the Group’s performance, and the Group has the right to invoice for the cumulative amount of completed performance during the entire contract period, treating it as a performance obligation fulfilled during a certain period. Revenue is recognized based on the progress of performance, except where the progress of performance cannot be reasonably determined. The Group determines the progress of performance for providing services based on the time schedule. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
Construction contract
The construction contracts between the Group and customers usually include obligations for construction and decoration works. As the customers have control over the construction assets during the performance period, the Group recognizes revenue based on the progress of performance, except when the progress cannot be reasonably determined. The Group determines the progress of providing services based on the input method. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
Variable consideration
Some contracts between the Group and customers include arrangements for reward points, forming variable consideration. The Group determines the best estimate of variable consideration based on either the expected value or the most likely amount to be realized. However, the transaction price that includes variable consideration does not exceed the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur, once the related uncertainty is resolved.
Sales return terms
For sales with sales return provisions, when the Group transfers control of the relevant goods to the customer, revenue is recognized based on the amount expected to be entitled for transferring the goods to the customer. The expected amount to be refunded due to sales returns is recognized as a provision for expected liabilities. Simultaneously, an asset is recognized for the expected cost of goods to be returned, which is calculated as the difference between the book value of the goods to be returned and the estimated costs (including the value impairment) associated with returning the goods. The net amount is recorded as a receivable for return cost. The cost is then recognized by deducting the net amount from the book value of the transferred goods. On each balance sheet date, the Group reassesses the future sales return situation and re-measures the aforementioned assets and liabilities.
Reward points program
The Group determines the stand-alone selling price of reward points based on factors such as the redemption policy and expected redemption rate. The transaction price is allocated to reward points and the goods provided based on their stand-alone selling prices in proportion and revenue is recognized when the customer obtains control of the goods upon redeeming the points or when the points expire.
Main responsible person/agent
When the Group acquires goods from third parties and subsequently transfers them to customers, the Group has considered the legal form of the contract and relevant facts and circumstances (such as primary responsibility for transferring the goods to customers, inventory risk assumed before or after the transfer of goods, pricing autonomy, etc.). If the Group has the ability to direct the use of the goods and obtain almost all economic benefits before transferring the goods, and has control over the goods, it recognizes revenue when the goods are delivered to customers and accepted by them based on the total consideration received or receivable. Otherwise, if the Group does not have control over the goods before transferring them to customers, it is considered a principal agent (i.e., facilitating transactions between upstream suppliers and downstream customers and earning commission fees). In this case, the Group recognizes revenue when it completes the agency service and has the right to receive the expected commission fees. The amount of revenue recognized is determined as the net amount after deducting the amounts payable to other related parties from the consideration received or receivable.
| (2) | Different revenue recognition methods and measurement methods for the same type of business with different business models |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
Governmental subsidies are recognized when they meet the conditions attached to and can be received. Where the governmental subsidiaries are monetary assets, they are measured according to the amount received or receivable. If the governmental subsidies are non-monetary assets, they shall be measured at their fair value. If their fair value cannot be obtained in a reliable way, they shall be measured at the nominal amount.
Government subsidies used for purchasing or forming long-term assets are recognized as government grants related to assets when the fundamental conditions for obtaining the subsidies are met, as specified in government documents. If the government documents do not provide clear guidance, grants that are based on the condition of purchasing or forming long-term assets are considered as government grants related to assets, while others are recognized as government grants related to revenue.
The Group recognizes received government grants based on their total amount.
Where the governmental subsidy related to the proceeds is used to compensate relevant costs or losses in the later period, the subsidy is recognized as deferred proceeds when acquired, and accounted into profits and losses of the current period during the period of recognition; where it is used to compensate the occurred costs or losses, it is directly into profits and losses of the current period directly.
Government subsidies related to assets shall be recognized as deferred income, which shall be included in profits and losses by stages according to a reasonable and systematic method within the service life of the relevant assets (but the government subsidies measured according to the nominal amount shall be directly included in the current profits and losses). If the relevant assets are sold, transferred, scrapped or damaged before the end of the service life, the undistributed balance of relevant deferred income shall be transferred into the profits and losses of the current period of asset disposal.
| 37. | Deferred tax assets/deferred tax liabilities |
| | √ | Applicable | ¨ | Not applicable |
Regarding the temporary difference between the book value and tax base of assets and liabilities on the balance sheet date and of the item that is not recognized as an asset and liability but whose tax base can be determined in accordance with the tax law, the deferred income tax of the Group is recorded using the balance sheet liability method.
All taxable temporary differences are recognized as deferred tax liabilities,
| (1) | Except when the taxable temporary differences arise from the following transactions: the initial recognition of business reputation, and the initial recognition of assets or liabilities arising from the following transactions which are simultaneously featured by the following: the transaction is not business combination, and at the time of transaction, the accounting profits will not be affected, nor will the taxable amount or the deductible loss be affected. |
| (2) | The deferred income tax liabilities arising from the taxable temporary differences related to the investments of subsidiaries, joint ventures and associates are recognized unless the time of the reverse of temporary differences can be controlled, and the temporary differences are unlikely to be reversed in the excepted future. |
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
As for any deductible temporary difference, and deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible temporary difference, and deductible loss or tax deduction to be likely obtained. Unless:
| (1) | Temporary differences deductible: Temporary differences arising from individual transactions not involving business combinations, which neither impact accounting profit nor taxable income or deductible loss upon their occurrence, and the initial recognition of assets and liabilities does not result in creating equal temporary differences or deductible temporary differences. |
| (2) | As for the deductible temporary difference of taxable relevant to the investment of subsidiaries, joint ventures and associates, the corresponding deferred income tax assets can be recognized when it can simultaneously meet the following the conditions: the temporary difference is likely to reverse, and the amount of the taxable can be obtained to offset the deductible temporary difference at a high possibility in the future. |
According to the tax law, on the balance sheet date, the deferred income tax assets and the deferred income liabilities shall be measured by the Group in accordance with the applicable tax rate during the period of recovering the assets as estimated or paying off the abilities, and it shall reflect the effect of the income tax of the recovering assets as estimated or the way of paying off the liabilities on the balance sheet date.
On the balance sheet date, the Group rechecks book value of deferred income tax assets of the Group. If it is unlikely to obtain sufficient taxable income taxes to offset the benefit of the deferred income tax assets, the book value of the deferred income tax assets shall be written down. On the balance sheet date, the Group reassesses the unrecognized deferred income tax assets and recognizes the deferred income tax assets within the limits that it is probable that sufficient taxable income is available for all or part of the deferred income tax assets.
If the following conditions are met simultaneously, the Company will present and report the deferred income tax assets and the deferred income tax liabilities at a net amount after offsetting: the Company has the legal right to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount with regard to taxes levied from the same taxpayer or different taxpayers with the same tax collection and management department, but the taxpayer involved intends to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount or obtain the assets and satisfy the liabilities simultaneously within every period of reversal of significant deferred income tax assets and deferred income tax liabilities.
| (1) | Accounting processing approach of business leasing |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Accounting treatment methods for financing lease |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Determination methods and accounting treatment for leases under the new leasing standard |
| | √ | Applicable | ¨ | Not applicable |
On the commencement date of the contract, the Group evaluates whether the contract is a lease or includes a lease. If one party in the contract transfers the right to control the use of one or more identified assets for a certain period of time in exchange for consideration, the contract is a lease or includes a lease.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
As lessee
Apart from short-term leases and leases of low-value assets, the Group recognizes right-of-use assets and lease liabilities.
Right-of-use assets
On the lease commencement date, the Group recognizes the right to use the leased assets that can be used during the lease term and measures it at cost. The cost of right-of-use assets includes: the initial measurement amount of lease liabilities; lease payments made by the lessee at or before the lease commencement date (net of lease incentives received); initial direct costs incurred by the lessee; estimated costs to dismantle and remove the leased asset or restore the site on which the leased asset is located to the condition specified in the lease agreement. If the Group re-measures the lease liability due to changes in lease payments, the carrying amount of the right-of-use asset is adjusted accordingly. The Group uses the straight-line method to depreciate the right-of-use assets subsequently. Where it is reasonably certain that ownership of the leased assets will be obtained at the end of the lease term, the Group depreciates the leased assets over their remaining useful lives. If the ownership of the leased asset can not be reasonably confirmed on the lease term expiry, the accrual depreciation of the Group shall be conducted within the shorter of two periods, namely the lease term and the remaining service life of lease asset.
Lease liabilities
On the lease commencement date, the present value of lease payments not yet paid is recognized as lease liability, except for short-term leases and leases of low-value assets. The lease payments include fixed payments and the variable lease payments subtracted by lease incentives, variable lease payments based on an index or rate, and payments that are expected to be made based on the residual value guarantee; it also includes the exercise price of purchase options or the payments required to exercise the termination options, provided that the Group reasonably determines that it will exercise the option or reflects that the Group will exercise the termination option during the lease term.
After the lease commencement date, the Group increases the carrying amount of the lease liability when recognizing interest and decreases it when paying lease payments. When there is a change in the substantially fixed payments, a change in the estimated payments for residual value guarantees, a change in the index or rate used to determine lease payments, or a change in the assessment or exercise of purchase options, renewal options, or termination options, the Group re-measures the lease liability using the present value of the revised lease payments.
Short-term leases and leases of low-value assets
On the commencement date of the lease term, the Group recognizes leases with a lease term not exceeding 12 months and excluding the purchase option as short-term leases; Leases with lower value when a single leased asset is a brand new asset are recognized as low-value asset leases. The Group chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and low-value asset leases. Costs or expenses related to the leased asset are recognized over the lease term using the straight-line method or another systematic and rational method.
As lessor
The lease for which all risks and rewards related to the ownership of the leased asset are substantially transferred on the commencement date of lease is a finance lease, and the other leases are an operating lease. When the Group acts as a sublease lessor, it classifies subleases based on the right of use assets generated from the original lease. If a contract contains both lease and non-lease components, the Group allocates the consideration for the contract to each component based on their relative standalone prices.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
As a lessor of finance lease
On the commencement date of the lease term, the Group recognizes the receivable financing leasing payments for financing leases and terminates the recognition of financing leasing assets. When the Group initially measures the receivable financing leasing payments, the net lease investment shall be taken as the entry value of the receivable financing lease payments. The net lease investment is the sum of the present value of lease payments not yet received and the unguaranteed residual value discounted at the lease’s implicit rate, including initial direct costs. The Group calculates and recognizes the interest income for each period of the lease term at a fixed periodic interest rate. The variable lease payments obtained by the Group that are not included in the measurement of net lease investments are recognized in the current period’s profit and loss when actually incurred.
As an operating lessor
The rental income from operating leases is recognized as revenue on a straight-line basis or another systematic and rational method over the lease term. Variable lease payments not included in the measurement of lease receivables are recognized as revenue when they become due. The initial direct costs are capitalized and amortized over the lease term on the same basis as rental income, and are recognized as expenses in each period.
| 39. | Other significant accounting policies and accounting estimates |
| | √ | Applicable | ¨ | Not applicable |
| (1) | Fair value measurement |
The Group measures equity instruments investments at fair value on each balance sheet date. The fair value is a price received by the market participants from selling an asset or paid by them for transferring a liability during orderly transaction at the measurement date.
For the assets and liabilities measured or disclosed at fair value in the financial statements, the level of fair value to which they belong is determined according to the lowest-level input value that is significant to the fair value measurement as a whole: The first level input valve is that the input value that can be obtained on measurement date and not adjusted quoted price of same assets or liabilities in active market; second level is the input value that can be directly or indirectly observed by relevant assets or liabilities except from first-level input value; third level is the input value that can not be observed by relevant assets or liabilities.
On each balance sheet date, the Group reassesses the assets and liabilities that are recognized in the financial statements to be consistently measured at fair value to determine whether to shift between levels of fair value measurement.
The consideration and transaction costs are paid for repurchasing equity instruments to reduce shareholders’ equity. Apart from share-based payments, the issuance (including refinancing), buy-back, sale, or cancellation of equity instruments are accounted for as changes in equity.
| (3) | Distribution of profits |
The cash dividends of the Company are recognized as liabilities after approval by the Shareholders’ Meeting.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4) | Significant accounting estimates |
The preparation of the financial statements requires the Management to make judgments, estimates and assumptions that affect the presentation of amounts of income, expenses, assets and liabilities and the disclosure thereof, as well as the disclosure of contingent liabilities on the balance sheet date. The results of these assumptions and estimated uncertainties may result in significant adjustments to the carrying value of assets or liabilities that will be affected.
Judgment
In applying the Group’s accounting policies, the Management made the following judgments that had a significant impact on the amounts recognized in the financial statements:
Principal person-in-charge
For the business of acquiring goods from third parties and subsequently transferring them to customers, the Group bears the primary responsibility for transferring the goods to customers, assumes the inventory risk of the goods before or after their transfer, and has the autonomy to set the price for the traded goods or services. The Group believes that it has the ability to direct the use of the goods and obtain almost all economic benefits before transferring the goods to customers, and has control over the goods. Therefore, the Group is the principal and recognizes revenue based on the total consideration received or receivable.
Business mode
The classification of financial assets in initial recognition depends on the business model of the Group in managing financial assets. When judging the business model, the Group considers the ways of enterprise evaluation and to report the performance of financial assets to key managers, the risks that affect the performance of financial assets and their management methods, and the ways in which relevant business managers are paid. When evaluating whether the contract cash flow is the goal, the Group needs to analyze and judge the reasons, time, frequency and value of the sale of financial assets before the due date.
Contractual cash flow characteristics
The classification of financial assets in initial recognition depends on the contractual cash flow characteristics of financial assets. When it is necessary to judge whether the contractual cash flow is only the payment of principal and interest based on unpaid principal, including the evaluation of the correction of time value of currency, it is necessary to judge whether there is a significant difference compared with the benchmark cash flow, and it is necessary to judge whether the fair value of financial assets with advanced refunding characteristics is very small.
Lease term – Lease contracts with renewal options
The lease term is the period during which the Group has the right to use the leased asset and is not cancellable, including the period covered by the renewal options if it is reasonably certain that the Group will exercise those options. When assessing the reasonableness of exercising lease renewal options, the Group takes into account all relevant facts and circumstances that contribute to the economic benefits associated with exercising the lease renewal options, which includes the expected changes in facts and circumstances between the commencement of the lease term and the exercise date of the options. After the commencement of the lease term, if significant events or changes within the Group’s control occur and have an impact on the reasonable determination of whether to exercise the corresponding lease renewal options, the Group will reassess the decision to exercise the renewal options. Based on the results of the reassessment, the lease term may be modified accordingly.
Estimation uncertainty
The following are future key assumptions on the balance sheet date and other key sources of estimated uncertainties that may result in significant adjustments to the carrying value of assets and liabilities in future accounting periods.
| APPENDIX II | | FINANCIAL INFORMATION OF THE TARGET GROUP |
Impairment of financial instruments
The Group uses the expected credit loss model to evaluate the impairment of financial instruments. It requires significant judgment and estimation, and taking into account all reasonable and based information, including forward-looking information for the application of the expected credit loss model. In making these judgments and estimates, the Group combines historical repayment data with factors such as economic policies, macroeconomic indicators, industry risks, and other factors to assess the expected changes in credit risk of the debtors. Differences in estimates may have an impact on the provision for Impairment. A provision for impairment may not be equal to the actual amount of impairment losses in the future.
Impairment of non-current assets other than financial assets (goodwill)
On the income statement date, the Group judges whether there are any signs of possible impairment of non-current assets other than financial assets. For intangible assets with uncertain useful life, in addition to the annual impairment test, when there is any indication of impairment, the impairment test is also carried out. Other non-current assets excluding financial assets are tested for impairment when there is an indication that the carrying value is not recoverable. When the book value of an asset or asset group is higher than the recoverable amount, that is, the higher of the net amount remained after the disposal expenses are deducted from the fair value and the present value of the estimated future cash flow, it indicates that impairment has occurred. The net amount after the fair value deducts the disposal expenses is determined by reference to the sales agreement price of the similar assets in the fair trade or the observable market price deducts the incremental cost directly attributable to the disposal of the assets. When estimating the present value of future cash flow, the Management must estimate the estimated future cash flow of the asset or asset group and select an appropriate discount rate to determine the present value of future cash flow. Please refer to Note VII, 74.
Fair value of non-listed equity investments
The Group determines the fair value of non-listed equity investments using the market approach. This requires the Group to determine comparable listed companies, select market multiples, and estimate discounts for lack of liquidity, resulting in uncertainties.
Deferred tax asset
Deferred income tax assets shall be recognized for all unused deductible losses to the extent that it is probable that there will be sufficient taxable income to offset the deductible losses. This requires the Management to use substantial judgments to estimate the time and amount of future taxable income and adopt the tax planning strategies to determine the amount of deferred income tax assets that should be recognized.
Reward points
The Group estimates a reasonable selling price for reward points separately, taking into account all relevant information, including the ability of customers to redeem reward points for free goods or enjoy discounts on goods, as well as the likelihood of customers exercising their redemption rights in order to allocate the consideration under the contracts. When estimating the likelihood of customers exercising their redemption rights, the Group conducts a comprehensive analysis based on historical data on point redemptions, current point redemption activities, and considerations of customer behavior and market trends in the future. The Group reassesses the estimated redemption rate of reward points at least on each balance sheet date and calculates the amount of revenue to be recognized and the amount of balances related to reward points based on the results of the reassessment.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Incremental borrowing rate for lessee
For leases where the lease interest rate cannot be determined, the Group takes the incremental borrowing rate of the lessee as the discount rate to calculate the present value of lease payments. When determining the incremental borrowing rate, the Group considers observable rates in the economic environment as the reference basis and makes adjustments based on its own circumstances, the nature of the leased asset, the lease term, and the lease liability amount to derive the applicable incremental borrowing rate.
| 40. | Changes in significant accounting policies and accounting estimate |
| (1) | Significant accounting policy changes |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Significant accounting estimate changes |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Adjustments to the financial statements related to the first-time adoption of new accounting standards or interpretations, applicable from 2023 or later |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| 1. | Main tax categories and tax rates |
Main tax categories and tax rates
| | √ | Applicable | ¨ | Not applicable |
| Type of tax | | Taxation basis | | | Tax rate | |
| VAT | | Taxable income | | | 13%, 9%, 6%, 5%, 0% | |
| Urban maintenance and construction tax | | Actually paid turnover tax | | | 7%, 5% | |
| Corporate Income Tax | | Taxable income | | | 25%, 20%, 16.5%,15%, 8.25%, 0% | |
| Housing property tax | | Housing property original value, rental income | | | 1.2%, 12% | |
| Extra charges for education and local extra charges for education | | Actually paid turnover tax | | | 3%, 2% | |
Note 1: Sales of consumables, vegetables, some meat, poultry, eggs, and other items are subject to tax exemption policies; the VAT rate for warehousing services and other ancillary services is 6%; the VAT rate for rental income is 9%, and if a simplified collection method is applicable, the collection rate is 5%; the VAT rate for taxable sales of fruits, seafood, some dry goods, grains, edible oils, dairy products, and other agricultural products is 9%, and the VAT rate for taxable sales of other goods is 13%.
Note 2: Self-use properties are taxed based on a certain percentage of the original value of the property, with a tax rate of 1.2%; rental properties are taxed based on rental income, with a tax rate of 12%.
Explanations shall be disclosed for different taxpayers for tax rate of enterprise income tax
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of taxpayer | | Income tax rate | |
| | | | (%) | |
| Chongqing Yonghui Superstores Co., Ltd. | | | 15 | |
| Guizhou Yonghui Superstores Co., Ltd. | | | 15 | |
| Yunnan Yonghui Superstores Co., Ltd. | | | 15 | |
| Guangxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Logistics Co., Ltd. | | | 15 | |
| Xizang Yonghui Superstores Co., Ltd. | | | 15 | |
| Guansu Yonghui Superstores Co., Ltd. | | | 15 | |
| Qinghai Yonghui Superstores Co., Ltd. | | | 15 | |
| Sichuan Yonghui Store Co., Ltd. | | | 15 | |
| Chengdu Yonghui Business Development Co., Ltd. | | | 15 | |
| Shaanxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | | 15 | |
| Ningxia Yonghui Superstores Co., Ltd. | | | 15 | |
| Guizhou Yonghui Logistics Co., Ltd. | | | 15 | |
| Beijing Yonghui Technology Co., Ltd. | | | 15 | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | | 0 | |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | | 0 | |
| Yonghui Holdings Co., Ltd. | | | 16.5,8.25 | |
| LOHAS Life International Business Co., Ltd. | | | 16.5 | |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | | 20 | |
| Shanghai Yinjie International Trade Co., Ltd. | | | 20 | |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | | 20 | |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | | 20 | |
| Hainan Fuli Supply Chain Management Co., Ltd. | | | 20 | |
| Fujian Yonghui Commercial Co., Ltd. | | | 20 | |
| Fujian Yonghui Import and Export Trade Co., Ltd. | | | 20 | |
| Sichuan Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Shanghai Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Zhejiang Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Shaanxi Fuping Supply Chain Management Co., Ltd. | | | 20 | |
| Anhui Fuwan Supply Chain Management Co., Ltd. | | | 20 | |
| Xinjiang Fuchi Supply Chain Management Co., Ltd. | | | 20 | |
| | √ | Applicable | ¨ | Not applicable |
Note 1: According to the Announcement on Extending the VAT Preferential Policies for Cultural and Educational Products (CS [2021] No. 10) and the Announcement on Continuing the Implementation of VAT Preferential Policies for Cultural and Educational Products (CA [2023] No. 60) by the Ministry of Finance and the State Taxation Administration, from January 1, 2021 to December 31, 2027, the wholesale and retail sectors for books are exempt from value-added tax.
Note 2: According to the Announcement on Exemption of VAT on Vegetable Circulation Link issued by the Ministry of Finance and the State Taxation Administration (CS [2011] No. 137), VAT on vegetable circulation link has been exempted since January 1, 2012.
Note 3: According to the Notice on Exempting VAT on Certain Fresh Meat and Egg Products in Agricultural Product Wholesale and Retail by the Ministry of Finance and the State Taxation Administration (CS [2012] No. 75), value added tax on certain fresh meat and egg products sold by taxpayers engaged in agricultural product wholesale and retail is exempted from October 1, 2012.
Note 4: Subsidiary companies of the Company, including Chongqing Yonghui Superstores Co., Ltd., Guizhou Yonghui Superstores Co., Ltd., Yunnan Yonghui Superstores Co., Ltd., Guangxi Yonghui Superstores Co., Ltd., Yonghui Logistics Co., Ltd., Xizang Yonghui Superstores Co., Ltd., Gansu Yonghui Superstores Co., Ltd., Qinghai Yonghui Superstores Co., Ltd., Sichuan Yonghui Superstores Co., Ltd., Chengdu Yonghui Commercial Development Co., Ltd., Shaanxi Yonghui Superstores Co., Ltd., Fuping Yunshang Supply Chain Management Co., Ltd., Ningxia Yonghui Superstores Co., Ltd., and Guizhou Yonghui Logistics Co., Ltd., enjoy preferential enterprise income tax policies, with enterprise income tax being levied at a rate of 15% from January 1, 2011 to December 31, 2030 according to the relevant provisions of the Ministry of Finance, General Administration of Customs, and the State Taxation Administration regarding deepening the implementation of tax policies related to the development of the Western Development Strategy (CS [2011] No. 58), Announcement on Enterprise Income Tax Issues Concerning the Implementation of the Western Development Strategy by the State Taxation Administration (State Taxation Administration Announcement No. 12 of 2012), and Announcement on Extending Enterprise Income Tax Policies for the Western Development Strategy (Ministry of Finance Announcement No. 23 of 2020).
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Note 5: The subsidiary companies, Fuping Yonghui Modern Agriculture Development Co., Ltd., and Gansu Minxian Yonghui Agriculture Development Co., Ltd. are eligible for the preferential policy of exempting corporate income tax on primary agricultural products processing and production in accordance with the relevant provisions in Article 86 of the Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China (State Council Order No. 512).
Note 6: Subsidiary companies of the Company, including Ruilingtong Marketing Service (Shanghai) Co., Ltd., Shanghai Yinjie International Trade Co., Ltd., Chongqing Boyuan Xunke Technology Co., Ltd., Yunnan Fuping Yunshang Supply Chain Management Co., Ltd., Hainan Fuli Supply Chain Management Co., Ltd., Fujian Yonghui Commercial Co., Ltd., Fujian Yonghui Import and Export Trade Co., Ltd., Sichuan Yunfu Supply Chain Management Co., Ltd., Shanghai Yunfu Supply Chain Management Co., Ltd., Zhejiang Yunfu Supply Chain Management Co., Ltd., Shaanxi Fuping Supply Chain Management Co., Ltd., Anhui Fuwan Supply Chain Management Co., Ltd., and Xinjiang Fuchi Supply Chain Management Co., Ltd., enjoy preferential enterprise income tax policies according to the Announcement of the State Taxation Administration on Matters Concerning the Implementation of Supportive Tax Policies for the Development of Small and Micro-profit Enterprises and Individuals (Announcement No. 6 of the State Taxation Administration in 2023). For small and micro-profit enterprises, 25% of the annual taxable income not exceeding RMB1 million is deducted and taxed at a rate of 20%. According to the Announcement of the Ministry of Finance and State Administration of Taxation on Further Implementation of Preferential Policies for Small and Micro Enterprises Income Tax (Announcement No. 13 of 2022 of the Ministry of Finance and the State Administration of Taxation), for small and micro-profit enterprises with an annual taxable income exceeding RMB1 million but not exceeding RMB3 million, a reduction of 25% shall be included in the taxable income, and the enterprise income tax shall be paid at a rate of 20%.
Note 7: The subsidiary companies of the Company are subject to the two-tier profit tax system as announced in the 2017 Policy Address, in accordance with the 2018 Inland Revenue (Amendment) (No. 3) Bill of the Hong Kong Special Administrative Region Government. The two-tier profit tax system applies to taxable years starting on or after April 1, 2018. For the first HKD2 million of assessable profits of a corporation, the tax rate will be reduced to 8.25%. Any profits thereafter will continue to be taxed at 16.5%. The two-tier profit tax system will benefit eligible enterprises with assessable profits, regardless of their size. To ensure that eligible enterprises are mainly small and medium-sized enterprises, only one related enterprise can be nominated for the benefits. The subsidiary company, Yonghui Holdings Limited, meets the above requirements and will be subject to the two-tier tax rates of 8.25% and 16.5%. The sub-subsidiary, LOHAS Life International Business, will be subject to the tax rate of 16.5%.
Note 8: In accordance with the “Management Measures for the Recognition of High-tech Enterprises” (GKFH [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise Recognition” (GKFH [2016] No. 195) regulations, Beijing Yonghui Technology Co., Ltd. was approved and certified as a high-tech enterprise on November 2, 2022, by the Beijing Municipal Science and Technology Bureau, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau of the State Taxation Administration, and obtained the “High-tech Enterprise Certificate” (Number: GR202211002597). The qualification is valid for 3 years, and the preferential period for enterprise income tax is from January 1, 2022 to December 31, 2024. During the qualification period, the company is entitled to enjoy the preferential policy of paying enterprise income tax at a reduced rate of 15%.
| | ¨ | Applicable | √ | Not applicable |
| VII. | Notes to Items of Consolidated Financial Statements |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Cash in hand | | | 72,725,636.77 | | | | 79,642,654.48 | |
| Bank deposit | | | 5,490,130,482.21 | | | | 6,968,854,377.60 | |
| Other monetary funds | | | 276,213,499.10 | | | | 567,443,680.14 | |
| Deposits of financial companies | | | | | | | | |
| Total | | | 5,839,069,618.08 | | | | 7,615,940,712.22 | |
| Including: total amount of deposit abroad | | | 33,091,563.78 | | | | 28,101,300.32 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| (1) | The year-end cash mainly represents the sales funds not yet deposited in banks by each store at year-end. |
| (2) | The funds held overseas at year-end represent funds held overseas by the subsidiaries Yonghui Holdings Co., Ltd., Yonghui Japan Co., Ltd., and LOHAS Life International Business Co., Ltd. |
| (3) | As of December 31, 2023, the restricted cash balance of the Group amounted to RMB141,300,533.68 (2022: RMB114,492,314.03), see Note VII, 33. |
| (4) | Interest income is derived from bank current deposits at the prevailing interest rate. The term of fixed-term fixed deposits is determined based on the cash needs of the Group, and interest income is earned at the corresponding interest rate of the bank fixed deposits. |
| (5) | Other monetary funds, excluding margin and escrow account funds, mainly consist of funds in transit, including POS machine card payment income, APP bank card payment income not yet transferred to the Group’s bank accounts, and balances in WeChat and other APP accounts. |
| Items | | Closing balance | | | Opening balance | |
| Total amount of loans and advances | | | 557,908,591.96 | | | | 895,062,185.85 | |
| Among which: | | | | | | | | |
| 1. Amount of loans and advances due within one year | | | 627,293,964.36 | | | | 863,287,777.35 | |
| Less: Provision for loan losses due within one year | | | 89,953,572.57 | | | | 45,216,735.85 | |
| Net value of loans and advances due within one year | | | 537,340,391.79 | | | | 818,071,041.50 | |
| 2. Amount of loans and advances due after one year | | | 20,881,421.49 | | | | 92,460,829.15 | |
| Less: Provision for loan losses due after one year | | | 313,221.32 | | | | 15,469,684.80 | |
| Net value of loans and advances due after one year | | | 20,568,200.17 | | | | 76,991,144.35 | |
| Note: | The loans and advances represent corporate loans and advances, consumer credit, etc. provided by Yonghui Small Loans Co., Ltd., a sub-subsidiary of the Group. |
The changes in the provision for loan losses are as follows:
Unit: Yuan Currency: RMB
| | | | | | Provision | | | Provision | | | | |
| | | Opening | | | made in | | | written-off in | | | Closing | |
| | | balance | | | this year | | | this year | | | balance | |
| Year 2023 | | | 60,686,420.65 | | | | 36,198,200.29 | | | | 6,617,827.05 | | | | 90,266,793.89 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 3. | Trading financial assets |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Reasons and | |
| | | | | | | | | basis for | |
| Items | | Closing balance | | | Opening balance | | | designation | |
| Financial assets measured at fair value with changes included in current profits and losses | | | 735,971,777.07 | | | | 890,826,719.10 | | | / | |
| Among which: | | | | | | | | | | | |
| Equity instrument investment | | | 388,932,227.74 | | | | 413,458,695.23 | | | / | |
| Fund products | | | 341,037,083.58 | | | | 477,368,023.87 | | | / | |
| Structured deposit | | | 6,002,465.75 | | | | | | | | |
| Among which: | | | | | | | | | | | |
| Total | | | 735,971,777.07 | | | | 890,826,719.10 | | | / | |
Other notes:
| | √ | Applicable | ¨ | Not applicable |
Trading financial assets mainly consist of fund products, stocks, asset management products, and wealth management products purchased during the year.
| 4. | Derivative financial assets |
| | ¨ | Applicable | √ | Not applicable |
| (1) | Category of notes receivable |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Notes receivable secured by the company at the end of period. |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Undue closing notes receivable before balance sheet date that endorsed or discounted by the Company |
| | ¨ | Applicable | √ | Not applicable |
| (4) | Classification and disclosure by bad debt provision |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
Provision for bad debts based on the general model of expected credit losses
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of significant changes in the carrying balance of notes receivable for which there have been provision for bad debts changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (6) | Notes receivable actually verified and canceled of current period |
| | ¨ | Applicable | √ | Not applicable |
Among these, verification and cancellation of important notes receivable:
| | ¨ | Applicable | √ | Not applicable |
Instructions on verification and cancellation of notes receivable:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| Items | | Closing balance | | | Opening balance | |
| Factoring receivable | | | 129,425,183.71 | | | | 715,364,593.55 | |
| Less: bad debt provision | | | 60,736,219.33 | | | | 76,237,912.99 | |
| Total | | | 68,688,964.38 | | | | 639,126,680.56 | |
| Note: | The balance of accounts receivable from factoring is formed by the sub-subsidiary Yonghui Qinghe Commercial Factoring (Chongqing) Co., Ltd. engaging in factoring business. |
| (1) | Disclosure by category |
Unit: Yuan Currency: RMB
| | | | | | December 31, 2023 | | | | |
| | | | | | | | | | | | Bad debt | | | | | |
| Items | | | Amount | | | | Ratio | | | | provision | | | | Net amount | |
| | | | | | | | % | | | | | | | | | |
| Accounts receivable from factoring with recourse | | | 129,425,183.71 | | | | 100.00 | | | | 60,736,219.33 | | | | 68,688,964.38 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | December 31, 2022 | | | | |
| | | | | | | | | Bad debt | | | | |
| Items | | Amount | | | Ratio | | | provision | | | Net amount | |
| | | | | | | | % | | | | | | | | | |
| Accounts receivable from factoring with recourse | | | 715,364,593.55 | | | | 100.00 | | | | 76,237,912.99 | | | | 639,126,680.56 | |
| (2) | Provisioned for, recovered or reversed bad debt of current term |
| | | Allowance for | |
| | | doubtful | |
| Items | | | accounts | |
| January 1, 2023 | | | 76,237,912.99 | |
| Provision made in this year | | | | |
| Provision reversed in this year | | | 2,565,671.68 | |
| Provision written-off in this year | | | 12,936,021.98 | |
| December 31, 2023 | | | 60,736,219.33 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book | | | Opening book | |
| Aging | | balance | | | balance | |
| Within 1 year | | | 417,495,474.90 | | | | 513,809,042.91 | |
| Sub-total within one year | | | 417,495,474.90 | | | | 513,809,042.91 | |
| 1-2 years | | | 27,657,213.75 | | | | 30,520,920.71 | |
| 2-3 years | | | 19,281,834.84 | | | | 37,491,593.67 | |
| Over 3 years | | | 50,274,690.75 | | | | 21,016,298.88 | |
| Total | | | 514,709,214.24 | | | | 602,837,856.17 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Classification and disclosure by bad debt provision |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | Opening balance | |
| | | Book balance | | Bad debt provision | | Book balance | | Bad debt provision | |
| | | | | | | | | Proportion | | | | | | | | | | Proportion | | | |
| | | | | | | | | of bad-debt | | Carrying | | | | | | | | of bad-debt | | Carrying | |
| Category | | Amount | | Proportion | | Amount | | provision | | value | | Amount | | Proportion | | Amount | | provision | | value | |
| | | | | (%) | | | | (%) | | | | | | (%) | | | | (%) | | | |
| Provision made on an individual basis | | 1,894,322.62 | | 0.37 | | 1,894,322.62 | | 100.00 | | | | 1,894,322.62 | | 0.31 | | 1,894,322.62 | | 100.00 | | | |
| Provision made on a collective basis | | 512,814,891.62 | | 99.63 | | 91,072,410.69 | | 17.76 | | 421,742,480.93 | | 600,943,533.55 | | 99.69 | | 70,332,602.42 | | 11.70 | | 530,610,931.13 | |
| Among which: | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | 283,389,112.74 | | 55.06 | | 52,071,963.36 | | 18.37 | | 231,317,149.38 | | 334,400,257.07 | | 55.48 | | 33,922,557.08 | | 10.14 | | 300,477,699.99 | |
| Supplier service fees and rentals | | 181,638,702.76 | | 35.29 | | 38,522,576.57 | | 21.21 | | 143,116,126.19 | | 174,574,704.04 | | 28.96 | | 31,212,180.54 | | 17.88 | | 143,362,523.50 | |
| Construction payment | | | | | | | | | | | | 11,117,786.51 | | 1.84 | | 4,389,356.94 | | 39.48 | | 6,728,429.57 | |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from affiliated parties | | 47,787,076.12 | | 9.28 | | 477,870.76 | | 1.00 | | 47,309,205.36 | | 80,850,785.93 | | 13.41 | | 808,507.86 | | 1.00 | | 80,042,278.07 | |
| Total | | 514,709,214.24 | | / | | 92,966,733.31 | | / | | 421,742,480.93 | | 602,837,856.17 | | / | | 72,226,925.04 | | / | | 530,610,931.13 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | Closing balance |
| | | | | | | | | Proportion of | | | |
| | | Book | | | Bad debt | | | bad-debt | | | Reasons for |
| Name | | balance | | | provision | | | provision | | | provision |
| | | | | | | | | | | (%) | | | |
| Client I | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100.00 | | | Expected not to be recovered |
| Total | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100.00 | | | / |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | √ | Applicable | ☐ | Not applicable |
Combined provision items: Combination 1
Unit: Yuan Currency: RMB
| | Closing balance |
| | | | | | | | | Proportion of | |
| | | Account | | | Bad debt | | | bad-debt | |
| Name | | receivable | | | provision | | | provision | |
| | | | | | | | | | | (%) | |
| Within 1 year | | | 376,098,958.34 | | | | 26,328,938.84 | | | | 7.00 | |
| 1-2 years | | | 22,637,753.84 | | | | 6,468,560.64 | | | | 28.57 | |
| 2-3 years | | | 18,878,074.09 | | | | 10,384,011.22 | | | | 55.01 | |
| Over 3 years | | | 47,413,029.23 | | | | 47,413,029.23 | | | | 100.00 | |
| Total | | | 465,027,815.50 | | | | 90,594,539.93 | | | | 19.48 | |
Combined provision items: Combination 2
Unit: Yuan Currency: RMB
| | Closing balance |
| | | | | | | | | Proportion of | |
| | | Account | | | Bad debt | | | bad-debt | |
| Name | | receivable | | | provision | | | provision | |
| | | | | | | | | | | (%) | |
| Receivables from affiliated parties | | | 47,787,076.12 | | | | 477,870.76 | | | | 1.00 | |
| Total | | | 47,787,076.12 | | | | 477,870.76 | | | | 1.00 | |
Explanation of the provision for bad debt based on portfolio composition:
| | ¨ | Applicable | √ | Not applicable |
Explanation of the provision for bad debt based on portfolio composition:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Description of significant changes in the book balance of accounts receivable due to changes in loss provision in the current period:
| | ¨ | Applicable | √ | Not applicable |
| (3) | Provision for bad debts |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered | | | Charge-off | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | or Reversed | | | or write-off | | | changes | | | balance | |
| Bad-debt provision for accounts receivable | | 72,226,925.04 | | | 41,905,188.23 | | | 3,952,915.56 | | | 17,212,464.40 | | | | | | 92,966,733.31 | |
| Total | | 72,226,925.04 | | | 41,905,188.23 | | | 3,952,915.56 | | | 17,212,464.40 | | | | | | 92,966,733.31 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| (4) | Accounts receivable actually written off in the current period |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Write-off amount | |
| Accounts receivable actually written off | | | 17,212,464.40 | |
Significant write-off of accounts receivable during the year
| | ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of receivables:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5) | Accounts receivable and contract assets of the top five ending balances collected by the debtor |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Closing | | | Proportion to | | | | |
| | | | | | | | | balance of | | | the total closing | | | | |
| | | Closing | | | Closing | | | accounts | | | balance of | | | Closing | |
| | | balance of | | | balance of | | | receivable | | | accounts | | | balance of | |
| | | accounts | | | contract | | | and contract | | | receivable and | | | bad-debt | |
| Unit name | | receivable | | | assets | | | assets | | | contract assets | | | provision | |
| | | | | | | | | | | | | | | (%) | | | | | |
| Client I | | | 63,036,012.22 | | | | | | | | 63,036,012.22 | | | | 12.25 | | | | 4,412,688.78 | |
| Client II | | | 36,445,808.78 | | | | | | | | 36,445,808.78 | | | | 7.08 | | | | 2,551,206.61 | |
| Client III | | | 34,181,676.55 | | | | | | | | 34,181,676.55 | | | | 6.64 | | | | 341,816.76 | |
| Client IV | | | 20,325,814.26 | | | | | | | | 20,325,814.26 | | | | 3.95 | | | | 1,422,826.89 | |
| Client V | | | 14,011,083.31 | | | | | | | | 14,011,083.31 | | | | 2.72 | | | | 14,011,083.31 | |
| Total | | | 168,000,395.12 | | | | | | | | 168,000,395.12 | | | | 32.64 | | | | 22,739,622.35 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Significant changes in the carrying value during the reporting period and the reasons |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Classification and disclosure by bad debt provision |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
Provision for bad debts based on the general model of expected credit losses
| | ¨ | Applicable | √ | Not applicable |
Basis for stage classification and bad debt provision ratio
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of significant changes in the carrying amount of contract assets for which loss provisions were made during the current period:
| | ¨ | Applicable | √ | Not applicable |
| (4) | Provision for bad debts of contract assets in current period |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (5) | Status of contract assets actually written off in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant contract asset write-off situations
| | ¨ | Applicable | √ | Not applicable |
Explanation of contract asset write-off:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 9. | Financing of receivables |
| (1) | Classification of receivables financing |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Financing of pledged receivables of the company at the end of the period |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Receivables financing endorsed or discounted by the company at the end of the period and not yet due on the balance sheet date |
| | ¨ | Applicable | √ | Not applicable |
| (4) | Classification and disclosure by bad debt provision |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision for bad debts based on the general model of expected credit losses
| | ¨ | Applicable | √ | Not applicable |
Basis for stage classification and bad debt provision ratio
Explanation of significant changes in the carrying amount of financing of receivables for which loss provisions were made during the current period:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (6) | Status of accounts receivable financing actually written off in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant accounts receivable financing write-off situations
| | ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| | ¨ | Applicable | √ | Not applicable |
| (7) | Receivables financing increase and decrease of current period and fair value changes: |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (1) | Advance payments listed according to aging |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| Aging | | Amount | | | Proportion | | | Amount | | | Proportion | |
| | | | | | (%) | | | | | | (%) | |
| Within 1 year | | | 1,089,946,729.92 | | | | 91.96 | | | | 1,160,134,121.11 | | | | 83.51 | |
| 1-2 years | | | 52,388,650.71 | | | | 4.42 | | | | 130,727,746.76 | | | | 9.41 | |
| 2-3 years | | | 23,223,104.23 | | | | 1.96 | | | | 37,574,616.93 | | | | 2.70 | |
| Over 3 years | | | 19,661,786.82 | | | | 1.66 | | | | 60,798,870.99 | | | | 4.38 | |
| Total | | | 1,185,220,271.68 | | | | 100.00 | | | | 1,389,235,355.79 | | | | 100.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Reasons for untimely settlement of advance payment that has aging of over one year and of significant amount:
Prepayments with an age of more than 1 year are mainly prepayment for goods
| (2) | Prepayments for the top five ending balances categorized by prepayment object |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Proportion in | |
| | | | | | the total closing | |
| | | | | | balance of | |
| Unit name | | Closing balance | | | prepayments | |
| | | | | | (%) | |
| Supplier I | | | 65,514,899.66 | | | | 5.53 | |
| Supplier II | | | 28,176,779.94 | | | | 2.38 | |
| Supplier III | | | 27,038,151.84 | | | | 2.28 | |
| Supplier IV | | | 26,842,541.11 | | | | 2.26 | |
| Supplier V | | | 24,928,532.69 | | | | 2.10 | |
| Total | | | 172,500,905.24 | | | | 14.55 | |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Itemized list
| √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Interest receivable | | | 941,391.67 | | | | 770,879.94 | |
| Other receivables | | | 563,030,272.81 | | | | 648,905,448.81 | |
| Total | | | 563,971,664.48 | | | | 649,676,328.75 | |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Interest receivable
| (1) | Classification of interest receivable |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Interest on small loans | | | 941,391.67 | | | | 770,879.94 | |
| Total | | | 941,391.67 | | | | 770,879.94 | |
| (2) | Significant overdue interest |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | Classification and disclosure by bad debt provision |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
| (4) | Provision for bad debts based on the general model of expected credit losses |
| | ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the carrying balance of interest receivable for which there have been provision for bad debts changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (6) | Interest receivable actually verified and canceled of current period |
| | ¨ | Applicable | √ | Not applicable |
Significant accrued interest write-off situations
| | ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Dividends receivable
| | ¨ | Applicable | √ | Not applicable |
| (2) | Significant dividends receivable with more than one-year aging |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | Classification and disclosure by bad debt provision |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
| (4) | Provision for bad debts based on the general model of expected credit losses |
| | ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the carrying balance of dividends receivable for which there have been provision for bad debts changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
None
| (6) | Dividends receivable actually verified and canceled of current period |
| | ¨ | Applicable | √ | Not applicable |
Significant accrued dividends write-off situations
| | ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other receivables
| | √ | Applicable | ☐ | Not applicable |
| | | Closing book | | | Opening book | |
| Aging | | balance | | | balance | |
| Within 1 year | | | 143,104,386.17 | | | | 189,582,745.46 | |
| Sub-total within one year | | | 143,104,386.17 | | | | 189,582,745.46 | |
| 1-2 years | | | 104,503,734.32 | | | | 80,312,625.85 | |
| 2-3 years | | | 57,231,859.27 | | | | 79,907,022.43 | |
| Over 3 years | | | 356,558,737.02 | | | | 384,331,646.14 | |
| Total | | | 661,398,716.78 | | | | 734,134,039.88 | |
| (2) | Classification by nature of payment |
| | √ | Applicable | ☐ | Not applicable |
| | | Closing book | | | Opening book | |
| Nature of payment | | balance | | | balance | |
| Various types of deposits and guarantees receivable | | | 489,484,746.78 | | | | 562,493,581.63 | |
| Purchases and store petty cash payments | | | 65,233,226.90 | | | | 84,160,245.08 | |
| Receivables from affiliated parties | | | 18,945,065.73 | | | | 13,826,983.71 | |
| Other receivables | | | 87,735,677.37 | | | | 73,653,229.46 | |
| Total | | | 661,398,716.78 | | | | 734,134,039.88 | |
| (3) | Provision for bad debts recognized |
| | √ | Applicable | ☐ | Not applicable |
| | | Phase I | | | Phase II | | | Phase III | | | | |
| | | | | | Expected credit | | | Expected credit | | | | |
| | | Expected | | | loss within the | | | loss within the | | | | |
| | | credit loss | | | whole duration (no | | | whole duration | | | | |
| | | over the next | | | credit impairment | | | (credit impairment | | | | |
| Bad debt provision | | 12 months | | | occurred) | | | incurred) | | | Total | |
| Balance as of January 1, 2023 | | | 10,274,192.44 | | | | 1,312,828.53 | | | | 73,641,570.10 | | | | 85,228,591.07 | |
| The balance as of January 1, 2023 is in the current period | | | | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -987,238.57 | | | | 987,238.57 | | | | | | | | | |
| – Transferred to Phase III | | | | | | | -561,790.28 | | | | 561,790.28 | | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | | | | | | |
| Provision of the current period | | | 2,385,014.63 | | | | 998,334.50 | | | | 19,996,502.93 | | | | 23,379,852.06 | |
| Provision reversed in current period | | | 6,090,390.35 | | | | | | | | | | | | 6,090,390.35 | |
| Charge-off of the current period | | | | | | | | | | | | | | | | |
| Write-off of the current period | | | | | | | | | | | 4,149,608.81 | | | | 4,149,608.81 | |
| Other changes | | | | | | | | | | | | | | | | |
| Balance as of December 31, 2023 | | | 5,581,578.15 | | | | 2,736,611.32 | | | | 90,050,254.50 | | | | 98,368,443.97 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Basis for stage classification and bad debt provision ratio
| (1) | The Company handles other receivables using the general model for expected credit losses. On each balance sheet date, the credit risk of these receivables is assessed and categorized into three stages to calculate the expected credit losses. |
| | | |
| | | The Company respectively measures the expected credit losses of financial instruments in different stages. If the credit risk of a financial instrument has not increased significantly since initial recognition, in the first stage, the Company measures the loss provision based on the expected credit loss within the next 12 months; if the credit risk of a financial instrument has increased significantly after initial recognition but no credit reduction has occurred, in the second stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument; if the financial instrument has suffered credit impairment since initial recognition, in the third stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument. |
| (2) | The Company divides other receivables into payment nature and aging portfolio based on credit risk characteristics and calculates expected credit losses based on the portfolio. For other receivables classified into portfolios, the Company calculates expected credit losses based on default risk exposure and expected credit loss rates within the next 12 months or the entire duration. |
| (3) | Provision for significant bad debt risk on other receivables with large amounts and significant impact on profitability. Provision for bad debt is recognized based on the expected credit loss throughout the entire remaining period. |
Explanation of significant changes in the book value of other receivables with provision changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| | ¨ | Applicable | √ | Not applicable |
| (4) | Provision for bad debts |
| | √ | Applicable | ☐ | Not applicable |
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered | | | Charge-off | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | or Reversed | | | or write-off | | | changes | | | balance | |
| Bad-debt provision for other receivables | | | 85,228,591.07 | | | | 23,379,852.06 | | | | 6,090,390.35 | | | | 4,149,608.81 | | | | | | | | 98,368,443.97 | |
| Total | | | 85,228,591.07 | | | | 23,379,852.06 | | | | 6,090,390.35 | | | | 4,149,608.81 | | | | | | | | 98,368,443.97 | |
Significant reversal or recovery of bad-debt provision of current year is:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5) | Other receivables actually verified and canceled of current period |
| | √ | Applicable | ☐ | Not applicable |
| Items | | Write-off amount | |
| Other receivables actually written off | | | 4,149,608.81 | |
Where the other receivables written off is important:
| | ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of other receivables:
| | ¨ | Applicable | √ | Not applicable |
| (6) | Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | Proportion in | | | | | | | Closing | |
| | | | | | total closing | | | | | | | balance of | |
| | Closing | | | balance of other | | | | | | | bad-debt | |
| Unit name | | balance | | | receivable | | | Nature of receivable | | Aging | | provision | |
| | | | | | (%) | | | | | | | | |
| Client I | | | 54,750,000.00 | | | | 8.28 | | | Various types of deposits and guarantees receivable | | Over 3 years | | | 547,500.00 | |
| Client II | | | 16,972,427.96 | | | | 2.57 | | | Other receivables | | Over 3 years | | | 16,972,427.96 | |
| Client III | | | 13,821,492.25 | | | | 2.09 | | | Receivables from affiliated parties | | Within 4 years | | | 13,821,492.25 | |
| Client IV | | | 10,000,000.00 | | | | 1.51 | | | Various types of deposits and guarantees receivable | | 2-3 years | | | 100,000.00 | |
| Client V | | | 10,000,000.00 | | | | 1.51 | | | Other receivables | | 1-2 years | | | 10,000,000.00 | |
| Total | | | 105,543,920.21 | | | | 15.96 | | | / | | / | | | 41,441,420.21 | |
| 1. | Accounts receivable involving governmental subsidies |
| | ¨ | Applicable | √ | Not applicable |
| 2. | Other receivables with terminated confirmation due to financial assets transfer |
| | ¨ | Applicable | √ | Not applicable |
| 3. | Amount of assets and liabilities formed through transfer of other accounts receivable and continuous involvement |
| (7) | Reported under other receivables due to centralized cash management |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1) | Inventory classification |
| | √ | Applicable | ☐ | Not applicable |
| Items | | Book balance | | Closing balance
Provision for inventory
depreciation or provision
for impairment of contract
fulfilling costs | | Carrying value | | Book balance | | Opening balance
Provision for inventory
depreciation or provision
for impairment of contract
fulfilling costs | | Carrying value | |
| Raw material | | 11,722,204.41 | | | | 11,722,204.41 | | 8,304,623.79 | | | | 8,304,623.79 | |
| Inventory goods | | 8,225,436,229.31 | | | | 8,225,436,229.31 | | 10,419,571,039.89 | | | | 10,419,571,039.89 | |
| Low-cost consumables | | 31,824,104.55 | | | | 31,824,104.55 | | 38,713,833.46 | | | | 38,713,833.46 | |
| Total | | 8,268,982,538.27 | | | | 8,268,982,538.27 | | 10,466,589,497.14 | | | | 10,466,589,497.14 | |
| (2) | Provision for inventory depreciation or provision for impairment of contract fulfilling costs |
| | ¨ | Applicable | √ | Not applicable |
Causes for reversal or write-off of inventory falling price reserves in the current period
| | ¨ | Applicable | √ | Not applicable |
Provision for inventory impairment is calculated based on portfolios
| | ¨ | Applicable | √ | Not applicable |
Provision standards for inventory impairment based on portfolios
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | Explanation of capitalized borrowing costs included in the ending inventory balance and calculation criteria and basis |
| | ¨ | Applicable | √ | Not applicable |
| (4) | Explanation for the current amortization amount of contract performance cost |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 13. | Available-for-sale assets |
| | ¨ | Applicable | √ | Not applicable |
| 14. | Non-current assets due within one year |
| | √ | Applicable | ☐ | Not applicable |
| Items | | Closing balance | | | Opening balance | |
| Finance lease receivable due within one year | | | 49,380,092.40 | | | | 43,534,741.35 | |
| Total | | | 49,380,092.40 | | | | 43,534,741.35 | |
Creditor investments due within one year
| ¨ | Applicable | √ | Not applicable |
Other creditor investments due within one year
| ¨ | Applicable | √ | Not applicable |
Other explanations for non-current assets maturing within one year
| | √ | Applicable | ¨ | Not applicable |
| Items | | Closing balance | | | Opening balance | |
| Input tax to be certified | | | 1,224,290,088.04 | | | | 1,267,353,243.41 | |
| Input tax to be deducted | | | 135,854,796.23 | | | | 187,562,364.10 | |
| Advance income tax | | | 4,964,812.95 | | | | 36,129,348.48 | |
| Advance payment of other taxes | | | 260,832.25 | | | | 2,801,052.91 | |
| Total | | | 1,365,370,529.47 | | | | 1,493,846,008.90 | |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Changes in provision for impairment of creditor investments
| | ¨ | Applicable | √ | Not applicable |
| (2) | End-of-year significant creditor investments |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Impairment provision recognized |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of significant changes in the book value of creditor investments with provision changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| | ¨ | Applicable | √ | Not applicable |
| (4) | Actual write-offs of creditor investments in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant situations of write-off of important creditor investments
| | ¨ | Applicable | √ | Not applicable |
Explanation of creditor investments write-off:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| 17. | Other creditor investments |
| (1) | Other creditor investments |
| | ¨ | Applicable | √ | Not applicable |
Changes in impairment provision for other creditor investments
| | ¨ | Applicable | √ | Not applicable |
| (2) | End-of-year significant other creditor investments |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Impairment provision recognized |
| | ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the book value of other creditor investments with provision changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| | ¨ | Applicable | √ | Not applicable |
| (4) | Status of other creditor investments actually written off in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant situations of write-off of other creditor investments
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of other creditor investments write-off:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Closing balance | | | | | | | | | Opening balance | | | | | | Discount | |
| | | | | | Bad debt | | | Carrying | | | | | | Bad debt | | | Carrying | | | rate | |
| Items | | Book balance | | | provision | | | value | | | Book balance | | | provision | | | value | | | interval | |
| Finance lease outlay | | 227,393,410.57 | | | | | | 227,393,410.57 | | | 264,650,510.99 | | | | | | | 264,650,510.99 | | | 4.35%-4.90% | |
| Including: unrealized financing income | | 48,774,581.99 | | | | | | 48,774,581.99 | | | 62,304,995.06 | | | | | | | 62,304,995.06 | | | | |
| Total | | 227,393,410.57 | | | | | | 227,393,410.57 | | | 264,650,510.99 | | | | | | | 264,650,510.99 | | | / | |
| (2) | Classification and disclosure by bad debt provision |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
| (3) | Provision for bad debts based on the general model of expected credit losses |
| | ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the book value of long-term receivables with provision changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4) | Provision for bad debts |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (5) | Status of long-term receivables actually written off in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant long-term receivables write-off situations
| | ¨ | Applicable | √ | Not applicable |
Explanation of long-term receivables write-off:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 19. | Long-term equity investments |
| (1) | Long-term equity investments |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase/decrease in the current period | |
| | | | | | | | | | | | Investment | | | Other | | | | | | | | | | | | | | | | | | Closing | |
| | | | | | | | | | | | profit and loss | | | comprehensive | | | | | | Distribution of | | | Provision of | | | | | | | | | balance of | |
| | | | | | Increased | | | Decreased | | | recognized with | | | income | | | Other equity | | | cash dividends | | | impairment | | | | | | | | | provision for | |
| Investee | | Opening balance | | | investment | | | investment | | | the equity method | | | adjustments | | | changes | | | or profits | | | losses | | | Others | | | Closing balance | | | impairment | |
| I. Cooperative enterprises | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. (Note 1) | | 48,619,418.14 | | | | | | | | | -23,767,144.07 | | | | | | 23,202,621.79 | | | | | | | | | | | | 48,054,895.86 | | | | |
| Subtotal | | 48,619,418.14 | | | | | | | | | -23,767,144.07 | | | | | | 23,202,621.79 | | | | | | | | | | | | 48,054,895.86 | | | | |
| II. Joint ventures | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Zhongbai Holdings Group Co., Ltd. (“Zhongbai Group”) (Note 2) | | 406,097,191.64 | | | | | | -3,415,099.16 | | | -45,467,223.47 | | | | | | 71,289.83 | | | | | | -35,064,018.73 | | | | | | 322,222,140.11 | | | 203,397,822.57 | |
| Chengdu Hongqi Chain Co., Ltd. (“Hongqi Chain”) | | 2,046,627,590.92 | | | | | | | | | 117,834,480.06 | | | | | | | | | -126,235,200.00 | | | -358,226,870.98 | | | | | | 1,680,000,000.00 | | | 358,226,870.98 | |
| Fujian OneBank Co., Ltd. (“OneBank”) (Note 3) | | 611,919,130.46 | | | 55,200,000.00 | | | | | | 21,893,148.88 | | | 4,617,660.61 | | | | | | | | | | | | | | | 693,629,939.95 | | | | |
| Xiangcun Gaoke Agricultural Co., Ltd. (“Xiangcun Gaoke”) | | 53,000,000.00 | | | | | | | | | -10,070,846.46 | | | | | | | | | | | | -42,929,153.54 | | | | | | — | | | 399,676,183.23 | |
| Fujian Minwei Industrial Co., Ltd. | | 106,574,742.72 | | | | | | | | | 11,855,409.21 | | | | | | | | | | | | | | | | | | 118,430,151.93 | | | | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | 61,871,460.14 | | | | | | | | | -17,303,225.46 | | | | | | | | | | | | | | | | | | 44,568,234.68 | | | | |
| Beijing Friendship Messenger Trading Co., Ltd. | | 61,883,573.36 | | | | | | | | | 36,725,645.58 | | | | | | | | | -30,300,000.00 | | | | | | | | | 68,309,218.94 | | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | 31,151,958.25 | | | 10,994,112.01 | | | | | | 13,070,293.87 | | | | | | | | | -3,000,000.00 | | | | | | | | | 52,216,364.13 | | | | |
1233 International Supply Chain Management Co., Ltd. | | 190,957,444.93 | | | | | | | | | 4,904,640.31 | | | | | | | | | | | | | | | | | | 195,862,085.24 | | | | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. (Note 4) | | 7,810,480.46 | | | | | | -7,501,411.13 | | | -309,069.33 | | | | | | | | | | | | | | | | | | — | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Increase/decrease in the current period | |
| | | | | | | | | | | | Investment | | | Other | | | | | | | | | | | | | | | | | | Closing | |
| | | | | | | | | | | | profit and loss | | | comprehensive | | | | | | Distribution of | | | Provision of | | | | | | | | | balance of | |
| | | | | | Increased | | | Decreased | | | recognized with | | | income | | | Other equity | | | cash dividends | | | impairment | | | | | | | | | provision for | |
| Investee | | Opening balance | | | investment | | | investment | | | the equity method | | | adjustments | | | changes | | | or profits | | | losses | | | Others | | | Closing balance | | | impairment | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | 5,101,278.39 | | | | | | | | | 524,421.87 | | | | | | | | | | | | | | | | | | 5,625,700.26 | | | 3,218,259.25 | |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | 9,579.45 | | | | | | | | | -9,579.45 | | | | | | | | | | | | | | | | | | — | | | 4,062,445.92 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. (Note 6) | | | | | | | | | | | 19,133.52 | | | | | | | | | | | | | | | | | | 19,133.52 | | | | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. (Note 5) | | 7,957,621.70 | | | | | | -7,957,621.70 | | | | | | | | | | | | | | | | | | | | | — | | | | |
| Zhejiang Bianlixian Supermarket Co., Ltd. | | | | | 3,400,000.00 | | | | | | -672,786.60 | | | | | | | | | | | | | | | | | | 2,727,213.40 | | | | |
| Subtotal | | 3,590,962,052.42 | | | 69,594,112.01 | | | -18,874,131.99 | | | 132,994,442.53 | | | 4,617,660.61 | | | 71,289.83 | | | -159,535,200.00 | | | -436,220,043.25 | | | | | | 3,183,610,182.16 | | | 968,581,581.95 | |
| Total | | 3,639,581,470.56 | | | 69,594,112.01 | | | -18,874,131.99 | | | 109,227,298.46 | | | 4,617,660.61 | | | 23,273,911.62 | | | -159,535,200.00 | | | -436,220,043.25 | | | | | | 3,231,665,078.02 | | | 968,581,581.95 | |
Other disclosures
| Note 1: | The Group’s joint venture, Yonghui Fresh Food Development Co., Ltd. (“Yonghui Fresh Food”), completed a new round of financing in 2023. Yonghui Fresh Food introduced a third-party shareholder, Yulin Energy Industry Fund Management Co., Ltd., with a capital increase of RMB75,000,000.00, resulting in an increase in the Group’s net asset share in Yonghui Fresh Food by RMB23,202,621.79. |
| | |
| Note 2: | In 2023, the Group reduced its equity stake in Zhongbai Group by 0.08% through the Shenzhen Stock Exchange centralized trading platform. At the same time, the Group transferred the accumulated other equity changes due to the decrease in the Group’s net asset share in Zhongbai Group, RMB71,289.83, and the provision for long-term equity investment impairment, RMB1,397,570.25. |
| | |
| Note 3: | In 2023, the Group signed a share transfer agreement with third-party Fujian Xintong Investment Group Co., Ltd. to purchase a 2.3% stake in Fujian OneBank Co., Ltd. for RMB55,200,000.00. After the transfer, the Group holds a 29.8% stake in Fujian OneBank Co., Ltd. |
| | |
| Note 4: | In 2023, the Group exited the operation of Fujian Lingyu Jinhua Brand Management Co., Ltd. through a reduction of capital and no longer holds any equity in Fujian Lingyu Jinhua Brand Management Co., Ltd. |
| | |
| Note 5: | In 2023, the Group signed a termination agreement with third-party Beijing Yuanxin Technology Group Co., Ltd. to terminate the operation of Beijing Yonghui Yuanxin Health Technology Co., Ltd. and cancel Beijing Yonghui Yuanxin Health Technology Co., Ltd. |
| | |
| Note 6: | In 2023, the Group signed a share transfer agreement with Lin Shu to transfer 20% of the Group’s equity in Shanghai Xuanhui Business Service Technology Co., Ltd. After the transfer, the Group holds a 20% stake in Shanghai Xuanhui Business Service Technology Co., Ltd. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Impairment testing of long-term equity investments |
| | √ | Applicable | ☐ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | | | | | | | | | | | |
| Items | | Carrying
value | | | Recoverable
amounts | | | Impairment
amount | | | Forecast period | | | Key
parameters
of forecast
period | | Key
parameters
of the stable
period | | Basis for
determining
key
parameters
of the
stable period |
| Hongqi Chain | | 2,038,226,870.98 | | | 1,680,000,000.00 | | | 358,226,870.98 | | | 5 years | | | Revenue growth rate, discount rate | | Revenue growth rate, discount rate | | The stable period growth rate is consistent with the forecast data in authoritative industry reports, and the discount rate is the pre-tax discount rate reflecting specific risks of the assets |
| Total | | 2,038,226,870.98 | | | 1,680,000,000.00 | | | 358,226,870.98 | | | / | | | / | | / | | / |
In 2023, the Group’s long-term equity investment in Hongqi Chain showed signs of impairment. The Group conducted impairment testing on this long-term equity investment. Since the recoverable amount determined by the present value of expected future cash flows is lower than the carrying amount of this long-term equity investment, a provision for long-term equity investment impairment needs to be recognized for the current year.
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 20. | Other equity instrument investments |
| (1) | Other equity instrument investments |
| ¨ | Applicable | √ | Not applicable |
| (2) | Explanation of cases where termination has been confirmed in the current period |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| 21. | Other non-current financial assets |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Financial assets measured at fair value with changes included in current profits and losses | | | 3,651,480,119.24 | | | | 3,918,000,000.00 | |
| Total | | | 3,651,480,119.24 | | | | 3,918,000,000.00 | |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Measurement model for investment properties
| (1) | Investment properties measured at cost |
Unit: Yuan Currency: RMB
| | | Houses and | | | | |
| Items | | buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1.Opening balance | | | 397,840,556.69 | | | | 397,840,556.69 | |
| 2.Increase in the current period | | | | | | | | |
| 3.Decrease in the current period | | | 181,013.92 | | | | 181,013.92 | |
| (2) Other transfer | | | 181,013.92 | | | | 181,013.92 | |
| 4.Closing balance | | | 397,659,542.77 | | | | 397,659,542.77 | |
| II. Accumulated depreciation and amortization | | | | | | | | |
| 1.Opening balance | | | 86,706,177.05 | | | | 86,706,177.05 | |
| 2.Increase in the current period | | | 10,805,136.72 | | | | 10,805,136.72 | |
| (1) Depreciation or amortization | | | 10,805,136.72 | | | | 10,805,136.72 | |
| 3.Decrease in the current period | | | | | | | | |
| 4.Closing balance | | | 97,511,313.77 | | | | 97,511,313.77 | |
| III. Provision for impairment | | | | | | | | |
| 1.Opening balance | | | | | | | | |
| 2.Increase in the current period | | | | | | | | |
| 3.Decrease in current period | | | | | | | | |
| 4.Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1.Closing book value | | | 300,148,229.00 | | | | 300,148,229.00 | |
| 2.Opening book value | | | 311,134,379.64 | | | | 311,134,379.64 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Investment properties consisting of a partial lease of Yonghui Urban Life Plaza and Dongzhan Commercial Building.
| (2) | Investment properties without certificate of title |
| ¨ | Applicable | √ | Not applicable |
| (3) | Impairment testing of investment properties measured at cost |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Fixed assets | | | 3,842,169,544.96 | | | | 4,114,413,404.13 | |
| Total | | | 3,842,169,544.96 | | | | 4,114,413,404.13 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Fixed assets
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Houses and | | | Machinery and | | | Means of | | | Electronic | | | Tools and | | | | |
| Items | | buildings | | | equipment | | | transport | | | equipment | | | instruments | | | Total | |
| I. Original Book Value: | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 3,047,274,659.50 | | | | 2,572,969,626.20 | | | | 305,275,808.58 | | | | 928,356,650.26 | | | | 2,090,925,374.54 | | | | 8,944,802,119.08 | |
| 2. Increase in the current period | | | 280,456,995.39 | | | | 94,329,435.65 | | | | 1,357,643.00 | | | | 24,552,568.46 | | | | 43,751,498.41 | | | | 444,448,140.91 | |
| (1) Purchase | | | 7,205,973.35 | | | | 4,307,686.75 | | | | 1,159,389.92 | | | | 12,742,096.83 | | | | 3,653,552.98 | | | | 29,068,699.83 | |
| (2) Transferred from work in progress | | | 273,251,022.04 | | | | 90,021,748.90 | | | | 198,253.08 | | | | 11,810,471.63 | | | | 40,097,945.43 | | | | 415,379,441.08 | |
| 3. Decrease in the current period | | | 11,050,997.71 | | | | 143,095,792.72 | | | | 10,430,835.19 | | | | 70,918,926.22 | | | | 134,972,266.77 | | | | 370,468,818.61 | |
| (1) Disposal or scrapping | | | 11,050,997.71 | | | | 143,095,792.72 | | | | 10,430,835.19 | | | | 70,918,926.22 | | | | 134,972,266.77 | | | | 370,468,818.61 | |
| 4. Closing balance | | | 3,316,680,657.18 | | | | 2,524,203,269.13 | | | | 296,202,616.39 | | | | 881,990,292.50 | | | | 1,999,704,606.18 | | | | 9,018,781,441.38 | |
| II. Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | |
| 1.Opening balance | | | 607,325,355.50 | | | | 1,796,074,512.41 | | | | 86,048,168.29 | | | | 752,065,257.80 | | | | 1,500,500,682.20 | | | | 4,742,013,976.20 | |
| 2.Increase in the current period | | | 91,098,252.60 | | | | 248,927,667.87 | | | | 14,493,546.33 | | | | 126,685,670.94 | | | | 213,696,258.73 | | | | 694,901,396.47 | |
| (1) Addition | | | 91,098,252.60 | | | | 248,927,667.87 | | | | 14,493,546.33 | | | | 126,685,670.94 | | | | 213,696,258.73 | | | | 694,901,396.47 | |
| 3.Decrease in the current period | | | 1,359,672.71 | | | | 114,416,750.42 | | | | 9,139,210.54 | | | | 62,420,202.63 | | | | 116,883,769.26 | | | | 304,219,605.56 | |
| (1) Disposal or scrapping | | | 1,359,672.71 | | | | 114,416,750.42 | | | | 9,139,210.54 | | | | 62,420,202.63 | | | | 116,883,769.26 | | | | 304,219,605.56 | |
| 4.Closing balance | | | 697,063,935.39 | | | | 1,930,585,429.86 | | | | 91,402,504.08 | | | | 816,330,726.11 | | | | 1,597,313,171.67 | | | | 5,132,695,767.11 | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | | | | | | |
| 1.Opening balance | | | | | | | 46,210,771.76 | | | | 179,204.84 | | | | 11,270,597.44 | | | | 30,714,164.71 | | | | 88,374,738.75 | |
| 2.Increase in the current period | | | | | | | 3,500,266.41 | | | | 3,556.50 | | | | 1,831,551.50 | | | | 2,459,185.11 | | | | 7,794,559.52 | |
| (1) Addition | | | | | | | 3,500,266.41 | | | | 3,556.50 | | | | 1,831,551.50 | | | | 2,459,185.11 | | | | 7,794,559.52 | |
| 3.Decrease in the current period | | | | | | | 29,212,579.85 | | | | 61,522.23 | | | | 5,268,301.14 | | | | 17,710,765.74 | | | | 52,253,168.96 | |
| (1) Disposal or scrapping | | | | | | | 29,212,579.85 | | | | 61,522.23 | | | | 5,268,301.14 | | | | 17,710,765.74 | | | | 52,253,168.96 | |
| 4.Closing balance | | | | | | | 20,498,458.32 | | | | 121,239.11 | | | | 7,833,847.80 | | | | 15,462,584.08 | | | | 43,916,129.31 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1.Closing book value | | | 2,619,616,721.79 | | | | 573,119,380.95 | | | | 204,678,873.20 | | | | 57,825,718.59 | | | | 386,928,850.43 | | | | 3,842,169,544.96 | |
| 2.Opening book value | | | 2,439,949,304.00 | | | | 730,684,342.03 | | | | 219,048,435.45 | | | | 165,020,795.02 | | | | 559,710,527.63 | | | | 4,114,413,404.13 | |
| (2) | Temporary idle fixed assets |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Fixed assets leased out through operating leases |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4) | Fixed assets without certificate of title |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Carrying value | | | Reasons for failure
to get the certificates
of title |
| Factories and office buildings of Guizhou Yonghui Logistics Center | | | 281,778,407.96 | | | Processing |
| Yonghui Northeast Warehouse Center | | | 186,333,881.28 | | | Processing |
| Rail interface of the underground passage at Nanqiaosi Station, Chongqing Xuanhui Real Estate | | | 25,543,922.87 | | | The Group only has the right to use without ownership. |
As of December 31, 2023 and December 31, 2022, the Group had had no temporarily idle fixed assets, no leased-in fixed assets, and no fixed assets leased out for operating purposes.
| (5) | Impairment testing of fixed assets |
| √ | Applicable | ¨ | Not applicable |
Other notes:
As stated in Note VII, 74, the Group recognized a provision for long-term asset impairment for the asset group related to stores, limited to the residual value, amounting to RMB83,929,775.72, including RMB7,794,559.52 for fixed asset impairment loss.
| | ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years' impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Disposal of fixed asset
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 24. | Construction in progress |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Construction in progress | | | 240,333,156.71 | | | | 383,281,366.61 | |
| Total | | | 240,333,156.71 | | | | 383,281,366.61 | |
Construction in progress
| (1) | Construction in progress |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Closing
balance | | | | | | | | | Opening
balance | | | | |
| | | | | | Impairment | | | Carrying | | | | | | Impairment | | | Carrying | |
| Items | | Book balance | | | provision | | | value | | | Book balance | | | provision | | | value | |
| Store decoration | | | 93,794,839.46 | | | | | | | | 93,794,839.46 | | | | 80,602,137.56 | | | | | | | | 80,602,137.56 | |
| Guizhou Logistics Park Industrial Park | | | | | | | | | | | | | | | 15,101,940.23 | | | | | | | | 15,101,940.23 | |
| Yonghui Northeast Warehousing Center Construction Project | | | | | | | | | | | | | | | 174,399,580.98 | | | | | | | | 174,399,580.98 | |
| Nantong Logistics Park Warehousing Center Building No. 8 | | | | | | | | | | | | | | | 51,009,174.33 | | | | | | | | 51,009,174.33 | |
| Nantong Logistics Park Warehouse, Training Center Equipment, and Decoration | | | | | | | | | | | | | | | 20,292,356.56 | | | | | | | | 20,292,356.56 | |
| Phase II of Sichuan Pengzhou Industrial Park | | | 146,538,317.25 | | | | | | | | 146,538,317.25 | | | | 41,876,176.95 | | | | | | | | 41,876,176.95 | |
| Total | | | 240,333,156.71 | | | | | | | | 240,333,156.71 | | | | 383,281,366.61 | | | | | | | | 383,281,366.61 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Changes of major work in progress in the current period |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | | | | Amount of | | | Other | | | | | | Proportion of | | | | | | | | | Including: | | | Interest | | | | |
| | | | | | | | | | | | transferred | | | decreased | | | | | | accumulative | | | | | | Accumulated | | | amount of | | | capitalization | | | | |
| | | | | | | | | Increase | | | fixed assets of | | | amount of | | | | | | total project | | | | | | amount of | | | capitalization | | | rate in the | | | | |
| | | | | | Opening | | | in current | | | current | | | current | | | Closing | | | investment in | | | Project | | | interest | | | of current | | | current | | | Source of | |
| Project name | | Budget amount | | | balance | | | period | | | period | | | period | | | balance | | | the budget | | | progress | | | capitalization | | | interest | | | period | | | funds | |
| | | | | | | | | | | | | | | | | | | | | (%) | | | | | | | | | | | | (%) | | | | |
| Yonghui Northeast Warehousing Center Construction Project | | 238,177,616.79 | | | 174,399,580.98 | | | 16,285,213.79 | | | 190,684,794.77 | | | | | | | | | 80 | | | 100 | | | | | | | | | | | | Self-funded | |
| Guizhou Logistics Park Industrial Park | | 374,710,200.00 | | | 15,101,940.23 | | | 9,651,620.37 | | | 19,342,621.31 | | | 5,410,939.29 | | | | | | 82 | | | 100 | | | | | | | | | | | | Self-funded | |
| Nantong Logistics Park Warehousing Center Building No. 8 | | 93,971,619.92 | | | 51,009,174.33 | | | | | | 51,009,174.33 | | | | | | | | | 54 | | | 100 | | | | | | | | | | | | Self-funded | |
| Phase II of Sichuan Pengzhou Industrial Park | | 311,482,500.00 | | | 41,876,176.95 | | | 117,780,113.02 | | | 6,809,836.38 | | | 6,308,136.34 | | | 146,538,317.25 | | | 51 | | | 71 | | | | | | | | | | | | Self-funded | |
| Total | | 1,018,341,936.71 | | | 282,386,872.49 | | | 143,716,947.18 | | | 267,846,426.79 | | | 11,719,075.63 | | | 146,538,317.25 | | | / | | | / | | | | | | | | | / | | | / | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | Provision of impairment losses of construction in progress in current period |
| | ¨ | Applicable | √ | Not applicable |
| (4) | Impairment testing of work in progress |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Project materials
| (1) | Construction materials |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 25. | Productive biological assets |
| (1) | Productive biological assets measured at cost |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Planting industry | | | | |
| Items | | Persimmon trees | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 12,727,696.62 | | | | 12,727,696.62 | |
| 2. Increase in the current period | | | | | | | | |
| 3. Decrease in the current period | | | | | | | | |
| 4. Closing balance | | | 12,727,696.62 | | | | 12,727,696.62 | |
| II. Accumulated depreciation | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in the current period | | | 636,384.83 | | | | 636,384.83 | |
| 3. Decrease in the current period | | | | | | | | |
| 4. Closing balance | | | 636,384.83 | | | | 636,384.83 | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in the current period | | | | | | | | |
| 3. Decrease in the current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 12,091,311.79 | | | | 12,091,311.79 | |
| 2. Opening book value | | | 12,727,696.62 | | | | 12,727,696.62 | |
| (2) | Impairment test of productive biological assets measured at cost |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Productive biological assets measured at fair value |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Impairment testing of oil and gas assets |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Houses and | | | | |
| Items | | buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1.Opening balance | | | 32,488,021,817.48 | | | | 32,488,021,817.48 | |
| 2.Increase in the current period | | | 1,307,696,003.56 | | | | 1,307,696,003.56 | |
| (1) Increase | | | 1,307,696,003.56 | | | | 1,307,696,003.56 | |
| 3.Decrease in the current period | | | 2,721,723,040.91 | | | | 2,721,723,040.91 | |
| (1) Disposal | | | 2,721,723,040.91 | | | | 2,721,723,040.91 | |
| 4.Closing balance | | | 31,073,994,780.13 | | | | 31,073,994,780.13 | |
| II. Accumulated depreciation | | | | | | | | |
| 1.Opening balance | | | 12,510,931,921.53 | | | | 12,510,931,921.53 | |
| 2.Increase in the current period | | | 1,989,750,727.60 | | | | 1,989,750,727.60 | |
| (1) Addition | | | 1,989,750,727.60 | | | | 1,989,750,727.60 | |
| 3.Decrease in the current period | | | 925,637,916.59 | | | | 925,637,916.59 | |
| (1) Disposal | | | 925,637,916.59 | | | | 925,637,916.59 | |
| 4.Closing balance | | | 13,575,044,732.54 | | | | 13,575,044,732.54 | |
| III. Provision for impairment | | | | | | | | |
| 1.Opening balance | | | 559,365,404.14 | | | | 559,365,404.14 | |
| 2.Increase in the current period | | | 57,039,231.29 | | | | 57,039,231.29 | |
| (1) Addition | | | 57,039,231.29 | | | | 57,039,231.29 | |
| 3.Decrease in the current period | | | 150,626,497.20 | | | | 150,626,497.20 | |
| (1) Disposal | | | 150,626,497.20 | | | | 150,626,497.20 | |
| 4.Closing balance | | | 465,778,138.23 | | | | 465,778,138.23 | |
| IV. Book value | | | | | | | | |
| 1.Closing book value | | | 17,033,171,909.36 | | | | 17,033,171,909.36 | |
| 2.Opening book value | | | 19,417,724,491.81 | | | | 19,417,724,491.81 | |
| (2) | Impairment test of right-of-use assets |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
As stated in Note VII, 74 of the financial statements, the Group has made a provision for long-term asset impairment based on the residual value of the asset group related to stores, amounting to RMB83,929,775.72, including a loss from impairment of right-of-use assets of RMB57,039,231.29.
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years' impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Non-patented | | | | | | | | | | |
| Items | | Land use right | | | Patent rights | | | technologies | | | Software | | | Sales network | | | Total | |
| I. Original book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 684,864,068.17 | | | | 159,739.89 | | | | 31,193,166.14 | | | | 1,523,175,683.81 | | | | 124,688,679.24 | | | | 2,364,081,337.25 | |
| 2. Increase in the current period | | | 3,750,000.00 | | | | | | | | | | | | 17,807,975.14 | | | | | | | | 21,557,975.14 | |
| (1) Purchase | | | 3,750,000.00 | | | | | | | | | | | | 5,747,439.05 | | | | | | | | 9,497,439.05 | |
| (2) Internal R&D | | | | | | | | | | | | | | | 12,060,536.09 | | | | | | | | 12,060,536.09 | |
| 3. Decrease in the current period | | | | | | | | | | | 970,873.79 | | | | 1,238,850.69 | | | | 3,735,849.06 | | | | 5,945,573.54 | |
| (1) Disposal | | | | | | | | | | | 970,873.79 | | | | 1,238,850.69 | | | | 3,735,849.06 | | | | 5,945,573.54 | |
| 4. Closing balance | | | 688,614,068.17 | | | | 159,739.89 | | | | 30,222,292.35 | | | | 1,539,744,808.26 | | | | 120,952,830.18 | | | | 2,379,693,738.85 | |
| II. Accumulated amortization | | | | | | | | | | | | | | | | | | | | | | | | |
| 1.Opening balance | | | 159,818,582.96 | | | | 56,710.42 | | | | 12,948,192.53 | | | | 794,009,496.92 | | | | 37,162,317.59 | | | | 1,003,995,300.42 | |
| 2.Increase in the current period | | | 15,093,244.80 | | | | 15,175.30 | | | | 6,085,957.15 | | | | 263,649,288.88 | | | | 6,139,222.74 | | | | 290,982,888.87 | |
| (1) Addition | | | 15,093,244.80 | | | | 15,175.30 | | | | 6,085,957.15 | | | | 263,649,288.88 | | | | 6,139,222.74 | | | | 290,982,888.87 | |
| 3.Decrease in the current period | | | | | | | | | | | 552,085.00 | | | | 778,722.04 | | | | 1,098,647.24 | | | | 2,429,454.28 | |
| (1) Disposal | | | | | | | | | | | 552,085.00 | | | | 778,722.04 | | | | 1,098,647.24 | | | | 2,429,454.28 | |
| 4.Closing balance | | | 174,911,827.76 | | | | 71,885.72 | | | | 18,482,064.68 | | | | 1,056,880,063.76 | | | | 42,202,893.09 | | | | 1,292,548,735.01 | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | | | | | | |
| 1.Opening balance | | | | | | | | | | | | | | | | | | | 46,263,333.33 | | | | 46,263,333.33 | |
| 2.Increase in the current period | | | | | | | | | | | | | | | | | | | 2,933,333.33 | | | | 2,933,333.33 | |
| (1) Addition | | | | | | | | | | | | | | | | | | | 2,933,333.33 | | | | 2,933,333.33 | |
| 3.Decrease in the current period | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) Disposal | | | | | | | | | | | | | | | | | | | | | | | | |
| 4.Closing balance | | | | | | | | | | | | | | | | | | | 49,196,666.66 | | | | 49,196,666.66 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1.Closing book value | | | 513,702,240.41 | | | | 87,854.17 | | | | 11,740,227.67 | | | | 482,864,744.50 | | | | 29,553,270.43 | | | | 1,037,948,337.18 | |
| 2.Opening book value | | | 525,045,485.21 | | | | 103,029.47 | | | | 18,244,973.61 | | | | 729,166,186.89 | | | | 41,263,028.32 | | | | 1,313,822,703.50 | |
The proportion of intangible assets generated through internal development during the current period to the balance of intangible assets is 8.93%
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Land usage right without certificate of title |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Reasons for failure
to get the certificates |
| Items | | Carrying value | | | of title |
| Guizhou Logistics Park | | | 41,104,125.00 | | | In the process of handling |
| (3) | Impairment testing of intangible assets |
| √ | Applicable | ¨ | Not applicable |
Other disclosure: The relevant information is separately disclosed in Note V, 27 Impairment of long-term assets, Note VII, 74 Asset impairment loss in the financial statements.
| | ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1) | Original book value of goodwill |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase in the | | | | | | | |
| | | | | | current period | | | | | | | |
| Name of invested | | | | | Formed by | | | Decrease in the | | | | |
| entity or matter | | Opening | | | business | | | current period | | | Closing | |
| forming goodwill | | balance | | | merger | | | Disposal | | | balance | |
| Shanghai Dongzhan International Trade Co., Ltd. | | | 3,661,378.25 | | | | | | | | | | | | 3,661,378.25 | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| Total | | | 309,118,158.17 | | | | | | | | | | | | 309,118,158.17 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Provision for goodwill impairment |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Name of invested | | | | | Increase in the | | | Decrease in the | | | | |
| entity or matter | | Opening | | | current period | | | current period | | | Closing | |
| forming goodwill | | balance | | | Provision | | | Disposal | | | balance | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| Total | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| (3) | Information about the asset group or portfolio of asset groups where goodwill is located |
| | ¨ | Applicable | √ | Not applicable |
Changes in asset group or portfolio of asset groups
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (4) | Specific determination method of recoverable amount |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| | ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| | ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| | ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| | ¨ | Applicable | √ | Not applicable |
| (5) | Performance commitments and corresponding impairment of goodwill |
There were performance commitments and the reporting period or the previous reporting period was within the performance commitment period when goodwill was formed
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 30. | Long-term prepaid expenses |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Amortization | | | | | | Provision of | | | | |
| | | Opening | | | Increase in | | | amount in | | | Other | | | impairment | | | Closing | |
| Items | | balance | | | current period | | | current period | | | decreases | | | losses | | | balance | |
| Renovation costs of rented store | | | 2,862,660,251.33 | | | | 280,132,456.12 | | | | 601,113,137.40 | | | | 261,351,584.82 | | | | 19,095,984.91 | | | | 2,261,232,000.32 | |
| Decoration expenses for Nantong Logistics Park project | | | 27,232,970.17 | | | | 12,278,902.44 | | | | 7,194,557.47 | | | | 46,230.28 | | | | | | | | 32,271,084.86 | |
| Decoration expenses for East China Logistics Park | | | 10,561,758.79 | | | | 478,788.99 | | | | 2,047,930.33 | | | | | | | | | | | | 8,992,617.45 | |
| Total | | | 2,900,454,980.29 | | | | 292,890,147.55 | | | | 610,355,625.20 | | | | 261,397,815.10 | | | | 19,095,984.91 | | | | 2,302,495,702.63 | |
Other notes:
The decrease in long-term prepaid expenses for the year is due to the closure of certain stores.
As stated in Note VII, 74, the Group has made a provision for long-term asset impairment based on the residual value of the asset group related to stores, amounting to RMB83,929,775.72, including a loss from impairment of long-term prepaid expenses of RMB19,095,984.91.
| 31. | Deferred income tax assets/deferred income tax liabilities |
| (1) | Deferred income tax assets not offset |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| | | Deductible | | | | | | Deductible | | | | |
| | | temporary | | | Deferred | | | temporary | | | Deferred | |
| Items | | differences | | | tax asset | | | differences | | | tax asset | |
| Provision for impairment of assets | | | 1,065,423,597.99 | | | | 224,564,688.82 | | | | 1,022,982,930.42 | | | | 218,923,655.88 | |
| Unrealized profits in internal transaction | | | 17,967,274.91 | | | | 4,491,818.73 | | | | 28,258,325.26 | | | | 7,064,581.31 | |
| Deductible loss | | | 1,163,338,051.11 | | | | 278,018,136.79 | | | | 2,120,796,624.40 | | | | 489,896,401.87 | |
| Lease liabilities | | | 15,429,510,847.49 | | | | 3,207,973,110.11 | | | | 16,620,946,455.26 | | | | 3,444,682,630.04 | |
| Provision for impairment of credit | | | 256,322,532.76 | | | | 60,263,888.18 | | | | 224,021,895.98 | | | | 45,936,716.51 | |
| Estimated liabilities | | | 20,928,407.74 | | | | 3,970,261.70 | | | | 2,407,083.35 | | | | 361,062.50 | |
| Reward points program | | | 35,524,886.63 | | | | 6,797,072.18 | | | | 30,168,728.86 | | | | 6,319,559.03 | |
| Total | | | 17,989,015,598.63 | | | | 3,786,078,976.51 | | | | 20,049,582,043.53 | | | | 4,213,184,607.14 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Deferred income tax liabilities not offset |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| | | Temporary | | | | | | Temporary | | | | |
| | | taxable | | | Deferred | | | taxable | | | Deferred | |
| Items | | difference | | | tax liabilities | | | difference | | | tax liabilities | |
| Estimated value added of the assets in business combination not under same control | | | 323,468,871.86 | | | | 80,867,217.97 | | | | 502,024,923.43 | | | | 125,506,230.86 | |
| Profits and losses from changes in fair value | | | 591,995,024.21 | | | | 139,919,503.91 | | | | 668,222,799.20 | | | | 158,910,861.58 | |
| One-time deduction of fixed assets | | | 177,129,438.92 | | | | 33,014,184.07 | | | | 371,560,344.15 | | | | 70,400,175.07 | |
| Receivable from finance lease payments | | | 58,131,714.98 | | | | 11,596,643.50 | | | | 44,102,634.67 | | | | 9,986,264.27 | |
| Right-of-use assets | | | 11,843,353,983.51 | | | | 2,482,192,036.14 | | | | 13,186,384,240.43 | | | | 2,736,149,492.55 | |
| Total | | | 12,994,079,033.48 | | | | 2,747,589,585.59 | | | | 14,772,294,941.88 | | | | 3,100,953,024.33 | |
| (3) | Deferred income tax assets or liabilities listed with the net amount after being offset |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount not | | | | | | Amount not | | | | |
| | | Offset in the | | | Closing Balance | | | Offset in the | | | Closing Balance | |
| | | Period of | | | of Offset | | | Period of | | | of Offset | |
| | | Deferred Income | | | Deferred Income | | | Deferred Income | | | Deferred Income | |
| | | Tax Assets and | | | Tax Assets or | | | Tax Assets and | | | Tax Assets or | |
| Items | | Liabilities | | | Liabilities | | | Liabilities | | | Liabilities | |
| Deferred tax asset | | | 2,672,905,882.80 | | | | 1,113,173,093.71 | | | | 2,974,769,914.96 | | | | 1,238,414,692.18 | |
| Deferred tax liabilities | | | 2,672,905,882.80 | | | | 74,683,702.79 | | | | 2,974,769,914.96 | | | | 126,183,109.37 | |
| (4) | Details of unrecognized deferred tax assets |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Deductible temporary differences | | | 2,116,332,923.41 | | | | 2,249,012,729.65 | |
| Deductible loss | | | 9,245,677,968.30 | | | | 7,981,292,888.03 | |
| Total | | | 11,362,010,891.71 | | | | 10,230,305,617.68 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5) | Deductible losses of unconfirmed deferred income tax assets will be expired in the following listed year |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Year | | Closing Balance | | | Opening Balance | | | Comments | |
| Year 2023 | | | | | | | 677,860,363.11 | | | | | |
| Year 2024 | | | 1,378,421,768.85 | | | | 1,433,451,155.15 | | | | | |
| Year 2025 | | | 1,161,064,446.27 | | | | 1,220,976,236.86 | | | | | |
| Year 2026 | | | 2,979,528,314.54 | | | | 2,400,282,148.31 | | | | | |
| Year 2027 | | | 1,912,125,772.80 | | | | 2,248,722,984.60 | | | | | |
| Year 2028 | | | 1,814,537,665.84 | | | | | | | | | |
| Total | | | 9,245,677,968.30 | | | | 7,981,292,888.03 | | | | / | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 32. | Other non-current assets |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 33. | Assets with ownership or usage restrictions |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | End of the period | | Opening |
| Items | | Book
balance | | | Carrying
value | | | Restricted
type | | Restricted
situation | | Book
balance | | | Carrying
value | | | Restricted
type | | Restricted
situation |
| Monetary funds | | 141,300,533.68 | | | 141,300,533.68 | | | Freeze | | Judicial freeze, deposit | | 114,492,314.03 | | | 114,492,314.03 | | | Freeze | | Judicial freeze, deposit |
| Total | | 141,300,533.68 | | | 141,300,533.68 | | | / | | / | | 114,492,314.03 | | | 114,492,314.03 | | | / | | / |
Other notes:
As of December 31, 2023, cash and cash equivalents with a carrying value of RMB28,990,792.66 (December 31, 2022: RMB28,364,715.91) were used as lease deposit.
As of December 31, 2023, cash and cash equivalents with a carrying value of RMB112,309,741.02 (December 31, 2022: RMB86,127,598.12) were frozen due to litigation.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1) | Classification of short-term loans |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | 5,130,220,089.04 | | | | 6,528,480,368.69 | |
| Total | | | 5,130,220,089.04 | | | | 6,528,480,368.69 | |
Descriptions for categories of short-term loans:
The Group had had no overdue short-term borrowings as of December 31, 2023 and December 31, 2022.
| (2) | Overdue unliquidated short-term loans |
| | ¨ | Applicable | √ | Not applicable |
The significant overdue and unpaid short-term borrowings are as follows:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| 35. | Trading financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 36. | Derivative financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (1) | Presentation of accounts payable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Payment for goods | | | 9,816,260,354.84 | | | | 12,155,435,663.28 | |
| Total | | | 9,816,260,354.84 | | | | 12,155,435,663.28 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group had had no significant accounts payable with an aging of more than one year as of December 31, 2023 and December 31, 2022.
| (2) | Significant accounts payable with an aging of over 1 year or overdue |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (1) | Presentation of receivables in advance |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Advance payment of rent and other expenses from the lessee | | | 106,067,963.44 | | | | 196,630,132.94 | |
| Total | | | 106,067,963.44 | | | | 196,630,132.94 | |
As of December 31, 2023, there had been no significant unearned revenues with an aging of over 1 year.
| (2) | Significant accounts collected in advance with an aging of more than one year |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Significant changes in the carrying value during the reporting period and the reasons |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (1) | Contractual liabilities |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Advance payments from customers | | | 4,780,629,293.96 | | | | 4,725,011,338.79 | |
| Reward points program | | | 41,156,582.21 | | | | 41,497,236.68 | |
| Advance payment of supplier service fees | | | 29,055,710.03 | | | | 60,091,972.32 | |
| Total | | | 4,850,841,586.20 | | | | 4,826,600,547.79 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Significant contractual liabilities with an aging of over 1 year |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Reason for
outstanding payment
or carry-over |
| Advance payments from customers | | | 2,173,392,339.45 | | | Fulfillment obligations not occurred |
| Total | | | 2,173,392,339.45 | | | / |
| (3) | Significant changes in the carrying value during the reporting period and the reasons |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 41. | Employee compensation payable |
| (1). | List of payrolls payable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| I. Short-term payrolls | | | 667,018,347.14 | | | | 7,146,687,277.27 | | | | 7,263,166,542.76 | | | | 550,539,081.65 | |
| II. Post-employment welfare – defined contribution plan | | | 86,573,970.43 | | | | 752,028,657.04 | | | | 800,723,596.94 | | | | 37,879,030.53 | |
| III. Dismiss welfare | | | 4,722,568.63 | | | | 49,952,250.57 | | | | 40,234,887.66 | | | | 14,439,931.54 | |
| Total | | | 758,314,886.20 | | | | 7,948,668,184.88 | | | | 8,104,125,027.36 | | | | 602,858,043.72 | |
| (2). | List of short-term payrolls |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| I. Salaries, bonuses, allowances and subsidies | | | 602,994,385.76 | | | | 6,265,121,582.08 | | | | 6,374,724,508.31 | | | | 493,391,459.53 | |
| II. Employee services and benefits | | | 6,422,025.46 | | | | 234,938,680.39 | | | | 239,227,197.64 | | | | 2,133,508.21 | |
| III. Social Insurance | | | 23,707,660.64 | | | | 453,305,152.42 | | | | 456,381,116.74 | | | | 20,631,696.32 | |
| Include: medical insurance premiums | | | 20,690,697.72 | | | | 422,112,977.67 | | | | 424,055,113.68 | | | | 18,748,561.71 | |
| Work injury insurance premium | | | 2,077,925.25 | | | | 22,675,372.25 | | | | 23,846,752.55 | | | | 906,544.95 | |
| Maternity insurance premiums | | | 939,037.67 | | | | 8,516,802.50 | | | | 8,479,250.51 | | | | 976,589.66 | |
| IV. Housing provident fund | | | 6,916,474.57 | | | | 151,487,241.51 | | | | 152,561,491.99 | | | | 5,842,224.09 | |
| V. Labor union expenditure and employee education expenses | | | 26,977,800.71 | | | | 41,834,620.87 | | | | 40,272,228.08 | | | | 28,540,193.50 | |
| Total | | | 667,018,347.14 | | | | 7,146,687,277.27 | | | | 7,263,166,542.76 | | | | 550,539,081.65 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | List of defined contribution plans |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| 1. Basic endowment insurance | | | 83,971,524.37 | | | | 727,092,511.63 | | | | 774,495,323.67 | | | | 36,568,712.33 | |
| 2. Unemployment insurance premium | | | 2,602,446.06 | | | | 24,936,145.41 | | | | 26,228,273.27 | | | | 1,310,318.20 | |
| Total | | | 86,573,970.43 | | | | 752,028,657.04 | | | | 800,723,596.94 | | | | 37,879,030.53 | |
Other notes:
| √ | Applicable | ¨ | Not applicable |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| VAT | | | 152,072,740.55 | | | | 138,180,271.36 | |
| Corporate Income Tax | | | 22,148,345.90 | | | | 22,720,511.72 | |
| Personal income tax | | | 11,793,228.40 | | | | 15,330,684.42 | |
| Urban maintenance and construction tax | | | 9,338,612.66 | | | | 8,421,980.54 | |
| Maintenance fees for river and sea embankments | | | 19,298,999.79 | | | | 22,197,289.42 | |
| Housing property tax | | | 4,357,111.68 | | | | 3,417,321.03 | |
| Education Surcharge | | | 7,772,496.16 | | | | 6,991,849.55 | |
| Others | | | 18,667,333.83 | | | | 12,346,822.24 | |
| Total | | | 245,448,868.97 | | | | 229,606,730.28 | |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Other payables | | | 1,725,134,598.87 | | | | 1,899,603,590.71 | |
| Total | | | 1,725,134,598.87 | | | | 1,899,603,590.71 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
List by categories
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Overdue significant payable interest:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
List by categories
| | ¨ | Applicable | √ | Not applicable |
Other payables listed by nature of payment
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Accrued expenses for store rent, electricity, freight, and other expenses | | | 982,418,440.74 | | | | 1,016,060,791.93 | |
| Equipment and engineering payments | | | 139,990,137.09 | | | | 210,137,462.48 | |
| Deposits and guarantees | | | 443,441,619.45 | | | | 445,267,593.23 | |
| Others | | | 159,284,401.59 | | | | 228,137,743.07 | |
| Total | | | 1,725,134,598.87 | | | | 1,899,603,590.71 | |
As of December 31, 2023, the Group had had no significant other payables with an aging of over 1 year.
Significant other payables with an aging of more than one year or overdue
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 44. | Liabilities held for sale |
| | ¨ | Applicable | √ | Not applicable |
| 45. | Non-current liabilities due within one year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Long-term borrowings due within one year | | | 300,334.58 | | | | 141,246,585.00 | |
| Lease liabilities due within 1 year | | | 1,792,051,529.61 | | | | 1,870,617,070.60 | |
| Total | | | 1,792,351,864.19 | | | | 2,011,863,655.60 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 46. | Other current liabilities |
Other current liabilities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Amount of tax to be written off | | | 457,882,012.38 | | | | 460,794,502.35 | |
| Total | | | 457,882,012.38 | | | | 460,794,502.35 | |
The increases and reductions of short-term bonds payable:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1). | Classification of long-term loans |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | 349,889,789.58 | | | | 2,070,085,001.67 | |
| Total | | | 349,889,789.58 | | | | 2,070,085,001.67 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Specifics of payable bonds: (excluding preferred shares, perpetual bonds, and other financial instruments classified as financial liabilities) |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Explanation of convertible bonds |
| | ¨ | Applicable | √ | Not applicable |
Accounting treatment and basis for judgment of conversion rights
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Description on other financial instruments classified as financial liabilities |
Basic information of Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Table of change in Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Descriptions of the other financial tools in financial liabilities:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Houses and buildings | | | 22,573,513,713.62 | | | | 24,981,451,232.22 | |
| Less: Lease liabilities due within one year | | | 1,792,051,529.61 | | | | 1,870,617,070.60 | |
| Total | | | 20,781,462,184.01 | | | | 23,110,834,161.62 | |
Itemized list
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Long-term accounts payable
| (1). | List of long-term payables according to nature of funds |
| | ¨ | Applicable | √ | Not applicable |
Special accounts payable
| (1). | Special payables categorized by nature of payment |
| | ¨ | Applicable | √ | Not applicable |
| 51. | Long-term payroll payable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Closing balance | | | Cause |
| Pending Litigation and Arbitration | | | 7,383,565.56 | | | | 37,797,080.80 | | | Litigation involved |
| Total | | | 7,383,565.56 | | | | 37,797,080.80 | | | / |
Other descriptions, including the descriptions of relevant important assumptions and estimations of important accrued liabilities:
The year-end balance of contingent liabilities arises from disputes related to house lease and payment of goods.
Deferred income
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in
the current
period | | | Decrease in
the current
period | | | Closing
balance | | | Cause |
| Governmental subsidy | | | 104,500,259.85 | | | | 4,562,995.50 | | | | 9,592,355.43 | | | | 99,470,899.92 | | | Received governmental subsidy related to assets |
| Total | | | 104,500,259.85 | | | | 4,562,995.50 | | | | 9,592,355.43 | | | | 99,470,899.92 | | | / |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 54. | Other non-current liabilities |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Related party borrowing | | | 46,931,643.83 | | | | | |
| Total | | | 46,931,643.83 | | | | | |
In the fiscal year 2023, the Group’s subsidiary extended loans to ParknShop (China) Investment Co., Ltd. totaling RMB46,250,000.00, with an interest rate of 4.75% and due on May 8, 2026. The original total loan amount was RMB46,250,000.00, with an interest rate of 4.75% and a start date of May 9, 2019, due on May 8, 2023.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | Increase/Decrease (+, -) | |
| | | | Opening balance | | | New
issue | | | Share
donation | | | Share
converted from reserved funds | | | Others | | | Subtotal | | | Closing balance | |
| Total number of shares | | | | 9,075,036,993.00 | | | | | | | | | | | | | | | | | | | | | | | | 9,075,036,993.00 | |
Other notes:
There was no change in share capital during the current year.
| 56. | Other equity instruments |
| (1). | Basic information of Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Table of change in Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
Other descriptions for change situations and reasons on increase and decrease of equity instruments in current period, and relevant accounting treatment basis:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance |
| Capital premium (share capital premium) | | | 3,372,208,364.38 | | | | | | | | | | | 3,372,208,364.38 |
| Other capital reserves | | | 919,914,177.48 | | | | 23,202,621.79 | | | | | | | 943,116,799.27 |
| Total | | | 4,292,122,541.86 | | | | 23,202,621.79 | | | | | | | 4,315,325,163.65 |
Other descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
Note: As stated in Note VII 19 note 1, the related matters have resulted in an increase in Others of RMB23,202,621.79 in capital surplus
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening
balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance |
| Equity incentive buyback | | | 263,483,654.25 | | | | 225,284,643.05 | | | | | | | 488,768,297.30 |
| Total | | | 263,483,654.25 | | | | 225,284,643.05 | | | | | | | 488,768,297.30 |
Other descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
On August 8, 2022, the Company held the 3rd meeting of the fifth Board of Directors and approved the Proposal on Repurchasing Shares through centralized bidding trading. It was decided to use own funds not exceeding RMB700 million to repurchase shares at a price not exceeding RMB5 per share, with the buyback period from August 8, 2022 to August 7, 2023. In 2023, the Company bought back 64,395,100 shares through centralized bidding at a price of RMB225,284,643.05. As of December 31, 2023, the Company has cumulatively bought back 149,999,828 shares through centralized bidding, accounting for 1.65% of the total share capital of the Company. The lowest transaction price was RMB2.86 per share, and the highest transaction price was RMB3.54 per share. The total amount paid for the buy-back was RMB488,768,297.30.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 59. | Other comprehensive income |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of current period | |
| Items | | Opening
balance | | | Amount
before income
tax in the
current
period | | | Less:
transferring
other
comprehensive
income
recorded in the
last period into
the profit and
loss of current
period | | | Less:
transferring
other
comprehensive
income
recorded in the
last period into
the retained
earnings of
current period | | | Less: income
tax expense | | | Attributable
to parent
company
after tax | | | Attributable
to minority
shareholders
after tax | | | Closing
balance | |
| I. Other comprehensive income that cannot be re-classified into profits and losses | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Other comprehensive income to be re-classified into profits and losses | | 440,260.72 | | | 4,633,452.70 | | | | | | | | | | | | 4,633,452.70 | | | | | | 5,073,713.42 | |
| Including: other comprehensive incomes that can be transferred into profit and loss under the equity method | | 785,921.18 | | | 4,617,660.61 | | | | | | | | | | | | 4,617,660.61 | | | | | | 5,403,581.79 | |
| Balance arising from the translation of foreign currency financial statements | | -345,660.46 | | | 15,792.09 | | | | | | | | | | | | 15,792.09 | | | | | | -329,868.37 | |
| Total of other comprehensive income | | 440,260.72 | | | 4,633,452.70 | | | | | | | | | | | | 4,633,452.70 | | | | | | 5,073,713.42 | |
Other descriptions: including the descriptions for the adjustment of transferring losses and profits of cash flow hedging in force into initially recognized amount of arbitrage project:
None
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance |
| Statutory surplus reserve | | | 1,113,275,260.54 | | | | 19,565,389.42 | | | | | | | 1,132,840,649.96 |
| Total | | | 1,113,275,260.54 | | | | 19,565,389.42 | | | | | | | 1,132,840,649.96 |
Surplus reserves descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
Note: according to the Company Law and the article of associations, the statutory surplus reserve is appropriated by the Company by 10% of the net profit. Once the cumulative amount of statutory surplus reserves exceeds 50% of the registered capital of the Company, no further appropriation is needed.
After appropriating the legal accumulation fund, the Company is allowed to appropriate any accumulation fund. Upon approval, the Company may convert its Discretionary Surplus Reserves to make good previous years’ losses or to increase the capital of the Company.
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Current period | | | Last period | |
| Undistributed profits at the end of last period before adjustment | | | -6,751,820,069.61 | | | | -3,797,684,715.49 | |
| Total opening undistributed profits during adjustment (increase is indicated by “+”, and decrease is indicated by “-”) | | | | | | | | |
| Undistributed profits at the beginning of the year after adjustment | | | -6,751,820,069.61 | | | | -3,797,684,715.49 | |
| Add: net profit attributable to the owner of parent company in current period | | | -1,329,052,123.15 | | | | -2,763,166,060.87 | |
| Less: appropriation to statutory surplus reserves | | | 19,565,389.42 | | | | 9,468,553.39 | |
| Ordinary stock dividends payable | | | | | | | 181,500,739.86 | |
| Undistributed profit at the end of the period | | | -8,100,437,582.18 | | | | -6,751,820,069.61 | |
| 63. | Operating revenue and operating costs |
| (1). | Operating revenue and costs |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of current period | | | Amount of last period | |
| Items | | Revenue | | | Cost | | | Revenue | | | Cost | |
| Main business | | | 73,709,989,888.84 | | | | 61,679,645,003.43 | | | | 84,128,127,095.62 | | | | 72,065,720,723.20 | |
| Other business | | | 4,932,181,688.17 | | | | 260,174,457.55 | | | | 5,962,692,300.52 | | | | 294,869,404.88 | |
| Total | | | 78,642,171,577.01 | | | | 61,939,819,460.98 | | | | 90,090,819,396.14 | | | | 72,360,590,128.08 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Operating Revenue Deduction Statement |
Unit: ’0,000 Yuan Currency: RMB
| Items | | Current year | | | Specific deductions | | Last year | | | Specific deductions |
| Operating revenue amount | | | 7,864,217.16 | | | | | | 9,009,081.94 | | | |
| Total amount of deducted items from operating revenue | | | 15,327.82 | | | | | | 21,709.14 | | | |
| Percentage of total amount of items deducted from operating income to operating income (%) | | | 0.19 | / | | | | | 0.24 | / | | |
| I. Non-core Business Income | | | | | | | | | | | | |
| 1. Other business income unrelated to normal operations. such as rental of fixed assets, intangible assets, packing materials, sale of materials, non- monetary asset exchanges using materials, income from entrusted management services, and other income included in the main operating income but unrelated to the normal operations of the listed company. | | | 12,440.33 | | | Income from selling waste paper and scraps of RMB124.4033 million | | | 17,688.57 | | | Sales revenue from waste paper and scraps: RMB176.4799 million, as well as trustee fee income of RMB0.4058 million |
| 2. Income from non-qualified financial business activities, such as interests income from funds borrowed; income generated from non- qualified financial businesses introduced in the current and previous fiscal years, such as guarantee, factoring, microloans, finance leasing, pawnbroking, etc., excluding finance leasing activities conducted for the purpose of selling main products. | | | | | | | | | | | | |
| 3. Income generated from new trade business in the current and previous fiscal years. | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Current year | | | Specific deductions | | Last year | | | Specific deductions |
| 4. Income generated from related-party transactions unrelated to the Company’s existing normal business operations. | | | 2,887.49 | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. | | | 4,020.57 | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. |
| 5. Income of subsidiary companies consolidated under the same control from the beginning of the period to the consolidation date. | | | | | | | | | | | | |
| 6. Income generated from business activities that have not formed or have difficulty forming a stable business model. | | | | | | | | | | | | |
| Subtotal of non-core business income | | | 15,327.82 | | | | | | 21,709.14 | | | |
| II. Income without Substantive Commercial Nature | | | | | | | | | | | | |
| 1. Income generated from transactions or events that do not significantly change the future cash flow of the company in terms of risk, timing, or amount. | | | | | | | | | | | | |
| 2. Income generated from transactions without genuine business activities. such as false income realized through self- trading, and false income generated through the use of internet technology or other methods to construct transactions. | | | | | | | | | | | | |
| 3. Income generated from business activities with unfair transaction prices. | | | | | | | | | | | | |
| 4. Income generated from subsidiary companies or businesses acquired during the current fiscal year at unfair consideration or non-transaction methods. | | | | | | | | | | | | |
| 5. Income involved in non-standard audit opinions in the audit report. | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Current year | | | Specific deductions | | Last year | | | Specific deductions |
| 6. Income generated from other transactions or events without commercial rationality. | | | | | | | | | | | | |
| Subtotal of income without substantive commercial nature | | | | | | | | | | | | |
| III. Other Income Unrelated to or without Substantive Commercial Nature of the Core Business | | | | | | | | | | | | |
| Operating revenue after deductions | | | 7,848,889.34 | | | | | | 8,987,372.80 | | | |
| | Note 1: | The non-operating income deducted in the current year includes revenue from sales of waste paper and scraps amounting to RMB124.4033 million (2022: RMB176.4799 million), as well as trust fee income not obtained from entrusted operations in the current year (2022: RMB405,800). Yonghui Superstores Co., Ltd.’s main business includes the sale of fresh products, food supplies, clothing, and related promotional services, logistics and distribution, property purchase and rental, etc. The above-mentioned income is unrelated to the core business and is deducted. |
| | Note 2: | The non-operating income deducted in the current year, which is unrelated to the existing normal operating business, generated from related-party transactions amounts to RMB28.8749 million (2022: RMB40.2057 million). This portion represents income obtained by the Group from providing financial shared services and information system services to related parties, which are unrelated to the main business and therefore deducted. |
| | Note 3: | The Group’s factoring and small loans business has been conducted since 2017 and is not a newly added non-financial business in the current and previous fiscal years, so the related income does not require deduction. |
| | Note 4: | Apart from the above, the Group has no other non-core business income or income without substantive commercial nature that needs to be deducted. |
| (3). | Breakdown of operating revenue and operating cost |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Group | | | Total | |
| | | Operating
| | | | | | Operating
| | | | |
| Contract classification | | revenue | | | Operating costs | | | revenue | | | Operating costs | |
| Product type | | | | | | | | | | | | | | | | |
| Fresh and processed products | | | 33,064,238,470.36 | | | | 28,712,538,717.71 | | | | 33,064,238,470.36 | | | | 28,712,538,717.71 | |
| Food supplies | | | 40,645,751,418.48 | | | | 32,967,106,285.72 | | | | 40,645,751,418.48 | | | | 32,967,106,285.72 | |
| Others | | | 3,716,781,922.38 | | | | 27,516,467.23 | | | | 3,716,781,922.38 | | | | 27,516,467.23 | |
| Lease income | | | 1,215,399,765.79 | | | | 232,657,990.32 | | | | 1,215,399,765.79 | | | | 232,657,990.32 | |
| By operating region | | | | | | | | | | | | | | | | |
| Southeast China | | | 13,614,469,720.68 | | | | 10,901,590,751.73 | | | | 13,614,469,720.68 | | | | 10,901,590,751.73 | |
| North China | | | 8,319,001,336.28 | | | | 6,545,180,919.11 | | | | 8,319,001,336.28 | | | | 6,545,180,919.11 | |
| East China | | | 18,310,866,417.72 | | | | 14,450,083,592.29 | | | | 18,310,866,417.72 | | | | 14,450,083,592.29 | |
| West China | | | 15,597,448,839.24 | | | | 12,073,319,143.70 | | | | 15,597,448,839.24 | | | | 12,073,319,143.70 | |
| Southwest China | | | 12,729,768,681.05 | | | | 9,969,578,942.68 | | | | 12,729,768,681.05 | | | | 9,969,578,942.68 | |
| South China | | | 3,668,001,023.43 | | | | 2,889,596,453.81 | | | | 3,668,001,023.43 | | | | 2,889,596,453.81 | |
| Central China | | | 6,402,615,558.61 | | | | 5,110,469,657.66 | | | | 6,402,615,558.61 | | | | 5,110,469,657.66 | |
| Classification by time of transfer of goods | | | | | | | | | | | | | | | | |
| Transfer at a certain time point | | | 73,848,870,201.92 | | | | 61,679,645,003.43 | | | | 73,848,870,201.92 | | | | 61,679,645,003.43 | |
| Transfer within a certain period of time | | | 3,577,901,609.30 | | | | 27,516,467.23 | | | | 3,577,901,609.30 | | | | 27,516,467.23 | |
| Lease income | | | 1,215,399,765.79 | | | | 232,657,990.32 | | | | 1,215,399,765.79 | | | | 232,657,990.32 | |
| Total | | | 78,642,171,577.01 | | | | 61,939,819,460.98 | | | | 78,642,171,577.01 | | | | 61,939,819,460.98 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| | √ | Applicable | ¨ | Not applicable |
The income recognized in current year and included in the opening book value of contract liabilities are as follows:
Unit: Yuan Currency: RMB
| | | Year 2023 | | | Year 2022 | |
| Recognition of revenue at a specific point in time | | | 2,017,065,078.68 | | | | 2,605,793,511.81 | |
| (4). | Description of performance obligations |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Description of allocating to the residual fulfillment obligations |
| | ¨ | Applicable | √ | Not applicable |
| (6). | Major contract changes or significant adjustment of transaction prices |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Urban maintenance and construction tax | | | 55,987,329.40 | | | | 42,820,977.85 | |
| Education Surcharge | | | 43,309,275.12 | | | | 30,507,599.49 | |
| Housing property tax | | | 29,160,433.56 | | | | 27,787,249.03 | |
| Land use tax | | | 5,634,244.18 | | | | 6,435,328.01 | |
| Stamp duty | | | 49,482,768.72 | | | | 58,209,315.28 | |
| Foundation for water works | | | 22,586,626.55 | | | | 28,281,587.08 | |
| Others | | | 11,754,361.71 | | | | 10,248,627.51 | |
| Total | | | 217,915,039.24 | | | | 204,290,684.25 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 6,433,510,959.89 | | | | 6,894,456,729.72 | |
| Depreciation and amortization | | | 3,018,996,871.52 | | | | 3,352,286,549.67 | |
| Water and electricity fees and fuel expenses | | | 1,454,147,113.82 | | | | 1,435,149,314.69 | |
| Freight and warehousing service fees | | | 960,425,686.80 | | | | 1,124,809,975.36 | |
| Rent and property management fees | | | 655,803,824.33 | | | | 646,063,414.92 | |
| Business publicity expense | | | 435,038,229.37 | | | | 523,708,654.82 | |
| Cleaning fees | | | 400,412,211.78 | | | | 459,319,319.85 | |
| Low-cost consumables | | | 319,356,416.90 | | | | 383,679,370.32 | |
| Repair fees | | | 178,878,942.67 | | | | 290,459,146.49 | |
| Platform service fee | | | 413,819,204.49 | | | | 324,353,724.68 | |
| Office expenses such as car, travel, and communication expenses | | | 144,904,993.94 | | | | 164,065,892.28 | |
| Others | | | 264,838,983.93 | | | | 251,385,598.09 | |
| Total | | | 14,680,133,439.44 | | | | 15,849,737,690.89 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 66. | Administrative expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 1,171,849,432.46 | | | | 1,306,796,064.66 | |
| Depreciation and amortization | | | 310,346,749.51 | | | | 316,565,974.34 | |
| Costs of wear and tear of commodities | | | 175,493,033.32 | | | | 189,586,964.39 | |
| Rent and property management fees | | | 7,319,793.85 | | | | 23,359,209.11 | |
| Office expenses such as car, travel, and communication expenses | | | 92,808,902.31 | | | | 76,451,781.43 | |
| Consulting, audit, legal, and other intermediary service expenses | | | 26,431,464.93 | | | | 41,561,506.24 | |
| Low-cost consumables | | | 18,696,546.37 | | | | 30,102,567.07 | |
| Others | | | 84,200,033.53 | | | | 61,992,033.69 | |
| Total | | | 1,887,145,956.28 | | | | 2,046,416,100.93 | |
| 67. | Research and development expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 279,212,442.36 | | | | 419,095,163.99 | |
| Depreciation and amortization | | | 31,938,966.34 | | | | 35,174,423.30 | |
| Office expenses such as car, travel, and communication expenses | | | 7,115,843.23 | | | | 24,573,999.83 | |
| Low-cost consumables | | | | | | | 886,829.36 | |
| Others | | | | | | | 2,168,018.56 | |
| Total | | | 318,267,251.93 | | | | 481,898,435.04 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Interest expense | | | 1,280,427,957.39 | | | | 1,556,082,561.75 | |
| Less: interest income | | | 114,344,551.59 | | | | 201,725,230.95 | |
| Exchange gains and losses | | | -893,679.55 | | | | -2,057,174.07 | |
| Service fees and others | | | 157,862,778.86 | | | | 185,897,135.79 | |
| Total | | | 1,323,052,505.11 | | | | 1,538,197,292.52 | |
| | Note: | This year, interest expenses include interest expenditure on lease liabilities amounting to RMB1,128,478,683.54. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Classification by nature | | Amount of
current period | | | Amount of
last period | |
| Governmental subsidies related to daily activities | | | 183,265,521.59 | | | | 208,831,135.67 | |
| Return of individual income tax withheld service changes withheld and remitted | | | 2,250,880.96 | | | | 3,116,184.84 | |
| Total | | | 185,516,402.55 | | | | 211,947,320.51 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Equity method accounted long-term equity investment income/(loss) | | | 109,227,298.46 | | | | -49,507,225.29 | |
| Investment income/(loss) from disposal of long-term equity investments | | | 863,324.20 | | | | -28,804,251.10 | |
| Investment income/(loss) from trading financial assets | | | 286,203,306.86 | | | | -26,966,353.53 | |
| Total | | | 396,293,929.52 | | | | -105,277,829.92 | |
| 71. | Income from net exposure hedging |
| | ¨ | Applicable | √ | Not applicable |
| 72. | Fair value changes in equity investments |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
Sources generating income from changes
in fair value | | Amount of
current period | | | Amount of
last period | |
| Trading financial assets | | | -76,342,984.38 | | | | -601,461,962.47 | |
| Other non-current financial assets | | | | | | | 6,781,795.03 | |
| Total | | | -76,342,984.38 | | | | -594,680,167.44 | |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Bad debt loss of accounts receivable | | | 37,952,272.67 | | | | 44,438,621.48 | |
| Bad debt loss of other receivables | | | 17,289,461.71 | | | | 17,540,867.49 | |
| Bad debt losses on loans | | | 36,198,200.29 | | | | 45,246,646.85 | |
| Bad debt losses on factored receivables | | | -2,565,671.68 | | | | 12,734,502.35 | |
| Total | | | 88,874,262.99 | | | | 119,960,638.17 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| I. Impairment Loss on Long-term Equity Investments | | | 436,220,043.25 | | | | 196,826,745.04 | |
| II. Impairment Loss on Fixed Assets | | | 7,794,559.52 | | | | 52,736,374.45 | |
| III. Impairment loss of intangible assets | | | 2,933,333.33 | | | | 1,140,000.00 | |
| IV. Impairment Loss on Right-of-use Assets | | | 57,039,231.29 | | | | 314,554,050.92 | |
| V. Impairment Loss on Long-term Prepaid Expenses | | | 19,095,984.91 | | | | 69,950,490.22 | |
| Total | | | 523,083,152.30 | | | | 635,207,660.63 | |
Other notes:
In 2023, some stores operated by the Group did not meet expectations, and there were indications of impairment for long-term assets (including fixed assets, right-of-use assets, and long-term prepaid expenses) of these stores. The Group conducted impairment testing on the aforementioned long-term assets with the stores as asset groups and made impairment provisions for the asset groups related to the stores where the recoverable amount was lower than the carrying amount. The recoverable amount is determined based on the higher of the present value of expected future cash flows and the fair value less disposal costs of the asset group. When determining the present value of the estimated future cash flows of the asset groups, the Group used an income growth rate and gross margin rate based on historical experience and forecasts of market development. A discount rate of 11.0% (December 31, 2022: 11.0%) was used to reflect the specific risks of the relevant assets.
| 75. | Gains on disposal of assets |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Loss on disposal of fixed assets | | | 6,982,614.68 | | | | -28,166,889.98 | |
| Disposal loss on intangible assets | | | -3,055,990.60 | | | | -13,017.82 | |
| Gains on disposals of rights-of-use-assets | | | 350,942,576.58 | | | | 363,888,069.30 | |
| Total | | | 354,869,200.66 | | | | 335,708,161.50 | |
Non-operating income
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | | | Amount included in
the non-recurring
profit and loss of
the current period | |
| Compensation income | | | 166,513,088.06 | | | | 192,231,769.01 | | | | | |
| Cash overage | | | 709,862.07 | | | | 857,859.48 | | | | | |
| Accounts payable that can’t be paid | | | 56,899,194.05 | | | | 82,100,945.92 | | | | 56,899,194.05 | |
| Others | | | 57,575,074.63 | | | | 56,902,735.11 | | | | 57,575,074.63 | |
| Total | | | 281,697,218.81 | | | | 332,093,309.52 | | | | 114,474,268.68 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Governmental subsidies included in current profits and losses
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 77. | Non-operating expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | | | Amount included in
the non-recurring
profit and loss of
the current period | |
| Total losses on disposal of non-current assets | | | 98,040,812.38 | | | | 127,897,871.37 | | | | 98,040,812.38 | |
| External donation | | | 438,215.57 | | | | 2,598,649.60 | | | | 438,215.57 | |
| Compensation and litigation expenses, etc | | | 57,318,005.52 | | | | 108,549,070.21 | | | | 57,318,005.52 | |
| Others | | | 11,535,252.04 | | | | 13,741,763.02 | | | | 11,535,252.04 | |
| Total | | | 167,332,285.51 | | | | 252,787,354.20 | | | | 167,332,285.51 | |
| (1). | Table of income tax expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of last
period | |
| Current income tax expenses | | | 29,570,252.92 | | | | 30,300,421.54 | |
| Deferred income tax expenses | | | 73,742,191.89 | | | | -249,101,273.39 | |
| Total | | | 103,312,444.81 | | | | -218,800,851.85 | |
| (2). | Adjustment of accounting profits and income tax expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | |
| Total profit | | | -1,361,418,009.61 | |
| Income tax expense calculated as per legal/applicable tax rate | | | -340,354,502.40 | |
| Impact on different applicable rates in subsidiary | | | -24,318,363.25 | |
| Impact on adjustment of income tax in last period | | | -2,569,764.17 | |
| Impact on nontaxable income | | | -68,420,614.71 | |
| Impact on nondeductible cost, expense and loss | | | 5,000,568.18 | |
| Impact on deductible loss of unrecognized assets from deferred income tax in the previous period | | | -23,219,584.97 | |
| Impact on deductible transient difference or deductible loss of unconfirmed assets from deferred income tax in the current period | | | 587,600,524.27 | |
| Profit/(Loss) attributable to Cooperative Enterprises and Joint Ventures | | | -30,405,818.14 | |
| Income tax expenses | | | 103,312,444.81 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 79. | Other comprehensive income |
| | √ | Applicable | ¨ | Not applicable |
See Note VII, 59 of the financial statements for details
| 80. | Cash flow statement items |
| (1). | Cash relating to operating activities |
Other cash received relating to operating activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Governmental subsidy | | | 180,487,042.62 | | | | 198,077,290.57 | |
| Interest income of bank deposit | | | 171,651,765.42 | | | | 236,474,211.69 | |
| Income from compensation, etc. | | | 166,513,088.06 | | | | 192,231,769.01 | |
| Deposits and guarantees, etc. | | | 73,008,834.85 | | | | 67,761,561.38 | |
| Cash overage | | | 709,862.07 | | | | 857,859.48 | |
| Repayments of loans from small loan and factoring companies in Chongqing | | | 873,958,781.46 | | | | 633,902,529.57 | |
| Others | | | 57,575,074.63 | | | | 56,902,735.11 | |
| Total | | | 1,523,904,449.11 | | | | 1,386,207,956.81 | |
Other cash paid relating to operating activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Sales expenses, administrative expenses, and research and development expenses | | | 5,632,009,282.98 | | | | 5,990,148,571.44 | |
| Financial expenses – financial service fees | | | 157,161,863.84 | | | | 185,897,135.79 | |
| Expenditure on donation | | | 438,215.57 | | | | 2,598,649.60 | |
| Penalties, compensation, overdue fine and other non-operating expenses | | | 38,439,742.32 | | | | 118,535,527.02 | |
| Deposits and reserves, etc. | | | 1,825,973.78 | | | | 26,438,008.09 | |
| Payment of letters of guarantee and security for costs | | | 26,182,142.90 | | | | | |
| Total | | | 5,856,057,221.39 | | | | 6,323,617,891.94 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Cash relating to investment activities |
Cash received relating to important investment activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Cash received from the transfer of trading financial assets, other equity investments, and the recovery of long-term equity investments | | | 421,011,225.76 | | | | 1,218,210,833.38 | |
| Joint venture dividends | | | 159,535,200.00 | | | | 29,998,400.00 | |
| Financial products recovered | | | 2,430,585,269.62 | | | | 1,942,083,905.78 | |
| Receipt of investment income from financial management | | | 262,422,634.41 | | | | 365,978,129.93 | |
| Total | | | 3,273,554,329.79 | | | | 3,556,271,269.09 | |
Cash paid relating to important investment activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Purchase of bank wealth management, asset management, and trust products | | | 2,360,000,000.00 | | | | 2,450,000,000.00 | |
| Total | | | 2,360,000,000.00 | | | | 2,450,000,000.00 | |
Other cash received relating to investment activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Financial products recovered | | | 2,430,585,269.62 | | | | 1,942,083,905.78 | |
| Receipt of investment income from financial management | | | 262,422,634.41 | | | | 365,978,129.93 | |
| Total | | | 2,693,007,904.03 | | | | 2,308,062,035.71 | |
Other cash paid relating to investment activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Purchase of bank wealth management, asset management, and trust products | | | 2,360,000,000.00 | | | | 2,450,000,000.00 | |
| Total | | | 2,360,000,000.00 | | | | 2,450,000,000.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Cash relating to financing activities |
Other cash received relating to financing activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Receipt of lease payments from finance leases | | | 79,951,033.98 | | | | 54,280,019.15 | |
| Total | | | 79,951,033.98 | | | | 54,280,019.15 | |
Other cash paid relating to financing activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Share buy-backs | | | 225,284,643.05 | | | | 263,483,654.25 | |
| Cash paid to acquire minority interests | | | | | | | 2,980,000.00 | |
| Payment of fixed rent for non-exempt lease contracts | | | 2,956,330,441.50 | | | | 3,046,511,329.10 | |
| Total | | | 3,181,615,084.55 | | | | 3,312,974,983.35 | |
Changes in liabilities generated from financing activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase in the current period | | | Decrease in the current period | |
| Items | | Opening balance | | | Cash changes | | | Non-cash
changes | | | Cash changes | | | Non-cash
changes | | | Closing balance | |
| Short-term loans | | | 6,528,480,368.69 | | | | 6,200,000,000.00 | | | | 124,337,871.49 | | | | 7,722,598,151.14 | | | | | | | | 5,130,220,089.04 | |
| Short-term borrowings and long-term borrowings due within one year | | | 2,211,331,586.67 | | | | | | | | 27,611,402.36 | | | | 1,888,752,864.87 | | | | | | | | 350,190,124.16 | |
| Lease liabilities due within one year and lease liabilities | | | 24,981,451,232.22 | | | | | | | | 2,436,174,687.10 | | | | 2,956,330,441.50 | | | | 1,887,781,764.20 | | | | 22,573,513,713.62 | |
| Total | | | 33,721,263,187.58 | | | | 6,200,000,000.00 | | | | 2,588,123,960.95 | | | | 12,567,681,457.51 | | | | 1,887,781,764.20 | | | | 28,053,923,926.82 | |
| (4). | Explanation of reporting cash flows on a net basis |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Significant activities and financial effects that do not involve cash inflows or outflows in the current period but affect the financial position of the enterprise or may affect the future cash flows of the enterprise |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 81. | Supplementary information for cash flow statement |
| (1). | Supplementary data to cash flow statement |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Supplementary information | | Amount of
current period | | | Amount of
last period | |
| 1. Cash flows converted from net profits for business operation activities: | | | | | | | | |
| Net profit | | | -1,464,730,454.42 | | | | -2,999,674,942.55 | |
| Plus: provision for impairment of assets | | | 523,083,152.30 | | | | 635,207,660.63 | |
| Credit impairment loss | | | 88,874,262.99 | | | | 119,960,638.17 | |
| Depreciation of fixed assets, depreciation of oil & gas assets, and depreciation of productive biological assets | | | 695,537,781.30 | | | | 834,245,791.32 | |
| Amortization of right-of-use assets | | | 1,989,750,727.60 | | | | 2,165,542,154.48 | |
| Amortisation of intangibles | | | 290,982,888.87 | | | | 286,456,187.95 | |
| Depreciation and amortization of investment properties | | | 10,805,136.72 | | | | 10,807,004.14 | |
| Amortization of long-term deferred expenses | | | 610,355,625.20 | | | | 675,107,070.50 | |
| Losses on the disposal of fixed assets, intangible assets and other long-term assets (profit is indicated by “-”) | | | -354,869,200.66 | | | | -335,708,161.50 | |
| Loss on scrapping of fixed assets (profit is indicated by “-”) | | | 98,040,812.38 | | | | 127,897,871.37 | |
| Loss on changes in fair value (profit is indicated by “-”) | | | 76,342,984.38 | | | | 594,680,167.44 | |
| Financial expenses (profit is indicated by “-”) | | | 1,280,235,192.86 | | | | 1,554,025,387.68 | |
| Investment loss (profit is indicated by “-”) | | | -396,293,929.52 | | | | 105,277,829.92 | |
| Decrease in deferred income tax assets (increase is indicated by “-”) | | | 125,241,598.47 | | | | -202,389,523.47 | |
| Increase in deferred income tax liabilities (decrease is indicated by “-”) | | | -51,499,406.58 | | | | -46,711,749.92 | |
| Decrease of inventory (increase is indicated by “-”) | | | 2,197,606,958.87 | | | | 324,901,709.72 | |
| Decrease of operational receivables (increase is indicated by “-”) | | | 1,300,791,364.07 | | | | 1,659,712,792.97 | |
| Increase in operational payables (decrease is indicated by “-”) | | | -2,479,724,814.80 | | | | 364,857,172.10 | |
| Others | | | 28,350,274.80 | | | | -10,114,723.73 | |
| Net cash flow from operating activities | | | 4,568,880,954.83 | | | | 5,864,080,337.22 | |
| 2. Major investment and financing activities that do not involve cash receipts and payments: | | | | | | | | |
| Conversion of debts into capital | | | | | | | | |
| Convertible bonds due within one year | | | | | | | | |
| Fixed assets under financing lease | | | | | | | | |
| 3. Net change in cash and cash equivalents: | | | | | | | | |
| Closing balance of cash | | | 5,696,636,200.67 | | | | 7,443,008,300.63 | |
| Minus: opening balance of cash | | | 7,443,008,300.63 | | | | 8,643,661,498.06 | |
| Add: closing balance of cash equivalents | | | | | | | | |
| Minus: opening balance of cash equivalents | | | | | | | | |
| Net increase in cash and cash equivalents | | | -1,746,372,099.96 | | | | -1,200,653,197.43 | |
| (2). | Net cash paid in current period and acquired from subsidiary |
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Net cash received from disposal of subsidiaries during the current period |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount | |
| Cash or cash equivalents received for disposal of subsidiaries during the current period | | | 16,218,914.55 | |
| Less: cash and cash equivalents held by subsidiaries on the date of losing the control right | | | | |
| Add: cash or cash equivalents received for disposal of subsidiaries in the last period | | | | |
| Net cash received from the disposal of subsidiaries | | | 16,218,914.55 | |
| (4). | Composition of cash and cash equivalents |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| I.Cash | | | 5,696,636,200.67 | | | | 7,443,008,300.63 | |
| Including: cash on hand | | | 72,725,636.77 | | | | 79,642,654.48 | |
| Bank deposit ready for payment at any time | | | 5,376,687,857.46 | | | | 6,824,286,681.92 | |
| Other monetary funds ready for payment at any time | | | 247,222,706.44 | | | | 539,078,964.23 | |
| II. Cash equivalents | | | | | | | | |
| Including: bond investments due in three months | | | | | | | | |
| III. Closing balance of cash and cash equivalents | | | 5,696,636,200.67 | | | | 7,443,008,300.63 | |
| Including: restricted cash and cash equivalents used by parent company or subsidiaries | | | 141,300,533.68 | | | | 114,492,314.03 | |
| (5). | Situation where the use of cash and cash equivalents is restricted but still presented as cash and cash equivalents |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | |
| Items | | current period | | | Reason |
| Monetary funds | | | 112,309,741.02 | | | Judicial frozen |
| Monetary funds | | | 28,990,792.66 | | | Deposit |
| Total | | | 141,300,533.68 | | | / |
| (6). | Monetary funds other than cash and cash equivalents |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 82. | Notes to items in statement of changes in equity |
Description for adjustment on item name of “Others”, adjustment amount and other matters at the end of last year:
| | ¨ | Applicable | √ | Not applicable |
| 83. | Foreign currency monetary items |
| (1). | Monetary items of foreign currency |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan
| | | Closing balance | | | | | | Closing balance | |
| | | of foreign | | | Conversion | | | converted into | |
| Items | | currency | | | exchange rate | | | RMB | |
| Monetary funds | | | | | | | | | | | | |
| USD | | | 1,267,997.03 | | | | 7.08 | | | | 8,977,418.97 | |
| HKD | | | 29,144,187.00 | | | | 0.91 | | | | 26,521,210.17 | |
| GBP | | | 16,742.56 | | | | 9.04 | | | | 151,352.74 | |
| JPY | | | 33 | | | | 0.05 | | | | 1.65 | |
| EUR | | | 18,386.24 | | | | 7.86 | | | | 144,515.85 | |
| CAD | | | 0.17 | | | | 5.37 | | | | 0.91 | |
| AUD | | | 0.07 | | | | 4.85 | | | | 0.34 | |
| Account receivable | | | | | | | | | | | | |
| EUR | | | 2,475.58 | | | | 7.86 | | | | 19,458.06 | |
| GBP | | | 19,492.70 | | | | 9.04 | | | | 176,214.01 | |
| Accounts payable | | | | | | | | | | | | |
| USD | | | 2,828,724.54 | | | | 7.08 | | | | 20,027,369.74 | |
| EUR | | | 452,041.84 | | | | 7.86 | | | | 3,553,048.86 | |
| AUD | | | 66,872.24 | | | | 4.85 | | | | 324,330.36 | |
| CAD | | | 47,650.73 | | | | 5.37 | | | | 255,884.42 | |
| GBP | | | 19,338.55 | | | | 9.04 | | | | 174,820.49 | |
| (2). | Descriptions of entities running businesses overseas: including description of main operating place, recording currency and selection basis, and the reason for change of recording currency of major entities running businesses overseas |
| | √ | Applicable | ¨ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Year 2023 | | | Year 2022 | |
| Interest expenses on lease liabilities | | | 1,128,478,683.54 | | | | 1,257,899,530.25 | |
| Simplified approach for recognizing short-term lease expenses in profit or loss | | | 93,506,251.20 | | | | 97,962,295.48 | |
| Variable lease payments not included in the measurement of lease liabilities | | | 24,405,117.78 | | | | 28,916,339.16 | |
| Income from the sublease of the right to use the assets | | | 1,215,399,765.79 | | | | 1,276,613,499.74 | |
| Total cash outflow related to lease | | | 3,070,811.423.54 | | | | 3,173,389,963.74 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | Note: | The lease assets leased by the Group include buildings and structures, machinery and equipment, transportation equipment, and other equipment used in the operation process. The lease terms for buildings and structures are usually 5-20 years, while the lease terms for machinery and equipment, transportation equipment, and other equipment are usually 1 year. The lease agreements usually stipulate that the area of leased assets subleased by the Group shall not exceed a certain percentage. Some lease agreements include renewal options, termination options, and variable lease payment terms. Impact of variable lease terms on future potential cash outflows see “Future potential cash outflows not included in lease liability measurement”. |
Variable lease payments not included in the measurement of lease liabilities
| | √ | Applicable | ¨ | Not applicable |
The potential future cash outflows that are not included in the measurement of lease liabilities by the Group mainly arise from the risk exposures, such as variables lease payments, renewal and termination options in lease contracts, lease residual value guarantees, and leases committed but not yet commenced.
Variable lease payments
Many of the Group’s real estate leases include variable lease payment terms that are linked to the sales generated from the leased properties. The purpose of incorporating these terms, whenever possible, is to align lease payments with the stores that generate higher cash flows.
Leases that have been committed but not yet commenced
The anticipated future cash outflows for leases committed but not yet commenced by the Group are as follows:
Unit: Yuan Currency: RMB
| Items | | Year 2023 | | | Year 2022 | |
| Within 1 year (including 1 year) | | | 9,653,725.75 | | | | 5,523,294.23 | |
| 1-2 years (including 2 years) | | | 9,611,881.52 | | | | 9,021,158.85 | |
| 2-3 years (including 3 years) | | | 9,813,489.13 | | | | 10,161,586.54 | |
| Over 3 years | | | 30,419,809.90 | | | | 125,916,598.16 | |
| Total | | | 59,498,906.30 | | | | 150,622,637.78 | |
Right-of-use assets, as disclosed in Note VII, 27; simplified treatment of short-term leases, as disclosed in Note V, 38; lease liabilities, as disclosed in Note VII, 49.
Lease expenses for the simplified treatment of short-term leases or leases of low-value assets.
| | ¨ | Applicable | √ | Not applicable |
Lease-back transaction and basis of judgment
| | ¨ | Applicable | √ | Not applicable |
Total cash outflows related to leasing: 3,070,811,423.54 (Unit: Yuan; Currency: RMB).
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Operating lease as lessor
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Including: | |
| | | | | | related income
from variable | |
| | | | | | lease payments
that are not | |
| | | | | | included in the | |
| Items | | Lease income | | | rental income | |
| Lease income | | | 1,200,409,956.67 | | | | | |
| Total | | | 1,200,409,956.67 | | | | | |
Finance lease as lessor
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | Income from
variable lease | |
| | | | | | | | | payments not
included in the | |
| Items | | Sales gains or
losses | | | Financing
income | | | net investment in
the lease | |
| Leases | | | 46,227,778.98 | | | | 14,989,809.12 | | | | | |
| Total | | | 46,227,778.98 | | | | 14,989,809.12 | | | | | |
Reconciliation table of undiscounted leasing receipts and net investment in the lease
| | √ | Applicable | ¨ | Not applicable |
| Items | | Closing Balance | | | Opening Balance | |
| Total undiscounted leasing receipts | | | 339,474,576.68 | | | | 385,493,688.13 | |
| Less: Unrealized financing income | | | 62,701,073.71 | | | | 77,308,435.79 | |
| Net investment in the lease | | | 276,773,502.97 | | | | 308,185,252.34 | |
Undiscounted leasing receipts in the next five years
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Undiscounted leasing | |
| | | receipts per year | |
| Items | | Closing Balance | | | Opening Balance | |
| Year 1 | | | 64,217,997.44 | | | | 57,735,287.08 | |
| Year 2 | | | 39,688,354.50 | | | | 43,696,546.17 | |
| Year 3 | | | 33,232,676.94 | | | | 36,271,032.21 | |
| Year 4 | | | 30,840,565.86 | | | | 33,576,473.86 | |
| Year 5 | | | 29,763,412.10 | | | | 32,641,071.99 | |
| Total undiscounted leasing receipts after five years | | | 141,731,569.84 | | | | 181,573,276.82 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | Recognition of sales profit or loss on finance lease as a producer or dealer |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| VIII. | Research and Development Expenses |
| (1). | Listed by nature of expenses |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Internal software development, operation and maintenance | | | 319,427,941.85 | | | | 499,251,991.56 | |
| Total | | | 319,427,941.85 | | | | 499,251,991.56 | |
| Wherein: Incurred R&D expenses | | | 318,267,251.93 | | | | 481,898,435.04 | |
| Capitalized R&D expenses | | | 1,160,689.92 | | | | 17,353,556.52 | |
| (2). | Development expenses that meet the capitalization criteria for research and development projects |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase in | | | | | | | | | | |
| | | current period | | | Decrease in Current Period | | | | |
| | | | | | | | | | | | Transferred | | | | |
| | | | | | Internal | | | Recognized as | | | into losses and | | | | |
| | | Opening | | | development | | | intangible | | | profits in | | | Closing | |
| Items | | balance | | | expenses | | | assets | | | current period | | | balance | |
| Internal software development | | | 10,899,846.17 | | | | 1,160,689.92 | | | | 12,060,536.09 | | | | | | | | | |
| Total | | | 10,899,846.17 | | | | 1,160,689.92 | | | | 12,060,536.09 | | | | | | | | | |
Significant capitalized research and development projects
| | ¨ | Applicable | √ | Not applicable |
Impairment provision for development expenses
| | ¨ | Applicable | √ | Not applicable |
| (3). | Significant externally purchased research projects |
| | ¨ | Applicable | √ | Not applicable |
| IX. | Changes in Consolidation Scope |
| 1. | Business combination not under the same control |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Non-controlling interest business combinations occurred during the period |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Combined cost and goodwill |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Identifiable assets and liabilities of acquiree on the acquisition date |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Profit or loss by recalculating the shares before acquisition date according to fair value |
Whether the situations exist that business combination is realized in steps by deal for many times and the control right is acquired in the reporting period
| | ¨ | Applicable | √ | Not applicable |
| (5). | Description of the determination failure of reasonable combination consideration at acquisition date or at end of combination period or the fair value of assets and liabilities that can be identified by the acquiree |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| 2. | Business combination under the same control |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Business combination under same control in current period |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (3). | The book value of the assets and liabilities of the consolidated party on the date of consolidation |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 4. | Disposal of subsidiaries |
Existence of transactions or events during the period resulting in loss of control over subsidiaries
| | √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| Name of Subsidiary | | Time point of
losing control
right | | | Consideration
received on the
date of loss of
control | | | Proportion (%)
disposed on the
date of loss of
control | | | Method of disposal
on the date of loss
of control | | | Basis for
determining the
date of loss of
control | | | Balance between
the disposal price
and the net assets
of the subsidiary
entitled in the
consolidated
financial statement
corresponding to
the disposal of the
investment | | | Proportion of
residual equities on
the date of losing
control right (%) | | | Carrying value of
remaining equity
at the financial
statement level on
the date of loss of
control | | | Fair value of
remaining equity
at the financial
statement level on
the date of loss of
control | | | Re-measurement of
the gains or losses
arising from the
remaining equity
at fair value | | | Methods and key
assumptions used
for determining
the fair value of
remaining equity
at the financial
statement level on
the date of loss of
control | | | Amount of other
comprehensive
income related to
the equity
investment in the
subsidiary
transferred to
investment income
or retained
earnings | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | November 23, 2023 | | | | 1,465.29 | | | | 45 | | | | Equity transfer | | | | Business registration change completed | | | | 0.00 | | | | 15 | | | | 488.43 | | | | 488.43 | | | | 0.00 | | | | Market approach | | | | | |
| Guangdong Yonghui Yunchuang Technology Co., Ltd. | | | October 16, 2023 | | | | 270.00 | | | | 100 | | | | Equity transfer | | | | Business registration change completed | | | | 268.26 | | | | | | | | | | | | | | | | | | | | | | | | | |
Other notes:
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Note 1: Yonghui Superstores Co., Ltd. entered into an agreement with a third party regarding the transfer of equity of Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. The agreement stipulates the transfer of 45% equity of Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. to the third party, with a transfer price of RMB14,652,900.
Note 2: Yonghui Yunchuang Technology Co., Ltd. entered into an agreement with a third party regarding the transfer of equity of Guangdong Yonghui Yunchuang Technology Co., Ltd. The agreement stipulates the transfer of 100% equity of Guangdong Yonghui Yunchuang Technology Co., Ltd. to the third party, with a transfer price of RMB2,700,000.
Whether the situations exist that investment for the subsidiary is disposed in steps by deal for many times and the control right has lost in the reporting period
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 5. | Changes in the combination scope for other reasons |
Descriptions for change in combination ranges caused by other reasons (e.g. newly establishment of subsidiary, clearing of subsidiary, etc.), and relevant situations:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| X. | Interests in Other Entities |
| (1). | Constitution of the enterprise group |
| | √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Principal | | | | | | | | Shareholding | | |
| | | Place of | | Registered | | Registered | | Nature of | | ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | RMB50 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Xiamen Yonghui Minsheng Superstores Co., Ltd. | | Xiamen, Fujian | | RMB41.67 million | | Xiamen, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Xiamen Yonghui Commercial Co., Ltd. | | Xiamen, Fujian | | RMB10 million | | Xiamen, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Fujian Strait Food Development Co., Ltd. | | Fuzhou, Fujian | | RMB53 million | | Fuzhou, Fujian | | Commercial trade | | 100 | | | | Investment establishment |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | Fuzhou, Fujian | | RMB10 million | | Fuzhou, Fujian | | Commercial trade | | 100 | | | | Investment establishment |
| Guangdong Yonghui Superstores Co., Ltd. | | Guangzhou, Guangdong | | RMB200 million | | Guangzhou, Guangdong | | Commercial retail | | | | 50 | | Investment establishment |
| Fujian Yonghui Logistics Co., Ltd. | | Fuzhou, Fujian | | RMB300 million | | Fuzhou, Fujian | | Logistic distribution | | 95 | | 5 | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | | | Shareholding | | |
| | | Place of | | Registered | | Registered | | Nature of | | ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Fujian Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | RMB800 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Shenzhen Yonghui Superstores Co., Ltd. | | Shenzhen, Guangdong | | RMB200 million | | Shenzhen Guangdong | | Commercial retail | | | | 50 | | Investment establishment |
| Fujian Yonghui Import and Export Trade Co., Ltd. | | Pingtan, Fujian | | RMB10 million | | Pingtan, Fujian | | Commercial trade | | | | 100 | | Investment establishment |
| Fujian Yongjin Trading Co., Ltd. | | Fuzhou, Fujian | | RMB30 million | | Fuzhou,Fujian | | Commercial trade | | 49 | | 51 | | Investment establishment |
| Jiangxi Yonghui Superstores Co., Ltd. | | Nanchang, Jiangxi | | RMB20 million | | Nanchang, Jiangxi | | Commercial retail | | 100 | | | | Investment establishment |
| Chongqing Yonghui Superstores Co., Ltd. | | Chongqing | | RMB714.4 million | | Chongqing | | Commercial retail | | 100 | | | | Investment establishment |
| Yonghui Logistics Co., Ltd. | | Chongqing | | RMB100 million | | Chongqing | | Logistic distribution | | 90 | | 10 | | Investment establishment |
| Sichuan Yonghui Store Co., Ltd. | | Chengdu, Sichuan | | RMB1 billion | | Chengdu, Sichuan | | Commercial retail | | 100 | | | | Investment establishment |
| Guizhou Yonghui Superstores Co., Ltd. | | Guiyang, Guizhou | | RMB200 million | | Guiyang, Guizhou | | Commercial retail | | 100 | | | | Investment establishment |
| Chengdu Yonghui Business Development Co., Ltd. | | Chengdu, Sichuan | | RMB130 million | | Chengdu, Sichuan | | Logistic distribution | | 80 | | 20 | | Investment establishment |
| Chongqing Xuanhui Real Estate Development Co., Ltd. | | Chongqing | | RMB100 million | | Chongqing | | Real estate | | | | 100 | | Investment establishment |
| Shaanxi Yonghui Superstores Co., Ltd. | | Xi’an, Shaanxi | | RMB10 million | | Xi’an, Shaanxi | | Commercial retail | | 100 | | | | Investment establishment |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | Fuping, Shaanxi | | RMB37 million | | Fuping, Shaanxi | | Food sales | | 100 | | | | Investment establishment |
| Guansu Yonghui Superstores Co., Ltd. | | Lanzhou, Gansu | | RMB10 million | | Lanzhou, Gansu | | Commercial retail | | 100 | | | | Investment establishment |
| Qinghai Yonghui Superstores Co., Ltd. | | Xining, Qinghai | | RMB20 million | | Xining, Qinghai | | Commercial retail | | 100 | | | | Investment establishment |
| Baotou Yonghui Superstores Co., Ltd. | | Beijing | | RMB50 million | | Beijing | | Commercial retail | | 100 | | | | Investment establishment |
| Yonghui Yunjin Technology Co., Ltd. | | Chongqing | | RMB500 million | | Chongqing | | Technical service | | 100 | | | | Investment establishment |
| Yonghui Holdings Co., Ltd. | | Hong Kong | | HKD30 million | | Hong Kong | | Investment | | 100 | | | | Investment establishment |
| Chongqing Yonghui Small Loan Co., Ltd. | | Chongqing | | RMB300 million | | Chongqing | | Commercial loan | | | | 100 | | Investment establishment |
| Yonghui Qinghe Business Factoring (Chongqing) Co., Ltd. | | Chongqing | | RMB200 million | | Chongqing | | Commercial factoring | | | | 100 | | Investment establishment |
| LOHAS Life International Business Co., Ltd. | | Hong Kong | | HKD100,000 | | Hong Kong | | Commercial trade | | | | 100 | | Investment establishment |
| Yonghui Japan Co., Ltd. | | Japan | | JPY95 million | | Japan | | Commercial trade | | | | 80 | | Investment establishment |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | Chengdu, Sichuan | | RMB10 million | | Chengdu, Sichuan | | Information technology | | 100 | | | | Investment establishment |
| Tianjin Yonghui Superstores Co., Ltd. | | Tianjin | | RMB10 million | | Tianjin | | Commercial retail | | | | 100 | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | | | Shareholding | | |
| | | Place of | | Registered | | Registered | | Nature of | | ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Anhui Yonghui Superstores Co., Ltd. | | Hefei, Anhui | | RMB285.08 million | | Hefei, Anhui | | Commercial retail | | 100 | | | | Investment establishment |
| Anhui Yonghui Logistics Co., Ltd. | | Feidong, Anhui | | RMB50 million | | Feidong, Anhui | | Logistic distribution | | 100 | | | | Investment establishment |
| Jiangsu Yonghui Superstores Co., Ltd. | | Nanjing, Jiangsu | | RMB200 million | | Nanjing, Jiangsu | | Commercial retail | | 100 | | | | Investment establishment |
| Zhejiang Yonghui Superstores Co., Ltd. | | Hangzhou, Zhejiang | | RMB120 million | | Hangzhou, Zhejiang | | Commercial retail | | 100 | | | | Investment establishment |
| Jiangsu Yonghui Business Management Co., Ltd. | | Nanjing, Jiangsu | | RMB30 million | | Nanjing, Jiangsu | | Commercial trade | | 100 | | | | Investment establishment |
| Ningbo Yonghui Superstores Co., Ltd. | | Ningbo, Zhejiang | | RMB20 million | | Ningbo, Zhejiang | | Commercial retail | | 100 | | | | Investment establishment |
| East China Yonghui Logistics Co., Ltd. | | Kunshan, Jiangsu | | RMB50 million | | Kunshan, Jiangsu | | Logistic distribution | | 100 | | | | Investment establishment |
| Jiaxing Yonghui Superstores Co., Ltd. | | Jiaxing, Zhejiang | | RMB40 million | | Jiaxing, Zhejiang | | Commercial retail | | | | 100 | | Investment establishment |
| Henan Yonghui Superstores Co., Ltd. | | Zhengzhou, Henan | | RMB80.86 million | | Zhengzhou, Henan | | Commercial retail | | 100 | | | | Investment establishment |
| Shanxi Yonghui Superstores Co., Ltd. | | Taiyuan, Shanxi | | RMB50 million | | Taiyuan, Shanxi | | Commercial retail | | 100 | | | | Investment establishment |
| Heilongjiang Yonghui Superstores Co., Ltd. | | Harbin, Heilongjiang | | RMB100 million | | Harbin, Heilongjiang | | Commercial retail | | 100 | | | | Investment establishment |
| Jilin Yonghui Superstores Co., Ltd. | | Changchun, Jilin | | RMB300 million | | Changchun, Jilin | | Commercial retail | | 100 | | | | Investment establishment |
| Liaoning Yonghui Superstores Co., Ltd. | | Shenyang, Liaoning | | RMB600 million | | Shenyang, Liaoning | | Commercial retail | | 100 | | | | Investment establishment |
| Liaoning Yonghui Logistics Co., Ltd. | | Shenyang, Liaoning | | RMB100 million | | Shenyang, Liaoning | | Logistic distribution | | | | 100 | | Investment establishment |
| Songyuan Yonghui Superstores Co., Ltd. | | Songyuan, Jilin | | RMB10 million | | Songyuan, Jilin | | Commercial retail | | | | 55 | | Investment establishment |
| Shanghai Yonghui Superstores Co., Ltd. | | Shanghai | | RMB300 million | | Shanghai | | Commercial retail | | 100 | | | | Investment establishment |
| Shanghai Baoshan Yonghui Superstores Co., Ltd. | | Shanghai | | RMB20 million | | Shanghai | | Commercial retail | | | | 100 | | Investment establishment |
| Shanghai Yonghui Yangpu Superstores Co., Ltd. | | Shanghai | | RMB40 million | | Shanghai | | Commercial retail | | | | 100 | | Investment establishment |
| Shanghai Songjiang Yonghui Superstores Co., Ltd. | | Shanghai | | RMB1 million | | Shanghai | | Commercial retail | | | | 100 | | Investment establishment |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | Fuping, Shaanxi | | RMB200 million | | Fuping, Shaanxi | | Commercial trade | | 100 | | | | Investment establishment |
| Xizang Yonghui Superstores Co., Ltd. | | Lhasa, Xizang | | RMB20 million | | Lhasa, Xizang | | Commercial retail | | 100 | | | | Investment establishment |
| Guizhou Yonghui Logistics Co., Ltd. | | Guiyang, Guizhou | | RMB50 million | | Guiyang, Guizhou | | Logistic distribution | | 100 | | | | Investment establishment |
| Chengde Yonghui Renhe Superstores Co., Ltd. | | Chengde, Hebei | | RMB10 million | | Chengde, Hebei | | Commercial retail | | | | 51 | | Investment establishment |
| Hebei Yonghui Superstores Co., Ltd. | | Shijiazhuang, Hebei | | RMB200 million | | Shijiazhuang, Hebei | | Commercial retail | | 100 | | | | Investment establishment |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | Minxian, Gansu | | RMB20 million | | Minxian, Gansu | | Food sales | | | | 51 | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | | | Shareholding | | |
| | | Place of | | Registered | | Registered | | Nature of | | ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Shandong Yonghui Superstores Co., Ltd. | | Jinan,Shandong | | RMB50 million | | Jinan, Shandong | | Commercial retail | | 100 | | | | Investment establishment |
| Fuzhou Dongzhan International Trade Co., Ltd. | | Fuzhou, Fujian | | RMB30 million | | Fuzhou, Fujian | | Commercial trade | | | | 100 | | Investment establishment |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | Shanghai | | RMB10 million | | Shanghai | | Business services | | | | 57 | | Investment establishment |
| Guangdong PARK&YH Superstores Co., Ltd. | | Shenzhen, Guangdong | | RMB850 million | | Shenzhen, Guangdong | | Commercial retail | | 50 | | | | Investment establishment |
| Beijing Yonghui Superstores Co., Ltd. | | Beijing | | RMB600 million | | Beijing | | Commercial retail | | 100 | | | | Investment establishment |
| Hubei Yonghui Zhongbai Superstores Co., Ltd. | | Wuhan, Hubei | | RMB100 million | | Wuhan, Hubei | | Commercial retail | | 55 | | | | Investment establishment |
| Yunnan Yonghui Superstores Co., Ltd. | | Kunming,Yunnan | | RMB50 million | | Kunming, Yunnan | | Commercial retail | | 100 | | | | Investment establishment |
| Ningxia Yonghui Superstores Co., Ltd. | | Yinchuan, Ningxia | | RMB10 million | | Yinchuan, Ningxia | | Commercial retail | | 100 | | | | Investment establishment |
| Hunan Yonghui Superstores Co., Ltd. | | Changsha,Hunan | | RMB40 million | | Changsha, Hunan | | Commercial retail | | 100 | | | | Investment establishment |
| Guangxi Yonghui Superstores Co., Ltd. | | Nanning, Guangxi | | RMB20 million | | Nanning, Guangxi | | Commercial retail | | 100 | | | | Investment establishment |
| Beijing Yonghui Commercial Co., Ltd. | | Beijing | | RMB112.42 million | | Beijing | | Commercial retail | | | | 100 | | Consolidation not under the same control |
| Shanghai Dongzhan International Trade Co., Ltd. | | Shanghai | | RMB43.55 million | | Shanghai | | Commercial trade | | 100 | | | | Consolidation not under the same control |
| Shanghai Yinjie International Trade Co., Ltd. | | Shanghai | | RMB1 million | | Shanghai | | Commercial trade | | | | 100 | | Consolidation not under the same control |
| Guangzhou PARK&YH Superstores Co., Ltd. | | Guangzhou, Guangdong | | RMB218.74 million | | Guangzhou, Guangdong | | Commercial retail | | | | 48.34 | | Consolidation not under the same control |
| Jiangmen ParknShop Supermarket Co., Ltd. | | Jiangmen, Guangdong | | RMB5 million | | Jiangmen, Guangdong | | Commercial retail | | | | 48.34 | | Consolidation not under the same control |
| Dongguan DG Mall Supermarket Co., Ltd. | | Dongguan, Guangdong | | RMB2.5 million | | Dongguan, Guangdong | | Commercial retail | | | | 48.34 | | Consolidation not under the same control |
| Yonghui Yunchuang Technology Co., Ltd. | | Shanghai | | RMB2.25 billion | | Shanghai | | Business services | | 46.6 | | | | Consolidation not under the same control |
| Fujian Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | RMB10 million | | Fuzhou, Fujian | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Shenzhen Yonghui Yunchuang Technology Co., Ltd. | | Shenzhen, Guangdong | | RMB10 million | | Shenzhen, Guangdong | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Fujian Yunwang Technology Co., Ltd. | | Fuzhou, Fujian | | RMB100 million | | Fuzhou, Fujian | | Commercial retail | | | | 27.96 | | Consolidation not under the same control |
| Chongqing Yonghui Yunchuang Technology Co., Ltd. | | Chongqing | | RMB10 million | | Chongqing | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Fuzhou Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | RMB11.3 million | | Fuzhou, Fujian | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | | | Shareholding | | |
| | | Place of | | Registered | | Registered | | Nature of | | ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Beijing Yonghui Yunchuang Technology Co., Ltd. | | Beijing | | RMB10 million | | Beijing | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Beijing Huichuang Youpin Technology Co., Ltd. | | Beijing | | RMB10 million | | Beijing | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Jiangsu Yonghui Yunchuang Technology Co., Ltd. | | Nanjing, Jiangsu | | RMB10 million | | Nanjing, Jiangsu | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Zhejiang Yonghui Yunchuang Technology Co., Ltd. | | Hangzhou, Zhejiang | | RMB10 million | | Hangzhou, Zhejiang | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Anhui Yonghui Yunchuang Technology Co., Ltd. | | Hefei, Anhui | | RMB10 million | | Hefei, Anhui | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Ningbo Yonghui Yunchuang Technology Co., Ltd. | | Ningbo, Zhejiang | | RMB20 million | | Ningbo, Zhejiang | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Xiamen Yongyun Technology Co., Ltd. | | Xiamen, Fujian | | RMB10 million | | Xiamen, Fujian | | Commercial retail | | | | 27.96 | | Consolidation not under the same control |
| Shanghai Yonghui Yunchuang Technology Co., Ltd. | | Shanghai | | RMB10 million | | Shanghai | | Technical service | | | | 46.6 | | Consolidation not under the same control |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | RMB89.55 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | | Consolidation under the same control |
| Fujian Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | RMB35.1 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | | Consolidation under the same control |
| Jiangsu Yunfu Supply Chain Management Co., Ltd. | | Nanjing, Jiangsu | | RMB10 million | | Nanjing, Jiangsu | | Food sales | | | | 100 | | Investment establishment |
| Shandong Fuping Supply Chain Management Co., Ltd. | | Weifang, Shandong | | RMB10 million | | Weifang, Shandong | | Commercial retail | | | | 100 | | Investment establishment |
| Jiangxi Fuping Supply Chain Management Co., Ltd. | | Nanchang, Jiangxi | | RMB10 million | | Nanchang, Jiangxi | | Commercial retail | | | | 100 | | Investment establishment |
| Shaanxi Fuping Supply Chain Management Co., Ltd. | | Weinan, Shaanxi | | RMB10 million | | Weinan, Shaanxi | | Commercial retail | | | | 100 | | Investment establishment |
| Hainan Fuli Supply Chain Management Co., Ltd. | | Sanya, Hainan | | RMB10 million | | Sanya, Hainan | | Commercial retail | | | | 100 | | Investment establishment |
| Anhui Fuwan Supply Chain Management Co., Ltd. | | Hefei, Anhui | | RMB10 million | | Hefei, Anhui | | Commercial retail | | | | 100 | | Investment establishment |
| Zhuhai Fuyue Supply Chain Management Co., Ltd. | | Zhuhai, Guangdong | | RMB10 million | | Zhuhai, Guangdong | | Commercial retail | | | | 100 | | Investment establishment |
| Hebei Fuji Supply Chain Management Co., Ltd. | | Shijiazhuang, Hebei | | RMB10 million | | Shijiazhuang, Hebei | | Commercial retail | | | | 100 | | Investment establishment |
| Xinjiang Fuchi Supply Chain Management Co., Ltd. | | Aksu, Xinjiang | | RMB10 million | | Aksu, Xinjiang | | Commercial retail | | | | 100 | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal | | | | | | | | Shareholding | | |
| | | Place of | | Registered | | Registered | | Nature of | | ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Guangdong Fuyue Supply Chain Management Co., Ltd. | | Guangzhou, Guangdong | | RMB30 million | | Guangzhou, Guangdong | | Commercial retail | | | | 100 | | Investment establishment |
| Zhejiang Yunfu Supply Chain Management Co., Ltd. | | Hangzhou, Zhejiang | | RMB30 million | | Hangzhou, Zhejiang | | Food sales | | | | 100 | | Investment establishment |
| Fuzhou Fuping Supply Chain Management Co., Ltd. | | Fuzhou, Fujian | | RMB30 million | | Fuzhou, Fujian | | Food sales | | | | 100 | | Investment establishment |
| Shanghai Yunfu Supply Chain Management Co., Ltd. | | Shanghai | | RMB30 million | | Shanghai | | Food sales | | | | 100 | | Investment establishment |
| Sichuan Yunfu Supply Chain Management Co., Ltd. | | Chengdu, Sichuan | | RMB10 million | | Chengdu, Sichuan | | Food sales | | | | 100 | | Investment establishment |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | Kunming, Yunnan | | RMB10 million | | Kunming, Yunnan | | Food sales | | | | 100 | | Investment establishment |
| Baotou Yonghui Commercial Co., Ltd. | | Baotou, Inner Mongolia | | RMB50 million | | Baotou, Inner Mongolia | | Commercial retail | | 100 | | | | Investment establishment |
| Beijing Yonghui Technology Co., Ltd. | | Beijing | | RMB10 million | | Beijing | | Commercial retail | | 100 | | | | Investment establishment |
| Fujian Yuntong Supply Chain Co., Ltd. | | Fuzhou, Fujian | | RMB100 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Fujian Yongyuehui Business Management Co., Ltd. | | Fuzhou, Fujian | | RMB100 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Guangxi Fuyue Supply Chain Management Co., Ltd. | | Nanning, Guangxi | | RMB10 million | | Nanning, Guangxi | | Commercial retail | | | | 100 | | Investment establishment |
| Zhangzhou Yonghui Digital Business Co., Ltd. | | Zhangzhou, Fujian | | RMB10 million | | Zhangzhou, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Sichuan Huipeng E-commerce Co., Ltd. | | Chengdu, Sichuan | | RMB100 million | | Chengdu, Sichuan | | Commercial retail | | 100 | | | | Investment establishment |
| Anhui Yonghui Business Management Co., Ltd. | | Fuyang, Anhui | | RMB10 million | | Fuyang, Anhui | | Commodity distribution | | | | 100 | | Investment establishment |
| Yonghui Technology Co., Ltd. | | Fuzhou, Fujian | | RMB50 million | | Fuzhou, Fujian | | Technical service | | 100 | | | | Investment establishment |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
None
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Basis on being controllable of the invested company with half or less voting rights as well as on being uncontrollable of the invested company but with half or more voting rights:
Although the Group only holds less than 50% of the equity interest in Guangdong ParknShop Yonghui Superstores Co., Ltd (“Guangdong ParknShop”) and its subsidiaries, Guangdong ParknShop is a Sino-foreign joint venture where the highest governing body is the Board of Directors, consisting of six directors. The Group has the right to appoint the chairman and two additional directors. Major operational decisions require approval by more than half (including half) of the directors. If the attending directors reach a consensus of equal number of approvals and rejections, the Board of Directors shall vote again on the resolution, and all attending directors shall vote according to the chairman’s voting result. Therefore, the Group considers it as a subsidiary.
The control basis on important structured bodies within the consolidation scope:
None
Basis for determining whether the company is an agent or a bailor:
None
Other notes:
None
| (2). | Important non-wholly-owned subsidiaries |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Profit and loss | | | | | | Closing | |
| | | Shareholding | | | attributable to | | | Dividends | | | balance of | |
| | | ratio of | | | minority | | | assigned to | | | equity of | |
| | | minority | | | shareholders in | | | shareholders in | | | minority | |
| Name of Subsidiary | | shareholders | | | this term | | | this term | | | shareholders | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 50.00 | | | | -58,871,912.63 | | | | | | | | -29,166,389.87 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 53.40 | | | | -46,683,084.97 | | | | | | | | 105,835,986.75 | |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Main financial information of important non-wholly-owned subsidiaries |
| | √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | | | | | | | Closing balance | | | | | | | | | | | | | | | Opening balance | | | | | | | |
| | | | | | Non- | | | | | | | | | Non- | | | | | | | | | Non- | | | | | | | | | Non- | | | | |
| | | Current | | | current | | | Total | | | Current | | | current | | | Total | | | Current | | | current | | | Total | | | Current | | | current | | | Total | |
| Name of Subsidiary | | assets | | | asset | | | assets | | | liabilities | | | liabilities | | | liabilities | | | asset | | | asset | | | assets | | | liabilities | | | liabilities | | | liabilities | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 158,952.25 | | | | 97,647.21 | | | | 256,599.46 | | | | 203,660.21 | | | | 95,067.51 | | | | 298,727.72 | | | | 160,277.73 | | | | 115,117.50 | | | | 275,395.23 | | | | 198,303.39 | | | | 107,230.68 | | | | 305,534.07 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 353,002.45 | | | | 622.97 | | | | 353,625.42 | | | | 359,274.29 | | | | | | | | 359,274.29 | | | | 473,131.38 | | | | 1,429.82 | | | | 474,561.20 | | | | 485,379.89 | | | | | | | | 485,379.89 | |
| | | | | | Amount of current period | | | | | | | | | Amount of last period | | | | |
| | | | | | | | | | | | Cash flow | | | | | | | | | | | | Cash flow | |
| | | | | | | | | Total | | | from | | | | | | | | | Total | | | from- | |
| | | Operating | | | | | | comprehensive | | | operating | | | Operating | | | | | | comprehensive | | | operating | |
| Name of Subsidiary | | revenue | | | Net profit | | | income | | | activities | | | revenue | | | Net profit | | | income | | | activities | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 311,355.94 | | | | -11,989.42 | | | | -11,989.42 | | | | 25,512.32 | | | | 367,224.90 | | | | -20,852.95 | | | | -20,852.95 | | | | 12,974.60 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 10,207.07 | | | | 4,658.32 | | | | 4,658.32 | | | | -1,468.87 | | | | 3,694.32 | | | | -6,682.45 | | | | -6,682.45 | | | | -10,246.41 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Important limitations on using Group’s assets and paying off liabilities of the Group |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Financial support and other support provided to the structured entities that are included in the combined financial statement |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 2. | Transactions controlling the subsidiaries in case of equity shares change of subsidiaries |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Description on changes in equity of subsidiaries |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Influences of transactions on minority equity and equity attributable to the parent company |
| | ¨ | Applicable | √ | Not applicable |
| 3. | Equities in Cooperative Enterprises and Joint Ventures |
| | √ | Applicable | ¨ | Not applicable |
| (1). | Important cooperative enterprises and joint ventures |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | | | Accounting |
| | | | | | | | | | | | treatment |
| | | | | | | | | | | | | method for |
| | | | | | | | | | | | | investment in |
| | | | | | | | | | | | | cooperative |
| Names of cooperative | | Principal | | | | | | | Shareholding | | | enterprises |
| enterprises and joint | | Place of | | Registered | | Nature of | | | ratio (%) | | | and joint |
| ventures | | Business | | address | | business | | | Direct Indirect | | | ventures |
| Zhongbai Holdings Group Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Commercial retail | | | 9.85 | | | Equity method |
| Fujian OneBank Limited | | Pingtan, Fujian | | Pingtan, Fujian | | Finance | | | 29.80 | | | Equity method |
| Chengdu Hongqi Chain Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | | 21.00 | | | Equity method |
Description on the difference between the shareholding ratio in cooperative enterprises or joint ventures and voting right:
None
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Basis on holding a voting right below 20% but having significant influence, or holding a voting right above 20% but having no significant influence:
According to the provisions of the Articles of Association of Zhongbai Group, there are five non-independent directors in the board of directors of Zhongbai Group, and the Company holds one seat among them. Therefore, the Management of the Group thinks that it can exert significant influence over Zhongbai Group, making Zhongbai an affiliated business of the Company.
| (2). | Main financial information of important cooperative enterprises |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Main financial information of important joint ventures |
| | √ | Applicable | ¨ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Closing balance/amount of | | | Opening balance/incurred amount of | |
| | | current period | | | last period | |
| | | Zhongbai | | | | | | Hongqi | | | Zhongbai | | | | | | Hongqi | |
| | | Group | | | OneBank | | | Chain | | | Group | | | OneBank | | | Chain | |
| Current assets | | | 346,921.76 | | | | 2,680,623.74 | | | | 452,686.41 | | | | 393,673.03 | | | | 2,075,525.95 | | | | 450,903.44 | |
| Non-current asset | | | 799,764.29 | | | | 656,790.65 | | | | 358,342.97 | | | | 863,912.20 | | | | 514,048.51 | | | | 368,337.76 | |
| Total assets | | | 1,146,686.05 | | | | 3,337,414.39 | | | | 811,029.38 | | | | 1,257,585.23 | | | | 2,589,574.46 | | | | 819,241.20 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Current liabilities | | | 667,933.80 | | | | 1,670,431.30 | | | | 345,821.85 | | | | 716,965.87 | | | | 1,136,457.10 | | | | 334,535.49 | |
| Non-current liabilities | | | 241,604.00 | | | | 1,434,692.08 | | | | 54,087.02 | | | | 258,968.46 | | | | 1,230,607.54 | | | | 69,651.59 | |
| Total liabilities | | | 909,537.80 | | | | 3,105,123.38 | | | | 399,908.87 | | | | 975,934.33 | | | | 2,367,064.64 | | | | 404,187.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Minority interests | | | 6,640.86 | | | | 66.74 | | | | 6,255.09 | | | | | | | | | | | | | |
| Shareholders’ equity attributable to the parent company | | | 230,507.39 | | | | 232,291.01 | | | | 411,053.77 | | | | 275,395.81 | | | | 222,509.82 | | | | 415,054.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset share calculated as per shareholding ratio | | | 22,704.98 | | | | 69,222.72 | | | | 86,321.29 | | | | 27,346.80 | | | | 61,190.20 | | | | 87,161.36 | |
| Adjustments | | | 9,517.23 | | | | 140.27 | | | | 81,678.71 | | | | 13,262.92 | | | | 1.72 | | | | 117,501.40 | |
| – Goodwill | | | | | | | | | | | | | | | | | | | | | | | | |
| – Unrealized profits in internal transaction – Others | | | 9,517.23 | | | | 140.27 | | | | 81,678.71 | | | | 13,262.92 | | | | 1.72 | | | | 117,501.40 | |
| Book value on equity investment of joint ventures | | | 32,222.21 | | | | 69,362.99 | | | | 168,000.00 | | | | 40,609.72 | | | | 61,191.92 | | | | 204,662.76 | |
| Fair value of equity investment of joint ventures with public offer | | | 29,323.26 | | | | | | | | 142,228.80 | | | | 41,203.96 | | | | | | | | 160,792.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating revenue | | | 1,163,943.83 | | | | 72,446.00 | | | | 1,013,265.52 | | | | 1,219,740.63 | | | | 55,833.48 | | | | 1,002,008.89 | |
| Net profit | | | -33,269.33 | | | | 7,435.41 | | | | 56,108.39 | | | | -31,346.30 | | | | 3,503.12 | | | | 48,566.92 | |
| Net profits under discontinued operations | | | | | | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income | | | | | | | 1,597.41 | | | | | | | | | | | | -315.17 | | | | | |
| Total comprehensive income | | | -33,269.33 | | | | 9,032.82 | | | | 56,108.39 | | | | -31,346.30 | | | | 3,187.95 | | | | 48,566.92 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual dividend received from joint ventures | | | | | | | | | | | 12,623.52 | | | | | | | | | | | | 399.84 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Financial information summary of unimportant cooperative enterprises and joint ventures |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance/ | | | Opening balance/ | |
| | | amount of | | | incurred amount | |
| | | current period | | | of last period | |
| Cooperative enterprises: | | | | | | | | |
| Total book value of investment | | | 48,054,895.86 | | | | 48,619,418.14 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | | |
| – Net profit | | | -23,767,144.07 | | | | -108,103,528.11 | |
| – Other comprehensive income | | | | | | | | |
| – Total comprehensive income | | | -23,767,144.07 | | | | -108,103,528.11 | |
| | | | | | | | | |
| Joint ventures: | | | | | | | | |
| Total book value of investment | | | 487,758,102.10 | | | | 526,318,139.40 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | | |
| – Net profit | | | 38,734,037.06 | | | | 1,514,574.84 | |
| – Other comprehensive income | | | | | | | | |
| – Total comprehensive income | | | 38,734,037.06 | | | | 1,514,574.84 | |
As there is no obligation to bear additional losses for Fuzhou Yijiu San San Bean Products Co., Ltd., its net loss is recognized only up to the carrying value of long-term equity investments and other long-term equity interests that essentially represent its net investment, with a write-down to zero.
| (5). | Description on significant limitations of the ability to transfer funds to the Company by cooperative enterprises and joint ventures |
| | ¨ | Applicable | √ | Not applicable |
| (6). | Excess loss occurred to cooperative enterprises and joint ventures |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Accumulated | | | | | | |
| | | unrecognized | | | | | | |
| | | losses | | | Unconfirmed | | | |
| | | accumulated | | | losses this | | Accumulated | |
| | | in the | | | term (or net | | unconfirmed | |
| Names of cooperative enterprises | | previous | | | profit shared | | losses at the | |
| and joint ventures | | period | | | this term) | | end of term | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | | 7,036,522.16 | | | 3,138,124.47 | | | 10,174,646.63 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | | 116,284.11 | | | -116,284.11 | | | | |
| Total | | | 7,152,806.27 | | | 3,021,840.36 | | | 10,174,646.63 | |
| (7). | Unconfirmed commitment related to cooperative enterprise investment |
| | ¨ | Applicable | √ | Not applicable |
| (8). | Contingent liability related to cooperative enterprise or joint venture investment |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ | Applicable | √ | Not applicable |
| 5. | Equity in structured entities not included in the consolidated financial statement |
Description on the structured main body that is not included in the combined financial statement:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| 1. | Governmental subsidy recognized as receivables at the end of the reporting period |
| | ¨ | Applicable | √ | Not applicable |
Reasons for not receiving the expected amounts of governmental subsidy at estimated time
| | ¨ | Applicable | √ | Not applicable |
| 2. | Liabilities related to governmental subsidies |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Newly | | | Amount of | | | | | | | | | | | | |
| | | | | | increased | | | non-operating | | | Transferred | | | | | | | | | |
| | | | | | subsidy | | | income | | | to other | | | Other | | | | | | |
| | | | | | amount in | | | included in | | | comprehensive | | | changes in | | | | | | |
| | | Opening | | | current | | | current | | | income in the | | | current | | | Closing | | | Related to |
| Item | | balance | | | period | | | period | | | current period | | | period | | | balance | | | assets/income |
| Deferred income | | | 104,500,259.85 | | | | 4,562,995.50 | | | | | | | | 9,592,355.43 | | | | | | | | 99,470,899.92 | | | Asset-related |
| Total | | | 104,500,259.85 | | | | 4,562,995.50 | | | | | | | | 9,592,355.43 | | | | | | | | 99,470,899.92 | | | / |
| 3. | Governmental subsidies recognized in the current profit and loss |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| | | current period | | | last period | |
| Income-related | | | 173,673,166.16 | | | | 194,961,105.73 | |
| Asset-related | | | 9,592,355.43 | | | | 13,870,029.94 | |
| Total | | | 183,265,521.59 | | | | 208,831,135.67 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Major governmental subsidy information as follows:
Unit: Yuan Currency: RMB
| | | Recorded in other | | | |
| | | comprehensive | | | Related to |
| | | income for the year | | | assets/income |
| Reward subsidies | | | 66,704,242.00 | | | Income-related |
| Enterprise support subsidies | | | 33,643,784.92 | | | Income-related |
| Employment and skill subsidies | | | 25,531,336.35 | | | Income-related |
| Supply and price stability subsidies | | | 6,783,741.51 | | | Income-related |
| XII. | Risks Related to Financial Instruments |
| 1. | Risks of financial instruments |
| | √ | Applicable | ¨ | Not applicable |
Classification of financial instruments
The Group’s main financial instruments include cash and cash equivalents, accounts receivable, other receivables, other current assets, trading financial assets, debt investments, other non-current financial assets, accounts payable, other payables, and short-term borrowings. Details of the financial instruments are disclosed in the relevant notes. The risks associated with these financial instruments and the risk management policies adopted by the Group to mitigate these risks are described below. The Management of the Group manages and monitors these risk exposures to ensure that the risks are kept within limits.
The book values of various financial instruments on the balance sheet date are as follows:
Financial assets in 2023
| Item | | | Financial assets
measured at
fair value with
changes included
in current
profits and losses | | | | Financial assets
measured at
amortized costs | | | | Total | |
| Monetary funds | | | | | | | 5,839,069,618.08 | | | | 5,839,069,618.08 | |
| Loans and advances | | | | | | | 557,908,591.96 | | | | 557,908,591.96 | |
| Trading financial assets | | | 735,971,777.07 | | | | | | | | 735,971,777.07 | |
| Factoring receivable | | | | | | | 68,688,964.38 | | | | 68,688,964.38 | |
| Account receivable | | | | | | | 421,742,480.93 | | | | 421,742,480.93 | |
| Other receivables | | | | | | | 563,971,664.48 | | | | 563,971,664.48 | |
| Non-current assets due within one year | | | | | | | 49,380,092.40 | | | | 49,380,092.40 | |
| Long-term receivables | | | | | | | 227,393,410.57 | | | | 227,393,410.57 | |
| Other non-current financial assets | | | 3,651,480,119.24 | | | | | | | | 3,651,480,119.24 | |
| Total | | | 4,387,451,896.31 | | | | 7,728,154,822.80 | | | | 12,115,606,719.11 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Financial assets in 2022
| | | Financial assets | | | | | | | |
| | | measured at | | | | | | | |
| | | fair value with | | | | | | | |
| | | | changes included | | | | Financial assets | | | | | |
| | | | in current | | | | measured at | | | | | |
| Item | | | profits and losses | | | | amortized costs | | | | Total | |
| Monetary funds | | | | | | | 7,615,940,712.22 | | | | 7,615,940,712.22 | |
| Loans and advances | | | | | | | 895,062,185.85 | | | | 895,062,185.85 | |
| Trading financial assets | | | 890,826,719.10 | | | | | | | | 890,826,719.10 | |
| Factoring receivable | | | | | | | 639,126,680.56 | | | | 639,126,680.56 | |
| Account receivable | | | | | | | 530,610,931.13 | | | | 530,610,931.13 | |
| Other receivables | | | | | | | 649,676,328.75 | | | | 649,676,328.75 | |
| Non-current assets due within one year | | | | | | | 43,534,741.35 | | | | 43,534,741.35 | |
| Long-term receivables | | | | | | | 264,650,510.99 | | | | 264,650,510.99 | |
| Other non-current financial assets | | | 3,918,000,000.00 | | | | | | | | 3,918,000,000.00 | |
| Total | | | 4,808,826,719.10 | | | | 10,638,602,090.85 | | | | 15,447,428,809.95 | |
Financial liabilities
| | | Financial | | | Financial | |
| | | liabilities | | | liabilities | |
| | | | measured at | | | | measured at | |
| | | | amortized cost | | | | amortized cost | |
| Item | | | in 2023 | | | | in 2022 | |
| Short-term loans | | | 5,130,220,089.04 | | | | 6,528,480,368.69 | |
| Accounts payable | | | 9,816,260,354.84 | | | | 12,155,435,663.28 | |
| Other payables | | | 742,716,158.13 | | | | 883,542,798.78 | |
| Non-current liabilities due within one year | | | 1,792,351,864.19 | | | | 2,011,863,655.60 | |
| Long-term borrowings | | | 349,889,789.58 | | | | 2,070,085,001.67 | |
| Lease liabilities | | | 20,781,462,184.01 | | | | 23,110,834,161.62 | |
| Other non-current liabilities | | | 46,931,643.83 | | | | | |
| Total | | | 38,659,832,083.62 | | | | 46,760,241,649.64 | |
Risks of financial instruments
The Group faces various risks related to financial instruments in its day-to-day activities, including credit risk, liquidity risk, and market risk. An overview of the risk management policies of the Group regarding these risks is as follows.
The Board of Directors is responsible for establishing the risk management framework for the Group, formulating risk management policies and guidelines, and overseeing the implementation of risk management measures. The Group has established risk management policies to identify and analyze the risks it faces. These risk management policies provide specific guidelines for managing various aspects of risk, including market risk, credit risk, and liquidity risk. The Group periodically assesses the market environment and changes in its business activities to determine whether updates are required for the risk management policies and systems. The risk management for the Group is conducted by the Risk Management Committee in accordance with the policies approved by the Board of Directors. The Risk Management Committee identifies, evaluates, and mitigates relevant risks through close cooperation with other business departments within the Group. The Group’s internal audit department conducts regular audits of risk management controls and procedures, and reports the audit findings to the Group’s Audit Committee.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group diversifies its investment and business portfolio appropriately to mitigate financial instrument risks. It also reduces risks concentrated in a single industry, specific geographical area, or specific counterparties by developing corresponding risk management policies.
Credit risk
The Group only trades with recognized third party with good reputation. According to the Group’s policy, credit checks are conducted on all customers who request credit transactions. Furthermore, the Group continuously monitors the balance of accounts receivable to ensure it does not face significant bad debt risks. For transactions not settled in the functional currency of the relevant operating unit, the Group does not provide credit terms unless specifically approved by the Group’s credit control department.
As the counterparties for cash and fund product transactions are reputable banks with high credit ratings, the credit risk associated with these financial instruments is low.
The Group’s other financial assets include debt investments, accounts receivable, other receivables, and long-term receivables. The credit risk of these financial assets arises from the default of counterparties, and the maximum exposure to risk is equal to the carrying value of these instruments.
The maximum credit risk exposure to the Group on each balance sheet date is the total amount receivable from customers, net of impairment allowances.
Since the Group only trades with recognized and reputable third parties, no collateral is required. Credit risk concentrations are managed based on customers/counterparties, geographical areas, and industries. As of December 31, 2023, the Group has exposed to specific credit risk concentration, as 32.64% (December 31, 2022: 27.97%) of the Group’s accounts receivable is derived from the top five customers with the largest outstanding balances.
Criteria for determining a significant increase in credit risk
The Group assesses on each balance sheet date whether there has been a significant increase in credit risk of the relevant financial instruments since initial recognition. When determining whether there is a significant increase in credit risk after initial recognition, the Group considers obtaining reasonable and supportable information without incurring unnecessary additional costs or efforts. This includes qualitative and quantitative analysis based on the Group’s historical data, external credit risk ratings, and forward-looking information. Based on a single financial instrument or a combination of financial instruments with similar credit risk characteristics, the Group compares the default risk of financial instruments on the balance sheet date with the default risk on the initial recognition date to determine the change of the default risk of financial instruments during the expected duration of the financial instruments.
When the following qualitative criteria are triggered, the Group considers that there has been a significant increase in credit risk for financial instruments:
The qualitative criteria primarily include significant adverse changes in the debtor’s business or financial condition and the occurrence of credit-impaired assets on the watchlist.
To determine if credit impairment has occurred, the Group applies criteria consistent with its internal credit risk management objectives, considering both quantitative and qualitative indicators. The Group considers the following factors primarily when assessing whether a debtor has incurred credit impairment:
| (1) | The issuer or debtor experiences significant financial difficulties. |
| (2) | The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.; |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3) | The creditor, due to economic or contractual considerations relating to the debtor’s financial difficulties, grants the debtor concessions that would not otherwise be made; |
| (4) | The debtor is likely to become bankrupt or carry out other financial reorganizations; |
| (5) | The financial difficulties of the issuer or the debtor cause the disappearance of active market for the financial asset; |
| (6) | For a financial asset that has been purchased at a substantial discount or an original financial asset, the discount has reflected the fact that a credit loss has occurred. |
Credit impairment of financial instrument may be caused by the joint action of multiple events, instead of an individually identifiable event.
The Group’s maximum risk exposure and year-end classification by credit risk grade for financial assets are as follows:
Year 2023
| | | Expected | | | | | | | | | | | | | |
| | | credit loss | | | | | | | | | | | | | |
| | | over the next | | | Expected credit losses for the | | | | |
| Items | | 12 months | | | whole duration | | | | |
| | | | | | | | | | | | Simplified | | | | |
| | | Phase I | | | Phase II | | | Phase III | | | method | | | Total | |
| Monetary funds | | | 5,839,069,618.08 | | | | | | | | | | | | | | | | 5,839,069,618.08 | |
| Loans and advances | | | 533,995,993.97 | | | | 3,187,611.30 | | | | 20,724,986.69 | | | | | | | | 557,908,591.96 | |
| Factoring receivable | | | 42,345,246.37 | | | | 970,000.00 | | | | 25,373,718.01 | | | | | | | | 68,688,964.38 | |
| Account receivable | | | | | | | | | | | | | | | 421,742,480.93 | | | | 421,742,480.93 | |
| Other receivables | | | 563,971,664.48 | | | | | | | | | | | | | | | | 563,971,664.48 | |
| Non-current assets due within one year | | | | | | | | | | | | | | | 49,380,092.40 | | | | 49,380,092.40 | |
| Long-term receivables | | | | | | | | | | | | | | | 227,393,410.57 | | | | 227,393,410.57 | |
| Total | | | 6,979,382,522.90 | | | | 4,157,611.30 | | | | 46,098,704.70 | | | | 698,515,983.90 | | | | 7,728,154,822.80 | |
Year 2022
| | | Expected | | | | | | | | | | | | | |
| | | credit loss | | | | | | | | | | | | | |
| | | over the next | | | Expected credit losses for the | | | | |
| Items | | 12 months | | | whole duration | | | | |
| | | | | | | | | | | | Simplified | | | | |
| | | Phase I | | | Phase II | | | Phase III | | | method | | | Total | |
| Monetary funds | | | 7,615,940,712.22 | | | | | | | | | | | | | | | | 7,615,940,712.22 | |
| Loans and advances | | | 832,505,385.27 | | | | 13,507,856.52 | | | | 49,048,944.06 | | | | | | | | 895,062,185.85 | |
| Factoring receivable | | | 544,341,433.50 | | | | 872,322.41 | | | | 93,912,924.65 | | | | | | | | 639,126,680.56 | |
| Account receivable | | | | | | | | | | | | | | | 530,610,931.13 | | | | 530,610,931.13 | |
| Other receivables | | | 649,063,146.88 | | | | 613,181.87 | | | | | | | | | | | | 649,676,328.75 | |
| Non-current assets due within one year | | | | | | | | | | | | | | | 43,534,741.35 | | | | 43,534,741.35 | |
| Long-term receivables | | | | | | | | | | | | | | | 264,650,510.99 | | | | 264,650,510.99 | |
| Total | | | 9,641,850,677.87 | | | | 14,993,360.80 | | | | 142,961,868.71 | | | | 838,796,183.47 | | | | 10,638,602,090.85 | |
Liquidity risk
The Group’s objective is to maintain a balance between the continuity and flexibility of financing by utilizing various financing methods. The Group generates funds for operating financing through operations and borrowings.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The maturity period of financial liabilities based on non-discounted contractual cash flows is analyzed as follows:
Year 2023
| Items | | Within 1 year | | | 1-5 years | | | Over 5 years | | | Total | |
| Short-term loans | | | 5,167,567,595.15 | | | | | | | | | | | | 5,167,567,595.15 | |
| Accounts payable | | | 9,816,260,354.84 | | | | | | | | | | | | 9,816,260,354.84 | |
| Other payables | | | 742,716,158.13 | | | | | | | | | | | | 742,716,158.13 | |
| Non-current liabilities due within one year | | | 3,106,586,868.31 | | | | | | | | | | | | 3,106,586,868.31 | |
| Long-term borrowings | | | 11,870,864.58 | | | | 352,370,268.75 | | | | | | | | 364,241,133.33 | |
| Lease liabilities | | | | | | | 11,895,367,512.33 | | | | 17,064,177,174.51 | | | | 28,959,544,686.84 | |
| Other non-current liabilities | | | | | | | 53,149,100.00 | | | | | | | | 53,149,100.00 | |
| Total | | | 18,845,001,841.01 | | | | 12,300,886,881.08 | | | | 17,064,177,174.51 | | | | 48,210,065,896.60 | |
Year 2022
| Items | | Within 1 year | | | 1-5 years | | | Over 5 years | | | Total | |
| Short-term loans | | | 6,640,025,704.86 | | | | | | | | | | | | 6,640,025,704.86 | |
| Accounts payable | | | 12,155,435,663.28 | | | | | | | | | | | | 12,155,435,663.28 | |
| Other payables | | | 883,542,798.78 | | | | | | | | | | | | 883,542,798.78 | |
| Non-current liabilities due within one year | | | 3,156,364,767.06 | | | | | | | | | | | | 3,156,364,767.06 | |
| Long-term borrowings | | | | | | | 2,132,721,309.72 | | | | | | | | 2,132,721,309.72 | |
| Lease liabilities | | | | | | | 11,564,660,391.39 | | | | 18,476,009,160.08 | | | | 30,040,669,551.47 | |
| Total | | | 22,835,368,933.98 | | | | 13,697,381,701.11 | | | | 18,476,009,160.08 | | | | 55,008,759,795.17 | |
Market risk
Interest rate risks
The Group’s bank borrowings are fixed-rate, so the Group does not face the risk of market interest rate fluctuations.
Exchange rate risk
The Group is exposed to transactional currency risk. Such risks are caused by sales or purchases made by business units in currencies other than their functional currencies. The Group focuses its main business throughout China, which are settled in RMB. Therefore, the Group faces a low risk of currency fluctuations.
Equity instrument investment price risk
The equity instrument investment price risk refers to the risk of a decrease in the fair value of equity securities due to changes in stock index levels and individual security values. As of December 31, 2023, the Group has exposed to equity instrument investment price risk due to certain individual equity instrument investments classified at fair value through profit or loss and whose changes are recognized in the current period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The following table demonstrates the sensitivity of the Group’s net profit and other comprehensive income after tax to a 5% change in the fair value of equity instrument investments (based on the carrying value on the balance sheet date), assuming all other variables remain constant.
Year 2023
| | | | | | | | | Increase/ | | | | |
| | | | | | | | | (Decrease) | | | Increase/ | |
| | | Carrying value | | | | | | in other | | | (Decrease) | |
| | | of equity | | | Increase/ | | | comprehensive | | | in total | |
| | | instrument | | | (Decrease) in | | | income after | | | shareholders’ | |
| Items | | investments | | | net profit | | | tax | | | equity | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | 388,932,227.74 | | | | 19,446,611.39/
-19,446,611.39 | | | | | | | | 19,446,611.39/
-19,446,611.39 | |
Year 2022
| | | | | | | | | Increase/ | | | | |
| | | | | | | | | (Decrease) | | | Increase/ | |
| | | Carrying value | | | | | | in other | | | (Decrease) | |
| | | of equity | | | Increase/ | | | comprehensive | | | in total | |
| | | instrument | | | (Decrease) in | | | income after | | | shareholders’ | |
| Items | | investments | | | net profit | | | tax | | | equity | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | | 206,295,359.14 | | | | 10,314,767.96/
-10,314,767.96 | | | | | | | | 10,314,767.96/
-10,314,767.96 | |
Capital management
The Group’s primary objective of capital management is to ensure the Group’s ability to continue as a going concern and maintain healthy capital ratios to support business development and maximize shareholder value.
The Group manages its capital structure and makes adjustments based on the economic situation and changes in the risk characteristics of the relevant assets. To maintain or adjust the capital structure, the Group may adjust the distribution of profits to shareholders, return capital to shareholders, or issue new shares. Capital management objectives, policies, or procedures have not changed for the year 2023 and 2022.
The Group manages capital using the debt-to-equity ratio, which has been 88.6% as of December 31, 2023 (December 31, 2022: 87.7%). The Management of the Group believes that this ratio meets the requirements for capital management.
| (1) | The Company is engaged in hedging activities for risk management |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | The Company is engaged in qualifying hedging activities and applies hedge accounting. |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (3) | The Company is engaged in hedging activities for risk management and expects to achieve risk management objectives but does not apply hedge accounting. |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| 3. | Financial asset transfers |
| (1) | Classification of transfer methods |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Financial assets derecognized due to transfer |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Financial assets still involved in the transfer |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
XIII. Fair Value Disclosures
| 1. | Closing fair value of assets and liabilities measured at fair value |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing fair value | | | | |
| | | Primary | | | Secondary | | | Tertiary | | | | |
| | | fair value | | | fair value | | | fair value | | | | |
| Items | | calculation | | | calculation | | | calculation | | | Total | |
| I. Continuous fair value calculation | | | | | | | | | | | | | | | | |
| (I) Trading financial assets | | | 347,039,549.33 | | | | – | | | | 388,932,227.74 | | | | 735,971,777.07 | |
| 1. Financial assets measured at fair value and booked into current profits and losses | | | 347,039,549.33 | | | | – | | | | 388,932,227.74 | | | | 735,971,777.07 | |
| (1) Debt instrument investment | | | | | | | | | | | | | | | | |
| (2) Equity instrument investment | | | | | | | | | | | 388,932,227.74 | | | | 388,932,227.74 | |
| (3) Fund products | | | 341,037,083.58 | | | | | | | | | | | | 341,037,083.58 | |
| (4) Structured deposits | | | 6,002,465.75 | | | | | | | | | | | | 6,002,465.75 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Closing fair value | | | | |
| | | Primary | | | Secondary | | | Tertiary | | | | |
| | | fair value | | | fair value | | | fair value | | | | |
| Items | | calculation | | | calculation | | | calculation | | | Total | |
| 2. Financial assets that are specified to be measured at fair value and whose changes are booked into current profits and losses | | | | | | | | | | | | | | | | |
| (1) Debt instrument investment | | | | | | | | | | | | | | | | |
| (2) Equity instrument investment | | | | | | | | | | | | | | | | |
| (II) Other creditors’ investments | | | | | | | | | | | | | | | | |
| (III) Investment in other equity instruments | | | | | | | | | | | | | | | | |
| (IV) Investment properties | | | | | | | | | | | | | | | | |
| 1. The right to use land for lease | | | | | | | | | | | | | | | | |
| 2. Buildings for lease | | | | | | | | | | | | | | | | |
| 3. Land use right held and transferred after preparation for increment | | | | | | | | | | | | | | | | |
| (V) Biological assets | | | | | | | | | | | | | | | | |
| 1. Consumable biological assets | | | | | | | | | | | | | | | | |
| 2. Productive biological assets | | | | | | | | | | | | | | | | |
| (VI) Other non-current financial assets | | | | | | | | | | | 3,651,480,119.24 | | | | 3,651,480,119.24 | |
| Total assets measured at fair value continuously | | | 347,039,549.33 | | | | | | | | 4,040,412,346.98 | | | | 4,387,451,896.31 | |
The Group recognizes the transfer between levels based on the occurrence date of the events that cause the transfer between levels.
For financial instruments traded in active markets, the Group determines their fair value based on their quoted market prices. For financial instruments that are not traded in active markets, the Group uses valuation techniques to determine their fair value, and the valuation model used is the market approach model.
The Financial Department of the Group is led by the Financial Manager and is responsible for formulating policies and procedures for fair value measurement of financial instruments. The financial manager reports directly to the Chief Financial Officer and the Audit Committee. On each balance sheet date, the financial department analyzes the value changes of financial instruments and determines the main input values applicable to the valuation. The valuation must be reviewed and approved by the Chief Financial Officer. The valuation process and results are discussed with the Audit Committee annually for the purpose of mid-term and annual financial reporting.
Fair value refers to the amount at which both parties to a transaction who are familiar with the condition exchange their assets or clear off their debts under fair conditions instead of the amount induced by forced selling or liquidation. The following methods and assumptions are used to estimate the fair values. Long-term receivables, long and short-term borrowings, etc., are valued at fair value using the discounted cash flow method, using the market yield of other financial instruments with similar contractual terms, credit risks, and remaining maturities as the discount rate. On December 31, 2023, the Group assessed the self-non-compliance risk of borrowings, both long-term and short-term, as not significant.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Listed equity instrument investments are valued at market quotations. Non-listed equity instruments are measured at fair value using market approach, based on unobservable market prices or rates assumptions. The Group determines comparable listed companies based on industry, scale, leverage, and strategy, and calculates appropriate market multiples, such as price-earnings multiples, for each selected comparable listed company. Adjustments are made by giving consideration to specific facts and circumstances of the entity, including liquidity and scale differences with the comparable listed companies. The Group believes that the fair value and its changes estimated using valuation techniques are reasonable and represent the most appropriate values as of the balance sheet date.
| 2. | Basis for determination of market price for measurement of fair value of the first level on an ongoing concern or not |
| | ¨ | Applicable | √ | Not applicable |
| 3. | For continuous and discontinuous secondary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| | ¨ | Applicable | √ | Not applicable |
| 4. | For continuous and discontinuous tertiary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| | √ | Applicable | ¨ | Not applicable |
| | | Fair value | | | | | | Range interval |
| Equity instrument | | at the end of | | Valuation | | Unobservable | | (weighted |
| investment | | the year | | techniques | | Inputs | | average) |
| Dalian Wanda Commercial Management Group Co., Ltd. | | 2023:
3,646,595,814.39 | | Market approach | | Price-to-book ratio, liquidity discount | | Lower price-to-book ratio, higher liquidity discount, lower fair value |
| | | 2022:
4,118,000,000.00 | | Market approach | | Price-earnings ratio, liquidity discount | | Lower price-earnings ratio, higher liquidity discount, and lower fair value |
| | | | | | | | | |
| Advantage Solutions Inc. | | 2023:
388,932,227.74 | | Market approach | | Marketability Discount | | Higher liquidity discount, lower fair value |
| | | | | | | | | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | 2023:
4,884,304.85 | | Market approach | | Price-to-book ratio | | Lower price-to- book ratio, lower fair value |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 5. | Continuous tertiary fair value calculating projects, adjustment information among book values at term start and term end as well as sensitivity analysis on unobserved parameters |
| | √ | Applicable | ¨ | Not applicable |
| | | Opening
balance | | | Other changes | | | Transferred-out
from level 3 | | | Current gains
or losses are
recognized in
profit or loss | | | Closing balance | | | Changes in
unrealized gains
or losses on
assets held at
the end of the
year that are
recognized in
profit or loss | |
| Equity instrument investment | | | 207,163,336.09 | | | | 84,690,201.41 | | | | | | | 97,078,690.24 | | | | 388,932,227.74 | | | | 97,078,690.24 | |
| Other non-current financial assets | | | 3,918,000,000.00 | | | | -266,519,880.76 | | | | | | | | | | | 3,651,480,119.24 | | | | | |
| Total | | | 4,125,163,336.09 | | | | -181,829,679.35 | | | | | | | 97,078,690.24 | | | | 4,040,412,346.98 | | | | 97,078,690.24 | |
| 6. | For continuous fair value calculating items, the transfer reasons and the policy of determining the transfer time point shall be described if transferring occurs among levels in the term |
| | ¨ | Applicable | √ | Not applicable |
| 7. | Estimate technology change occurred in the current year and change reasons |
| | ¨ | Applicable | √ | Not applicable |
| 8. | Financial asset not measured in fair value and fair value of financial liabilities |
| | √ | Applicable | ¨ | Not applicable |
The following is a comparison of the carrying value and fair value of various categories of financial instruments, excluding lease liabilities and financial instruments with minimal differences between carrying value and fair value:
| | | Carrying value | | | Fair value | |
| Financial liabilities | | | | | | | | |
| Long-term borrowings | | | 349,889,789.58 | | | | 345,653,482.03 | |
The Management has assessed cash and cash equivalents, loans and advances, accounts receivable financing, accounts receivable, and accounts payable, among others, and determined that due to their short remaining terms, their fair values are approximately equal to their carrying amounts.
Fair value refers to the amount at which both parties to a transaction who are familiar with the condition exchange their assets or clear off their debts under fair conditions instead of the amount induced by forced selling or liquidation. The following methods and assumptions are used to estimate the fair values.
Long-term receivables, long and short-term borrowings, etc., are valued at fair value using the discounted cash flow method, using the market yield of other financial instruments with similar contractual terms, credit risks, and remaining maturities as the discount rate. On December 31, 2023, the Group assessed the self-non-compliance risk of borrowings, both long-term and short-term, as not significant.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ | Applicable | √ | Not applicable |
XIV. Affiliated Parties and Affiliated Transactions
| 1. | Parent company of the Company |
| | ¨ | Applicable | √ | Not applicable |
| 2. | Subsidiaries of the Company |
For details on the Company’s subsidiaries, please refer to the notes
| | √ | Applicable | ¨ | Not applicable |
For details of subsidiaries, please refer to Section X.1. Equity in subsidiaries
| 3. | Cooperative enterprises and joint ventures of the Company |
See Note for significant cooperative enterprises and joint ventures of the Company
| | √ | Applicable | ¨ | Not applicable |
For details of important cooperative enterprises and joint venture, please refer to section X, 3, Equities in Cooperative Enterprises and Joint Venture.
The information of other cooperative enterprises and joint ventures that have related- party transaction with the Company in this term, or had related-party transaction with the Company at earlier term and have formed balances.
| | √ | Applicable | ¨ | Not applicable |
Names of cooperative enterprises
and joint ventures | | Relation to the Company |
| Yonghui Fresh Food Development Co., Ltd. | | The Group’s shareholding ratio of 32.12% |
| Zhongbai Holdings Group Co., Ltd. | | The Group’s shareholding ratio of 9.85% |
| Fujian OneBank Limited | | The Group’s shareholding ratio of 29.80% |
| Chengdu Hongqi Chain Co., Ltd. | | The Group’s shareholding ratio of 21.00% |
| Xiangcun Gaokao Agricultural Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | The Group’s shareholding ratio of 42.00% |
| Beijing Friendship Messenger Trading Co., Ltd. | | The Group’s shareholding ratio of 30.00% |
| Fujian Minwei Industrial Co., Ltd. | | The Group’s shareholding ratio of 17.59% |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 30.00% |
| 1233 International Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 40.00% |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | The Group’s shareholding ratio of 15.53% |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | The Group’s shareholding ratio of 4.24% |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | The Group’s shareholding ratio of 9.32% |
Other disclosures
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Note 1: According to the provisions of the Articles of Association of the Origin Country Network Technology (Shanghai) Co., Ltd. (“Origin Country Network”), the board of directors of Origin Country Network consists of five members, of which one is nominated by our subsidiary Yonghui Yunchuang Technology Co., Ltd. Therefore, the Management of the Group believes that it can exert significant influence over Origin Country Network, making it a joint venture of the Company.
| 4. | Other affiliated parties |
| | √ | Applicable | ¨ | Not applicable |
| Name of other affiliated parties | | Relationship of other affiliated parties
with the Company |
| Tencent Technology (Shenzhen) Co.Ltd | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Shenzhen Tencent Computer System Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Songyuan Rongtong Real Estate Development Co., Ltd. | | Minority shareholder of the Company’s sub-subsidiary |
| PARKnSHOP (China) Investment Co., Ltd. | | Minority shareholder of the Company’s subsidiary |
| Beijing Jingdong Century Trade Co., Ltd. | | Enterprise holding an 8.11% equity interest in the Company |
| Beijing Jingbangda Trading Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.39% equity in the Company |
| Beijing Jingdong Century Information Technology Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.39% equity in the Company |
| Jiangsu Jingdong Information Technology Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.39% equity in the Company |
| Dada Group Limited | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.39% equity in the Company |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Name of other affiliated parties | | Relationship of other affiliated parties
with the Company |
| Fujian Xuanhui Yongjia Business Operation Management Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| Sanming Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | Original cooperative enterprise of the Company |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. | | Original cooperative enterprise of the Company |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | Companies in which the Company holds a 15% equity interest |
| Directors, Supervisors, Chief Financial Officer, and Board Secretary | | Key Management Staff |
| Zhang Xuansong | | Natural person holding an 8.72% equity interest in the Company |
| 5. | Affiliated transactions |
| (1). | Related transactions for purchasing and selling commodities and providing and accepting labor service |
Table for goods procurement/labor service acceptance
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Content of related | | Amount of | | | Amount of | |
| Affiliated parties | | transaction | | current period | | | last period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Commodity purchase | | | 1,469,156,234.15 | | | | 2,105,500,249.94 | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Commodity purchase | | | 570,067,475.31 | | | | 593,897,060.08 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Commodity purchase | | | 742,340,591.77 | | | | 602,816,315.71 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Commodity purchase | | | 978,919,593.22 | | | | 1,027,468,818.31 | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | | | | | 36,607.52 | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Commodity purchase | | | 138,408,653.95 | | | | 46,846,888.78 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Commodity purchase | | | 3,704,000.35 | | | | 53,239,419.68 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Commodity purchase | | | 6,997.83 | | | | 19,241,251.01 | |
| Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | | 37,967,841.57 | | | | 47,647,616.10 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Commodity purchase | | | 7,505,928.23 | | | | 9,857,019.24 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Content of related | | Amount of | | | Amount of | |
| Affiliated parties | | transaction | | current period | | | last period | |
| Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | Commodity purchase | | | 153,499.02 | | | | 441,674.33 | |
| Dada Group Limited and its subsidiaries | | Labor service acceptance | | | 387,267,398.89 | | | | 427,634,887.75 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 149,517,773.68 | | | | 206,339,930.69 | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 116,341,117.94 | | | | 106,055,596.48 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 15,844,626.82 | | | | 53,420,539.84 | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Labor service acceptance | | | 24,649,426.67 | | | | 24,551,286.93 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 145,657.05 | | | | 5,832,616.83 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 17,528,327.10 | | | | 6,286,109.86 | |
| Beijing Jingbangda Trading Co., Ltd. and its subsidiaries | | Labor service acceptance | | | | | | | 596,261.58 | |
| Chengdu Hongqi Chain Co., Ltd. | | Labor service acceptance | | | 110,745.21 | | | | 427,308.47 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Labor service acceptance | | | | | | | 476,151.68 | |
| Shenzhen Tencent Computer System Co., Ltd. | | Labor service acceptance | | | 91,194.94 | | | | 1,886,792.45 | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | Labor service acceptance | | | | | | | 300.00 | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 871,899.54 | | | | 105.66 | |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Labor service acceptance | | | 1,679,145.84 | | | | | |
| Fujian Xuanhui Real Estate Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | | 2,831,979.18 | | | | | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Acquisition of fixed assets | | | 5,445,769.70 | | | | 13,507,804.63 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Acquisition of fixed assets | | | 760,249.90 | | | | 27,595.46 | |
| PARKnSHOP (China) Investment Co., Ltd. | | Usage fee for funds | | | 2,303,769.47 | | | | 2,148,661.82 | |
Table for goods sale/labor service rendering
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Content of related | | Amount of | | | Amount of | |
| Affiliated parties | | transaction | | current period | | | last period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Sales of goods | | | 62,725,436.88 | | | | 150,093,850.59 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Sales of goods | | | 512,460.80 | | | | 55,182,325.71 | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Sales of goods | | | 93,060,771.98 | | | | 52,176,092.90 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Content of related | | Amount of | | | Amount of | |
| Affiliated parties | | transaction | | current period | | | last period | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Sales of goods | | | 1,417,301.80 | | | | 12,710,597.41 | |
| Tencent Technology (Shenzhen) Co. Ltd | | Sales of goods | | | | | | | 495,611.37 | |
| Fujian OneBank Limited | | Sales of goods | | | | | | | 4,969.91 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Provision of labor services | | | 16,936,812.86 | | | | 21,318,264.78 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Provision of labor services | | | 10,605,632.77 | | | | 11,277,391.86 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Provision of labor services | | | 218,416.99 | | | | 5,465,952.11 | |
| Fujian OneBank Limited | | Provision of labor services | | | 711,976.40 | | | | 1,504,481.80 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Provision of labor services | | | | | | | 405,823.11 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Provision of labor services | | | 4,575.07 | | | | 36,658.55 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Provision of labor services | | | 10,188.69 | | | | 152,169.96 | |
| Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | Provision of labor services | | | 58,868.10 | | | | 58,912.41 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | Provision of labor services | | | 141,509.44 | | | | 127,358.49 | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Provision of labor services | | | 153,845.52 | | | | | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Provision of labor services | | | 33,122.64 | | | | 117,924.53 | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Provision of labor services | | | | | | | 94,339.62 | |
| Tencent Technology (Shenzhen) Co. Ltd | | Provision of labor services | | | | | | | 47,305.54 | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Provision of labor services | | | | | | | 4,943.09 | |
| Fujian OneBank Limited | | Interest income | | | 8,512,613.57 | | | | 14,301,348.84 | |
| Fujian Minwei Industrial Co., Ltd. | | Interest income | | | 1,693,288.23 | | | | 3,278,939.00 | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | Interest income | | | 2,021,552.69 | | | | 3,144,280.00 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Interest income | | | | | | | 6,121,111.00 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Interest income | | | 455,753.42 | | | | 531,666.05 | |
Affiliated transaction description on purchase and sale of goods, supply and labor service acceptance.
| ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Related entrusted management/contracting and mandatory management/outsourcing conditions |
Table for trustee management and contracting of the Company:
| | ¨ | Applicable | √ | Not applicable |
Description of the condition of affiliated trusteeship/contracting
| | ¨ | Applicable | √ | Not applicable |
List of entrusted management/outsource cases of the Company
| | ¨ | Applicable | √ | Not applicable |
Description on affiliated management/contracting condition
| | ¨ | Applicable | √ | Not applicable |
The Company is the lessor:
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | Confirmed | | | Confirmed | |
| | | | | leasing income | | | leasing income | |
| | | | | in current | | | in previous | |
| Name of lessee | | Type of leased assets | | period | | | period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse leasing | | | 22,796,883.00 | | | | 21,820,885.81 | |
| 1233 International Supply Chain Management Co., Ltd. | | Commercial land – Fuzhou MIXC | | | 3,394,909.28 | | | | 4,318,987.78 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | Commercial land – Chongqing Xuanhui Real Estate Company | | | 570,629.72 | | | | 983,749.64 | |
| Beijing Yonghui Yuanxin Health Technology Co., Ltd. and its subsidiaries | | Commercial land – Guanghua Avenue Store, Wenjiang, Chengdu | | | | | | | 230,603.70 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Company as the Leasee:
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | Simplified rental fees for | | Variable lease payments | | | | | | | | | |
| | | | | short-term leases and | | not included in the | | | | | | | | | |
| | | | | low-value asset leases | | measurement of lease | | | | | Interest expense on lease | | | Increased right-of-use | |
| | | | | (if applicable) | | liabilities (if applicable) | | Rent paid | | | liabilities assumed | | | assets | |
| Name of Lessor | | Type of leased assets | | Amount of
current
period | | Amount of
last period | | | Amount of
current
period | | Amount of
last period | | | Amount of
current
period | | | Amount of
last period | | | Amount of
current
period | | | Amount of
last period | | | Amount of
current
period | | | Amount of
last period | |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Commercial land – Pucheng Xinghua Store | | | | | | | | | | | | | | | 2,756,399.32 | | | | 2,689,318.80 | | | | 1,027,362.46 | | | | 1,105,949.88 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Zhang Xuansong | | Commercial land – Daru Shijia Store | | | | | | | | | | | | | | | 5,957,905.36 | | | | 5,957,905.36 | | | | 1,119,711.37 | | | | 1,345,709.01 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Zhang Xuansong | | Office building – Zuohai Office Building | | | | | | | | | | | | | | | 3,364,197.04 | | | | 3,368,808.68 | | | | 35,572.39 | | | | 35,474.94 | | | | 3,330,930.47 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Commercial land – Fuzhou Minhou Nantong Branch Store | | | | | | | | | | | | | | | 912,307.04 | | | | 908,708.28 | | | | 1,165,508.28 | | | | 1,153,594.70 | | | | – | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Sanming Xuanhui Property Development Co., Ltd. | | Commercial land – Yongjia Tiandi Store | | | | | | | | | | | | | | | 791,390.47 | | | | 730,514.28 | | | | 936,521.42 | | | | 924,483.60 | | | | 169,958.64 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Commercial land and office building – Park Store | | | | | | | | | | | | | | | 4,370,322.28 | | | | 3,250,455.43 | | | | 1,073,978.16 | | | | 929,005.04 | | | | 6,150,237.91 | | | | 1,722,158.32 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Simplified rental fees for | | Variable lease payments | | | | | | | | | |
| | | | | short-term leases and | | not included in the | | | | | | | | | |
| | | | | low-value asset leases | | measurement of lease | | | | | Interest expense on lease | | | Increased right-of-use | |
| | | | | (if applicable) | | liabilities (if applicable) | | Rent paid | | | liabilities assumed | | | assets | |
| Name of Lessor | | Type of leased
assets | | Amount of
current
period | | Amount of
last period | | | Amount of
current
period | | Amount of
last period | | | Amount of
current
period | | | Amount of
last period | | | Amount of
current
period | | | Amount of
last period | | | Amount of
current
period | | | Amount of
last period | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Commercial land – Quangang Yongjia Store, Quanzhou | | | | | | | | | | | | | | | 2,198,296.56 | | | | 1,998,451.32 | | | | 1,186,629.60 | | | | 1,227,399.86 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse Leasing – Beijing Logistics Warehouse | | 5,174,311.92 | | | 5,174,311.92 | | | | | | | | | | 5,174,311.92 | | | | 5,174,311.92 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse Leasing – Anhui Logistics Warehouse | | 366,972.50 | | | | | | | | | | | | | 366,972.50 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse Leasing – Shaanxi Logistics Warehouse | | | | | 595,369.67 | | | | | | | | | | | | | | 595,369.67 | | | | | | | | | | | | | | | | | |
Descriptions of affiliated leases condition
| | √ | Applicable | ☐ | Not applicable |
Since January 1, 2021, the Company has been adopting the new leasing standard. Under the new standard, for non-exempt lease contracts, the Company no longer recognizes lease expenses on the balance sheet. Lease expenses for exempt contracts are recognized using the straight-line method.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Related-party guarantee |
The Company as the guarantor
| | ¨ | Applicable | √ | Not applicable |
The Company as the guaranteed party
| | ¨ | Applicable | √ | Not applicable |
Description of affiliated guarantee
| | ¨ | Applicable | √ | Not applicable |
| (5). | Fund inter-bank lending for affiliated parties |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Affiliated parties | | Lending amount | | | Starting date | | Due date | | Explanation |
| Borrowings | | | | | | | | | |
| PARKnSHOP (China) Investment Co., Ltd. | | | 46,250,000.00 | | | May 9, 2023 | | May 8, 2026 | | Borrowings |
| Lendings | | | | | | | | | | |
| Fujian Minwei Industrial Co., Ltd. | | | 15,426,841.79 | | | December 31, 2023 | | December 31, 2024 | | Factoring funds |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 14,108,990.51 | | | December 14, 2023 | | December 31, 2024 | | Factoring funds |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 393,862.51 | | | May 11, 2023 | | October 31, 2024 | | Group borrowings |
| (a) | In the fiscal year 2023, the Group’s subsidiary extended loans to ParknShop (China) Investment Co., Ltd. totaling RMB46,250,000.00, with an interest rate of 4.75% and due on May 8, 2026. The original total loan amount was RMB46,250,000.00, with an interest rate of 4.75% and a start date of May 9, 2019, due on May 8, 2023. |
| (b) | In the year 2021, Fujian Minwei Industrial Co., Ltd. obtained factoring loans from the Group with a total amount of RMB61,900,000.00, with an annual interest rate of 8.50%, maturing within 2022. In the year 2022, an extension of RMB53,900,000.00 was granted, with an annual interest rate of 8.50%, maturing within 2023. In the year 2023, an extension of RMB15,426,841.79 was granted. |
| (c) | In the year 2021, Fujian Xingyuan Agricultural and Animal Husbandry Technology Co, Ltd. obtained factoring loans from the Group with a total amount of RMB35,000,000.00, with an annual interest rate of 12.00%, maturing within 2022. In the year 2022, an extension of RMB25,971,389.79 was granted, with an annual interest rate of 12.00%, maturing within 2023. In the year 2023, an extension of RMB14,108,990.51 was granted. |
| (d) | In the year 2023, Fuzhou Yiyi San Can Bean Products Co., Ltd. and its subsidiary obtained short-term loans from the Group with a total amount of RMB393,862.51 (2022: RMB438,876.40), with an annual interest rate of 4.785%-4.875%, starting the earliest on May 11, 2023, with maturity date the latest on November 27, 2024. The remaining balance is RMB12,167,876.40, which will mature no later than February 24, 2024. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (6). | Assets transferring and debt restructuring of affiliated parties |
| | ¨ | Applicable | √ | Not applicable |
| (7). | Remuneration for key management personnel |
| | √ | Applicable | ☐ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Remuneration for key management personnel | | | 2,331.64 | | | | 2,364.79 | |
| (8). | Other related transactions |
| | ¨ | Applicable | √ | Not applicable |
| 6. | Unsettled items related to receivables, payables, and affiliated parties |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | Closing balance | | | Opening balance | |
| Project name | | Affiliated parties | | Book balance | | | Bad debt
provision | | | Book balance | | | Bad debt
provision | |
| Account receivable | | Dada Group Limited and its subsidiaries | | | 34,181,676.55 | | | | 341,816.77 | | | | 59,362,623.65 | | | | 593,626.24 | |
| Account receivable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 898,414.49 | | | | 8,984.14 | | | | 764,445.10 | | | | 7,644.45 | |
| Account receivable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 1,443,456.91 | | | | 14,434.57 | | | | 1,432,130.81 | | | | 14,321.31 | |
| Account receivable | | Jiangsu Jingdong Information Technology Co., Ltd. | | | 284,794.41 | | | | 2,847.94 | | | | 284,794.41 | | | | 2,847.94 | |
| Account receivable | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiary | | | 4,964,630.51 | | | | 49,646.31 | | | | 4,516,540.92 | | | | 45,165.41 | |
| Account receivable | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 6,014,103.25 | | | | 60,141.03 | | | | 14,489,642.29 | | | | 144,896.42 | |
| Other receivables | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 13,821,492.25 | | | | 13,821,492.25 | | | | 12,944,531.11 | | | | 12,944,531.11 | |
| Other receivables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 100,000.00 | | | | 1,000.00 | | | | 200,000.00 | | | | 2,000.00 | |
| Other receivables | | Fujian OneBank Limited | | | 866,128.40 | | | | 8,661.28 | | | | 389,579.34 | | | | 3,895.79 | |
| Other receivables | | Dada Group Limited and its subsidiaries | | | 59,547.55 | | | | 595.48 | | | | 110,000.00 | | | | 1,100.00 | |
| Other receivables | | Beijing Jingdong Century Trade Co., Ltd. | | | 100,000.00 | | | | 1,000.00 | | | | 100,000.00 | | | | 1,000.00 | |
| Other receivables | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | | | | | | | | | 82,500.00 | | | | 825.00 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing balance | | | Opening balance | |
| Project name | | Affiliated parties | | Book balance | | | Bad debt
provision | | | Book balance | | | Bad debt
provision | |
| Other receivables | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | | | | | | | | | | 373.26 | | | | 3.73 | |
| Other receivables | | Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | 3,969,595.64 | | | | 39,695.96 | | | | | | | | | |
| Prepaid accounts | | Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 3,451,908.28 | | | | | | | | 88,942,276.95 | | | | | |
| Prepaid accounts | | Beijing Friendship Messenger Trading Co., Ltd. | | | 65,514,899.66 | | | | | | | | 24,965,052.97 | | | | | |
| Prepaid accounts | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 14,798,339.15 | | | | | | | | 6,726,802.12 | | | | | |
| Prepaid accounts | | Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | | | | | | | | | | 495,345.17 | | | | | |
| Prepaid accounts | | Fujian Lingyu Jinhua Brand Management Co., Ltd. | | | | | | | | | | | 55,296.26 | | | | | |
| Prepaid accounts | | Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | | 5,527.79 | | | | | | | | 254,734.86 | | | | | |
| Prepaid accounts | | Dada Group Limited and its subsidiaries | | | 785,961.95 | | | | | | | | 115,422.46 | | | | | |
| Prepaid accounts | | Origin Country Network Technology (Shanghai) Co., Ltd. | | | 27,422.02 | | | | | | | | 67,800.10 | | | | | |
| Prepaid accounts | | Shanghai Xuanhui Business Service Technology Co., Ltd. | | | 16,249.99 | | | | | | | | 16,249.99 | | | | | |
| Prepaid accounts | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 11,066.00 | | | | | | | | 12,032.40 | | | | | |
| Prepaid accounts | | Shenzhen Tencent Computer System Co., Ltd. | | | 854,716.98 | | | | | | | | 2,052,547.17 | | | | | |
| Factoring receivable | | Fujian Minwei Industrial Co., Ltd. | | | 15,426,841.79 | | | | 4,628,052.54 | | | | 25,935,974.23 | | | | 7,780,792.27 | |
| Factoring receivable | | Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 14,108,990.51 | | | | 8,465,394.31 | | | | 24,069,912.36 | | | | 7,179,682.94 | |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | Closing book | | | | Opening book | |
| Project name | | Affiliated parties | | | balance | | | | balance | |
| Accounts payable | | Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | 229,634,343.19 | | | | 158,782,785.61 | |
| Accounts payable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 122,803,359.27 | | | | 150,674,367.43 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing book | | | | Opening book | |
| Project name | | Affiliated parties | | | balance | | | | balance | |
| Accounts payable | | Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | | 125,955.03 | | | | 3,714,327.94 | |
| Accounts payable | | Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | | 1,686,624.04 | | | | 389,777.13 | |
| Accounts payable | | Dada Group Limited and its subsidiaries | | | 14,294,741.03 | | | | | |
| Accounts payable | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 2,376.69 | | | | 2,927,831.08 | |
| Accounts payable | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | | | | | 3,685,311.72 | |
| Accounts payable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 105,692.17 | | | | 11,753.14 | |
| Accounts payable | | Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | | 40,586.73 | | | | 114,477.03 | |
| Accounts payable | | Origin Country Network Technology (Shanghai) Co., Ltd. | | | 52,775.50 | | | | 55,305.33 | |
| Accounts payable | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 221,734.15 | | | | 3,447.15 | |
| Other payables | | Dada Group Limited and its subsidiaries | | | 30,723,535.72 | | | | 52,983,951.82 | |
| Other payables | | PARKnSHOP (China) Investment Co., Ltd. | | | | | | | 46,969,371.21 | |
| Other payables | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | | | | | 20,144,212.34 | |
| Other payables | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | | 29,694,435.19 | | | | 20,158,019.37 | |
| Other payables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 18,188,135.48 | | | | 25,143,631.86 | |
| Other payables | | Songyuan Rongtong Real Estate Development Co., Ltd. | | | 1,778,060.52 | | | | 1,778,060.52 | |
| Other payables | | Chengdu Hongqi Chain Co., Ltd. and its subsidiaries | | | | | | | 200,000.00 | |
| Other payables | | Tencent Cloud Computing (Beijing) Co., Ltd. | | | | | | | 1,204,212.55 | |
| Other payables | | Zhang Xuansong | | | 1,880,742.05 | | | | 1,880,742.05 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing book | | | | Opening book | |
| Project name | | Affiliated parties | | | balance | | | | balance | |
| Other payables | | Fujian Xuanhui Real Estate Development Co., Ltd. and its subsidiaries | | | 1,957,896.72 | | | | 1,369,579.07 | |
| Other payables | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 360,465.62 | | | | 81,150.66 | |
| Other payables | | Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | 5,936,687.77 | | | | | |
| Other payables | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 2,453,667.80 | | | | 1,640,383.21 | |
| Contract liabilities | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 174,642.44 | | | | | |
| Contract liabilities | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 2,015.70 | | | | 2,017.92 | |
| Contract liabilities | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 4,199,706.23 | | | | 4,038,766.18 | |
| Contract liabilities | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | | | | | 878,866.62 | |
| Contract liabilities | | Dada Group Limited and its subsidiaries | | | 1,382.66 | | | | 40,902.40 | |
| Contract liabilities | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | | | | | | 3,965.56 | |
| Advance payment | | Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | | | | | | 8,172.80 | |
| Advance payment | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | | | | | 1,103,310.75 | |
| Lease liabilities | | Fujian Xuanhui Real Estate Development Co., Ltd. | | | 44,738,883.88 | | | | 57,161,386.37 | |
| Lease liabilities | | Zhang Xuansong | | | 20,320,479.21 | | | | 28,202,639.31 | |
| Lease liabilities | | Fuzhou Xuanhui Property Development Co., Ltd. | | | 24,521,455.20 | | | | 38,507,138.00 | |
| Lease liabilities | | Yonghui (Pucheng) Real Estate Development Co., Ltd. | | | 20,511,406.73 | | | | 27,827,132.10 | |
| Lease liabilities | | Sanming Xuanhui Property Development Co., Ltd. | | | 19,894,239.44 | | | | 30,643,982.21 | |
| Other non-current liabilities | | PARKnSHOP (China) Investment Co., Ltd. | | | 46,931,643.83 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
(3) Other items
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Project name | | Affiliated parties | | Closing book
balance | | | Opening book
balance | |
| Cash deposits and balances | | Fujian OneBank Limited | | | 300,053,572.33 | | | | 800,300,903.35 | |
| 7. | Commitment of affiliated parties |
| ¨ | Applicable | √ | Not applicable |
8. Others
| ¨ | Applicable | √ | Not applicable |
| 1. | Various equity instruments |
| ¨ | Applicable | √ | Not applicable |
Outstanding stock options or other equity instruments at the end of the period
| ¨ | Applicable | √ | Not applicable |
| 2. | Condition of equity-settled share-based payment |
| ¨ | Applicable | √ | Not applicable |
| 3. | Condition of cash-settled share-based payment |
| ¨ | Applicable | √ | Not applicable |
| 4. | Share-based payment expenses for the current period |
| ¨ | Applicable | √ | Not applicable |
| 5. | Condition of modification and termination of share-based payment |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| XVI. | Commitments and Contingencies |
| ¨ | Applicable | √ | Not applicable |
External commitments, property and amount on balance sheet date
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Important contingencies existed on the balance sheet date |
| ¨ | Applicable | √ | Not applicable |
| (2). | The descriptions shall be given to significant contingencies which do not require separate disclosure by the Company: |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| XVII. | Events Occurring after the Balance Sheet Date |
| 1. | Important non-adjusting events |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| 4. | Description of other events occurring after the balance sheet date |
| ¨ | Applicable | √ | Not applicable |
| XVIII. | Other Important Matters |
| 1. | Correction of accounting error at earlier stage |
| (1). | Retrospective restatement |
| ¨ | Applicable | √ | Not applicable |
| (2). | Prospective application |
| ¨ | Applicable | √ | Not applicable |
| 2. | Major debt restructuring |
| ¨ | Applicable | √ | Not applicable |
| (1). | Non-monetary assets exchange |
| ¨ | Applicable | √ | Not applicable |
| (2). | Other assets replacements |
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| (1). | Determination basis and accounting policy of reporting division |
| ¨ | Applicable | √ | Not applicable |
| (2). | Financial information of report segments |
| ¨ | Applicable | √ | Not applicable |
| (3). | The Company shall explain the reason if there is no report segment or it can not disclose the total assets and total balance in the report segments. |
| √ | Applicable | ¨ | Not applicable |
Excluding the retail business, the Group does not operate any other business that has a significant impact on its operational results. The products sold by the Group have similar characteristics and bear similar risks and returns. Therefore, the Group’s operating activities belong to a single business segment. As the Group operates its business only in one region, with the majority of its revenue and assets located within the territory of China, the Group is not required to disclose segment data.
| ¨ | Applicable | √ | Not applicable |
| 7. | Other significant transactions and matters having effect on investor’s decision |
| ¨ | Applicable | √ | Not applicable |
| ¨ | Applicable | √ | Not applicable |
| XIX. | Notes to Main Items in the Parent Company’s Financial Statements |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Aging | | Closing book
balance | | | Opening book
balance | |
| Within 1 year | | | 74,112,527.39 | | | | 75,576,047.68 | |
| Sub-total within one year | | | 74,112,527.39 | | | | 75,576,047.68 | |
| 1-2 years | | | 265,984.71 | | | | 894,402.56 | |
| 2-3 years | | | 728,520.59 | | | | 250,621.82 | |
| Over 3 years | | | 330,998.34 | | | | 213,526.58 | |
| Total | | | 75,438,031.03 | | | | 76,934,598.64 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Classified disclosure by bad-debt provision method |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | Opening balance | |
| | | Book balance | | Bad debt provision | | | | Book balance | | Bad debt provision | | | |
| | | | | | | | | Proportion | | | | | | | | | | | Proportion | | | |
| | | | | | | | | of bad-debt | | Carrying | | | | | | | | | of bad-debt | | Carrying | |
| Category | | Amount | | Ratio | | Amount | | provision | | value | | Amount | | | Ratio | | Amount | | provision | | value | |
| | | | | | | % | | | | | | (%) | | | | | | | | | | % | | | | | | (%) | | | | |
| Provision made on a collective basis | | | 75,438,031.03 | | | 100.00 | | | 5,720,723.07 | | | 7.58 | | | 69,717,307.96 | | | 76,934,598.64 | | | | 100.00 | | | 4,196,611.60 | | | 5.45 | | | 72,737,987.04 | |
| Among which: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | | 73,450,045.37 | | | 97.36 | | | 5,184,891.32 | | | 7.06 | | | 68,265,154.05 | | | 73,228,760.38 | | | | 95.18 | | | 3,676,899.99 | | | 5.02 | | | 69,551,860.39 | |
| Supplier service fees and rentals | | | 1,056,996.54 | | | 1.41 | | | 526,521.87 | | | 49.81 | | | 530,474.67 | | | 2,280,236.00 | | | | 2.97 | | | 505,455.59 | | | 22.17 | | | 1,774,780.41 | |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from affiliated | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| parties | | | 930,989.12 | | | 1.23 | | | 9,309.88 | | | 1.00 | | | 921,679.24 | | | 1,425,602.26 | | | | 1.85 | | | 14,256.02 | | | 1.00 | | | 1,411,346.24 | |
| Total | | | 75,438,031.03 | | | / | | | 5,720,723.07 | | | / | | | 69,717,307.96 | | | 76,934,598.64 | | | | / | | | 4,196,611.60 | | | / | | | 72,737,987.04 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| √ | Applicable | ¨ | Not applicable |
Combined provision items: Combination 1
Unit: Yuan Currency: RMB
| | | Closing balance | |
| | | | | | | | | Proportion of | |
| Name | | Account receivable | | | Bad debt
provision | | | bad-debt
provision | |
| | | | | | | | | | | | (%) | |
| Within 1 year | | | 73,583,248.32 | | | | 5,150,827.45 | | | | 7.00 | |
| 1-2 years | | | 264,705.51 | | | | 68,823.43 | | | | 26.00 | |
| 2-3 years | | | 328,089.74 | | | | 160,763.97 | | | | 49.00 | |
| Over 3 years | | | 330,998.34 | | | | 330,998.34 | | | | 100.00 | |
| Total | | | 74,507,041.91 | | | | 5,711,413.19 | | | | | |
Explanation of the provision for bad debt based on portfolio composition:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| √ | Applicable | ¨ | Not applicable |
Combined provision items: Combination 2
Unit: Yuan Currency: RMB
| | | Closing balance | |
| | | | | | | | | Proportion of | |
| Name | | Account receivable | | | Bad debt
provision | | | bad-debt
provision | |
| | | | | | | | | | | | (%) | |
| Accounts receivable from affiliated parties | | | 930,989.12 | | | | 9,309.88 | | | | 1.00 | |
| Total | | | 930,989.12 | | | | 9,309.88 | | | | | |
Explanation of the provision for bad debt based on portfolio composition:
| ¨ | Applicable | √ | Not applicable |
Provision for bad debts based on the general model of expected credit losses
| ¨ | Applicable | √ | Not applicable |
Description of significant changes in the book balance of accounts receivable due to changes in loss provision in the current period:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Situation of the provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase and decrease of current period | | | | | | | |
| Category | | Opening
balance | | | Provision | | | Provision
Recovered
or Reversed | | | Charge-off
or write-off | | | Other
changes | | | Closing
balance | |
| Bad-debt provision for accounts receivable | | | 4,196,611.60 | | | | 1,578,592.26 | | | | | | | | 54,480.79 | | | | | | | | 5,720,723.07 | |
| Total | | | 4,196,611.60 | | | | 1,578,592.26 | | | | | | | | 54,480.79 | | | | | | | | 5,720,723.07 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | √ | Not applicable |
| (4). | Receivables actually verified and cancelled in the current period |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Write-off
amount | |
| Accounts receivable actually written off | | | 54,480.79 | |
Significant write-off of accounts receivable during the year
| ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of receivables:
| ¨ | Applicable | √ | Not applicable |
| (5). | Accounts receivable and contract assets of the top five ending balances collected by the debtor |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Unit name | | Closing
balance of
accounts
receivable | | | Proportion in
the total
closing
balance of
accounts
receivable | | | Closing
balance of
bad-debt
provision | |
| | | | | | (%) | | | | |
| Client I | | | 36,445,808.78 | | | | 48.31 | | | | 2,551,206.61 | |
| Client II | | | 4,655,951.62 | | | | 6.17 | | | | 325,916.61 | |
| Client III | | | 4,346,578.17 | | | | 5.76 | | | | 304,260.47 | |
| Client IV | | | 3,627,104.42 | | | | 4.81 | | | | 253,897.31 | |
| Client V | | | 1,393,447.77 | | | | 1.85 | | | | 97,541.34 | |
| Total | | | 50,468,890.76 | | | | 66.90 | | | | 3,532,822.34 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Other receivables | | | 10,036,094,493.61 | | | | 11,153,838,335.49 | |
| Total | | | 10,036,094,493.61 | | | | 11,153,838,335.49 | |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Interest receivable
| (1). | Classification of interest receivable |
| ¨ | Applicable | √ | Not applicable |
| (2). | Significant overdue interest |
| ¨ | Applicable | √ | Not applicable |
| (3). | Classified disclosure by bad-debt provision method |
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| ¨ | Applicable | √ | Not applicable |
| (4). | Provision for bad debts based on the general model of expected credit losses |
| ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the carrying balance of interest receivable for which there have been provision for bad debts changes in the current period:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5). | Situation of the provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | √ | Not applicable |
| (6). | Interest on receivables actually written off in the current period |
| ¨ | Applicable | √ | Not applicable |
Significant accrued interest write-off situations
| ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Dividends receivable
| ¨ | Applicable | √ | Not applicable |
| (2). | Significant dividend receivable of more than 1 year |
| ¨ | Applicable | √ | Not applicable |
| (3). | Classified disclosure by bad-debt provision method |
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| ¨ | Applicable | √ | Not applicable |
| (4). | Provision for bad debts based on the general model of expected credit losses |
| ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the carrying balance of dividends receivable for which there have been provision for bad debts changes in the current period:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5). | Situation of the provision of bad debts |
| ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | √ | Not applicable |
Other notes:
| (6). | Dividends on receivables actually written off in the current period |
| ¨ | Applicable | √ | Not applicable |
Significant accrued dividends write-off situations
| ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Other receivables
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Aging | | Closing book
balance | | | Opening book
balance | |
| Within 1 year | | | 9,980,892,464.22 | | | | 11,101,750,690.94 | |
| Sub-total within one year | | | 9,980,892,464.22 | | | | 11,101,750,690.94 | |
| 1-2 years | | | 15,184,320.75 | | | | 10,615,888.36 | |
| 2-3 years | | | 8,126,621.90 | | | | 12,335,754.05 | |
| Over 3 years | | | 50,151,367.12 | | | | 46,269,309.38 | |
| Total | | | 10,054,354,773.99 | | | | 11,170,971,642.73 | |
| (2). | Classification of other accounts payable according to the nature of payment |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Nature of payment | | Closing book
balance | | | Opening book
balance | |
| Various types of deposits and guarantees receivable | | | 58,577,363.02 | | | | 65,722,463.55 | |
| Purchases and store petty cash payments | | | 3,397,659.18 | | | | 4,644,790.40 | |
| Receivables from affiliated parties | | | 17,958,742.01 | | | | 13,377,404.37 | |
| Other receivables | | | 8,004,724.09 | | | | 6,105,429.08 | |
| Intra-group receivables | | | 9,966,416,285.69 | | | | 11,081,121,555.33 | |
| Total | | | 10,054,354,773.99 | | | | 11,170,971,642.73 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Phase I | | | Phase II | | | Phase III | | | | |
| Bad debt provision | | Expected credit
loss over the
next 12 months | | | Expected credit
loss within the
whole duration
(no credit
impairment
occurred) | | | Expected credit
loss within the
whole duration
(credit
impairment
incurred) | | | Total | |
| Balance as of January 1, 2023 | | | 817,018.41 | | | | 577,443.13 | | | | 15,738,845.70 | | | | 17,133,307.24 | |
| The balance as of January 1, 2023 is in the current period | | | | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -321,997.58 | | | | 321,997.58 | | | | | | | | | |
| – Transferred to Phase III | | | | | | | -19,022.32 | | | | 19,022.32 | | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | | | | | | |
| Provision of the current period | | | 362,132.50 | | | | | | | | 3,190,633.48 | | | | 3,552,765.98 | |
| Provision reversed in current period | | | 112,602.10 | | | | 412,283.20 | | | | 1,885,253.21 | | | | 2,410,138.51 | |
| Charge-off of the current period | | | | | | | | | | | | | | | | |
| Write-off of the current period | | | | | | | | | | | 15,654.33 | | | | 15,654.33 | |
| Other changes Balance as of December 31, 2023 | | | 744,551.23 | | | | 468,135.19 | | | | 17,047,593.96 | | | | 18,260,280.38 | |
| Basis for stage classification and bad debt provision ratio |
| (1) | The Company handles other receivables using the general model for expected credit losses. On each balance sheet date, the credit risk of these receivables is assessed and categorized into three stages to calculate the expected credit losses. |
| | | |
| | | The Company respectively measures the expected credit losses of financial instruments in different stages. If the credit risk of a financial instrument has not increased significantly since initial recognition, in the first stage, the Company measures the loss provision based on the expected credit loss within the next 12 months; if the credit risk of a financial instrument has increased significantly after initial recognition but no credit reduction has occurred, in the second stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument; if the financial instrument has suffered credit impairment since initial recognition, in the third stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument. |
| | | |
| | (2) | The Company divides other receivables into payment nature and aging portfolio based on credit risk characteristics and calculates expected credit losses based on the portfolio. For other receivables classified into portfolios, the Company calculates expected credit losses based on default risk exposure and expected credit loss rates within the next 12 months or the entire duration. |
| | | |
| | (3) | Provision for significant bad debt risk on other receivables with large amounts and significant impact on profitability. Provision for bad debt is recognized based on the expected credit loss throughout the entire remaining period. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of significant changes in the book value of other receivables with provision changes in the current period:
| ¨ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| ¨ | Applicable | √ | Not applicable |
| (4). | Situation of the provision of bad debts |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Increase and decrease of current period | |
| Category | | Opening
balance | | | Provision | | | Provision
Recovered
or Reversed | | | Charge-off
or write-off | | | Other
changes | | | Closing
balance | |
| Bad-debt provision for other receivables | | | 17,133,307.24 | | | | 3,552,765.98 | | | | 2,410,138.51 | | | | 15,654.33 | | | | | | | | 18,260,280.38 | |
| Total | | | 17,133,307.24 | | | | 3,552,765.98 | | | | 2,410,138.51 | | | | 15,654.33 | | | | | | | | 18,260,280.38 | |
Significant reversal or recovery of bad-debt provision of current year is:
| ¨ | Applicable | √ | Not applicable |
| (5). | Other receivables actually verified and cancelled of current year |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Write-off | |
| Items | | amount | |
| Other receivables actually written off | | | 15,654.33 | |
Where the other receivables written off is important:
| ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of other receivables:
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (6). | Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Unit name | | Closing balance | | | Proportion in total
closing balance of
other receivables | | | Nature of
receivable | | Aging | | Closing balance of
bad-debt provision | |
| | | | | | | | (%) | | | | | | | | | |
| No. 1 | | | 1,250,472,354.00 | | | | 12.44 | | | Intra-group receivables. | | Within 1 year | | | | |
| No. 2 | | | 1,125,645,870.32 | | | | 11.20 | | | Intra-group receivables. | | Within 1 year | | | | |
| No. 3 | | | 1,048,752,084.91 | | | | 10.43 | | | Intra-group receivables. | | Within 1 year | | | | |
| No. 4 | | | 839,965,511.75 | | | | 8.35 | | | Intra-group receivables. | | Within 1 year | | | | |
| No. 5 | | | 811,354,466.82 | | | | 8.07 | | | Intra-group receivables. | | Within 1 year | | | | |
| Total | | | 5,076,190,287.80 | | | | 50.49 | | | / | | / | | | | |
| (7). | Reported under other receivables due to centralized cash management |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| 3. | Long-term equity investment |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Book balance | | | Closing balance
Impairment
provision | | | Carrying value | | | Book balance | | | Opening balance
Impairment
provision | | | Carrying value | |
| Investment in subsidiaries | | | 8,674,607,680.11 | | | | | | | | 8,674,607,680.11 | | | | 8,533,363,770.99 | | | | | | | | 8,533,363,770.99 | |
| Investment in cooperative enterprises and joint ventures | | | 3,653,918,821.42 | | | | 757,903,054.21 | | | | 2,896,015,767.21 | | | | 3,561,969,941.27 | | | | 356,747,029.69 | | | | 3,205,222,911.58 | |
| Total | | | 12,328,526,501.53 | | | | 757,903,054.21 | | | | 11,570,623,447.32 | | | | 12,095,333,712.26 | | | | 356,747,029.69 | | | | 11,738,586,682.57 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Investment in subsidiaries |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | | | | | | | | Depreciation | | | | |
| | | | | | | | | | | | | | | provision | | | Closing balance | |
| | | Opening | | | Increase in the | | | Decrease in the | | | | | | accrued in | | | of provision for | |
| Investee | | balance | | | current period | | | current period | | | Closing balance | | | current period | | | impairment | |
| Fujian Yonghui Superstores Co., Ltd. | | | 800,000,000.00 | | | | | | | | | | | | 800,000,000.00 | | | | | | | | | |
| Chongqing Yonghui Superstores Co., Ltd. | | | 714,400,000.00 | | | | | | | | | | | | 714,400,000.00 | | | | | | | | | |
| Beijing Yonghui Superstores Co., Ltd. | | | 600,000,000.00 | | | | | | | | | | | | 600,000,000.00 | | | | | | | | | |
| Liaoning Yonghui Superstores Co., Ltd. | | | 600,000,000.00 | | | | | | | | | | | | 600,000,000.00 | | | | | | | | | |
| Sichuan Yonghui Store Co., Ltd. | | | 1,000,000,000.00 | | | | | | | | | | | | 1,000,000,000.00 | | | | | | | | | |
| Jilin Yonghui Superstores Co., Ltd. | | | 300,000,000.00 | | | | | | | | | | | | 300,000,000.00 | | | | | | | | | |
| Shanghai Yonghui Superstores Co., Ltd. | | | 300,000,000.00 | | | | | | | | | | | | 300,000,000.00 | | | | | | | | | |
| Anhui Yonghui Superstores Co., Ltd. | | | 285,080,000.00 | | | | | | | | | | | | 285,080,000.00 | | | | | | | | | |
| Fujian Yonghui Logistics Co., Ltd. | | | 285,000,000.00 | | | | | | | | | | | | 285,000,000.00 | | | | | | | | | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 370,000,000.00 | | | | | | | | | | | | 370,000,000.00 | | | | | | | | | |
| Guizhou Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Hebei Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Jiangsu Yonghui Superstores Co., Ltd. | | | 200,000,000.00 | | | | | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Zhejiang Yonghui Superstores Co., Ltd. | | | 120,000,000.00 | | | | | | | | | | | | 120,000,000.00 | | | | | | | | | |
| Chengdu Yonghui Business Development Co., Ltd. | | | 104,000,000.00 | | | | | | | | | | | | 104,000,000.00 | | | | | | | | | |
| Yonghui Logistics Co., Ltd. | | | 90,000,000.00 | | | | | | | | | | | | 90,000,000.00 | | | | | | | | | |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | | 89,521,504.19 | | | | | | | | | | | | 89,521,504.19 | | | | | | | | | |
| Henan Yonghui Superstores Co., Ltd. | | | 80,860,000.00 | | | | | | | | | | | | 80,860,000.00 | | | | | | | | | |
| Shanghai Dongzhan International Trade Co., Ltd. | | | 59,210,296.00 | | | | | | | | | | | | 59,210,296.00 | | | | | | | | | |
| Hubei Yonghui Zhongbai Superstores Co., Ltd. | | | 55,000,000.00 | | | | | | | | | | | | 55,000,000.00 | | | | | | | | | |
| Fujian Strait Food Development Co., Ltd. | | | 53,000,000.00 | | | | | | | | | | | | 53,000,000.00 | | | | | | | | | |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | | | | | | | | | | Depreciation | | | | |
| | | | | | | | | | | | | | | provision | | | Closing balance | |
| | | Opening | | | Increase in the | | | Decrease in the | | | | | | accrued in | | | of provision for | |
| Investee | | balance | | | current period | | | current period | | | Closing balance | | | current period | | | impairment | |
| Anhui Yonghui Logistics Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| Shandong Yonghui Superstores Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| Xiamen Yonghui Minsheng Superstores Co., Ltd. | | | 41,670,000.00 | | | | | | | | | | | | 41,670,000.00 | | | | | | | | | |
| Hunan Yonghui Superstores Co., Ltd. | | | 40,000,000.00 | | | | | | | | | | | | 40,000,000.00 | | | | | | | | | |
| Fujian Yonghui Commercial Co., Ltd. | | | 37,398,045.18 | | | | | | | | | | | | 37,398,045.18 | | | | | | | | | |
| Jiangsu Yonghui Business Management Co., Ltd. | | | 30,000,000.00 | | | | | | | | | | | | 30,000,000.00 | | | | | | | | | |
| Fujian Yonghui Culture Media Co., Ltd. | | | 28,256,090.88 | | | | | | | | 28,256,090.88 | | | | 0.00 | | | | | | | | | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | | 31,010,000.00 | | | | | | | | | | | | 31,010,000.00 | | | | | | | | | |
| Yonghui Holdings Co., Ltd. | | | 25,277,999.95 | | | | | | | | | | | | 25,277,999.95 | | | | | | | | | |
| Ningbo Yonghui Superstores Co., Ltd. | | | 20,000,000.00 | | | | | | | | | | | | 20,000,000.00 | | | | | | | | | |
| Guangxi Yonghui Superstores Co., Ltd. | | | 60,000,000.00 | | | | | | | | | | | | 60,000,000.00 | | | | | | | | | |
| Xiamen Yonghui Commercial Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Jiangxi Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Shaanxi Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Shanxi Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Heilongjiang Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | 90,000,000.00 | | | | | | | | 100,000,000.00 | | | | | | | | | |
| Xiangxin Investment Fund Management Co., Ltd. | | | 11,500,000.00 | | | | | | | | 11,500,000.00 | | | | 0.00 | | | | | | | | | |
| Yunnan Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Ningxia Yonghui Superstores Co., Ltd. | | | 60,000,000.00 | | | | | | | | | | | | 60,000,000.00 | | | | | | | | | |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | | | | | | | | | | Depreciation | | | | |
| | | | | | | | | | | | | | | provision | | | Closing balance | |
| | | Opening | | | Increase in the | | | Decrease in the | | | | | | accrued in | | | of provision for | |
| Investee | | balance | | | current period | | | current period | | | Closing balance | | | current period | | | impairment | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | 9,000,000.00 | | | | | | | | 9,000,000.00 | | | | 0.00 | | | | | | | | | |
| Fujian Yongjin Trading Co., Ltd. | | | 4,900,000.00 | | | | | | | | | | | | 4,900,000.00 | | | | | | | | | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | | 200,000,000.00 | | | | | | | | | | | | 200,000,000.00 | | | | | | | | | |
| Guizhou Yonghui Logistics Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| Yonghui Yunjin Technology Co., Ltd. | | | 500,000,000.00 | | | | | | | | | | | | 500,000,000.00 | | | | | | | | | |
| Xizang Yonghui Superstores Co., Ltd. | | | 20,000,000.00 | | | | | | | | | | | | 20,000,000.00 | | | | | | | | | |
| Guansu Yonghui Superstores Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Qinghai Yonghui Superstores Co., Ltd. | | | 20,000,000.00 | | | | | | | | | | | | 20,000,000.00 | | | | | | | | | |
| Beijing Yonghui Technology Co., Ltd. | | | 10,000,000.00 | | | | | | | | | | | | 10,000,000.00 | | | | | | | | | |
| Fujian Yuntong Supply Chain Co., Ltd. | | | 100,000,000.00 | | | | | | | | | | | | 100,000,000.00 | | | | | | | | | |
| Fujian Yongyuehui Business Management Co., Ltd. | | | 100,000,000.00 | | | | | | | | | | | | 100,000,000.00 | | | | | | | | | |
| East China Yonghui Logistics Co., Ltd. | | | 50,000,000.00 | | | | | | | | | | | | 50,000,000.00 | | | | | | | | | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 338,279,834.79 | | | | | | | | | | | | 338,279,834.79 | | | | | | | | | |
| Sichuan Huipeng E-commerce Co., Ltd. | | | | | | | 100,000,000.00 | | | | | | | | 100,000,000.00 | | | | | | | | | |
| Total | | | 8,533,363,770.99 | | | | 190,000,000.00 | | | | 48,756,090.88 | | | | 8,674,607,680.11 | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Investment in cooperative enterprises and joint ventures |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase/decrease in the current period | | | | | | | |
| | | | | | | | | | | | Investment | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | profit and loss | | Other | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | recognized with | | comprehensive | | | | | | Distribution of | | | Provision of | | | | | | | | | Closing balance | |
| | | Opening | | | Increased | | | Decreased | | | the equity | | income | | | Other equity | | | cash dividends | | | impairment | | | | | | | | | of provision for | |
| Investment unit | | balance | | | investment | | | investment | | | method | | adjustments | | | changes | | | or profits | | | losses | | | Others | | | Closing balance | | | impairment | |
| I. Cooperative enterprises Yonghui Fresh Food Development Co., Ltd. | | | 48,619,418.14 | | | | | | | | | | | -23,767,144.07 | | | | | | | 23,202,621.79 | | | | | | | | | | | | | | 48,054,895.86 | | | | | |
| Subtotal | | | 48,619,418.14 | | | | | | | | | | | -23,767,144.07 | | | | | | | 23,202,621.79 | | | | | | | | | | | | | | 48,054,895.86 | | | | | |
| II. Joint ventures Chengdu Hongqi Chain Co., Ltd. | | | 2,046,627,590.92 | | | | | | | | | | | 117,834,480.06 | | | | | | | | | | | -126,235,200.00 | | | -358,226,870.98 | | | | | | | 1,680,000,000.00 | | | | 358,226,870.98 | |
| Fujian OneBank Limited | | | 611,919,130.46 | | | | 55,200,000.00 | | | | | | | 21,893,148.88 | | | 4,617,660.61 | | | | | | | | | | | | | | | | | | 693,629,939.95 | | | | | |
| Xiangcun Gaokao Agricultural Co., Ltd. | | | 53,000,000.00 | | | | | | | | | | | -10,070,846.46 | | | | | | | | | | | | | | -42,929,153.54 | | | | | | | | | | | 399,676,183.23 | |
| 1233 International Supply Chain Management Co., Ltd. | | | 190,957,444.93 | | | | | | | | | | | 4,904,640.31 | | | | | | | | | | | | | | | | | | | | | 195,862,085.24 | | | | | |
| Fujian Minwei Industrial Co., Ltd. | | | 106,574,742.72 | | | | | | | | | | | 11,855,409.21 | | | | | | | | | | | | | | | | | | | | | 118,430,151.93 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | Increase/decrease in the current period | | | | | | | |
| | | | | | | | | | | | Investment | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | profit and loss | | | Other | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | recognized with | | | comprehensive | | | | | | Distribution of | | | Provision of | | | | | | | | | Closing balance | |
| | | Opening | | | Increased | | | Decreased | | | the equity | | | income | | | Other equity | | | cash dividends | | | impairment | | | | | | | | | of provision for | |
| Investment unit | | balance | | | investment | | | investment | | | method | | | adjustments | | | changes | | | or profits | | | losses | | | Others | | | Closing balance | | | impairment | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 54,489,052.80 | | | | | | | | | | | | -14,975,941.64 | | | | | | | | | | | | | | | | | | | | | | | | 39,513,111.16 | | | | | |
| Beijing Friendship Messenger Trading Co., Ltd. | | | 61,883,573.36 | | | | | | | | | | | | 36,725,645.58 | | | | | | | | | | | | -30,300,000.00 | | | | | | | | | | | | 68,309,218.94 | | | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 31,151,958.25 | | | | 10,994,112.01 | | | | | | | | 13,070,293.87 | | | | | | | | | | | | -3,000,000.00 | | | | | | | | | | | | 52,216,364.13 | | | | | |
| Subtotal | | | 3,156,603,493.44 | | | | 66,194,112.01 | | | | | | | | 181,236,829.81 | | | | 4,617,660.61 | | | | | | | | -159,535,200.00 | | | | -401,156,024.52 | | | | | | | | 2,847,960,871.35 | | | | 757,903,054.21 | |
| Total | | | 3,205,222,911.58 | | | | 66,194,112.01 | | | | | | | | 157,469,685.74 | | | | 4,617,660.61 | | | | 23,202,621.79 | | | | -159,535,200.00 | | | | -401,156,024.52 | | | | | | | | 2,896,015,767.21 | | | | 757,903,054.21 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Impairment testing of long-term equity investments |
| | √ | Applicable | ¨ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| | ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Carrying value | | | Recoverable amounts | | | Impairment amount | | | Forecast
period | | Key parameters
of forecast
period | | Key parameters
of the stable
period | | Basis for
determining key
parameters of
the stable period |
| Hongqi Chain | | | 2,038,226,870.98 | | | | 1,680,000,000.00 | | | | 358,226,870.98 | | | 5 years | | Revenue growth rate, discount rate | | Revenue growth rate, discount rate | | The stable period growth rate is consistent with the forecast data in authoritative industry reports, and the discount rate is the pre-tax discount rate reflecting specific risks of the assets |
| Total | | | 2,038,226,870.98 | | | | 1,680,000,000.00 | | | | 358,226,870.98 | | | / | | / | | / | | / |
In 2023, the Group’s long-term equity investment in Hongqi Chain showed signs of impairment. The Group conducted impairment testing on this long-term equity investment. Since the recoverable amount determined by the present value of expected future cash flows is lower than the carrying amount of this long-term equity investment, a provision for long-term equity investment impairment needs to be recognized for the current year.
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| | ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| | ¨ | Applicable | √ | Not applicable |
| 4. | Operating revenues and operating costs |
| (1). | Operating revenue and costs |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | Amount of current period | | | Amount of last period | |
| Items | | Revenue | | | Cost | | | Revenue | | | Cost | |
| Main business | | | 6,893,649,809.87 | | | | 6,056,223,090.90 | | | | 7,611,241,236.24 | | | | 6,968,231,428.63 | |
| Other business | | | 553,381,418.68 | | | | 13,974,197.91 | | | | 599,683,767.74 | | | | 11,908,124.52 | |
| Total | | | 7,447,031,228.55 | | | | 6,070,197,288.81 | | | | 8,210,925,003.98 | | | | 6,980,139,553.15 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Breakdown of operating revenue and operating cost |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | The Company | | | | Total | |
| Contract classification | | Operating
revenue | | | | Operating
costs | | | | Operating
revenue | | | | Operating
costs | |
| Product type Fresh and processed products | | 4,877,202,367.38 | | | | 4,423,584,643.71 | | | | 4,877,202,367.38 | | | | 4,423,584,643.71 | |
| Food supplies | | 2,016,447,442.49 | | | | 1,632,638,447.19 | | | | 2,016,447,442.49 | | | | 1,632,638,447.19 | |
| Others | | 500,803,916.28 | | | | 4,999,291.91 | | | | 500,803,916.28 | | | | 4,999,291.91 | |
| Lease income | | 52,577,502.40 | | | | 8,974,906.00 | | | | 52,577,502.40 | | | | 8,974,906.00 | |
| Classification by time of transfer of goods Transfer at a certain time point | | 6,901,168,911.69 | | | | 6,056,223,090.90 | | | | 6,901,168,911.69 | | | | 6,056,223,090.90 | |
| Transfer within a certain period of time | | 493,284,814.46 | | | | 4,999,291.91 | | | | 493,284,814.46 | | | | 4,999,291.91 | |
| Lease income | | 52,577,502.40 | | | | 8,974,906.00 | | | | 52,577,502.40 | | | | 8,974,906.00 | |
| Total | | 7,447,031,228.55 | | | | 6,070,197,288.81 | | | | 7,447,031,228.55 | | | | 6,070,197,288.81 | |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (3). | Description of performance obligations |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Description of allocating to the residual fulfillment obligations |
| | ¨ | Applicable | √ | Not applicable |
(5). Major contract changes or significant adjustment of transaction prices
| | ¨ | Applicable | √ | Not applicable |
Other notes:
None
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Long-term equity investment income measured with cost method | | | 489,977,700.60 | | | | 370,500,000.00 | |
| Long-term equity investment income measured with equity method | | | 157,469,685.74 | | | | 4,843,630.72 | |
| Investment income for disposing long-term equity investment production | | | 20,206,892.60 | | | | -1,716,557.39 | |
| Investment income of holding trading financial assets | | | 28,825,935.82 | | | | -45,127,381.37 | |
| Total | | | 696,480,214.76 | | | | 328,499,691.96 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| XX. | Supplementary Information |
| 1. | Detailed statement of current non-recurring profit and loss |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount | | | Explanation | |
| Non-current assets disposal profit and loss, including the charge against of the impairment preparation | | | 257,691,712.48 | | | | | |
| Governmental subsidies recognized in the current profits and losses except those that are closely related to the Company’s normal operation, comply with national policies, are entitled under established criteria, and have a continuous impact on the Company’s profit and loss | | | 185,516,402.55 | | | | | |
| Gain or loss from the fair value changes of financial assets and financial liabilities held by non-financial enterprises, and from the disposal of financial assets and financial liabilities, excluding effective hedging transactions related to the Company’s normal operation | | | 209,860,322.48 | | | | | |
| Other non-operating income and expenditures except the items above | | | 45,182,795.55 | | | | | |
| Other profit and loss items conforming to the definition of non-recurring profit and loss | | | 44,450,016.83 | | | | | |
| Less: income tax impact amount | | | 84,217,265.45 | | | | | |
| Impact amount of minority shareholders’ equity (after-tax) | | | 11,353,799.99 | | | | | |
| Total | | | 647,130,184.45 | | | | | |
If items not listed in the “Interpretative Announcement on Non-recurring Gains and Losses for Companies Disclosing Securities Publicly No. 1 – Non-recurring Gains and Losses” are recognized as non-recurring gains and losses which are significant in amount, or if non-recurring gains and losses listed in the “Interpretative Announcement on Non-recurring Gains and Losses for Companies Disclosing Securities Publicly No. 1 – Non-recurring Gains and Losses” are defined as recurring gains and losses, the reasons shall be explained.
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 2. | Returns on equity and earnings per share |
| | √ | Applicable | ¨ | Not applicable |
| | | Weighted | | | | | | | |
| | | average | | | | | | | |
| | | return on | | | Earnings per share | |
| Profits during the reporting period | | equity | | | Basic EPS | | | Diluted EPS | |
| | | (%) | | | | | | | |
| Net profits attributable to the Company’s ordinary shareholders | | | -20.09 | | | | -0.15 | | | | -0.15 | |
| Net profits attributable to the Company’s ordinary shareholders after the deduction of the non-recurring profits and losses | | | -29.87 | | | | -0.22 | | | | -0.22 | |
| 3. | Accounting data difference arising from foreign and domestic accounting standards |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| Chairman: Zhang Xuansong |
| Approved by the Board of Directors and submitted on April 25, 2024 |
Revision Information
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 4. | For the six months ended June 30, 2024 |
Section X Financial Reports
| | ¨ | Applicable | √ | Not applicable |
Consolidated Balance Sheet
June 30, 2024
Prepared by: Yonghui Superstores Co., Ltd.
| | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | |
| Items | | Notes | | | June 30, 2024 | | | December 31, 2023 | |
| Current assets: | | | | | | | | | | | | |
| Monetary funds | | | | | | | 5,060,367,277.43 | | | | 5,839,069,618.08 | |
| Loans and advances (short-term) | | | | | | | | | | | 537,340,391.79 | |
| Trading financial assets | | | | | | | 2,709,808,027.29 | | | | 735,971,777.07 | |
| Notes receivable | | | | | | | | | | | | |
| Factoring receivable | | | | | | | | | | | 68,688,964.38 | |
| Account receivable | | | | | | | 340,365,769.57 | | | | 421,742,480.93 | |
| Receivables financing | | | | | | | | | | | | |
| Advance payments | | | | | | | 1,033,704,230.05 | | | | 1,185,220,271.68 | |
| Other receivables | | | | | | | 499,763,124.04 | | | | 563,971,664.48 | |
| Including: interests receivable | | | | | | | | | | | 941,391.67 | |
| Dividends receivable | | | | | | | | | | | | |
| Inventories | | | | | | | 5,700,299,097.82 | | | | 8,268,982,538.27 | |
| Assets held for sale | | | | | | | | | | | | |
| Non-current assets due within one year | | | | | | | 39,294,201.28 | | | | 49,380,092.40 | |
| Other current assets | | | | | | | 1,261,168,881.04 | | | | 1,365,370,529.47 | |
| Total current assets | | | | | | | 16,644,770,608.52 | | | | 19,035,738,328.55 | |
| Non-current assets: | | | | | | | | | | | | |
| Loans and advances | | | | | | | | | | | 20,568,200.17 | |
| Debt investment | | | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | | | |
| Long-term receivables | | | | | | | 246,002,092.19 | | | | 227,393,410.57 | |
| Long-term equity investment | | | | | | | 3,483,319,623.26 | | | | 3,231,665,078.02 | |
| Investment in other equity instruments | | | | | | | | | | | | |
| Other non-current financial assets | | | | | | | 3,302,565,585.85 | | | | 3,651,480,119.24 | |
| Investment properties | | | | | | | 294,720,219.41 | | | | 300,148,229.00 | |
| Fixed assets | | | | | | | 3,625,260,512.73 | | | | 3,842,169,544.96 | |
| Construction in progress | | | | | | | 219,563,980.39 | | | | 240,333,156.71 | |
| Productive biological assets | | | | | | | 11,773,119.37 | | | | 12,091,311.79 | |
| Right-of-use assets | | | | | | | 15,697,679,162.43 | | | | 17,033,171,909.36 | |
| Intangible assets | | | | | | | 889,202,658.50 | | | | 1,037,948,337.18 | |
| Development expenses | | | | | | | | | | | | |
| Goodwill | | | | | | | 3,661,378.25 | | | | 3,661,378.25 | |
| Long-term deferred expenses | | | | | | | 2,072,673,004.53 | | | | 2,302,495,702.63 | |
| Deferred tax asset | | | | | | | 1,034,169,951.76 | | | | 1,113,173,093.71 | |
| Other non-current assets | | | | | | | | | | | | |
| Total non-current assets | | | | | | | 30,880,591,288.67 | | | | 33,016,299,471.59 | |
| Total assets | | | | | | | 47,525,361,897.19 | | | | 52,052,037,800.14 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | June 30, 2024 | | | December 31, 2023 | |
| Current liabilities: | | | | | | | | | | | | |
| Short-term loans | | | | | | | 4,400,540,277.78 | | | | 5,130,220,089.04 | |
| Trading financial liabilities | | | | | | | | | | | | |
| Notes payable | | | | | | | | | | | | |
| Accounts payable | | | | | | | 7,572,133,519.53 | | | | 9,816,260,354.84 | |
| Accounts collected in advance | | | | | | | 276,593,321.13 | | | | 106,067,963.44 | |
| Contract liabilities | | | | | | | 4,740,724,785.72 | | | | 4,850,841,586.20 | |
| Payroll payable | | | | | | | 560,911,478.01 | | | | 602,858,043.72 | |
| Taxes payable | | | | | | | 293,332,963.57 | | | | 245,448,868.97 | |
| Other payables | | | | | | | 1,459,013,244.36 | | | | 1,725,134,598.87 | |
| Including: interests payable | | | | | | | | | | | | |
| Dividends payable | | | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | | | 2,194,490,015.37 | | | | 1,792,351,864.19 | |
| Other current liabilities | | | | | | | 442,244,527.06 | | | | 457,882,012.38 | |
| Total current liabilities | | | | | | | 21,939,984,132.53 | | | | 24,727,065,381.65 | |
| Non-current liabilities: | | | | | | | | | | | | |
| Provision for insurance contracts | | | | | | | | | | | | |
| Long-term borrowings | | | | | | | | | | | 349,889,789.58 | |
| Bonds payable | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Lease liabilities | | | | | | | 19,211,152,552.49 | | | | 20,781,462,184.01 | |
| Long-term accounts payable | | | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | | | |
| Estimated liabilities | | | | | | | 23,539,437.34 | | | | 37,797,080.80 | |
| Deferred income | | | | | | | 92,756,226.30 | | | | 99,470,899.92 | |
| Deferred tax liabilities | | | | | | | 58,863,108.65 | | | | 74,683,702.79 | |
| Other non-current liabilities | | | | | | | 46,977,316.08 | | | | 46,931,643.83 | |
| Total non-current liabilities | | | | | | | 19,433,288,640.86 | | | | 21,390,235,300.93 | |
| Total liabilities | | | | | | | 41,373,272,773.39 | | | | 46,117,300,682.58 | |
| Equity (or shareholders’ equity): | | | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | | | 9,075,036,993.00 | | | | 9,075,036,993.00 | |
| Other equity instruments | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Capital reserves | | | | | | | 4,247,701,109.72 | | | | 4,315,325,163.65 | |
| Less: Treasury shares | | | | | | | 488,768,297.30 | | | | 488,768,297.30 | |
| Other comprehensive income | | | | | | | 11,698,153.58 | | | | 5,073,713.42 | |
| Special reserves | | | | | | | | | | | | |
| Surplus reserves | | | | | | | 1,134,683,347.18 | | | | 1,132,840,649.96 | |
| General risk reserves | | | | | | | | | | | | |
| Undistributed profits | | | | | | | -7,826,965,531.23 | | | | -8,100,437,582.18 | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | | | | | 6,153,385,774.95 | | | | 5,939,070,640.55 | |
| Minority interests | | | | | | | -1,296,651.15 | | | | -4,333,522.99 | |
| Total equity (or shareholders’ equity) | | | | | | | 6,152,089,123.80 | | | | 5,934,737,117.56 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | | | 47,525,361,897.19 | | | | 52,052,037,800.14 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Balance Sheet of the Parent Company
June 30, 2024
Prepared by: Yonghui Superstores Co., Ltd.
| | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | |
| Items | | Notes | | | June 30, 2024 | | | December 31, 2023 | |
| Current assets: | | | | | | | | | | | | |
| Monetary funds | | | | | | | 2,604,069,259.62 | | | | 4,092,150,003.46 | |
| Trading financial assets | | | | | | | 1,806,564,985.47 | | | | | |
| Notes receivable | | | | | | | | | | | | |
| Account receivable | | | | | | | 25,971,348.22 | | | | 69,717,307.96 | |
| Receivables financing | | | | | | | | | | | | |
| Advance payments | | | | | | | 77,787,516.44 | | | | 49,071,202.87 | |
| Other receivables | | | | | | | 9,918,509,928.96 | | | | 10,036,094,493.61 | |
| Including: interests receivable | | | | | | | | | | | | |
| Dividends receivable | | | | | | | | | | | | |
| Inventories | | | | | | | 192,653,030.65 | | | | 328,866,754.44 | |
| Assets held for sale | | | | | | | | | | | | |
| Non-current assets due within one year | | | | | | | 330,109.61 | | | | | |
| Other current assets | | | | | | | 57,810,809.81 | | | | 49,920,265.13 | |
| Total current assets | | | | | | | 14,683,696,988.78 | | | | 14,625,820,027.47 | |
| Non-current assets: | | | | | | | | | | | | |
| Debt investment | | | | | | | | | | | | |
| Other creditor investments | | | | | | | | | | | | |
| Long-term receivables | | | | | | | 1,082,007.36 | | | | 2,642,385.68 | |
| Long-term equity investment | | | | | | | 11,331,058,652.83 | | | | 11,570,623,447.32 | |
| Investment in other equity instruments | | | | | | | | | | | | |
| Other non-current financial assets | | | | | | | 3,302,565,585.85 | | | | 3,651,480,119.24 | |
| Investment properties | | | | | | | | | | | | |
| Fixed assets | | | | | | | 310,745,340.96 | | | | 324,426,598.97 | |
| Construction in progress | | | | | | | 3,644,578.30 | | | | 3,237,965.73 | |
| Productive biological assets | | | | | | | | | | | | |
| Right-of-use assets | | | | | | | 618,410,784.52 | | | | 631,471,105.03 | |
| Intangible assets | | | | | | | 102,542,855.38 | | | | 137,208,365.14 | |
| Development expenses | | | | | | | | | | | | |
| Goodwill | | | | | | | | | | | | |
| Long-term deferred expenses | | | | | | | 42,415,140.51 | | | | 51,082,303.52 | |
| Deferred tax asset | | | | | | | 21,243,664.95 | | | | 14,687,600.10 | |
| Other non-current assets | | | | | | | | | | | | |
| Total non-current assets | | | | | | | 15,733,708,610.66 | | | | 16,386,859,890.73 | |
| Total assets | | | | | | | 30,417,405,599.44 | | | | 31,012,679,918.20 | |
| Current liabilities: | | | | | | | | | | | | |
| Short-term loans | | | | | | | 850,540,277.78 | | | | 1,901,562,910.56 | |
| Trading financial liabilities | | | | | | | | | | | | |
| Notes payable | | | | | | | 2,750,000,000.00 | | | | 2,350,000,000.00 | |
| Accounts payable | | | | | | | 407,399,675.54 | | | | 283,173,469.95 | |
| Accounts collected in advance | | | | | | | 201,988,826.33 | | | | 3,775,967.04 | |
| Contract liabilities | | | | | | | 1,149,639,230.76 | | | | 837,046,681.71 | |
| Payroll payable | | | | | | | 67,824,085.23 | | | | 62,935,418.83 | |
| Taxes payable | | | | | | | 50,265,372.42 | | | | 36,463,845.96 | |
| Other payables | | | | | | | 6,759,514,856.76 | | | | 7,607,743,154.26 | |
| Including: interests payable | | | | | | | | | | | | |
| Dividends payable | | | | | | | | | | | | |
| Non-current liabilities due within one year | | | | | | | 456,987,570.37 | | | | 108,725,795.87 | |
| Other current liabilities | | | | | | | 106,603,774.91 | | | | 78,767,719.45 | |
| Total current liabilities | | | | | | | 12,800,763,670.10 | | | | 13,270,194,963.63 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | June 30, 2024 | | | December 31, 2023 | |
| Non-current liabilities: | | | | | | | | | | | | |
| Long-term borrowings | | | | | | | | | | | 349,889,789.58 | |
| Bonds payable | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Lease liabilities | | | | | | | 630,657,327.50 | | | | 647,779,325.30 | |
| Long-term accounts payable | | | | | | | | | | | | |
| Long-term payroll payable | | | | | | | | | | | | |
| Estimated liabilities | | | | | | | 2,383,510.52 | | | | 2,383,510.52 | |
| Deferred income | | | | | | | 1,333,333.50 | | | | 2,133,333.48 | |
| Deferred tax liabilities | | | | | | | | | | | | |
| Other non-current liabilities | | | | | | | | | | | | |
| Total non-current liabilities | | | | | | | 634,374,171.52 | | | | 1,002,185,958.88 | |
| Total liabilities | | | | | | | 13,435,137,841.62 | | | | 14,272,380,922.51 | |
| Equity (or shareholders’ equity): | | | | | | | | | | | | |
| Paid-in capital (or capital stock) | | | | | | | 9,075,036,993.00 | | | | 9,075,036,993.00 | |
| Other equity instruments | | | | | | | | | | | | |
| Including: preferred stock | | | | | | | | | | | | |
| Perpetual bonds | | | | | | | | | | | | |
| Capital reserves | | | | | | | 4,173,624,245.73 | | | | 4,173,624,245.73 | |
| Less: Treasury shares | | | | | | | 488,768,297.30 | | | | 488,768,297.30 | |
| Other comprehensive income | | | | | | | 11,949,375.45 | | | | 5,403,581.79 | |
| Special reserves | | | | | | | | | | | | |
| Surplus reserves | | | | | | | 1,134,683,347.18 | | | | 1,132,840,649.96 | |
| Undistributed profits | | | | | | | 3,075,742,093.76 | | | | 2,842,161,822.51 | |
| Total equity (or shareholders’ equity) | | | | | | | 16,982,267,757.82 | | | | 16,740,298,995.69 | |
| Total liabilities and owners’ (or shareholders’) equity | | | | | | | 30,417,405,599.44 | | | | 31,012,679,918.20 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Income Statement
January to June 2024
| | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Items | | Notes | | | 2024 semi-annual | | | 2023 semi-annual | |
| I. Total operating income | | | | | | | 37,779,186,915.06 | | | | 42,027,399,571.78 | |
| Including: operating income | | | | | | | 37,779,186,915.06 | | | | 42,027,399,571.78 | |
| II. Total operating cost | | | | | | | 37,901,260,794.72 | | | | 41,970,966,349.12 | |
| Including: operating cost | | | | | | | 29,628,245,252.09 | | | | 32,786,165,503.87 | |
| Taxes and surcharges | | | | | | | 107,633,833.93 | | | | 100,371,502.10 | |
| Selling expenses | | | | | | | 6,513,523,191.26 | | | | 7,264,482,947.30 | |
| Administrative expenses | | | | | | | 888,283,638.63 | | | | 945,434,502.57 | |
| Research and development expenses | | | | | | | 133,685,051.80 | | | | 207,361,419.05 | |
| Financial expenses | | | | | | | 629,889,827.01 | | | | 667,150,474.23 | |
| Including: interest expenses | | | | | | | 606,283,991.18 | | | | 664,816,098.55 | |
| Interest income | | | | | | | 55,067,138.02 | | | | 80,001,194.06 | |
| Plus: other income | | | | | | | 49,296,614.54 | | | | 76,204,238.58 | |
| Investment income (loss is indicated by “-”) | | | | | | | 275,981,109.67 | | | | 121,781,506.96 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | | | 83,807,009.41 | | | | 57,662,606.55 | |
| Income from fair value variation (loss filled with “-”) | | | | | | | -183,828,045.27 | | | | -21,006,851.52 | |
| Credit impairment losses (loss is indicated by “-”) | | | | | | | 15,003,996.73 | | | | -18,698,565.71 | |
| Assets impairment losses (loss is indicated by “-”) | | | | | | | | | | | | |
| Gains from disposal of assets (loss is indicated by “-”) | | | | | | | 223,869,211.88 | | | | 173,172,404.39 | |
| III. Operating profits (loss is indicated by “-”) | | | | | | | 258,249,007.89 | | | | 387,885,955.36 | |
| Plus: non-operating income | | | | | | | 85,931,744.70 | | | | 131,565,164.65 | |
| Less: Non-operating expenses | | | | | | | 20,397,098.53 | | | | 17,465,082.22 | |
| IV. Total profit (total loss is indicated by “-”) | | | | | | | 323,783,654.06 | | | | 501,986,037.79 | |
| Less: income tax expense | | | | | | | 112,956,087.98 | | | | 179,642,343.20 | |
| V. Net profit (net loss is indicated by “-”) | | | | | | | 210,827,566.08 | | | | 322,343,694.59 | |
| (I) Classified by business continuity | | | | | | | | | | | | |
| 1. Going-concern net profits (net losses listed with a “-”) | | | | | | | 210,827,566.08 | | | | 322,343,694.59 | |
| 2. Discontinuing operation net profits (net losses listed with a “-”) | | | | | | | | | | | | |
| (II) Classified by ownership | | | | | | | | | | | | |
| 1. Net profits assigned to shareholders in the parent company (net losses listed with a “-”) | | | | | | | 275,314,748.17 | | | | 373,773,322.41 | |
| 2. Minority interest incomes (net losses listed with a “-”) | | | | | | | -64,487,182.09 | | | | -51,429,627.82 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | 2024 semi-annual | | | 2023 semi-annual | |
| VI. After-tax Net Amount of Other Comprehensive Income | | | | | | | 6,624,440.16 | | | | 6,042,238.40 | |
| (I) Net amount of other comprehensive income after tax attributable to the owners of the parent company | | | | | | | 6,624,440.16 | | | | 6,042,238.40 | |
| 1. Other comprehensive income that cannot be reclassified into profit and loss | | | | | | | | | | | 3,789,977.56 | |
| (1) Changes caused by re-measurement and re-definition of benefit plan | | | | | | | | | | | | |
| (2) Other comprehensive income that cannot be converted into profits or losses under the equity method | | | | | | | | | | | 3,789,977.56 | |
| (3) Fair value changes of other equity instrument investment | | | | | | | | | | | | |
| (4) Fair value changes of enterprise own credit risk | | | | | | | | | | | | |
| 2. Other comprehensive income to be re-classified into profit and loss | | | | | | | 6,624,440.16 | | | | 2,252,260.84 | |
| (1) Other comprehensive income that can be converted into losses and profits under the equity method | | | | | | | 6,545,793.66 | | | | 2,237,664.25 | |
| (2) Fair value changes of other creditor investments | | | | | | | | | | | | |
| (3) Amount of financial assets re- classified and included in other comprehensive income | | | | | | | | | | | | |
| (4) Provision for credit depreciation of other creditor investments | | | | | | | | | | | | |
| (5) Cash flow hedging reserves | | | | | | | | | | | | |
| (6) Balance arising from the translation of foreign currency financial statements | | | | | | | 78,646.50 | | | | 14,596.59 | |
| (7) Others | | | | | | | | | | | | |
| (II) After-tax net amount of other comprehensive income attributable to minority shareholders | | | | | | | | | | | | |
| VII. Total comprehensive income | | | | | | | 217,452,006.24 | | | | 328,385,932.99 | |
| (I) Total comprehensive income attributable to the owners of the Parent Company | | | | | | | 281,939,188.33 | | | | 379,815,560.81 | |
| (II) Total comprehensive income attributable to minority shareholders | | | | | | | -64,487,182.09 | | | | -51,429,627.82 | |
| VIII. Earnings per share: | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | 0.03 | | | | 0.04 | |
| (II) Diluted EPS (RMB/share) | | | | | | | 0.03 | | | | 0.04 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Income Statement of the Parent Company
January to June 2024
| | | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | | Notes | | | | 2024 semi-annual | | | | 2023 semi-annual | |
| I. Operation Revenue | | | | | | | 3,233,522,199.44 | | | | 3,708,367,118.66 | |
| Less: operating cost | | | | | | | 2,612,613,808.48 | | | | 3,166,111,617.26 | |
| Taxes and surcharges | | | | | | | 11,544,096.40 | | | | 6,894,202.79 | |
| Selling expenses | | | | | | | 426,414,404.52 | | | | 416,083,904.88 | |
| Administrative expenses | | | | | | | 216,988,328.66 | | | | 170,090,135.93 | |
| Research and development expenses | | | | | | | 24,618,876.58 | | | | 29,031,653.04 | |
| Financial expenses | | | | | | | 18,581,910.17 | | | | 22,137,246.84 | |
| Including: interest expenses | | | | | | | 60,601,673.96 | | | | 68,929,475.40 | |
| Interest income | | | | | | | 51,276,835.65 | | | | 55,939,621.13 | |
| Plus: other income | | | | | | | 1,319,455.22 | | | | 893,999.98 | |
| Investment income (loss is indicated by “-”) | | | | | | | 275,874,679.10 | | | | 58,152,270.86 | |
| Including: share of profits of joint ventures and cooperative enterprise | | | | | | | 99,793,038.64 | | | | 57,922,149.43 | |
| Income from fair value variation (loss is indicated by “-”) | | | | | | | 6,564,985.47 | | | | 225,225.22 | |
| Credit impairment losses (loss is indicated by “-”) | | | | | | | 2,661,170.41 | | | | -5,410,255.94 | |
| Assets impairment losses (loss is indicated by “-”) | | | | | | | | | | | | |
| Gains from disposal of assets (loss is indicated by “-”) | | | | | | | 2,199,466.49 | | | | 2,618,752.02 | |
| II. Operating profit (loss is indicated by “-”) | | | | | | | 211,380,531.32 | | | | -45,501,649.94 | |
| Plus: non-operating income | | | | | | | 2,220,813.66 | | | | 8,697,092.70 | |
| Less: Non-operating expenses | | | | | | | 474,999.45 | | | | 279,270.78 | |
| III. Total profit (total loss is indicated by “-”) | | | | | | | 213,126,345.53 | | | | -37,083,828.02 | |
| Less: income tax expense | | | | | | | -3,869,650.78 | | | | -32,731,781.73 | |
| IV. Net profit (net loss is indicated by “-”) | | | | | | | 216,995,996.31 | | | | -4,352,046.29 | |
| (I) Net profit from continuous operation (net loss is indicated by “-”) | | | | | | | 216,995,996.31 | | | | -4,352,046.29 | |
| (II) Net profit from discontinued operation (net loss is indicated by “-”) | | | | | | | | | | | | |
| V. After-tax net amount of other comprehensive income | | | | | | | 6,545,793.66 | | | | 6,027,641.81 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | | | | | | | | | | | 3,789,977.56 | |
| 1. Changes caused by re-measurement of defined benefit plan | | | | | | | | | | | | |
| 2. Other comprehensive income using the equity method that will not be reclassified to profit or loss | | | | | | | | | | | 3,789,977.56 | |
| 3. Changes in fair value of other equity instrument investments | | | | | | | | | | | | |
| 4. Changes in fair value of enterprise’s own credit risk | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | 2024 semi-annual | | | 2023 semi-annual | |
| (II) Other comprehensive income to be reclassified to profit or loss | | | | | | | 6,545,793.66 | | | | 2,237,664.25 | |
| 1. Other comprehensive income that can be reclassified to profit or loss in equity method | | | | | | | 6,545,793.66 | | | | 2,237,664.25 | |
| 2. Changes in fair value of other creditor investments | | | | | | | | | | | | |
| 3. Amount of financial assets re- classified and included in other comprehensive income | | | | | | | | | | | | |
| 4. Provision for credit impairment of other creditor investments | | | | | | | | | | | | |
| 5. Cash flow hedging reserve | | | | | | | | | | | | |
| 6. Balance arising from the translation of foreign currency financial statements | | | | | | | | | | | | |
| 7. Others | | | | | | | | | | | | |
| VI. Total comprehensive income | | | | | | | 223,541,789.97 | | | | 1,675,595.52 | |
| VII. Earnings per share (EPS): | | | | | | | | | | | | |
| (I) Basic EPS (RMB/share) | | | | | | | | | | | | |
| (II) Diluted EPS (RMB/share) | | | | | | | | | | | | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Cash Flow Statement
January to June 2024
| | | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | | Notes | | | | 2024 semi-annual | | | | 2023 semi-annual | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 41,267,093,336.00 | | | | 45,699,697,060.61 | |
| Other cash received relating to operating activities | | | | | | | 775,905,274.89 | | | | 1,097,177,159.33 | |
| Subtotal of cash inflows from operating activities | | | | | | | 42,042,998,610.89 | | | | 46,796,874,219.94 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 32,080,553,250.86 | | | | 35,645,684,886.16 | |
| Cash paid to and on behalf of employees | | | | | | | 3,650,334,355.95 | | | | 4,122,277,297.77 | |
| Cash paid for taxes | | | | | | | 586,921,013.79 | | | | 515,702,694.51 | |
| Other cash paid relating to operating activities | | | | | | | 2,785,384,118.41 | | | | 3,926,024,216.66 | |
| Subtotal of cash outflows from operating activities | | | | | | | 39,103,192,739.01 | | | | 44,209,689,095.10 | |
| Net cash flow from operating activities | | | | | | | 2,939,805,871.88 | | | | 2,587,185,124.84 | |
| II. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 592,415,179.14 | | | | 117,983,558.39 | |
| Cash received from investment income | | | | | | | 39,414,400.00 | | | | 129,235,200.00 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 11,010,168.22 | | | | 364,987.80 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | | | | | 22,050,815.89 | | | | | |
| Other cash received relating to investment activities | | | | | | | 868,041,696.19 | | | | 1,039,061,801.38 | |
| Subtotal of cash inflows from investment activities | | | | | | | 1,532,932,259.44 | | | | 1,286,645,547.57 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 255,739,326.16 | | | | 335,772,028.32 | |
| Cash paid for investment | | | | | | | | | | | 11,200,000.00 | |
| Net cash paid for the disposal of subsidiaries and other business entities | | | | | | | | | | | | |
| Net cash paid for the acquisition of subsidiaries and other business entities Other cash paid relating to investment activities | | | | | | | 2,880,000,000.00 | | | | 600,000,000.00 | |
| Subtotal of cash outflows from investment activities | | | | | | | 3,135,739,326.16 | | | | 946,972,028.32 | |
| Net cash flow from investment activities | | | | | | | -1,602,807,066.72 | | | | 339,673,519.25 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | 2024 semi-annual | | | 2023 semi-annual | |
| III. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors Including: cash received by subsidiaries from absorbing minority shareholder’s investment | | | | | | | | | | | | |
| Cash received from borrowings | | | | | | | 1,600,000,000.00 | | | | 1,150,000,000.00 | |
| Other cash received relating to financing activities | | | | | | | 39,661,515.99 | | | | 40,032,392.75 | |
| Subtotal of cash inflows from financing activities | | | | | | | 1,639,661,515.99 | | | | 1,190,032,392.75 | |
| Cash paid for debt repayment | | | | | | | 2,350,000,000.00 | | | | 5,099,100,000.00 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 61,377,165.29 | | | | 92,975,106.22 | |
| Including: dividend and profit paid by subsidiaries to minority shareholders | | | | | | | | | | | | |
| Other cash paid relating to financing activities | | | | | | | 1,375,982,145.08 | | | | 1,536,974,832.67 | |
| Subtotal of cash outflows from financing activities | | | | | | | 3,787,359,310.37 | | | | 6,729,049,938.89 | |
| Net cash flow from financing activities | | | | | | | -2,147,697,794.38 | | | | -5,539,017,546.14 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | -890.14 | | | | 1,088,894.12 | |
| V. Net increase in cash and cash equivalents | | | | | | | -810,699,879.36 | | | | -2,611,070,007.93 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 5,696,636,200.67 | | | | 7,443,008,300.63 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 4,885,936,321.31 | | | | 4,831,938,292.70 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Cash Flow Statement of the Parent Company
January to June 2024
Unit: Yuan Currency: RMB
| Items | | Notes | | | 2024 semi-annual | | | 2023 semi-annual | |
| I. Cash flow from operating activities: | | | | | | | | | | | | |
| Cash received from selling goods and rendering services | | | | | | | 3,851,063,058.36 | | | | 3,999,156,676.96 | |
| Tax refunds received | | | | | | | | | | | | |
| Other cash received relating to operating activities | | | | | | | 59,746,573.05 | | | | 1,981,954,053.31 | |
| Subtotal of cash inflows from operating activities | | | | | | | 3,910,809,631.41 | | | | 5,981,110,730.27 | |
| Cash paid for purchasing goods and receiving services | | | | | | | 2,173,295,916.66 | | | | 4,962,757,416.40 | |
| Cash paid to and on behalf of employees | | | | | | | 341,367,288.99 | | | | 283,228,433.45 | |
| Cash paid for taxes | | | | | | | 55,027,908.27 | | | | 16,116,993.39 | |
| Other cash paid relating to operating activities | | | | | | | 1,347,784,224.08 | | | | 269,434,288.45 | |
| Subtotal of cash outflows from operating activities | | | | | | | 3,917,475,338.00 | | | | 5,531,537,131.69 | |
| Net cash flow from operating activities | | | | | | | -6,665,706.59 | | | | 449,573,598.58 | |
| II. Cash flow from investment activities: | | | | | | | | | | | | |
| Cash received from disposal of investments | | | | | | | 590,970,179.14 | | | | 95,000,000.00 | |
| Cash received from investment income | | | | | | | 124,528,458.47 | | | | 129,235,200.00 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | | | | | 243,516.07 | | | | 104,704.28 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | | | | | 377,762,864.53 | | | | | |
| Other cash received relating to investment activities | | | | | | | 50,099,209.99 | | | | 254,210,732.47 | |
| Subtotal of cash inflows from investment activities | | | | | | | 1,143,604,228.20 | | | | 478,550,636.75 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | | | | | 11,946,091.67 | | | | 29,849,022.41 | |
| Cash paid for investment | | | | | | | | | | | 111,200,000.00 | |
| Net cash paid for the acquisition of subsidiaries and other business entities | | | | | | | | | | | | |
| Other cash paid relating to investment activities | | | | | | | 1,850,000,000.00 | | | | | |
| Subtotal of cash outflows from investment activities | | | | | | | 1,861,946,091.67 | | | | 141,049,022.41 | |
| Net cash flow from investment activities | | | | | | | -718,341,863.47 | | | | 337,501,614.34 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Notes | | | 2024 semi-annual | | | 2023 semi-annual | |
| III. Cash flow from financing activities: | | | | | | | | | | | | |
| Cash received from investors | | | | | | | | | | | | |
| Cash received from borrowings | | | | | | | 1,200,000,000.00 | | | | 1,150,000,000.00 | |
| Other cash received relating to financing activities | | | | | | | 2,231,038.39 | | | | 4,479,881.86 | |
| Subtotal of cash inflows from financing activities | | | | | | | 1,202,231,038.39 | | | | 1,154,479,881.86 | |
| Cash paid for debt repayment | | | | | | | 1,850,000,000.00 | | | | 2,159,100,000.00 | |
| Cash paid for distribution of dividends and profits, or cash payment for interests | | | | | | | 43,850,467.16 | | | | 60,807,427.20 | |
| Other cash paid relating to financing activities | | | | | | | 75,812,371.88 | | | | 434,873,937.93 | |
| Subtotal of cash outflows from financing activities | | | | | | | 1,969,662,839.04 | | | | 2,654,781,365.13 | |
| Net cash flow from financing activities | | | | | | | -767,431,800.65 | | | | -1,500,301,483.27 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | | | | | | | | | | | | |
| V. Net increase in cash and cash equivalents | | | | | | | -1,492,439,370.71 | | | | -713,226,270.35 | |
| Plus: opening balance of cash and cash equivalents | | | | | | | 4,060,421,032.75 | | | | 3,726,159,392.19 | |
| VI. Closing balance of cash and cash equivalents | | | | | | | 2,567,981,662.04 | | | | 3,012,933,121.84 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Consolidated Statement of Changes in Equity
January to June 2024
Unit: Yuan Currency: RMB
| | | 2024 semi-annual | |
| | | Equity attributable to parent company | | | | | |
| | | Paid-in capital | | Other equity instruments | | | | | Other | | | | | | | | | | | | | | | | | |
| | | (or capital | | | | Perpetual | | | Capital | | Less: Treasury | | comprehensive | | | | Surplus | | General risk | | Undistributed | | | | | | Minority | | | |
| Items | | stock) | | Preferred stock | | bonds | | Others | | reserves | | shares | | income | | Special reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | Total equity | |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,315,325,163.65 | | 488,768,297.30 | | 5,073,713.42 | | | | 1,132,840,649.96 | | | | -8,100,437,582.18 | | | | 5,939,070,640.55 | | -4,333,522.99 | | 5,934,737,117.56 | |
| Plus: Changes in accounting policies Correction of previous errors Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,315,325,163.65 | | 488,768,297.30 | | 5,073,713.42 | | | | 1,132,840,649.96 | | | | -8,100,437,582.18 | | | | 5,939,070,640.55 | | -4,333,522.99 | | 5,934,737,117.56 | |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | -67,624,053.93 | | | | 6,624,440.16 | | | | 1,842,697.22 | | | | 273,472,050.95 | | | | 214,315,134.40 | | 3,036,871.84 | | 217,352,006.24 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 6,624,440.16 | | | | | | | | 275,314,748.17 | | | | 281,939,188.33 | | -64,487,182.09 | | 217,452,006.24 | |
| (II) Capital paid in and reduced by owners | | | | | | | | | | -67,624,053.93 | | | | | | | | | | | | | | | | -67,624,053.93 | | 67,524,053.93 | | -100,000.00 | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | -67,624,053.93 | | | | | | | | | | | | | | | | -67,624,053.93 | | 67,524,053.93 | | -100,000.00 | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 1,842,697.22 | | | | -1,842,697.22 | | | | | | | | | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to the owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | | | | | | | | | 1,842,697.22 | | | | -1,842,697.22 | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | 2024 semi-annual | |
| | | Equity attributable to parent company | | | | | |
| | | Paid-in capital | | Other equity instruments | | | | | | Other | | | | | | | | | | | | | | | | | |
| | | (or capital | | | | Perpetual | | | | Capital | | Less: Treasury | | comprehensive | | | | Surplus | | General risk | | Undistributed | | | | | | Minority | | | |
| Items | | stock) | | Preferred stock | | bonds | | Others | | reserves | | shares | | income | | Special reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | Total equity | |
| 4. Changes in the defined benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,247,701,109.72 | | 488,768,297.30 | | 11,698,153.58 | | | | 1,134,683,347.18 | | | | -7,826,965,531.23 | | | | 6,153,385,774.95 | | -1,296,651.15 | | 6,152,089,123.80 | |
| | 2023 semi-annual | |
| | | Equity attributable to parent company | | | | | |
| | | Paid-in capital | | Other equity instruments | | | | | | Other | | | | | | | | | | | | | | | | | |
| | | (or capital | | | | Perpetual | | | | Capital | | Less: Treasury | | comprehensive | | | | Surplus | | General risk | | Undistributed | | | | | | Minority | | | |
| Items | | stock) | | Preferred stock | | bonds | | Others | | reserves | | shares | | income | | Special reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | Total equity | |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,292,122,541.86 | | 263,483,654.25 | | 440,260.72 | | | | 1,113,275,260.54 | | | | -6,751,820,069.61 | | | | 7,465,571,332.26 | | 191,328,573.37 | | 7,656,899,905.63 | |
| Plus: Changes in accounting policies Correction of previous errors Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,292,122,541.86 | | 263,483,654.25 | | 440,260.72 | | | | 1,113,275,260.54 | | | | -6,751,820,069.61 | | | | 7,465,571,332.26 | | 191,328,573.37 | | 7,656,899,905.63 | |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | | | 225,284,643.05 | | 6,042,238.40 | | | | | | | | 373,773,322.41 | | | | 154,530,917.76 | | -51,429,627.82 | | 103,101,289.94 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 6,042,238.40 | | | | | | | | 373,773,322.41 | | | | 379,815,560.81 | | -51,429,627.82 | | 328,385,932.99 | |
| (II) Capital paid in and reduced by owners | | | | | | | | | | | | 225,284,643.05 | | | | | | | | | | | | | | -225,284,643.05 | | | | -225,284,643.05 | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | | | 225,284,643.05 | | | | | | | | | | | | | | -225,284,643.05 | | | | -225,284,643.05 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | 2023 semi-annual | |
| | | Equity attributable to parent company | | | | | |
| | | Paid-in capital | | Other equity instruments | | | | | | Other | | | | | | | | | | | | | | | | | |
| | | (or capital | | | | Perpetual | | | | Capital | | Less: Treasury | | comprehensive | | | | Surplus | | General risk | | Undistributed | | | | | | Minority | | | |
| Items | | stock) | | Preferred stock | | bonds | | Others | | reserves | | shares | | income | | Special reserves | | reserves | | reserves | | profits | | Others | | Subtotal | | interests | | Total equity | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Appropriation to general risk reserves | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Distribution to the owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in the defined benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,292,122,541.86 | | 488,768,297.30 | | 6,482,499.12 | | | | 1,113,275,260.54 | | | | -6,378,046,747.20 | | | | 7,620,102,250.02 | | 139,898,945.55 | | 7,760,001,195.57 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Statement of Changes in Equity of the Parent Company
January to June 2024
Unit: Yuan Currency: RMB
| | | 2024 semi-annual | |
| | | | | | | | | | | | | | | Other | | | | | | | | | |
| | | Paid-in capital | | Other equity instruments | | | | Less: Treasury | | comprehensive | | | | | | Undistributed | | | |
| Items | | (or capital stock) | | Preferred stock | | Perpetual bonds | | Others | | Capital reserves | | shares | | income | | Special reserves | | Surplus reserves | | profits | | Total equity | |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,173,624,245.73 | | 488,768,297.30 | | 5,403,581.79 | | | | 1,132,840,649.96 | | 2,842,161,822.51 | | 16,740,298,995.69 | |
| Plus: Changes in accounting policies Correction of previous errors Others | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,173,624,245.73 | | 488,768,297.30 | | 5,403,581.79 | | | | 1,132,840,649.96 | | 2,842,161,822.51 | | 16,740,298,995.69 | |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | | | | | 6,545,793.66 | | | | 1,842,697.22 | | 233,580,271.25 | | 241,968,762.13 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 6,545,793.66 | | | | | | 216,995,996.31 | | 223,541,789.97 | |
| (II) Capital paid in and reduced by owners | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | 2024 semi-annual | |
| | | | | Other equity instruments | | | | | | Other | | | | | | | | | |
| Items | | Paid-in capital
(or capital stock) | | Preferred stock | | Perpetual bonds | | Others | | Capital reserves | | Less: Treasury
shares | | comprehensive
income | | Special reserves | | Surplus reserves | | Undistributed
profits | | Total equity | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | 1,842,697.22 | | 16,584,274.94 | | 18,426,972.16 | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Distributions to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Others | | | | | | | | | | | | | | | | | | 1,842,697.22 | | 16,584,274.94 | | 18,426,972.16 | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Changes in the defined benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,173,624,245.73 | | 488,768,297.30 | | 11,949,375.45 | | | | 1,134,683,347.18 | | 3,075,742,093.76 | | 16,982,267,757.82 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | 2023 semi-annual | |
| | | | | | | | | | | | | | | Other | | | | | | | | | |
| | | Paid-in capital | | Other equity instruments | | | | Less: Treasury | | comprehensive | | | | | | Undistributed | | | |
| Items | | (or capital stock) | | Preferred stock | | Perpetual bonds | | Others | | Capital reserves | | shares | | income | | Special reserves | | Surplus reserves | | profits | | Total equity | |
| I. Closing balance of last year | | 9,075,036,993.00 | | | | | | | | 4,150,421,623.94 | | 263,483,654.25 | | 785,921.18 | | | | 1,113,275,260.54 | | 2,666,073,317.71 | | 16,742,109,462.12 | |
| Plus: Changes in accounting policies Correction of previous errors Others | | | | | | | | | | | | | | | | | | | | | | | |
| II. Opening balance of current year | | 9,075,036,993.00 | | | | | | | | 4,150,421,623.94 | | 263,483,654.25 | | 785,921.18 | | | | 1,113,275,260.54 | | 2,666,073,317.71 | | 16,742,109,462.12 | |
| III. Increase and decrease of current period (decrease is indicated by “-”) | | | | | | | | | | | | 225,284,643.05 | | 6,027,641.81 | | | | | | -4,352,046.29 | | -223,609,047.53 | |
| (I) Total Comprehensive Income | | | | | | | | | | | | | | 6,027,641.81 | | | | | | -4,352,046.29 | | 1,675,595.52 | |
| (II) Capital paid in and reduced by owners | | | | | | | | | | | | 225,284,643.05 | | | | | | | | | | -225,284,643.05 | |
| 1. Ordinary share invested by the owners | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Capital paid in by holders of other equity instruments | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Amount of share-based payments recognized into the equity | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Others | | | | | | | | | | | | 225,284,643.05 | | | | | | | | | | -225,284,643.05 | |
| (III) Profit distribution | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Appropriation to surplus reserve | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Distributions to owners (or shareholders) | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Others | | | | | | | | | | | | | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | 2023 semi-annual | |
| | | | | | | | | | | | | | | Other | | | | | | | | | |
| | | Paid-in capital | | Other equity instruments | | | | Less: Treasury | | comprehensive | | | | | | Undistributed | | | |
| Items | | (or capital stock) | | Preferred stock | | Perpetual bonds | | Others | | Capital reserves | | shares | | income | | Special reserves | | Surplus reserves | | profits | | Total equity | |
| (IV) Internal carryforward of equity | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Capital reserves converted to share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Surplus reserve converted into share capital (or capital stock) | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Loss made up by surplus reserve | | | | | | | | | | | | | | | | | | | | | | | |
4. Changes in the defined
benefit plan transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | |
| 5. Other comprehensive income transferred to retained earnings | | | | | | | | | | | | | | | | | | | | | | | |
| 6. Others | | | | | | | | | | | | | | | | | | | | | | | |
| (V) Special reserve | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Addition in current period | | | | | | | | | | | | | | | | | | | | | | | |
| 2. Use in current period | | | | | | | | | | | | | | | | | | | | | | | |
| (VI) Others | | | | | | | | | | | | | | | | | | | | | | | |
| IV. Closing balance of current period | | 9,075,036,993.00 | | | | | | | | 4,150,421,623.94 | | 488,768,297.30 | | 6,813,562.99 | | | | 1,113,275,260.54 | | 2,661,721,271.42 | | 16,518,500,414.59 | |
Person in charge of the Company: Zhang Xuansong
Person in charge of accounting work: Wu Kaizhi
Person in charge of accounting institution: Lin Wei
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Yonghui Superstores Co., Ltd. (“the Company”), established on August 13, 2009, is a limited liability company registered in Fujian Province, People’s Republic of China, with a long-term operating period. The Company’s issued common shares, denominated in RMB, are listed on the Shanghai Stock Exchange. The Company is headquartered at No. 436 West 2nd Ring Middle Road, Fuzhou City, Fujian Province.
The main business activities of the Company and its subsidiaries (the “Group”) include the sale of fresh products, food supplies, clothing, and related promotional services, logistics distribution, real estate property acquisition, construction and leasing, etc.
The financial statements were reported upon the approval by the resolution of the Board of Directors on August 22, 2024. According to Articles of Association of the Company, the financial statements would be submitted to the shareholders’ meeting for review.
The consolidation scope of the consolidated financial statements is determined based on control. For changes in the current year, please refer to Section IX, Change of Consolidation Scope and Section X, Equity in Other Entities.
| 2. | Scope of Consolidated Financial Statements |
As of June 30, 2024, the Company had owned 103 subsidiary companies, with a decrease of 9 compared to the previous year in the number of entities included in the consolidation scope. Among them, the decrease in the number of subsidiary companies within the consolidation scope is due to 6 cancellations and 3 transfers.
| IV. | Preparation Basis for Financial Statements |
The financial statements were prepared in accordance with the CASBE: Basic Standards promulgated by the Ministry of Finance and the specific accounting standards, application guidelines, explanations and other regulations (collectively referred to as “Accounting Standards for Business Enterprises”) issued and revised thereafter. Furthermore, this financial statement also discloses financial information in accordance with the No. 15 Rules for the Disclosure of Information of the Companies that Offer Securities to the Public – General Provisions on Financial Statement.
| | √ | Applicable | ¨ | Not applicable |
The financial statements were listed on a going concern basis.
Except for certain financial instruments, the financial statements were prepared in accordance with the historical cost as the basis for measurement. If the asset decreases in value, the provision for impairment of assets should be made according to relevant regulations.
| V. | Significant Accounting Policy and Estimate |
Specific accounting policies and accounting estimates presentation:
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group has formulated specific accounting policies and estimates based on its actual production and operational characteristics, mainly reflected in the provision for bad debts of receivables, inventory valuation methods, depreciation of fixed assets, amortization of intangible assets, capitalization criteria for research and development expenses, amortization of long-term prepaid expenses, recognition of deferred tax assets, provision for impairment of long-term assets, and revenue recognition and measurement.
| 1. | Statement on Compliance with Accounting Standards for Business Enterprises |
The financial statements comply with the requirements of the CASBE and faithfully and completely reflect the financial condition of the Company and the Group as of June 30, 2024, as well as the operational results and cash flows for the first half of 2024.
The accounting fiscal year of the Company begins on January 1 and ends on December 31 of the Gregorian calendar.
| | √ | Applicable | ¨ | Not applicable |
Business cycle of the Group is 12 months.
The recording currency adopted by the Company and its domestic subsidiaries and currency used for preparing the financial statements are RMB. The overseas subsidiary companies of the Company determine their functional currency based on the primary economic environment in which they operate and convert it to RMB when preparing financial statements. Unless otherwise specified, the monetary unit in the financial statements is RMB.
| 5. | Significance criteria determination methods and selection basis |
| | √ | Applicable | ¨ | Not applicable |
| Items | | Significance criteria |
| Significant accounts receivable with single provision for bad debt reserves | | Over RMB10,000 thousand |
| Significant provision reversals or reversals of bad debt reserves for receivables | | Over RMB10,000 thousand |
| Actual write-off of significant accounts receivable | | Over RMB10,000 thousand |
| Significant construction in progress | | Budget exceeding RMB80,000 thousand |
| Significant other payables | | Over RMB10,000 thousand |
| Significant non-wholly-owned subsidiaries | | Subsidiaries’ net assets account for 10% of the Group’s net assets |
| Significant capitalized research and development projects | | Over RMB10,000 thousand |
| Important cooperative enterprises and joint ventures | | Investee companies account for 10% of the Group’s net assets |
| Long-term equity investments with significant impairment provisions established | | Impairment provisions account for 5% of the carrying amount of long-term equity investments |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 6. | Accounting method for business combination under and not under the same control |
| | √ | Applicable | ¨ | Not applicable |
Business combination is divided into business combination under and not under same control.
Business combination under same control
For the business combination under same control, the assets and liabilities that the combing party obtains from the combined party, except from the adjustments made due to difference of accounting policies, shall be measured on the basis of the book value of the combined party in the consolidated financial statement of the final controller on the combination date. The difference between the book value of consideration paid and the book value of net assets acquired in a business combination is adjusted to capital reserves. If the capital reserves are insufficient, it is adjusted against retained earnings.
Business combination under same control that is realized by several transactions
In some financial statements, the book value shares of the net assets of the combined party in the consolidated financial statement of the final controller calculated based on the shareholding ratio on the combination date shall be deemed as the initial investment costs of the investment. For the balance between the initial investment costs, the book value of the investment held before the combination plus the book value of the consideration newly paid before the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted.
In consolidated financial statements, for the assets and liabilities of the acquiree obtained by the acquirer in the acquisition, in addition to the adjustment made due to difference of accounting policy, they shall be measured at the book value on the acquisition date in the consolidated financial statement of the final controller. For the balance between the sum of the book value of the investment held before the combination and the book value of the consideration newly paid on the combination date and the book value of net assets obtained in the combination, the capital reserves shall be offset, and if the capital reserves are not sufficient to be offset, the retained earnings shall be adjusted. For the long-term equity investment held by the combining party before it obtained the control over the combined party, changes in relevant profits and losses, other comprehensive incomes and other owner’s equities recognized from the later one of the date when the original equity is obtained and the date when the combining party and the combined party are under the final control of the same party to the combination date shall respectively be used to offset the retained income at the beginning period of the comparative statement or profits and losses of current period.
Business combination not under the same control
Business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination. In a business combination not under the same control, the party which obtains the control on other combining enterprise(s) on the acquisition date is the acquirer, and other combining enterprise(s) is(are) the acquiree. Acquisition date refers to the date on which the acquirer actually obtains the control on the acquiree.
Under the non-common control condition, acquiree’s identifiable assets, liability and contingent liabilities acquired from the business combination shall be measured at fair value on the acquisition date.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is greater than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference is recognized as goodwill and subsequently measured at cost less accumulated impairment losses. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the identifiable assets, liabilities, the fair value of and contingent liabilities, the fair value of merger consideration paid (or the fair value of equity securities issued), and the fair value of equity held by the acquiree before the acquisition date shall be rechecked at first. If the sum of the fair value of the merger consideration paid (or the fair value of the equity securities issued) and the fair value of the equity of the acquiree held before the acquisition date is still less than the fair value share of the identifiable net assets of the acquiree obtained in the merger, the difference shall be included in the current profits and losses.
In cases of step-by-step acquisition of businesses under common control, for long-term equity investments held by the acquiring party before the acquisition date, they are remeasured at fair value on the acquisition date. The difference between fair value and the book value is recognized in the current period’s income statement. For the other comprehensive income of the acquired party’s long-term equity investments held before the acquisition date accounted for under the equity method, the accounting treatment is based on the same basis as the direct disposal of the relevant assets or liabilities of the invested entity. Other changes in equity, other than net income, other comprehensive income, and profit distribution, are treated as income in the period to which the acquisition date belongs.
| 7. | Criteria for determining control and preparation method for consolidated financial statements |
| | √ | Applicable | ¨ | Not applicable |
The combination scope of the consolidated financial statements is determined on the basis of control, including the financial statements Company and all of its subsidiaries. Subsidiaries refer to the entities controlled by the Company (including the detachable parts of the Company and the invested companies, the structured entities controlled by the Company, and so on). An investor has control over an investee when it has the following three elements: the investor has the rights over the investee, the investor is entitled to variable returns through its involvement with the investee, and the investor has the ability to use its rights to affect the returns from the investee.
The accounting policies and accounting period adopted by the subsidiaries and the Company is not the same. In the preparation of the consolidated financial statements, the consolidated financial statements of the subsidiaries shall be properly adjusted in accordance with the accounting policies and accounting period of the Company. Assets, liabilities, equity, income, expenses and cash flows generated by all transactions between subsidiaries of the Group are fully offset at the time of the merger.
Where the loss shared by minority shareholders in a subsidiary exceeds the share enjoyed by minority shareholders in the subsidiary’s shareholder’s equity at the beginning of the period, the balance shall be written down with the minority shareholders’ equity.
For subsidiaries acquired through business combination not under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement from the date when the Group acquires the control right to the date when it terminates the control right. In the process of preparing consolidated financial statements, the financial statements of the subsidiary company shall be adjusted on the basis of the fair values of the identifiable assets, liabilities and contingent liabilities determined on the acquisition date.
For subsidiaries acquired through business combination under the same control, the operating results and cash flow of the acquiree shall be included to consolidated financial statement at the beginning of combination. During the preparation of consolidated financial statement, relevant items of financial statement of last year shall be adjusted and they will be regarded as reporting entities for consolidated statement and always exist since the control of final controller.
Where changes in relevant facts and circumstances result in changes to one or more of the control elements, the Group will reassess whether or not to control the investee.
In the circumstance of not losing the control, changes in minority shareholders’ equity are taken as an equity transaction.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 8. | Accounting method for joint venture arrangement and joint operation |
| | √ | Applicable | ¨ | Not applicable |
Joint arrangement refers to the arrangement jointly controlled by two or more participants. The Group’s joint arrangements are classified as Cooperative Enterprises.
Joint venture refers to the Group only enjoying the right of joint venturing arrangement over the net assets.
The Group shall carry out accounting treatment for the investment of joint ventures in accordance with the provisions on the equity method of accounting for long-term equity investment.
| 9. | Determination of cash and cash equivalents |
Cash refers to the Group’s cash on hand and deposits that can be used for payment at any time; cash equivalents refer to the cash held by the Group with short maturity, strong liquidity, and easy conversion to a known amount and the investment of low value changing risks.
| 10. | Foreign currency business and the translation of foreign currency financial statement |
| | √ | Applicable | ¨ | Not applicable |
The Group shall translate the amount of a foreign currency transaction into its functional currency.
For foreign currency transactions, the foreign currency amount is initially recognized by using the spot exchange rate as of the transaction date to translate it into the functional currency amount. The foreign currency monetary items on the balance sheet date shall be translated at the spot exchange rate on the balance sheet date. The resulting converted difference between the settlement and monetary items shall be treated as profit or loss in the current period, except for the difference arising from the special borrowings of foreign currency relating to the acquisition and construction of assets eligible for capitalization is disposed as per the principle of borrowing costs capitalization. The foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be changed. Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rate on the date when the fair value is determined. The resulting difference shall be recognized in the current profit or loss or other comprehensive income based on the nature of the non-monetary items.
For overseas operations, the Group translates the financial statements from their functional currency to RMB: for assets and liabilities in the balance sheet, the spot exchange rate as of the balance sheet date is used, while for equity items other than “undistributed profit”, the exchange rate as of the transaction date is used. For income and expense items in the income statement, the average exchange rate during the period is used for translation (unless the exchange rate fluctuations make it inappropriate, in which case the spot exchange rate as of the transaction date is used). The translation differences in the foreign currency financial statements obtained with the above-mentioned conversion method are recognized as other comprehensive income. In disposing of overseas operations, other comprehensive income related to the overseas operations shall be transferred to the disposal of current profits and losses, the partial disposal shall be calculated based on the disposal proportion.
The foreign currency cash flow and cash flow of overseas subsidiary shall be translated at the spot exchange rate on the date when the cash flow occurs. The influence of exchange rate fluctuation on cash shall be separately presented as an adjustment item in the cash flow statement.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Financial instruments refer to the contracts under which the financial assets of an enterprise are formed and the financial liability or right instruments of any other entity are formed.
Recognition and derecognition of financial instruments
A financial asset or financial liability shall be recognized when the Group becomes a party of financial instrument contract.
A financial asset (or part of it, or a portion of a group of similar financial assets) is derecognized when the following conditions are met, that is, it is written off from its account and balance sheet:
| (1) | The right to receive cash flow of financial assets expires; |
| (2) | Transferred the right to receive cash flows from financial assets is transferred, or assumed the obligation to pay the full amount of cash flows to third parties in time under the “pass-through agreement”; and (a) substantially transferred the almost all the risks and rewards of financial assets ownership, or (b) abandoned the control over the financial assets, although all the risks and rewards were substantially transferred or retained. |
Where the responsibility for a financial liability has been fulfilled, revoked or expired, the financial liability will be derecognized. Where the current financial liability is replaced by another financial liability of the same creditor on virtually different terms, or the terms of the current liability are substantially modified, such replacement or modification shall be disposed for derecognition of the original liability and recognition of new liabilities, and the difference shall be included in the current profit and loss.
Financial asset bought and sold by regular means shall be recognized and derecognized in accordance with accounting at the transaction date. The conventional method of buying and selling financial assets refer to the delivery of financial assets according to the contractual terms, with the contracts specifying the delivery dates determined by regulations or market conventions. The trading day is the date on which the Group promises to buy or sell financial assets.
Classification and measurement of financial assets
At the time of initial recognition, the financial assets of the Group are classified as follows according to the Group’s business model of managing financial assets and contractual cash flow characteristics of financial assets: financial assets measured at fair value with changes included in current profits and losses, financial assets measured at amortized cost.
In initial recognition, financial assets shall be measured at fair value, but the accounts receivable arising from the sale of goods or provision of services exclude significant financing elements or do not take into account the financing elements of less than one year, and the initial measurement shall be carried out according to the transaction price.
For the financial assets measured at fair value with changes included in the current profits and losses, the transaction expenses thereof are directly recorded into the profits and losses of the current period; for other categories of financial assets, the transaction expenses thereof are included into the initially recognized amount.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Subsequent measurement of financial assets depends on their classification:
Financial assets measured at amortized costs
Financial assets that meet the following conditions simultaneously and are classified as financial assets measured at amortized cost: the business mode for managing the financial assets is to collect the contractual cash flows; as stipulated in the contract terms of the financial assets, the cash flow generated on a specific date is only the payment for principal and interest based on the amount of outstanding principal. Actual interest method is adopted for determining interest income of such financial assets, the profits and losses that arise when such financial assets are terminated, amortized or depreciated, shall be recorded into the profits and losses of the current period.
Financial assets measured at fair value with changes included in current profits and losses
The Company classifies the financial assets above other than those measured at amortized cost as financial assets measured at fair value with changes included in current profits and losses. For such financial assets, the fair value is used for subsequent measurement, with all changes in fair value included in the current profits and losses.
Classification and measurement of financial liabilities
The financial liabilities of the Group are initially classified as financial liabilities measured at amortized cost. The transaction costs related to financial liabilities measured at amortized cost are included in their initially recognized amounts.
Subsequent measurement of financial liabilities depends on their classification:
Financial liabilities measured at amortised cost
These financial liabilities are calculated with the actual interest rate method with reference to the amortized cost for subsequent measurement.
Impairment of financial instruments
The group recognizes impairment losses and establishes provisions for expected credit losses on financial assets measured at amortized cost and lease receivables.
For accounts receivable without significant financing components, the Group measures the loss provision based on the expected credit loss amount within the whole duration by using the simplified measurement method.
For lease receivables, the Group chooses to apply a simplified measurement approach, measuring the loss provision based on the expected credit loss amount equivalent to the entire lease term.
For financial assets other than those using simplified measurement method, the Group assesses whether the credit risk has increased significantly since the initial recognition on each balance sheet date. If the credit risk does not increase significantly after initial recognition and is in the first stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the next 12 months, and calculates the interest income according to the book balance and the actual interest rate; if the credit risk has increased significantly since the initial recognition, but the credit depreciation has not occurred and the credit risk is in the second stage, the Group measures the loss reserve according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the book balance and the actual interest rate; if credit depreciation occurs after initial recognition and the credit risk is in the third stage, the Group measures the loss reserves according to the amount equivalent to the expected credit loss in the whole duration, and calculates the interest income according to the amortization cost and the actual interest rate. For financial instruments with low credit risk on the balance sheet date, the Group assumes that its credit risk has not increased significantly since initial recognition.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group assesses the expected credit loss of financial instruments based on individual and collective assessments. Considering the credit risk characteristics of different customers, the Group assesses the expected credit loss of receivables on the basis of aging combination.
For disclosures regarding the criteria for determining a significant increase in credit risk, definition of incurred credit-impaired assets, and assumptions for measuring expected credit losses, please refer to Note XII, 1.
The factors reflected by the methods applied by the Group to measure the expected credit loss of financial assets include: unbiased probability weighted average amount determined by evaluating a series of possible results, the time value of money, and reasonable and evidence-based information about past events, current situation and forecast of future economic situation which can be obtained on the balance sheet date without expending unnecessary extra cost or efforts.
If the Group no longer reasonably expects the cash flow of the financial asset contract to be recovered in whole or in part, the book balance of the financial asset shall be directly written down.
Transfer of financial assets
In the event that the Group has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. In case it has retained nearly all of the risks and rewards associated with the ownership of the financial asset, the financial asset shall not be derecognized.
In the event the Group has neither transferred nor retained almost all the risks and rewards of ownership of financial assets, the following cases shall be considered: if the control of the financial assets is abandoned, the financial assets are derecognized and the assets and liabilities are recognized; if the financial assets are controlled, the relevant financial assets are recognized according to the extent to which they continue to be involved in the transferred financial assets, and the related liabilities are recognized accordingly.
In case it continues to be involved by transferring the financial assets and providing financial guarantee, the assets resulted in are recognized according to any one of the book value of the financial assets and the financial guarantee amount, whichever is lower. The amount of financial guarantee refers to the highest amount of repayment to be demanded among the considerations received.
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Classification and determination basis of provision for bad debts based on credit risk characteristics grouping
| | √ | Applicable | ¨ | Not applicable |
For accounts receivable, regardless of whether there is a significant financing component, the Group always measures its loss provision based on the amount equivalent to the expected credit loss during the entire duration.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
When individual financial assets cannot be assessed for expected credit losses on a reasonable cost basis, the Group classifies receivables into various portfolios based on their credit risk characteristics. Expected credit losses are then calculated on a portfolio basis, and the determination of the portfolio is based on the following criteria:
Accounts receivable portfolio 1: Receivables for sales proceeds, supplier service fees, rent, project payments, and other amounts.
Accounts receivable portfolio 2: Receivables from affiliated parties
For accounts receivable divided into the portfolio, the Group prepares a comparison table between the aging/days overdue of accounts receivable and the expected credit loss rate in the whole duration to calculate the expected credit loss by referring to the experience of historical credit loss and combining the current situation and the forecast of future economic situation.
Calculation method for determining the age to identify the portfolio characteristics of credit risk
| | √ | Applicable | ¨ | Not applicable |
The Company shall prepare a comparison table of aging accounts receivable and expected credit loss rate in the whole duration and calculate expected credit losses by referring to the historical credit loss experience and combining the current situation and the forecast of the future economic situation. Aging based on the nature of funds and confirmation of credit risk characteristics of ageing combinations.
The table below shows the age combinations and expected credit loss rates for ageing combinations:
| | | Within | | | | | | | | | Over | |
| Nature of payment | | 1 year | | | 1-2 years | | | 2-3 years | | | 3 years | |
| Portfolio of accounts receivable 1 | | | 6 | % | | | 26 | % | | | 47 | % | | | 100 | % |
| Portfolio of accounts receivable 2 | | | 1 | % | | | 1 | % | | | 1 | % | | | 1 | % |
Criteria for recognizing impairments on an individual provision basis
| | √ | Applicable | ¨ | Not applicable |
For accounts receivable with significantly different credit risks from the overall credit risk, the Company recognizes expected credit losses on an individual provision basis. If the Company no longer reasonably expects the cash flow of the financial asset contract to be recovered in whole or in part, the book balance of the financial asset shall be directly written down.
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Classification and determination basis of provision for bad debts based on credit risk characteristics grouping
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other receivables are segmented into several portfolios based on their credit risk characteristics. The determination of portfolio composition for other receivables is as follows:
Other receivables portfolio 1: Receivables for various types of deposits, guarantees, purchases, and store reserve funds.
Other receivables portfolio 2: Receivables from related parties.
Other receivables portfolio 3: Other receivables.
Other receivables portfolio 4: Intra-group receivables.
For other receivables, factored receivables, loans granted, and advances that are grouped together, the Group calculates the expected credit losses based on default risk exposure and the expected credit loss rate over the next 12 months or the entire lease term.
Calculation method for determining the age to identify the portfolio characteristics of credit risk
| | √ | Applicable | ¨ | Not applicable |
The Company shall prepare a comparison table of other aging accounts receivable and expected credit loss rate in the whole duration and calculate expected credit losses by referring to the historical credit loss experience and combining the current situation and the forecast of the future economic situation. Aging based on the age and nature of funds to confirm credit risk characteristics of ageing combinations
The table below shows the age combinations and expected credit loss rates for ageing combinations:
| | | Within | | | | | | | | | Over | |
| Nature of payment | | 1 year | | | 1-2 years | | | 2-3 years | | | 3 years | |
| Portfolio of other accounts receivable 1 | | | 1 | % | | | 1 | % | | | 1 | % | | | 1 | % |
| Portfolio of other accounts receivable 2 | | | 1 | % | | | 1 | % | | | 1 | % | | | 1 | % |
| Portfolio of other accounts receivable 3 | | | 7 | % | | | 21 | % | | | 47 | % | | | 100 | % |
Criteria for recognizing impairments on an individual provision basis
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Inventory categories, cost allocation methods for issues, inventory counting system, devaluation methods for low-value consumables and packaging materials
| | √ | Applicable | ¨ | Not applicable |
The inventories include raw materials, finished goods, and low-value consumables.
The initial measurement of inventory shall be made at its cost. The costs of the inventory include purchasing cost, processing cost and other costs. The outgoing inventory is valued at actual cost using the weighted average method, while processed inventory is valued at actual cost using the weighted average method. Amortization method is adopted for the amortization of low priced and easily worn articles and packing materials.
The perpetual inventory system is used as the inventory taking method.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Confirmation criteria and accrual methods of inventory depreciation reserves
| | √ | Applicable | ¨ | Not applicable |
The cost or the net realizable value, whichever is lower, is calculated on the balance sheet date. When the inventory cost is higher than its NRV, inventory reserves shall be made, and shall be included in the current profits and losses. The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. When providing for inventory write-down, it is done based on the category of inventory.
Categories and determination basis for recognizing provision for inventory impairment based on a group approach, and determination basis of net realizable value for different categories of inventory
| | ¨ | Applicable | √ | Not applicable |
Calculation method and determination basis of net realizable value for each age combination based on the age of inventory
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| 18. | Held-for-sale non-current assets or disposal group |
| | √ | Applicable | ¨ | Not applicable |
Criteria for classifying as held-for-sale non-current assets or disposal group and accounting treatment method
| | √ | Applicable | ¨ | Not applicable |
The Group mainly classifies it into the held-for-sale category by selling (including non-monetary assets exchange with commercial substance, the same below) instead of continuing to use a non-current asset or disposal group to recover its book value.
The aforementioned non current assets do not include investment properties which are subsequently measured by fair value model, biological assets which are measured by net amount of fair value minus selling expenses, assets formed by employee compensation, financial assets, deferred income tax assets and rights arising from insurance contracts.
Disposal group refers to a group of assets that are disposed together through sale or other means in a transaction, and the liabilities directly related to these assets transferred in the transaction. The disposal group includes goodwill acquired in business combination under specific circumstances.
The Company divides the non-current assets or disposal groups meeting the following conditions into held-for-sale types: the non-current assets or disposal groups can be sold immediately in current circumstances according to the rules of selling this kind of assets in similar transactions or conventions of disposal group; highly possible to be sold, that is, resolution has been made for one sales plan and certain purchase commitment has been obtained and sales is anticipated to be completed within one year. If the Group loses control over its subsidiaries due to the sale of the investment in these subsidiaries, whether or not it retains part of the equity investment after the sale, the investment in subsidiaries to be sold satisfies the conditions for held-for-sale type. In some financial statements, the investment is divided into held-for-sale types, and all assets and liabilities of its subsidiaries are classified into held-for-sale types in the consolidated financial statements.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
In the initial measurement or re-measurement of the non-current assets or disposal groups held for sale on the balance sheet date, the difference between the book value and the net value after the sales amount are deducted from the fair value (the book value is higher than the net value) is recognised as asset impairment loss. For the amount of the asset impairment loss recognized by the disposal group held for sale, the goodwill book value of disposal group shall be deducted first, then book value of disposal group shall be deducted according to the proportion of the book values of various non-current assets measured in the disposal group.
If the fair value of non-current assets or disposal groups held for sale on the balance sheet date is less than the net value of the sale expenses, the amount of previous write-down shall be restored and transferred back within the impairment loss of assets recognized after being classified as held for sale. The amount transferred shall be included in the current profits or losses. The book value of goodwill that has been deducted cannot be reversed.
Determination criteria and reporting method for discontinued operations
| | ¨ | Applicable | √ | Not applicable |
| 19. | Long-term equity investment |
| | √ | Applicable | ¨ | Not applicable |
Long-term equity investment includes equity investment in subsidiaries, cooperative enterprises and joint ventures.
Long-term equity investment shall be initially measured as the initial investment cost when it is obtained. For the long-term equity investment obtained through business combination under the same control, the share of the book value of the equity of the merged party in the final controlling party’s consolidated financial statements obtained on the combination date shall be taken as the initial investment cost; the difference between the initial investment cost and the book value of the combination consideration shall be adjusted to the capital reserve (if it is insufficient to offset, the retained earnings shall be offset). Other comprehensive income before the merger date shall be accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when disposing of the investment. Shareholders’ equity recognized due to changes in Shareholders’ equity other than net profit and loss, other comprehensive income and profit distribution of the investee shall be transferred to the current profit and loss when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. For long-term equity investment obtained through a business combination not under the same control, the merger cost shall be used as the initial investment cost (if a business combination not under the same control is realized step by step through multiple transactions, the book value of the equity investment of the acquiree held before the purchase date shall be used. The sum of the new investment cost on the purchase date shall be the initial investment cost). Combination costs include the sum of the assets paid by the purchaser, the liabilities incurred or assumed, and the fair value of the equity securities issued. The other comprehensive income recognized by the equity method that is held before the purchase date is accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when disposing of the investment, as the investee removes net gains and losses, Shareholders’ equity confirmed by changes in other Shareholders’ equity other than other comprehensive income and profit distribution shall be transferred to the current profits and losses when the investment is disposed of, wherein those that are still long-term equity investments after disposal are carried forward in proportion, and those that are converted into financial instruments after disposal are carried forward in full. The accumulated fair value changes of equity investments held prior to the date of acquisition, accounted for as financial instruments and recorded in other comprehensive income, are fully transferred to retained earnings upon adoption of the cost method for accounting. For long-term equity investments acquired through means other than business combinations, the initial investment cost is determined as follows: for investments acquired by paying cash, the actual purchase price, along with directly related expenses, taxes, and other necessary expenditures, are considered as the initial investment cost; for investments acquired through the issuance of equity securities, the fair value of the equity securities at the time of issuance is considered as the initial investment cost.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
In the event the Company can exert significant influence over the investee, the cost method shall be employed in some financial statements of the Company. Control refers to the control power over the investors. Through the control, the investor can obtain variable returns by participating in relevant activities of the investor and can wield influence upon the return amount by using the control power to the investor.
The price of a long-term equity investment measured by employing the cost method shall be included at its initial investment cost. If there are additional investments or disinvestments, the long-term equity investment cost shall be adjusted. The dividends or profits declared to be distributed by the investee shall be recognized as the current investment income.
For investees over which the Group has joint control or significant influence, long-term equity investments are accounted for using the equity method. Joint control refers to the control of a specific arrangement, whose activities have to be decided with the consensus by all participants sharing control rights, according to related agreements. Significant influence refers to the investor’s right of participation in the decisions of financial and operational policies of the investee, not including the right to control, or jointly control with other participants.
Where the initial cost of a long-term equity investment calculated with the equity method is more than the investing enterprise’ attributable share of the fair value of the invested entity’s identifiable net assets for the investment, it is included in the initial cost of the long-term equity investment. Where the initial cost of a long term equity investment is less than the investing enterprise’ attributable share of the fair value of the invested entity’s identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When the equity method is applied, after the investor obtains a long-term equity investment, it shall, in accordance with the attributable share of the net profits or losses and other comprehensive income proportions of the investee, recognize the investment profits or losses and other comprehensive income and adjust the book value of the long-term equity investment. Confirming the share of the net profit or loss of the investee is based on the fair value of the investee’s identifiable assets at the time of obtaining the investment. In accordance with the Group’s accounting policies and accounting periods and after the internal transaction gains and losses that occur between the joint ventures and affiliated businesses, the proportion that should be enjoyed by the investor shall be measured (but if the internal transaction losses are the asset impairment losses, the amount shall be fully confirmed), and recognized after the net profit of the investee is adjusted, except for the assets that are invested or sold to constitute businesses. The investing enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall share, and shall reduce the book value of the long-term equity investment correspondingly. The Group recognizes the net losses incurred by the investee, limiting the recognition to the carrying amount of the long-term equity investment and any other long-term equity interests that essentially represent a net investment in the investee. However, the Group is not limited to the extent of the loss to the carrying amount of the investment if it has an additional obligation to cover the losses. Where any change is made to the shareholder’s equity other than the net profits and losses, other comprehensive income, and profit distribution of the investee, the book value of the long-term equity investment shall be adjusted and included in the shareholder’s equity.
When disposing a long-term equity investment, the balance between its book value and the actual purchase price shall be included in the current profits and losses. For the long-term equity investment accounted for using the equity method, if the equity method is terminated, the related comprehensive income calculated by the original equity method is calculated with the same accounting method the investee uses to directly dispose its related assets or liabilities. The Shareholder’ equity recognized due to the changes in other Shareholder’s equity of the investee is fully transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution; if the equity method is still adopted, the related comprehensive income calculated by the original equity method is put under accounting treatment on the same basis the investee disposing related assets or liabilities, and transferred to the current profit and loss in proportion. The Shareholder’ equity recognized due to the changes in other Shareholder’s equity of the investee is transferred into the current profit and loss, except for the net profit or loss, other comprehensive income and profit distribution.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | In case cost calculation model is adopted |
The investment properties refer to the properties held for earning the rent or capital appreciation or for both of them, including the leased buildings.
The initial measurement of the investment properties shall be made at its cost. Subsequent expenditures relating to investment properties are included in the cost of the investment properties in the event that the economic benefits associated with the asset are likely to flow in and the cost can be reliably measured. Otherwise, it shall be included in the current profit and loss when actually incurred.
The Group takes the cost model for subsequent measurement of investment properties and provides depreciation or amortization using the depreciation methods applied to buildings and structures within fixed assets.
| (1). | Recognition conditions |
| | √ | Applicable | ¨ | Not applicable |
Fixed assets shall be recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. Subsequent expenditure regarding the fixed assets, if it meets the recognition conditions, is included in the cost of the fixed assets, and the carrying amount of the replaced portion is derecognized; otherwise, it is included in the current profit or loss.
The initial measurement of fixed assets shall be made at their cost. The costs for the acquisition of fixed assets include the buying price, relevant expenses of taxation, other expenses that may be directly assigned to such assets before making the fixed assets reach expected use conditions.
| | √ | Applicable | ¨ | Not applicable |
| | | | | Depreciation | | | | | | Annual | |
| | | Depreciation | | Period | | | Residual | | | depreciation | |
| Category | | method | | (year) | | | value rate | | | rate | |
| Houses and buildings | | Straight-line method | | | 20-35 | | | | 5 | % | | | 2.71-4.75 | % |
| Machinery and equipment | | Straight-line method | | | 5-10 | | | | 5 | % | | | 9.5-19 | % |
| Transportation equipment | | Straight-line method | | | 5-10 | | | | 5 | % | | | 9.5-19 | % |
| Electronic equipment and tool appliances | | Straight-line method | | | 5 | | | | 5 | % | | | 19 | % |
The Group shall, at least at the end of each year, take a check on the useful life, expected net salvage value, and the depreciation method of the fixed assets, and adjust them when necessary.
| 22. | Construction in progress |
| | √ | Applicable | ¨ | Not applicable |
The cost of work in progress is determined based on the actual construction expenses incurred, including necessary construction expenses and other related costs incurred during the construction period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
When work in progress reaches the predetermined usable state, it is transferred to fixed assets and long-term prepaid expenses. The standards are as follows:
| Category | | Criteria for carrying forward fixed assets |
| Houses and buildings | | Actual commencement of use |
| Machinery and equipment | | Completion of installation and commissioning |
| Electronic equipment | | Actual commencement of use or completion of installation and commissioning |
| Means of transport | | Obtaining the vehicle driving license |
| Tools and machinery | | Actual commencement of use or completion of installation and commissioning |
| | √ | Applicable | ¨ | Not applicable |
Borrowing costs are recognized in the current period’s income statement.
| | √ | Applicable | ¨ | Not applicable |
The productive biological assets refer to biological assets held for the purpose of producing agricultural products, rendering services, or leasing, including economic forests. The initial measurement shall be made to the productive biological assets at its cost For self-generated productive biological assets, the cost includes necessary expenditures such as fertilizer costs, labor expenses, and allocated indirect costs incurred before reaching the predetermined production and operational objectives.
Productive biological assets are depreciated with the straight-line depreciation method over their useful lives from the date when they reach their intended production and operation purposes. The service life, estimated residual value rate, and annual depreciation rate for different types of productive biological assets are as follows:
| | | | | Estimated | | | Annual | |
| | | Estimated | | net residual | | | depreciation | |
| Category | | service life | | value rate | | | rate | |
| Mature persimmon trees | | 20 years | | | 5 | % | | | 4.75 | % |
The service life and estimated residual value of productive biological assets are determined based on historical experience. The Group is required to recheck the service life, expected net residual value, and depreciation method of productive biological assets at the end of the year, and any change of them will be treated as accounting estimate. Disposal consideration amount from sale, inventory loss, death or damage of productive biological assets shall be included in current profits and losses after deducting the book value and related taxes.
Impairment
The Group shall inspect productive biological assets at least at the end of each annual period. If there is conclusive evidence that due to natural disasters, plant diseases and insect pests, or changes in market demand, the recoverable amount of the productive biological assets is lower than their carrying amount, the difference between the recoverable amount and the carrying amount is recognized as a provision for impairment of biological assets and recorded as a current period loss.
Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Useful life and its determination basis, estimation methods, amortization methods, or review procedures |
| | √ | Applicable | ¨ | Not applicable |
Intangible assets are recognized only when it is probable that the economic benefits associated with it will flow to the Group and its costs can be measured reliably. The cost is used for initial measurement. However, if the fair value of the intangible assets acquired through business combination not under the same control can be reliably measured, such asses are individually recognized as intangible assets and measured at fair value.
The useful life of intangible assets is determined according to the period in which they can bring economic benefits to the Group. If it is impossible to foresee whether the period in which economic benefits can be brought to the Group, such assets are deemed as intangible assets.
The straight-line method is used for amortizing intangible assets within their useful life, which is determined as follows:
| Category | | Service life | | Determination basis |
| Land use right | | 40 years | | Term of land-use right |
| Software | | 5 years | | The shorter of the contract period and the estimated useful life |
| Patent right and non-patent technology | | 10 years | | The shorter of the term of patent rights or the estimated useful life |
| Sales network | | 10 years | | Expected service life |
The acquired land use rights obtained by the Group are usually accounted for as intangible assets. With respect to the buildings and structures that are self-developed and self-constructed, the related land use rights and the buildings are accounted for as intangible assets and fixed assets, respectively. In the case of purchased land and buildings, the paid prices are distributed between the land use rights and the buildings. Where it is difficult to allocate reasonably, all of such costs are disposed as fixed assets.
Intangible assets with limited service life shall be amortized using straight-line method in service life. At the end of each year, the Group shall verify the estimated service lives and amortization methods of the intangible assets with limited service life and make adjustment when needed.
| (2). | Scope of capitalization for research and development (R&D) expenditures and the related accounting treatment methods |
| | √ | Applicable | ¨ | Not applicable |
The expenditures for internal research and development projects of the Group are classified into research expenditures and development expenditures. The expenditure occurred during the research stage shall be included in the profits/losses of current period when it occurs. The expenditure at the stage of development shall be capitalized only if the following conditions are met simultaneously: technically feasible to complete the intangible assets so that they can be used or sold; having the intention to use and sell the intangible assets; the ways for economic benefits of intangible assets, including proving that the market exists for the products manufactured by such intangible assets, or that the intangible assets have own market, and proving that the serviceability of intangible assets if they are used internally; having sufficient technical and financial resources and other resource supports to complete the development of such intangible assets and having the ability to use or sell such intangible asset; the expenditure attributable to the development stage of such intangible asset can be measured reliably. The development expenditure not meeting the conditions above is included in the current profits and losses when it occurs.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 27. | Impairment of long-term assets |
| | √ | Applicable | ¨ | Not applicable |
For impairment of assets other than inventory, deferred taxes, and financial assets, the Group determines the impairment with the following methods:
As of the balance sheet date, if there are indications of impairment of assets, the Group will estimate their recoverable amounts and perform impairment testing; for goodwill formed due to business combinations and intangible assets that have not reached the usable condition, impairment testing will be conducted at least annually regardless of whether there are indications of impairment.
The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of the assets minus the disposal expenses and the present value of the expected future cash flow of the assets. Generally, the Group estimates the recoverable amount based on single assets. Where it is not possible to estimate the recoverable amount of single assets, the recoverable amount of the asset group to which the asset belongs is recognized. The recognition of an asset group is based on whether the major cash inflow generated by the asset group is independent of the cash inflows of other assets or asset groups.
When the recoverable amount of an asset or asset group is lower than its carrying amount, the Group reduces its carrying amount to the recoverable amount, include the write-down amount in the current profit and loss, and withdraw the corresponding provision for asset impairment.
If the factors affecting the impairment of the expendable biological asset have disappeared, the amount of the written-down shall be restored and reversed within the amount of the original provision for the decline in value, and the reversed amount is recognized in the current profits and losses. Once the provision for impairment of a productive biological asset is made, it shall not be reversed.
For the impairment test of goodwill, the carrying value of goodwill formed from business combinations is allocated to the relevant asset group or portfolio of asset groups using a reasonable method from the acquisition date onwards. The related asset group or combination of asset groups shall be the asset group or combination of asset groups that can benefit from the synergy effect of enterprise merger, and shall be no greater than the reporting segments determined by the Group.
If the carrying value of the asset group or portfolio of asset groups containing goodwill exceeds their recoverable amount, the impairment loss is first allocated to reduce the carrying value of goodwill in the asset group or portfolio of asset groups. The remaining impairment loss is then allocated proportionately to reduce the carrying value of the other assets in the asset group or portfolio of asset groups based on their respective proportion of the carrying value, excluding goodwill.
Once the assets impairment loss above is confirmed, it shall not be reversed in the future accounting periods.
| 28. | Long-term deferred expenses |
| | √ | Applicable | ¨ | Not applicable |
The store decoration and improvement expenses can be divided into two categories: the first category includes expenses for the decoration and improvement of operating and office premises before opening a new store, and the second category includes expenses for secondary (or over) decoration and improvement of already opened stores. The expenses for the decoration and improvement of a new store are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (10 years) and the lease term. The expenses for secondary (or over) decoration and improvement of already opened stores are amortized on a straight-line basis within the shorter of the estimated maximum benefits period (5 years) and the remaining lease term. At the end of each year, the remaining service life of deferred expenses is reviewed. If a deferred expense item no longer provides future benefits in subsequent accounting periods, the remaining unamortized balance of that item is recognized as a current period loss.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
The Group shall list the contract liabilities in the balance sheet according to the relationship between performance obligations and customer payment.
The contract liabilities refer to obligations to transfer goods or services to customers for which consideration has been received or is receivable from the customer before transferring the promised goods or services.
It refers to various forms of compensation or remuneration, other than share-based payments, given by the Company, to obtain services from employees or in connection with the termination of employment. Employee remuneration mainly includes short-term salaries, post-employment welfare, dismission welfare and other long-term employee welfare. Welfare provided by the Group for employees’ spouses, children and dependents, family members of deceased employees and other beneficiaries is also part of employee salaries.
| (1) | Accounting treatment method of short-term remuneration |
| | √ | Applicable | ¨ | Not applicable |
The Company confirms the actually occurred short-term salaries as liabilities during the accounting period that the staff provides service for the Company, and accounts them into profits and losses of the current period or relevant asset costs.
| (2) | Accounting treatment method for after-service benefits |
| | √ | Applicable | ¨ | Not applicable |
Post-employment welfare (defined contribution plans)
The Group’s employees participate in pension insurance and unemployment insurance managed by the local government. The corresponding expenses are recognized as relevant asset costs or current-period expenses when they are incurred.
| (3) | Accounting treatment method for severance benefits |
| | √ | Applicable | ¨ | Not applicable |
Severance benefits
When providing dismissal welfare to employees, the Group shall early confirm the employee salaries generated from dismiss welfare as liability and include it into current profits and losses under the following two situations: the enterprise cannot withdraw the dismissal welfare generated from plan for termination of labor relationship or layoff proposal; the enterprise confirms relevant cost and expense related to the recombination of dismiss welfare payment.
| (4) | Accounting arrangement method for other long-term employee’s welfare |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Except for contingent consideration and contingent liabilities assumed in a business combination under common control, when the obligations related to contingent matters meet the following conditions, they are recognized as estimated liabilities by the Group:
(1) This obligation is the current obligation of the Group;
(2) It is likely to cause any economic benefit to flow out of the Group as a result of performance of the obligation;
(3) The amount of the obligation can be measured reliably.
Estimated liabilities are initially measured in accordance with the best estimate of the expenditure required to perform the relevant current obligations, taking into account factors such as risks, uncertainties and time value of money associated with contingent events. The Company shall check the book value of the estimated debts on each balance sheet date. Where there is any exact evidence indicating that the book value cannot really reflect the current best estimate, the Company shall adjust the book value in accordance with the current best estimate.
| | √ | Applicable | ¨ | Not applicable |
Share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment. Equity-settled share-based payment refers to a transaction settled by the Group with shares or other equity instruments as the consideration for obtaining services.
Equity-settled share-based payment in exchange for services provided by employees is calculated at the fair value of the equity instruments granted to employees. For equity instrument that are exercisable immediately after being granted, the relevant costs or expenses are recognized based on fair value on the grant date, increasing the capital surplus. For equity instrument that can only be exercised after a specified service period or upon achievement of specified performance conditions, during the service period, for each balance sheet date within the waiting period, the services acquired during the period are recognized as related costs or expenses, increasing the capital surplus, based on the best estimation of the number of equity instruments expected to be exercised, using the fair value on the grant date. The fair value of equity instruments is determined based on the ex-right closing price on the grant date.
Share-based payments that are not ultimately exercised due to non-satisfaction of non-market conditions and/or service period conditions are not recognized as costs or expenses. If market conditions or non-exercisable conditions are specified in the share-based payment agreement, the share-based payment is considered to be exercisable as long as all other performance conditions and/or service period conditions are met, regardless of whether the market conditions or non-exercisable conditions are satisfied.
If the terms of equity-settled share-based payments are modified, at least the obtained services are recognized as if the terms were not modified. In addition, any modification that increases the fair value of the granted equity instrument, or a change in favor of the employee on the modification date, recognizes an increase in the acquisition of services.
If the terms of equity-settled share-based payments are canceled, it will be treated as an accelerated exercise on the cancellation date and the unconfirmed amount will be immediately recognized. If the employees or other parties are to meet non-vesting conditions but they do not meet the conditions in vesting period, the Company will cancel the equity-settled share-based payment as the treatment. However, if a new equity instrument is granted to an employee, and on the granting date, it is determined that the new equity instrument granted is used to replace the canceled equity instrument, the granted replacement equity instrument shall be treated in the same way as the modifications of the original equity instrument terms and conditions are treated.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 33. | Preference shares, perpetual capital securities and other financial instruments |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Accounting policies for revenue recognition and measurement disclosed based on the type of business |
| | √ | Applicable | ¨ | Not applicable |
Revenues from contracts with customers
The Group confirms the incomes while performing the obligations in the contract, namely obtaining control right of relevant commodities or services from customers. Obtaining control of the related goods or services refers to one can direct the use of the goods or provision of services and obtain almost all economic benefits from the goods.
Sales Contract
The sales contract between the Group and the client generally includes only the performance obligations of goods transfer. The Group, under normal conditions, recognizes revenue at the point in time when the customer obtains control of the related goods, which is usually the point of delivery as specified in contract. This recognition is based on the comprehensive consideration of the following factors: the present right to receive payment for the goods, the transfer of the primary risks and rewards associated with ownership of the goods, the transfer of legal ownership of the goods, the physical transfer of the goods, and the customer’s acceptance of the goods.
Provision of service contract
In the service contracts between the Group and its customers, which usually include provisions for display services, warehousing services, maintenance, and other performance obligations, the Group recognizes revenue based on the progress of performance during a specific period. This is because the customer simultaneously receives and consumes the economic benefits from the Group’s performance, and the Group has the right to invoice for the cumulative amount of completed performance during the entire contract period, treating it as a performance obligation fulfilled during a certain period. Revenue is recognized based on the progress of performance, except where the progress of performance cannot be reasonably determined. The Group determines the progress of performance for providing services based on the time schedule. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
Construction contract
The construction contracts between the Group and customers usually include obligations for construction and decoration works. As the customers have control over the construction assets during the performance period, the Group recognizes revenue based on the progress of performance, except when the progress cannot be reasonably determined. The Group determines the progress of providing services based on the input method. Where the performance progress cannot be reasonably determined and the cost incurred of the Group is expected to be compensated, the revenue shall be recognized according to the cost incurred until the performance progress can be reasonably determined.
Variable consideration
Some contracts between the Group and customers include arrangements for reward points, forming variable consideration. The Group determines the best estimate of variable consideration based on either the expected value or the most likely amount to be realized. However, the transaction price that includes variable consideration does not exceed the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur, once the related uncertainty is resolved.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Sales return terms
For sales with sales return provisions, when the Group transfers control of the relevant goods to the customer, revenue is recognized based on the amount expected to be entitled for transferring the goods to the customer. The expected amount to be refunded due to sales returns is recognized as a provision for expected liabilities. Simultaneously, an asset is recognized for the expected cost of goods to be returned, which is calculated as the difference between the book value of the goods to be returned and the estimated costs (including the value impairment) associated with returning the goods. The net amount is recorded as a receivable for return cost. The cost is then recognized by deducting the net amount from the book value of the transferred goods. On each balance sheet date, the Group reassesses the future sales return situation and re-measures the aforementioned assets and liabilities.
Reward points program
The Group determines the stand-alone selling price of reward points based on factors such as the redemption policy and expected redemption rate. The transaction price is allocated to reward points and the goods provided based on their stand-alone selling prices in proportion and revenue is recognized when the customer obtains control of the goods upon redeeming the points or when the points expire.
Main responsible person/agent
When the Group acquires goods from third parties and subsequently transfers them to customers, the Group has considered the legal form of the contract and relevant facts and circumstances (such as primary responsibility for transferring the goods to customers, inventory risk assumed before or after the transfer of goods, pricing autonomy, etc.). If the Group has the ability to direct the use of the goods and obtain almost all economic benefits before transferring the goods, and has control over the goods, it recognizes revenue when the goods are delivered to customers and accepted by them based on the total consideration received or receivable. Otherwise, if the Group does not have control over the goods before transferring them to customers, it is considered a principal agent (i.e., facilitating transactions between upstream suppliers and downstream customers and earning commission fees). In this case, the Group recognizes revenue when it completes the agency service and has the right to receive the expected commission fees. The amount of revenue recognized is determined as the net amount after deducting the amounts payable to other related parties from the consideration received or receivable.
| (2). | Different revenue recognition methods and measurement methods for the same type of business with different business models |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Governmental subsidies are recognized when they meet the conditions attached to and can be received. Where the governmental subsidiaries are monetary assets, they are measured according to the amount received or receivable. If the governmental subsidies are non- monetary assets, they shall be measured at their fair value. If their fair value cannot be obtained in a reliable way, they shall be measured at the nominal amount.
Government subsidies used for purchasing or forming long-term assets are recognized as government grants related to assets when the fundamental conditions for obtaining the subsidies are met, as specified in government documents. If the government documents do not provide clear guidance, grants that are based on the condition of purchasing or forming long-term assets are considered as government grants related to assets, while others are recognized as government grants related to revenue.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Group recognizes received government grants based on their total amount.
Where the governmental subsidy related to the proceeds is used to compensate relevant costs or losses in the later period, the subsidy is recognized as deferred proceeds when acquired, and accounted into profits and losses of the current period during the period of recognition; where it is used to compensate the occurred costs or losses, it is directly into profits and losses of the current period directly.
Government subsidies related to assets shall be recognized as deferred income, which shall be included in profits and losses by stages according to a reasonable and systematic method within the service life of the relevant assets (but the government subsidies measured according to the nominal amount shall be directly included in the current profits and losses). If the relevant assets are sold, transferred, scrapped or damaged before the end of the service life, the undistributed balance of relevant deferred income shall be transferred into the profits and losses of the current period of asset disposal.
| 37. | Deferred tax assets/deferred tax liabilities |
| | √ | Applicable | ¨ | Not applicable |
Regarding the temporary difference between the book value and tax base of assets and liabilities on the balance sheet date and of the item that is not recognized as an asset and liability but whose tax base can be determined in accordance with the tax law, the deferred income tax of the Group is withdrawn by using the balance sheet liability method.
All taxable temporary differences are recognized as deferred tax liabilities,
| (1) | Except when the taxable temporary differences arise from the following transactions: the initial recognition of business reputation, and the initial recognition of assets or liabilities arising from the following transactions which are simultaneously featured by the following: the transaction is not business combination, and at the time of transaction, the accounting profits will not be affected, nor will the taxable amount or the deductible loss be affected. |
| (2) | The deferred income tax liabilities arising from the taxable temporary differences related to the investments of subsidiaries, joint ventures and associates are recognized unless the time of the reverse of temporary differences can be controlled, and the temporary differences are unlikely to be reversed in the excepted future. |
As for any deductible temporary difference, and deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible temporary difference, and deductible loss or tax deduction to be likely obtained. Unless:
| (1) | Temporary differences deductible: Temporary differences arising from individual transactions not involving business combinations, which neither impact accounting profit nor taxable income or deductible loss upon their occurrence, and the initial recognition of assets and liabilities does not result in creating equal temporary differences or deductible temporary differences. |
| (2) | As for the deductible temporary difference of taxable relevant to the investment of subsidiaries, joint ventures and associates, the corresponding deferred income tax assets can be recognized when it can simultaneously meet the following the conditions: the temporary difference is likely to reverse, and the amount of the taxable can be obtained to offset the deductible temporary difference at a high possibility in the future. |
According to the tax law, on the balance sheet date, the deferred income tax assets and the deferred income liabilities shall be measured by the Group in accordance with the applicable tax rate during the period of recovering the assets as estimated or paying off the abilities, and it shall reflect the effect of the income tax of the recovering assets as estimated or the way of paying off the liabilities on the balance sheet date.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
On the balance sheet date, the Group rechecks book value of deferred income tax assets of the Group. If it is unlikely to obtain sufficient taxable income taxes to offset the benefit of the deferred income tax assets, the book value of the deferred income tax assets shall be written down. On the balance sheet date, the Group reassesses the unrecognized deferred income tax assets and recognizes the deferred income tax assets within the limits that it is probable that sufficient taxable income is available for all or part of the deferred income tax assets.
If the following conditions are met simultaneously, the Company will present and report the deferred income tax assets and the deferred income tax liabilities at a net amount after offsetting: the Company has the legal right to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount with regard to taxes levied from the same taxpayer or different taxpayers with the same tax collection and management department, but the taxpayer involved intends to settle the deferred income tax assets and the deferred income tax liabilities in current period at a net amount or obtain the assets and satisfy the liabilities simultaneously within every period of reversal of significant deferred income tax assets and deferred income tax liabilities.
| | √ | Applicable | ¨ | Not applicable |
Criteria and accounting treatment method for simplified treatment of short-term leases and leases of low-value assets as a lessee
| | √ | Applicable | ¨ | Not applicable |
Apart from short-term leases and leases of low-value assets, the Group recognizes right-of-use assets and lease liabilities.
Right-of-use assets
On the lease commencement date, the Group recognizes the right to use the leased assets that can be used during the lease term and measures it at cost. The cost of right-of-use assets includes: the initial measurement amount of lease liabilities; lease payments made by the lessee at or before the lease commencement date (net of lease incentives received); initial direct costs incurred by the lessee; estimated costs to dismantle and remove the leased asset or restore the site on which the leased asset is located to the condition specified in the lease agreement. If the Group re-measures the lease liability due to changes in lease payments, the carrying amount of the right-of-use asset is adjusted accordingly. The Group uses the straight-line method to depreciate the right-of-use assets subsequently. Where it is reasonably certain that ownership of the leased assets will be obtained at the end of the lease term, the Group depreciates the leased assets over their remaining useful lives. If the ownership of the leased asset can not be reasonably confirmed on the lease term expiry, the accrual depreciation of the Group shall be conducted within the shorter of two periods, namely the lease term and the remaining service life of lease asset.
Lease liabilities
On the lease commencement date, the present value of lease payments not yet paid is recognized as lease liability, except for short-term leases and leases of low-value assets. The lease payments include fixed payments and the variable lease payments subtracted by lease incentives, variable lease payments based on an index or rate, and payments that are expected to be made based on the residual value guarantee; it also includes the exercise price of purchase options or the payments required to exercise the termination options, provided that the Group reasonably determines that it will exercise the option or reflects that the Group will exercise the termination option during the lease term.
After the lease commencement date, the Group increases the carrying amount of the lease liability when recognizing interest and decreases it when paying lease payments. When there is a change in the substantially fixed payments, a change in the estimated payments for residual value guarantees, a change in the index or rate used to determine lease payments, or a change in the assessment or exercise of purchase options, renewal options, or termination options, the Group re-measures the lease liability using the present value of the revised lease payments.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Short-term leases and leases of low-value assets
On the commencement date of the lease term, the Group recognizes leases with a lease term not exceeding 12 months and excluding the purchase option as short-term leases; Leases with lower value when a single leased asset is a brand new asset are recognized as low-value asset leases. The Group chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and low-value asset leases. Costs or expenses related to the leased asset are recognized over the lease term using the straight-line method or another systematic and rational method.
Classification criteria and accounting treatment method for leases as a lessor
| | √ | Applicable | ¨ | Not applicable |
The lease for which all risks and rewards related to the ownership of the leased asset are substantially transferred on the commencement date of lease is a finance lease, and the other leases are an operating lease. When the Group acts as a sublease lessor, it classifies subleases based on the right of use assets generated from the original lease. If a contract contains both lease and non-lease components, the Group allocates the consideration for the contract to each component based on their relative standalone prices.
As a lessor of finance lease
On the commencement date of the lease term, the Group recognizes the receivable financing leasing payments for financing leases and terminates the recognition of financing leasing assets. When the Group initially measures the receivable financing leasing payments, the net lease investment shall be taken as the entry value of the receivable financing lease payments. The net lease investment is the sum of the present value of lease payments not yet received and the unguaranteed residual value discounted at the lease’s implicit rate, including initial direct costs. The Group calculates and recognizes the interest income for each period of the lease term at a fixed periodic interest rate. The variable lease payments obtained by the Group that are not included in the measurement of net lease investments are recognized in the current period’s profit and loss when actually incurred.
As an operating lessor
The rental income from operating leases is recognized as revenue on a straight-line basis or another systematic and rational method over the lease term. Variable lease payments not included in the measurement of lease receivables are recognized as revenue when they become due. The initial direct costs are capitalized and amortized over the lease term on the same basis as rental income, and are recognized as expenses in each period.
| 39. | Other significant accounting policies and accounting estimates |
| | √ | Applicable | ¨ | Not applicable |
| (1). | Measurement at fair value |
The Group measures equity instruments investments at fair value on each balance sheet date. The fair value is a price received by the market participants from selling an asset or paid by them for transferring a liability during orderly transaction at the measurement date.
For the assets and liabilities measured or disclosed at fair value in the financial statements, the level of fair value to which they belong is determined according to the lowest-level input value that is significant to the fair value measurement as a whole: The first level input valve is that the input value that can be obtained on measurement date and not adjusted quoted price of same assets or liabilities in active market; second level is the input value that can be directly or indirectly observed by relevant assets or liabilities except from first-level input value; third level is the input value that can not be observed by relevant assets or liabilities.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
On each balance sheet date, the Group reassesses the assets and liabilities that are recognized in the financial statements to be consistently measured at fair value to determine whether to shift between levels of fair value measurement.
The consideration and transaction costs are paid for repurchasing equity instruments to reduce shareholders’ equity. Apart from share-based payments, the issuance (including refinancing), buy-back, sale, or cancellation of equity instruments are accounted for as changes in equity.
The cash dividends of the Company are recognized as liabilities after approval by the Shareholders’ Meeting.
| (4). | Significant accounting estimate |
The preparation of the financial statements requires the Management to make judgments, estimates and assumptions that affect the presentation of amounts of income, expenses, assets and liabilities and the disclosure thereof, as well as the disclosure of contingent liabilities on the balance sheet date. The results of these assumptions and estimated uncertainties may result in significant adjustments to the carrying value of assets or liabilities that will be affected.
Judgment
In applying the Group’s accounting policies, the Management made the following judgments that had a significant impact on the amounts recognized in the financial statements:
Principal person-in-charge
For the business of acquiring goods from third parties and subsequently transferring them to customers, the Group bears the primary responsibility for transferring the goods to customers, assumes the inventory risk of the goods before or after their transfer, and has the autonomy to set the price for the traded goods or services. The Group believes that it has the ability to direct the use of the goods and obtain almost all economic benefits before transferring the goods to customers, and has control over the goods. Therefore, the Group is the principal and recognizes revenue based on the total consideration received or receivable.
Business mode
The classification of financial assets in initial recognition depends on the business model of the Group in managing financial assets. When judging the business model, the Group considers the ways of enterprise evaluation and to report the performance of financial assets to key managers, the risks that affect the performance of financial assets and their management methods, and the ways in which relevant business managers are paid. When evaluating whether the contract cash flow is the goal, the Group needs to analyze and judge the reasons, time, frequency and value of the sale of financial assets before the due date.
Contractual cash flow characteristics
The classification of financial assets in initial recognition depends on the contractual cash flow characteristics of financial assets. When it is necessary to judge whether the contractual cash flow is only the payment of principal and interest based on unpaid principal, including the evaluation of the correction of time value of currency, it is necessary to judge whether there is a significant difference compared with the benchmark cash flow, and it is necessary to judge whether the fair value of financial assets with advanced refunding characteristics is very small.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Lease term – including lease contracts with renewal options
The lease term is the period during which the Group has the right to use the leased asset and is not cancellable, including the period covered by the renewal options if it is reasonably certain that the Group will exercise those options. When assessing the reasonableness of exercising lease renewal options, the Group takes into account all relevant facts and circumstances that contribute to the economic benefits associated with exercising the lease renewal options, which includes the expected changes in facts and circumstances between the commencement of the lease term and the exercise date of the options. After the commencement of the lease term, if significant events or changes within the Group’s control occur and have an impact on the reasonable determination of whether to exercise the corresponding lease renewal options, the Group will reassess the decision to exercise the renewal options. Based on the results of the reassessment, the lease term may be modified accordingly.
Estimation uncertainty
The following are future key assumptions on the balance sheet date and other key sources of estimated uncertainties that may result in significant adjustments to the carrying value of assets and liabilities in future accounting periods.
Impairment of financial instruments
The Group uses the expected credit loss model to evaluate the impairment of financial instruments.It requires significant judgment and estimation, and taking into account all reasonable and based information, including forward-looking information for the application of the expected credit loss model. In making these judgments and estimates, the Group combines historical repayment data with factors such as economic policies, macroeconomic indicators, industry risks, and other factors to assess the expected changes in credit risk of the debtors. Differences in estimates may have an impact on the provision for Impairment. A provision for impairment may not be equal to the actual amount of impairment losses in the future.
Impairment of non-current assets other than financial assets (except goodwill)
The Group assesses whether there are indications of impairment on non-financial assets other than financial assets on the balance sheet date. For intangible assets with uncertain useful lives, impairment tests are conducted not only annually but also when there are indications of impairment. Other non-current assets excluding financial assets are tested for impairment when there is an indication that the carrying value is not recoverable. When the book value of an asset or asset group is higher than the recoverable amount, that is, the higher of the net amount remained after the disposal expenses are deducted from the fair value and the present value of the estimated future cash flow, it indicates that impairment has occurred. The net amount after the fair value deducts the disposal expenses is determined by reference to the sales agreement price of the similar assets in the fair trade or the observable market price deducts the incremental cost directly attributable to the disposal of the assets. When estimating the present value of future cash flow, the Management must estimate the estimated future cash flow of the asset or asset group and select an appropriate discount rate to determine the present value of future cash flow. Please refer to Note VII, 74.
Fair value of non-listed equity investments
The Group determines the fair value of non-listed equity investments using the market approach. This requires the Group to determine comparable listed companies, select market multiples, and estimate discounts for lack of liquidity, resulting in uncertainties.
Deferred tax asset
Deferred income tax assets shall be recognized for all unused deductible losses to the extent that it is probable that there will be sufficient taxable income to offset the deductible losses. This requires the Management to use substantial judgments to estimate the time and amount of future taxable income and adopt the tax planning strategies to determine the amount of deferred income tax assets that should be recognized.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Reward points
The Group estimates a reasonable selling price for reward points separately, taking into account all relevant information, including the ability of customers to redeem reward points for free goods or enjoy discounts on goods, as well as the likelihood of customers exercising their redemption rights in order to allocate the consideration under the contracts. When estimating the likelihood of customers exercising their redemption rights, the Group conducts a comprehensive analysis based on historical data on point redemptions, current point redemption activities, and considerations of customer behavior and market trends in the future. The Group reassesses the estimated redemption rate of reward points at least on each balance sheet date and calculates the amount of revenue to be recognized and the amount of balances related to reward points based on the results of the reassessment.
Incremental borrowing rate of the lessee
For leases where the lease interest rate cannot be determined, the Group takes the incremental borrowing rate of the lessee as the discount rate to calculate the present value of lease payments. When determining the incremental borrowing rate, the Group considers observable rates in the economic environment as the reference basis and makes adjustments based on its own circumstances, the nature of the leased asset, the lease term, and the lease liability amount to derive the applicable incremental borrowing rate.
| 40. | Changes in significant accounting policies and accounting estimate |
| (1). | Changes in significant accounting policies |
| ¨ | Applicable | Ö | Not applicable |
| (2). | Changes in significant accounting estimates |
| ¨ | Applicable | Ö | Not applicable |
| (3). | Adjustments to the financial statements related to the first-time adoption of new accounting standards or interpretations, applicable from 2024 or later |
| ¨ | Applicable | Ö | Not applicable |
| ¨ | Applicable | Ö | Not applicable |
| 1. | Main tax categories and tax rates |
Main tax categories and tax rates
| Ö | Applicable | ¨ | Not applicable |
| Type of tax | | Taxation basis | | Tax rate |
| VAT | | Taxable income | | 13 | %, | 9 | %, | 6 | %, |
| | | | | | 5 | %, | 0 | % |
| Urban maintenance and construction tax | | Actually paid turnover tax | | | 7 | %, | 5 | % |
| Corporate Income Tax | | Taxable income | | 25 | %, | 20 | %, | 16.5 | %, |
| | | | | 15 | %, | 8.25 | %, | 0 | % |
| Housing property tax | | Housing property original value, rental income | | | 1.2 | %, | 12 | % |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Type of tax | | Taxation basis | | Tax rate | |
| Extra charges for education and local extra charges for education | | Actually paid turnover tax | | 3%, 2 | % |
| Consumption tax | | Retail amount of gold and silver (including platinum) jewelry and diamond jewelry | | 5 | % |
| Note 1: | Sales of consumables, vegetables, some meat, poultry, eggs, and other items are subject to tax exemption policies; the VAT rate for warehousing services and other ancillary services is 6%; the VAT rate for rental income is 9%, and if a simplified collection method is applicable, the collection rate is 5%; the VAT rate for taxable sales of fruits, seafood, some dry goods, grains, edible oils, dairy products, and other agricultural products is 9%, and the VAT rate for taxable sales of other goods is 13%. |
| Note 2: | Self-use properties are taxed based on a certain percentage of the original value of the property, with a tax rate of 1.2%; rental properties are taxed based on rental income, with a tax rate of 12%. |
Explanations shall be disclosed for different taxpayers for tax rate of enterprise income tax
| Ö | Applicable | ¨ | Not applicable |
| | Income tax | |
| Name of taxpayer | | rate | |
| | | | (%) | |
| Chongqing Yonghui Superstores Co., Ltd. | | | 15 | |
| Guizhou Yonghui Superstores Co., Ltd. | | | 15 | |
| Yunnan Yonghui Superstores Co., Ltd. | | | 15 | |
| Guangxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Yonghui Logistics Co., Ltd. | | | 15 | |
| Xizang Yonghui Superstores Co., Ltd. | | | 15 | |
| Guansu Yonghui Superstores Co., Ltd. | | | 15 | |
| Qinghai Yonghui Superstores Co., Ltd. | | | 15 | |
| Sichuan Yonghui Store Co., Ltd. | | | 15 | |
| Chengdu Yonghui Business Development Co., Ltd. | | | 15 | |
| Shaanxi Yonghui Superstores Co., Ltd. | | | 15 | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | | 15 | |
| Ningxia Yonghui Superstores Co., Ltd. | | | 15 | |
| Guizhou Yonghui Logistics Co., Ltd. | | | 15 | |
| Beijing Yonghui Technology Co., Ltd. | | | 15 | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | | 0 | |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | | 0 | |
| Yonghui Holdings Co., Ltd. | | | 16.5, 8.25 | |
| LOHAS Life International Business Co., Ltd. | | | 16.5 | |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | | 20 | |
| Shanghai Yinjie International Trade Co., Ltd. | | | 20 | |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | | 20 | |
| Hainan Fuli Supply Chain Management Co., Ltd. | | | 20 | |
| Fujian Yonghui Commercial Co., Ltd. | | | 20 | |
| Fujian Yonghui Import and Export Trade Co., Ltd. | | | 20 | |
| Sichuan Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Shanghai Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Zhejiang Yunfu Supply Chain Management Co., Ltd. | | | 20 | |
| Anhui Fuwan Supply Chain Management Co., Ltd. | | | 20 | |
| Ö | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | Note 1: | According to the Announcement on Extending the VAT Preferential Policies for Cultural and Educational Products (CS [2021] No. 10) and the Announcement on Continuing the Implementation of VAT Preferential Policies for Cultural and Educational Products (CA [2023] No. 60) by the Ministry of Finance and the State Taxation Administration, from January 1, 2021 to December 31, 2027, the wholesale and retail sectors for books are exempt from value-added tax. |
| | Note 2: | According to the Announcement on Exemption of VAT on Vegetable Circulation Link issued by the Ministry of Finance and the State Taxation Administration (CS [2011] No. 137), VAT on vegetable circulation link has been exempted since January 1, 2012. |
| | Note 3: | According to the Notice on Exempting VAT on Certain Fresh Meat and Egg Products in Agricultural Product Wholesale and Retail by the Ministry of Finance and the State Taxation Administration (CS [2012] No. 75), value added tax on certain fresh meat and egg products sold by taxpayers engaged in agricultural product wholesale and retail is exempted from October 1, 2012. |
| | Note 4: | Subsidiary companies of the Company, including Chongqing Yonghui Superstores Co., Ltd., Guizhou Yonghui Superstores Co., Ltd., Yunnan Yonghui Superstores Co., Ltd., Guangxi Yonghui Superstores Co., Ltd., Yonghui Logistics Co., Ltd., Xizang Yonghui Superstores Co., Ltd., Gansu Yonghui Superstores Co., Ltd., Qinghai Yonghui Superstores Co., Ltd., Sichuan Yonghui Superstores Co., Ltd., Chengdu Yonghui Commercial Development Co., Ltd., Shaanxi Yonghui Superstores Co., Ltd., Fuping Yunshang Supply Chain Management Co., Ltd., Ningxia Yonghui Superstores Co., Ltd., and Guizhou Yonghui Logistics Co., Ltd., enjoy preferential enterprise income tax policies according to the relevant provisions of the Ministry of Finance, General Administration of Customs, and the State Taxation Administration regarding deepening the implementation of tax policies related to the development of the Western Development Strategy. |
| | | (CS [2011] No. 58), Announcement of the State Taxation Administration on Enterprise Income Tax Issues relating to the Implementation of the Western Development Strategy (Announcement No. 12 of the State Taxation Administration in 2012), and Announcement of the Ministry of Finance on the Continuation of Enterprise Income Tax Policies for Western Development (Announcement No. 23 of the Ministry of Finance in 2020), the enterprise income tax is levied at a rate of 15% from January 1, 2011 to December 31, 2030. |
| | Note 5: | The subsidiary companies, Fuping Yonghui Modern Agriculture Development Co., Ltd., and Gansu Minxian Yonghui Agriculture Development Co., Ltd. are eligible for the preferential policy of exempting corporate income tax on primary agricultural products processing and production in accordance with the relevant provisions in Article 86 of the Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China (State Council Order No. 512). |
| | Note 6: | Subsidiary companies of the Company, including Ruilingtong Marketing Service (Shanghai) Co., Ltd., Shanghai Yinjie International Trade Co., Ltd., Yunnan Fuping Yunshang Supply Chain Management Co., Ltd., Hainan Fuli Supply Chain Management Co., Ltd., Fujian Yonghui Commercial Co., Ltd., Fujian Yonghui Import and Export Trade Co., Ltd., Sichuan Yunfu Supply Chain Management Co., Ltd., Shanghai Yunfu Supply Chain Management Co., Ltd., Zhejiang Yunfu Supply Chain Management Co., Ltd., and Anhui Fuwan Supply Chain Management Co., Ltd., enjoy preferential enterprise income tax policies according to the Announcement of the State Taxation Administration on Matters Concerning the Implementation of Supportive Tax Policies for the Development of Small and Micro-profit Enterprises and Individuals (Announcement No. 6 of the State Taxation Administration in 2023). For small and micro-profit enterprises, 25% of the annual taxable income not exceeding RMB1 million is deducted and taxed at a rate of 20%. According to the Announcement of the Ministry of Finance and State Administration of Taxation on Further Implementation of Preferential Policies for Small and Micro Enterprises Income Tax (Announcement No. 13 of 2022 of the Ministry of Finance and the State Administration of Taxation), for small and micro-profit enterprises with an annual taxable income exceeding RMB1 million but not exceeding RMB3 million, a reduction of 25% shall be included in the taxable income, and the enterprise income tax shall be paid at a rate of 20%. |
| | Note 7: | The subsidiary companies of the Company are subject to the two-tier profit tax system as announced in the 2017 Policy Address, in accordance with the 2018 Inland Revenue (Amendment) (No. 3) Bill of the Hong Kong Special Administrative Region Government. The two-tier profit tax system applies to taxable years starting on or after April 1, 2018. For the first HKD2 million of assessable profits of a corporation, the tax rate will be reduced to 8.25%. Any profits thereafter will continue to be taxed at 16.5%. The two-tier profit tax system will benefit eligible enterprises with assessable profits, regardless of their size. To ensure that eligible enterprises are mainly small and medium-sized enterprises, only one related enterprise can be nominated for the benefits. The subsidiary company, Yonghui Holdings Limited, meets the above requirements and will be subject to the two-tier tax rates of 8.25% and 16.5%. The sub-subsidiary, LOHAS Life International Business, will be subject to the tax rate of 16.5%. |
| | Note 8: | In accordance with the “Management Measures for the Recognition of High-tech Enterprises” (GKFH [2016] No. 32) and the “Guidelines for the Management of High-tech Enterprise Recognition” (GKFH [2016] No. 195) regulations, Beijing Yonghui Technology Co., Ltd. was approved and certified as a high-tech enterprise on November 2, 2022, by the Beijing Municipal Science and Technology Bureau, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau of the State Taxation Administration, and obtained the “High-tech Enterprise Certificate” (Number: GR202211002597). The qualification is valid for 3 years, and the preferential period for enterprise income tax is from January 1, 2022 to December 31, 2024. During the qualification period, the company is entitled to enjoy the preferential policy of paying enterprise income tax at a reduced rate of 15%. Gansu Minxian Yonghui Agricultural Development Co., Ltd. was approved as a high-tech enterprise by the Science and Technology Department of Gansu Province, the Finance Department of Gansu Province, and the Gansu Provincial Taxation Bureau of the State Taxation Administration on October 6, 2023, and obtained the High-tech Enterprise Certificate (No. GR202362000002). The qualification is valid for 3 years, and the preferential period for enterprise income tax is from January 1, 2023 to December 31, 2025. During the qualification period, the company is entitled to enjoy the preferential policy of paying enterprise income tax at a reduced rate of 15%. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| ¨ | Applicable | Ö | Not applicable |
| VII. | Notes to Items of Consolidated Financial Statements |
| Ö | Applicable | ¨ | Not applicable |
| Items | | Closing balance | | | Opening balance | |
| Cash in hand | | | 50,711,775.13 | | | | 72,725,636.77 | |
| Bank deposit | | | 4,790,566,375.12 | | | | 5,490,130,482.21 | |
| Other monetary funds | | | 219,089,127.18 | | | | 276,213,499.10 | |
| Total | | | 5,060,367,277.43 | | | | 5,839,069,618.08 | |
| Including: total amount of deposit abroad | | | 31,546,989.10 | | | | 33,091,563.78 | |
Other disclosures
| 1. | The year-end cash mainly represents sales proceeds that have not yet been deposited by the stores into the bank. |
| 2. | The funds deposited overseas at the year-end belong to the subsidiary companies, including Yonghui Holdings Co., Ltd., Yonghui Japan Co., Ltd., and LOHAS Life International Business Co., Limited |
| 3. | The cash and cash equivalents for which the ownership of the Group is restricted at the year-end amount to RMB174,430,956.12 (as of December 31, 2023: RMB141,300,533.68). Please refer to Section XII, 33. |
| 4. | Interest income is derived from bank current deposits at the prevailing interest rate. The term of short-term fixed deposits is determined based on the cash needs of the Group, and interest income is earned at the corresponding interest rate of the bank fixed deposits. |
| 5. | Other cash and cash equivalents, excluding deposits, mainly consist of on-hold funds, including card swipe income from POS machines at the stores, card swiping income from bank card payments via the APP, and balances in APP accounts such as WeChat, which have not yet been transferred to the bank accounts of the Group. |
| Items | | Closing balance | | Opening balance | |
| Total amount of loans and advances Among which: | | | | | | 557,908,591.96 | |
| 1. Amount of loans and advances due within one year | | | | | | 627,293,964.36 | |
| Less: Provision for loan losses due within one year | | | | | | 89,953,572.57 | |
| Net value of loans and advances due within one year | | | | | | 537,340,391.79 | |
| 2. Amount of loans and advances due after one year | | | | | | 20,881,421.49 | |
| Less: Provision for loan losses due after one year | | | | | | 313,221.32 | |
| Net value of loans and advances due after one year | | | | | | 20,568,200.17 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The changes in the provision for loan losses are as follows:
Unit: Yuan Currency: RMB
| | | | | Provision | | Other | | | |
| | | Opening | | made in this | | decreases in | | Closing | |
| | | balance | | year | | current year | | balance | |
| Year 2024 | | | 90,266,793.89 | | | 7,811,203.42 | | 98,077,997.31 | | | | |
Explanation: The initial balance of loans and advances granted by the former subsidiary company, Chongqing Yonghui Micro-credit Co., Ltd., includes corporate loans, advances, and personal consumer credit. The decrease in the current year is due to the sale of 65% equity interest in Yonghui Yunjin Technology Co., Ltd., which is no longer included in the scope of consolidation.
| 3. | Trading financial assets |
| Ö | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | Opening
balance | | Reasons and
basis for
designation | |
| Financial assets measured at fair value with changes included in current profits and losses | | | 2,709,808,027.29 | | | 735,971,777.07 | | / | |
| Among which: | | | | | | | | | |
| Equity instrument investment | | | 348,110,366.74 | | | 388,932,227.74 | | / | |
| Fund products | | | 855,878,482.46 | | | 341,037,083.58 | | / | |
| Structured deposit | | | 1,505,819,178.09 | | | 6,002,465.75 | | / | |
| Total | | | 2,709,808,027.29 | | | 735,971,777.07 | | / | |
Other notes:
| Ö | Applicable | ¨ | Not applicable |
Trading financial assets mainly consist of fund products, stocks, asset management products, and wealth management products purchased during the year.
| 4. | Derivative financial assets |
| ¨ | Applicable | Ö | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Category of notes receivable |
| ¨ | Applicable | Ö | Not applicable |
| (2). | Notes receivable secured by the Company at the end of period |
| ¨ | Applicable | Ö | Not applicable |
| (3). | Undue closing notes receivable before balance sheet date that endorsed or discounted by the Company |
| ¨ | Applicable | Ö | Not applicable |
| (4). | Classified disclosure by bad-debt provision method |
| ¨ | Applicable | Ö | Not applicable |
Provision of bad debts due to specific consideration:
| ¨ | Applicable | Ö | Not applicable |
Provision of bad debts using provision matrix:
| ¨ | Applicable | Ö | Not applicable |
Provision for bad debts based on the general model of expected credit losses
| ¨ | Applicable | Ö | Not applicable |
Explanation of significant changes in the carrying balance of notes receivable for which there have been provision for bad debts changes in the current period:
| ¨ | Applicable | Ö | Not applicable |
| (5). | The situation of the provision of bad debts |
| ¨ | Applicable | Ö | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | Ö | Not applicable |
| (6). | Details of notes receivable actually written off during the current period. |
| ¨ | Applicable | Ö | Not applicable |
Among these, verification and cancellation of important notes receivable:
| ¨ | Applicable | Ö | Not applicable |
Instructions on verification and cancellation of notes receivable:
| ¨ | Applicable | Ö | Not applicable |
Other notes:
| ¨ | Applicable | Ö | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Factoring receivable | | | | | | | 129,425,183.71 | |
| Less: bad debt provision | | | | | | | 60,736,219.33 | |
| Total | | | | | | | 68,688,964.38 | |
Explanation: The initial balance of factoring receivable is from the former subsidiary, Yonghui Qinghe Commercial Factoring (Chongqing) Co., Ltd., which granted factoring receivables to external parties.
| (1) | Disclosure by category |
Unit: Yuan Currency: RMB
| | | December 31, 2023 | |
| Items | | Amount | | Ratio % | | Bad debt
provision | | Net amount | |
| Accounts receivable from factoring with recourse | | | 129,425,183.71 | | | 100.00 | | | 60,736,219.33 | | | 68,688,964.38 | |
| (2) | Provisioned for, recovered or reversed bad debt of current term |
Unit: Yuan Currency: RMB
| | Allowance for | |
| | | doubtful | |
| Items | | accounts | |
| January 1, 2024 | | | 60,736,219.33 | |
| Provision made in this year | | | | |
| Provision reversed in this year | | | 27,454,601.29 | |
| Other decreases in current year | | | 33,281,618.04 | |
| June 30, 2024 | | | | |
Explanation: The decrease in the current year is due to the sale of 65% equity interest in Yonghui Yunjin Technology Co., Ltd., which is no longer included in the scope of consolidation.
| Ö | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | Closing book | | | Opening book | |
| Aging | | balance | | | balance | |
| Within 1 year | | | 327,598,461.94 | | | | 417,495,474.90 | |
| Sub-total within one year | | | 327,598,461.94 | | | | 417,495,474.90 | |
| 1-2 years | | | 24,521,271.08 | | | | 27,657,213.75 | |
| 2-3 years | | | 20,566,732.01 | | | | 19,281,834.84 | |
| Over 3 years | | | 62,531,559.43 | | | | 50,274,690.75 | |
| Total | | | 435,218,024.46 | | | | 514,709,214.24 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Classified disclosure by bad-debt provision method |
| Ö | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | | Opening balance | | | |
| | | Book balance | | Bad debt provision | | | | Book balance | | Bad debt provision | | | |
| | | | | | | | | Proportion of | | | | | | | | | | Proportion of | | | |
| | | | | | | | | Bad-debt | | Carrying | | | | | | | | Bad-debt | | Carrying | |
| Category | | Amount | | Ratio | | Amount | | provision | | value | | Amount | | Ratio | | Amount | | provision | | value | |
| | | | | % | | | | (%) | | | | | | % | | | | (%) | | | |
| Provision made on an individual basis | | 1,894,322.62 | | 0.44 | | 1,894,322.62 | | 100.00 | | 1,894,322.62 | | 0.37 | | 1,894,322.62 | | 100.00 | | | | | |
| Provision made on a collective basis | | 433,323,701.84 | | 99.56 | | 92,957,932.27 | | 21.45 | | 340,365,769.57 | | 512,814,891.62 | | 99.63 | | 91,072,410.69 | | 17.76 | | 421,742,480.93 | |
| Among which: | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | 230,222,105.65 | | 52.90 | | 49,529,623.37 | | 21.51 | | 180,692,482.28 | | 283,389,112.74 | | 55.06 | | 52,071,963.36 | | 18.37 | | 231,317,149.38 | |
| Supplier service fees and rentals | | 176,017,260.13 | | 40.44 | | 43,157,465.54 | | 24.52 | | 132,859,794.59 | | 181,638,702.76 | | 35.29 | | 38,522,576.57 | | 21.21 | | 143,116,126.19 | |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from affiliated parties | | 27,084,336.06 | | 6.22 | | 270,843.36 | | 1.00 | | 26,813,492.70 | | 47,787,076.12 | | 9.28 | | 477,870.76 | | 1.00 | | 47,309,205.36 | |
| Total | | 435,218,024.46 | | / | | 94,852,254.89 | | / | | 340,365,769.57 | | 514,709,214.24 | | / | | 92,966,733.31 | | / | | 421,742,480.93 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| Ö | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | Closing balance | |
| Name | | | Book
balance | | | | Bad debt
provision | | | | Proportion
of bad-debt
provision | | | Reasons for
provision | |
| | | | | | | | | | | | (%) | | | | |
| Client I | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100.00 | | | Expected not to be recovered | |
| Total | | | 1,894,322.62 | | | | 1,894,322.62 | | | | 100.00 | | | / | |
Explanation for individual bad debt provision:
| ¨ | Applicable | Ö | Not applicable |
Provision of bad debts using provision matrix:
| Ö | Applicable | ¨ | Not applicable |
Combined provision items: Combination 1
Unit: Yuan Currency: RMB
| | | Closing balance | |
| | | | | | | | | Proportion of | |
| Name | | Account
receivable | | | Bad debt
provision | | | bad-debt
provision | |
| | | | | | | | | | | | (%) | |
| Within 1 year | | | 305,780,745.80 | | | | 18,346,855.09 | | | | 6.00 | |
| 1-2 years | | | 23,105,161.90 | | | | 6,007,305.39 | | | | 26.00 | |
| 2-3 years | | | 17,019,825.00 | | | | 7,999,317.75 | | | | 47.00 | |
| Over 3 years | | | 60,333,633.08 | | | | 60,333,610.68 | | | | 100.00 | |
| Total | | | 406,239,365.78 | | | | 92,687,088.91 | | | | 22.82 | |
Combined provision items: Combination 2
Unit: Yuan Currency: RMB
| | | Closing balance | |
| Name | | Account
receivable | | | Bad debt
provision | | | Proportion of
bad-debt
provision | |
| | | | | | | | | (%) | |
| Receivables from affiliated parties | | | 27,084,336.06 | | | | 270,843.36 | | | | 1.00 | |
| Total | | | 27,084,336.06 | | | | 270,843.36 | | | | 1.00 | |
Explanation of the provision for bad debt based on portfolio composition:
| Ö | Applicable | ¨ | Not applicable |
Please refer to V, 13 for details on accounts receivable
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision for bad debts based on the general model of expected credit losses
| ¨ | Applicable | Ö | Not applicable |
Basis for stage classification and bad debt provision ratio
None
Description of significant changes in the book balance of accounts receivable due to changes in loss provision in the current period:
| ¨ | Applicable | Ö | Not applicable |
| (3). | The situation of the provision of bad debts |
| Ö | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | Increase and decrease of current period Provision | | | |
| Category | | Opening
balance | | Provision | | Recovered or
Reversed | | Charge-off or
write-off | | Other
changes | | Closing
balance | |
| Bad-debt provision for accounts receivable | | | 92,966,733.31 | | | 5,754,538.77 | | | 3,460,557.84 | | | 408,459.35 | | | | | | 94,852,254.89 | |
| Total | | | 92,966,733.31 | | | 5,754,538.77 | | | 3,460,557.84 | | | 408,459.35 | | | | | | 94,852,254.89 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| ¨ | Applicable | Ö | Not applicable |
| (4). | Receivables actually verified and cancelled in the current period |
| Ö | Applicable | ¨ | Not applicable |
| | | Write-off | |
| Items | | amount | |
| Accounts receivable actually written off | | | 408,459.35 | |
Significant write-off of accounts receivable during the year
| ¨ | Applicable | Ö | Not applicable |
Descriptions for verification and write-off of receivables:
| ¨ | Applicable | Ö | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5). | Accounts receivable and contract assets of the top five ending balances collected by the debtor |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Unit name | | Closing
balance of
accounts
receivable | | | Closing
balance of
contract
assets | | | Closing
balance of
accounts
receivable
and contract
assets | | | Proportion to
the total
closing balance of
accounts
receivable
and contract
assets | | | Closing
balance of
bad-debt
provision | |
| | | | | | | | | | | | (%) | | | | |
| Client I | | | 64,431,208.98 | | | | | | | | 64,431,208.98 | | | | 14.80 | | | | 3,865,977.58 | |
| Client II | | | 27,149,214.35 | | | | | | | | 27,149,214.35 | | | | 6.24 | | | | 1,628,973.80 | |
| Client III | | | 14,766,910.10 | | | | | | | | 14,766,910.10 | | | | 3.39 | | | | 147,669.10 | |
| Client IV | | | 14,011,083.31 | | | | | | | | 14,011,083.31 | | | | 3.22 | | | | 14,011,083.31 | |
| Client V | | | 8,888,854.11 | | | | | | | | 8,888,854.11 | | | | 2.04 | | | | 8,888,854.11 | |
| Total | | | 129,247,270.85 | | | | | | | | 129,247,270.85 | | | | 29.69 | | | | 28,542,557.90 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Amounts and reasons for significant changes in book value during the reporting period |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Classified disclosure by bad-debt provision method |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
Provision for bad debts based on the general model of expected credit losses
| | ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the carrying amount of contract assets for which loss provisions were made during the current period.
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Provision for bad debts of contract assets in current period |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (5). | Details of contract assets actually written off during the current period. |
| | ¨ | Applicable | √ | Not applicable |
Significant contract asset write-off situations
| | ¨ | Applicable | √ | Not applicable |
Explanation of contract asset write-off:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 9. | Financing of receivables |
| (1). | The financing classification of receivables is shown as follows |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Financing of pledged receivables of the Company at the end of the period |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Financing of receivables endorsed or discounted by the Company at the end of the period and not yet due on the balance sheet date |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Classified disclosure by bad-debt provision method |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
Provision for bad debts based on the general model of expected credit losses
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of significant changes in the carrying amount of financing of receivables for which loss provisions were made during the current period:
| | ¨ | Applicable | √ | Not applicable |
| (5). | The situation of the provision of bad debts |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (6). | Financing status of receivables actually written off in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant accounts receivable financing write-off situations
| | ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| | ¨ | Applicable | √ | Not applicable |
| (7). | Receivables financing increase and decrease of current period and fair value changes: |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (1). | Advance payments listed by aging |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| Aging | | Amount | | | Proportion | | | Amount | | | Proportion | |
| | | | | | (%) | | | | | | (%) | |
| Within 1 year | | | 923,938,788.20 | | | | 89.38 | | | | 1,089,946,729.92 | | | | 91.96 | |
| 1-2 years | | | 44,815,866.36 | | | | 4.34 | | | | 52,388,650.71 | | | | 4.42 | |
| 2-3 years | | | 25,124,514.47 | | | | 2.43 | | | | 23,223,104.23 | | | | 1.96 | |
| Over 3 years | | | 39,825,061.02 | | | | 3.85 | | | | 19,661,786.82 | | | | 1.66 | |
| Total | | | 1,033,704,230.05 | | | | 100.00 | | | | 1,185,220,271.68 | | | | 100.00 | |
Reasons for untimely settlement of advance payment that has aging of over one year and of significant amount:
Prepayments with an age of more than 1 year are mainly prepayment for goods
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Prepayments for the top five ending balances collected according to prepayment object |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Unit name | | Closing balance | | | Proportion in
the total closing balance of
prepayments | |
| | | | | | (%) | |
| Supplier I | | | 34,526,826.22 | | | | 3.34 | |
| Supplier II | | | 22,131,591.25 | | | | 2.14 | |
| Supplier III | | | 21,403,557.54 | | | | 2.07 | |
| Supplier IV | | | 15,694,901.61 | | | | 1.52 | |
| Supplier V | | | 13,821,422.50 | | | | 1.34 | |
| Total | | | 107,578,299.12 | | | | 10.41 | |
Other explanations
| | ¨ | Applicable | √ | Not applicable |
Itemized list
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Interest receivable | | | 941,391.67 | | | | | |
| Other receivables | | | 499,763,124.04 | | | | 563,030,272.81 | |
| Total | | | 499,763,124.04 | | | | 563,971,664.48 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Interest receivable
| (1). | Classification of interest receivable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Interest on small loans | | | | | | | 941,391.67 | |
| Total | | | | | | | 941,391.67 | |
| (2). | Significant overdue interest |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Classified disclosure by bad-debt provision method |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
| (4). | Provision for bad debts based on the general model of expected credit losses |
| | ¨ | Applicable | √ | Not applicable |
| (5). | The situation of the provision of bad debts |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (6). | Interest on receivables actually written off in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant accrued interest write-off situations
| | ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Dividends receivable
| | ¨ | Applicable | √ | Not applicable |
| (2). | Significant dividend receivable of more than 1 year |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Classified disclosure by bad-debt provision method |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Provision for bad debts based on the general model of expected credit losses |
| | ¨ | Applicable | √ | Not applicable |
| (5). | The situation of the provision of bad debts |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (6). | Dividends on receivables actually written off in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant accrued dividends write-off situations
| | ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Other receivables
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book | | | Opening book | |
| Aging | | balance | | | balance | |
| Within 1 year | | | 131,709,862.47 | | | | 143,104,386.17 | |
| Sub-total within one year | | | 131,709,862.47 | | | | 143,104,386.17 | |
| 1-2 years | | | 48,543,376.95 | | | | 104,503,734.32 | |
| 2-3 years | | | 77,798,966.78 | | | | 57,231,859.27 | |
| Over 3 years | | | 338,987,673.57 | | | | 356,558,737.02 | |
| Total | | | 597,039,879.77 | | | | 661,398,716.78 | |
| (2). | Classification of other accounts payable according to the nature of payment |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing book | | | Opening book | |
| Nature of payment | | balance | | | balance | |
| Various types of deposits and guarantees receivable | | | 442,903,836.64 | | | | 489,484,746.78 | |
| Purchases and store petty cash payments | | | 43,738,721.60 | | | | 65,233,226.90 | |
| Receivables from affiliated parties | | | 15,815,287.63 | | | | 18,945,065.73 | |
| Other receivables | | | 94,582,033.90 | | | | 87,735,677.37 | |
| Total | | | 597,039,879.77 | | | | 661,398,716.78 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Provision of bad debts |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Phase I | | | Phase II | | | Phase III | | | | |
| | | | | | Expected credit | | | Expected credit | | | | |
| | | | | | loss within the | | | loss within the | | | | |
| | | | | | whole duration | | | whole duration | | | | |
| | | Expected credit | | | (no credit | | | (credit | | | | |
| | | loss over the | | | impairment | | | impairment | | | | |
| Bad debt provision | | next 12 months | | | occurred) | | | incurred) | | | Total | |
| Balance as of January 1, 2024 | | | 5,581,578.15 | | | | 2,736,611.32 | | | | 90,050,254.50 | | | | 98,368,443.97 | |
| Balance as of January 1, 2024 in the current period | | | | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -283,836.01 | | | | 283,836.01 | | | | | | | | | |
| – Transferred to Phase III | | | | | | | -703,168.41 | | | | 703,168.41 | | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | | | | | | |
| Provision of the current period | | | 3,303,392.91 | | | | 8,225.62 | | | | 1,289,284.23 | | | | 4,600,902.76 | |
| Provision reversed in current period | | | 1,569,031.31 | | | | 686,451.24 | | | | | | | | 2,255,482.55 | |
| Charge-off of the current period | | | | | | | | | | | | | | | | |
| Write-off of the current period | | | | | | | | | | | 3,437,108.45 | | | | 3,437,108.45 | |
| Other changes | | | | | | | | | | | | | | | | |
| Balance as of June 30, 2024 | | | 7,032,103.74 | | | | 1,639,053.30 | | | | 88,605,598.69 | | | | 97,276,755.73 | |
Basis for stage classification and bad debt provision ratio
| (1) | The Company handles other receivables using the general model for expected credit losses. On each balance sheet date, the credit risk of these receivables is assessed and categorized into three stages to calculate the expected credit losses. |
| | | |
| | | The Company respectively measures the expected credit losses of financial instruments in different stages. If the credit risk of a financial instrument has not increased significantly since initial recognition, in the first stage, the Company measures the loss provision based on the expected credit loss within the next 12 months; if the credit risk of a financial instrument has increased significantly after initial recognition but no credit reduction has occurred, in the second stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument; if the financial instrument has suffered credit impairment since initial recognition, in the third stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument. |
| (2) | The Company divides other receivables into payment nature and aging portfolio based on credit risk characteristics and calculates expected credit losses based on the portfolio. For other receivables classified into portfolios, the Company calculates expected credit losses based on default risk exposure and expected credit loss rates within the next 12 months or the entire duration. |
| (3) | Provision for significant bad debt risk on other receivables with large amounts and significant impact on profitability. Provision for bad debt is recognized based on the expected credit loss throughout the entire remaining period. |
Explanation of significant changes in the book value of other receivables with provision changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | The situation of the provision of bad debts |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase and decrease of current period | | | | |
| Category | | Opening
balance | | | Provision | | | Provision
Recovered or
Reversed | | | Charge-off or
write-off | | | Other
changes | | | Closing
balance | |
| Bad-debt provision for other receivables | | | 98,368,443.97 | | | | 4,600,902.76 | | | | 2,255,482.55 | | | | 3,437,108.45 | | | | | | | | 97,276,755.73 | |
| Total | | | 98,368,443.97 | | | | 4,600,902.76 | | | | 2,255,482.55 | | | | 3,437,108.45 | | | | | | | | 97,276,755.73 | |
Significant reversal or recovery of bad-debt provision of current year is:
| | ¨ | Applicable | √ | Not applicable |
| (5). | Other receivables actually verified and cancelled of current year |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Write-off | |
| Items | | amount | |
| Other receivables actually written off | | | 3,437,108.45 | |
Where the other receivables written off is important:
| | ¨ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of other receivables:
| | ¨ | Applicable | √ | Not applicable |
| (6). | Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Proportion | | | | | | | | |
| | | | | | in total | | | | | | | | |
| | | | | | closing | | | | | | | Closing | |
| | | | | | balance | | | | | | | balance of | |
| Unit name | | Closing
balance | | | of other
receivables | | | Nature of
receivable | | Aging | | bad-debt
provision | |
| | | | | | (%) | | | | | | | | |
| Client I | | | 54,750,000.00 | | | | 9.17 | | | Various types of deposits and guarantees receivable | | Over 3 years | | | 547,500.00 | |
| Client II | | | 16,972,427.96 | | | | 2.84 | | | Other receivables | | Over 3 years | | | 16,972,427.96 | |
| Client III | | | 14,081,094.25 | | | | 2.36 | | | Receivables from affiliated parties | | Within 4 years | | | 14,081,094.25 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | Proportion | | | | | | | | |
| | | | | | in total | | | | | | | | |
| | | | | | closing | | | | | | | Closing | |
| | | | | | balance | | | | | | | balance of | |
| | | Closing | | | of other | | | Nature of | | | | bad-debt | |
| Unit name | | balance | | | receivables | | | receivable | | Aging | | provision | |
| | | | | | (%) | | | | | | | | |
| Client IV | | | 10,000,000.00 | | | | 1.67 | | | Various types of deposits and guarantees receivable | | Over 3 years | | | 100,000.00 | |
| Client V | | | 10,000,000.00 | | | | 1.67 | | | Other receivables | | Over 3 years | | | 10,000,000.00 | |
| Total | | | 105,803,522.21 | | | | 17.71 | | | / | | / | | | 41,701,022.21 | |
| (7). | Reported under other receivables due to centralized cash management |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1). | Inventory classification |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Book balance | | | Closing balance
Provision for
inventory
depreciation or
provision for
impairment of
contract
fulfilling costs | | | Carrying value | | | Book balance | | | Opening balance Provision for
inventory
depreciation or
provision for
impairment of
contract
fulfilling costs | | | Carrying value | |
| Raw material | | | 4,033,261.17 | | | | | | | | 4,033,261.17 | | | | 11,722,204.41 | | | | | | | | 11,722,204.41 | |
| Inventory goods | | | 5,665,726,444.52 | | | | | | | | 5,665,726,444.52 | | | | 8,225,436,229.31 | | | | | | | | 8,225,436,229.31 | |
| Low-cost consumables | | | 30,539,392.13 | | | | | | | | 30,539,392.13 | | | | 31,824,104.55 | | | | | | | | 31,824,104.55 | |
| Total | | | 5,700,299,097.82 | | | | | | | | 5,700,299,097.82 | | | | 8,268,982,538.27 | | | | | | | | 8,268,982,538.27 | |
| (2). | Identification of data resources recognized as inventories |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Provision for inventory depreciation or provision for impairment of contract fulfilling costs |
| | ¨ | Applicable | √ | Not applicable |
Causes for reversal or write-off of inventory falling price reserves in the current period
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision for inventory impairment is calculated based on portfolios
| | ¨ | Applicable | √ | Not applicable |
Provision standards for inventory impairment based on portfolios
| ☐ | Applicable | √ | Not applicable |
| (4). | Explanation of capitalized borrowing costs included in the ending inventory balance and calculation criteria and basis |
| ☐ | Applicable | √ | Not applicable |
| (5). | Explanation of amortization of contract fulfillment costs in the current period |
| ☐ | Applicable | √ | Not applicable |
Other notes:
| ☐ | Applicable | √ | Not applicable |
| 13. | Available-for-sale assets |
| ☐ | Applicable | √ | Not applicable |
| 14. | Non-current assets due within one year |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Finance lease receivable due within one year | | | 39,294,201.28 | | | | 49,380,092.40 | |
| Total | | | 39,294,201.28 | | | | 49,380,092.40 | |
Debt investments due within one year
| ☐ | Applicable | √ | Not applicable |
| (1). | Creditor investments due within one year |
| ☐ | Applicable | √ | Not applicable |
Changes in provision for impairment of creditor investments due within one year in the current period
| ☐ | Applicable | √ | Not applicable |
| (2). | End-of-year significant creditor investments due within one year |
| ☐ | Applicable | √ | Not applicable |
| (3). | Provision of impairment losses |
| ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Explanation of significant changes in the balance of provisions for losses during the period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| | ¨ | Applicable | √ | Not applicable |
| (4). | Actual write-offs of creditor investments due within one year during the period |
| | ¨ | Applicable | √ | Not applicable |
Write-off situation of significant creditor investments due within one year
| | ¨ | Applicable | √ | Not applicable |
Explanation of write-offs of creditor investments due within one year:
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
Other creditor investments due within one year
| ¨ | Applicable | √ | Not applicable |
Other explanations for non-current assets maturing within one year
None
| (1). | Situation of other creditor investments due within one year |
| | ¨ | Applicable | √ | Not applicable |
Changes in provisions for impairment of creditor investments due within one year during the period
| | ¨ | Applicable | √ | Not applicable |
| (2). | End-of-year significant creditor investments due within one year |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Provision of impairment losses |
| | ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the balance of provisions for losses during the period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Actual write-offs of creditor investments due within one year during the period |
| | ¨ | Applicable | √ | Not applicable |
Write-off situation of significant creditor investments due within one year
| | ¨ | Applicable | √ | Not applicable |
Explanation of write-offs of creditor investments due within one year:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
Other explanations for non-current assets maturing within one year
| | ¨ | Applicable | √ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Input tax to be certified | | | 1,127,607,243.93 | | | | 1,224,290,088.04 | |
| Input tax to be deducted | | | 131,716,266.50 | | | | 135,854,796.23 | |
| Advance income tax | | | 1,532,295.85 | | | | 4,964,812.95 | |
| Advance payment of other taxes | | | 313,074.76 | | | | 260,832.25 | |
| Total | | | 1,261,168,881.04 | | | | 1,365,370,529.47 | |
Other notes:
| (1). | Creditor’s investment situation |
| | ¨ | Applicable | √ | Not applicable |
Changes in provision for impairment of creditor investments
| | ¨ | Applicable | √ | Not applicable |
| (2). | End-of-year significant creditor investments |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Provision of impairment losses |
| | ¨ | Applicable | √ | Not applicable |
Explanation of significant changes in the book value of creditor investments with provision changes in the current period:
| | ¨ | Applicable | √ | Not applicable |
Basis for provision for impairment and assessment of significant increase in credit risk of financial instruments during the period:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Actual write-offs of creditor investments in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant situations of write-off of important creditor investments
| | ¨ | Applicable | √ | Not applicable |
Explanation of creditor investments write-off:
| | ¨ | Applicable | √ | Not applicable |
| 17. | Other creditor investments |
| (1). | Situation of other creditor’s investments |
| | ¨ | Applicable | √ | Not applicable |
Changes in impairment provision for other creditor investments
| | ¨ | Applicable | √ | Not applicable |
| (2). | End-of-year significant other creditor investments |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Provision of impairment losses |
| | ¨ | Applicable | √ | Not applicable |
| (4). | Actual write-offs of other creditor investments in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant situations of write-off of other creditor investments
| | ¨ | Applicable | √ | Not applicable |
Explanation of other creditor investments write-off:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Closing balance | | | | | | | | | Opening balance | | | | | | Discount | |
| | | | | | Bad debt | | | Carrying | | | | | | Bad debt | | | Carrying | | | rate | |
| Items | | Book balance | | | provision | | | value | | | Book balance | | | provision | | | value | | | interval | |
| Finance lease outlay | | | 246,002,092.19 | | | | | | | | 246,002,092.19 | | | | 227,393,410.57 | | | | | | | | 227,393,410.57 | | | | 4.35%-4.90 | % |
| Including: unrealized financing income | | | 57,447,519.57 | | | | | | | | 57,447,519.57 | | | | 48,774,581.99 | | | | | | | | 48,774,581.99 | | | | | |
| Total | | | 246,002,092.19 | | | | | | | | 246,002,092.19 | | | | 227,393,410.57 | | | | | | | | 227,393,410.57 | | | | / | |
| (2) | Classified disclosure by bad-debt provision method |
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ¨ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ¨ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ¨ | Applicable | √ | Not applicable |
Provision for bad debts based on the general model of expected credit losses
| | ¨ | Applicable | √ | Not applicable |
| (3) | The situation of the provision of bad debts |
| | ¨ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ¨ | Applicable | √ | Not applicable |
| (4) | Actual write-offs of long-term receivables in the current period |
| | ¨ | Applicable | √ | Not applicable |
Significant long-term receivables write-off situations
| | ¨ | Applicable | √ | Not applicable |
Write-off explanation:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 19. | Long-term equity investments |
| (1). | Situation of long-term equity investments |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | Increase/decrease in the current period | | | | | | |
| | | | | | | | | | Investment
profit and loss
recognized | | | Other
comprehensive | | | Other | | | Distribution
of cash | | Provision of | | | | | | | | | Closing
balance of |
| | | Opening | | Increased | | | Decreased | | with the | | | income | | | equity | | | dividends or | | impairment | | | | | | | | | provision for |
| Investee | | balance | | investment | | | investment | | equity method | | | adjustments | | | changes | | | profits | | losses | | | Others | | | Closing balance | | | impairment |
| I. Cooperative enterprises | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. | | | 48,054,895.86 | | | | | | | | | -16,348,071.33 | | | | | | | | | | | | | | | | | | 31,706,824.53 | | | |
| Subtotal | | | 48,054,895.86 | | | | | | | | | -16,348,071.33 | | | | | | | | | | | | | | | | | | 31,706,824.53 | | | |
| II. Joint ventures | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Zhongbai Holdings Group Co., Ltd. (“Zhongbai Group”) | | | 322,222,140.11 | | | | | | | | | -14,000,172.02 | | | | | | | | | | | | | | | | | | 308,221,968.09 | | | 203,397,822.57 |
| Chengdu Hongqi Chain Co., Ltd. (“Hongqi Chain”) | | | 1,680,000,000.00 | | | | | | | | | 55,981,365.54 | | | | | | | | | -35,414,400.00 | | | | | | | | | 1,700,566,965.54 | | | 358,226,870.98 |
| Fujian OneBank Bank Co., Ltd. (“OneBank”) | | | 693,629,939.95 | | | | | | | | | 31,728,570.67 | | | 6,545,793.66 | | | | | | | | | | | | | | | 731,904,304.28 | | | |
| Xiangcun Gaoke Agricultural Co., Ltd. (“Xiangcun Gaoke”) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 399,676,183.23 |
| Fujian Minwei Industrial Co., Ltd. | | | 118,430,151.93 | | | | | | | | | 9,103,969.47 | | | | | | | | | | | | | | | | | | 127,534,121.40 | | | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | 44,568,234.68 | | | | | | | | | -9,818,782.16 | | | | | | | | | | | | | | | | | | 34,749,452.52 | | | |
| Beijing Friendship Messenger Trading Co., Ltd. | | | 68,309,218.94 | | | | | | | | | 14,435,065.64 | | | | | | | | | | | | | | | | | | 82,744,284.58 | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 52,216,364.13 | | | | | | | | | 3,173,042.89 | | | | | | | | | -4,000,000.00 | | | | | | | | | 51,389,407.02 | | | |
| 1233 International Supply Chain Management Co., Ltd. | | | 195,862,085.24 | | | | | | | | | 9,983,006.32 | | | | | | | | | | | | | | | | | | 205,845,091.56 | | | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | | 5,625,700.26 | | | | | | | | | -632,648.65 | | | | | | | | | | | | | | | | | | 4,993,051.61 | | | 3,218,259.25 |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | | 19,133.52 | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,133.52 | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | | Increase/decrease in the current period | | | | | | |
| | | | | | | | | | | | Investment
profit and loss
recognized | | | Other
Comprehensive | | | Other | | | Distribution
of cash | | | Provision of | | | | | | | | Closing
balance of |
| | | Opening | | | Increased | | | Decreased | | | with the | | | income | | | equity | | | dividends or | | | impairment | | | | | | | | provision for |
| Investee | | balance | | | investment | | | investment | | | equity method | | | adjustments | | | changes | | | profits | | | losses | | Others | | | Closing balance | | | impairment |
| Zhejiang Bianlixian Supermarket Co., Ltd. (Note 1) | | | 2,727,213.40 | | | | | | -2,694,631.04 | | | -32,582.36 | | | | | | | | | | | | | | | | | | | | | |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,062,445.92 |
| Yonghui Yunjin Technology Co., Ltd. (Note 2) | | | | | | | | | | | | 234,245.40 | | | | | | | | | | | | | | | 203,410,773.21 | | | 203,645,018.61 | | | |
| Subtotal | | | 3,183,610,182.16 | | | | | | -2,694,631.04 | | | 100,155,080.74 | | | 6,545,793.66 | | | | | | -39,414,400.00 | | | | | | 203,410,773.21 | | | 3,451,612,798.73 | | | 968,581,581.95 |
| Total | | | 3,231,665,078.02 | | | | | | -2,694,631.04 | | | 83,807,009.41 | | | 6,545,793.66 | | | | | | -39,414,400.00 | | | | | | 203,410,773.21 | | | 3,483,319,623.26 | | | 968,581,581.95 |
Other disclosures
| Note 1: | In 2024, all shareholders of Zhejiang Bianlixian Supermarket Co., Ltd. reached a resolution to terminate the operation of the company and cancel its registration. The company completed the deregistration procedures in April 2024. |
| Note 2: | In June 2024, the Group sold 65% equity of Yonghui Yunjin Technology Co., Ltd. (“Yunjin Technology”) held by the company to Shanghai Paihui Technology Co., Ltd., with a total transfer price of RMB377,762,864.53. After the completion of this transaction, the Group still holds 35% equity of Yunjin Technology, which is accounted for using the equity method. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Impairment testing of long-term equity investments |
| ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
| 20. | Other equity instrument investments |
| (1). | Other equity instrument investments |
| ¨ | Applicable | √ | Not applicable |
| (2). | Explanation of cases where termination has been confirmed in the current period |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
| 21. | Other non-current financial assets |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Financial assets measured at fair value with changes included in current profits and losses | | | 3,302,565,585.85 | | | | 3,651,480,119.24 | |
| Total | | | 3,302,565,585.85 | | | | 3,651,480,119.24 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
Measurement model for investment properties
| (1). | Investment properties measured with cost measurement model |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | Houses and | | | | |
| Items | | buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 397,659,542.77 | | | | 397,659,542.77 | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 397,659,542.77 | | | | 397,659,542.77 | |
| II. Accumulated depreciation and amortization | | | | | | | | |
| 1. Opening balance | | | 97,511,313.77 | | | | 97,511,313.77 | |
| 2. Increase in current period | | | 5,428,009.59 | | | | 5,428,009.59 | |
| (1) Depreciation or amortization | | | 5,428,009.59 | | | | 5,428,009.59 | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 102,939,323.36 | | | | 102,939,323.36 | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 294,720,219.41 | | | | 294,720,219.41 | |
| 2. Opening book value | | | 300,148,229.00 | | | | 300,148,229.00 | |
Investment properties consisting of a partial lease of Yonghui Urban Life Plaza and Dongzhan Commercial Building.
| (2). | Situation of investment properties without completed property ownership certificates: |
| ¨ | Applicable | √ | Not applicable |
| (3). | Impairment testing of investment properties measured at cost |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
Itemized list
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| Fixed assets | | | 3,625,260,512.73 | | | | 3,842,169,544.96 | |
| Total | | | 3,625,260,512.73 | | | | 3,842,169,544.96 | |
Other notes:
Fixed assets
| (1). | Information about fixed assets |
| √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | | |
| | | Houses and | | | Machinery and | | | Means of | | | Electronic | | | Tools and | | | | |
| Items | | buildings | | | equipment | | | transport | | | equipment | | | instruments | | | Total | |
| I. Original Book Value: | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 3,316,680,657.18 | | | | 2,524,203,269.13 | | | | 296,202,616.39 | | | | 881,990,292.50 | | | | 1,999,704,606.18 | | | | 9,018,781,441.38 | |
| 2. Increase in current period | | | 6,178,090.28 | | | | 50,667,359.01 | | | | 409,468.57 | | | | 6,633,405.93 | | | | 30,995,061.04 | | | | 94,883,384.83 | |
| (1) Purchase | | | | | | | 50,481,518.29 | | | | 409,468.57 | | | | 6,633,405.93 | | | | 30,995,061.04 | | | | 88,519,453.83 | |
| (2) Transferred from work in progress | | | 6,178,090.28 | | | | 185,840.72 | | | | | | | | | | | | | | | | 6,363,931.00 | |
| 3. Decrease in current period | | | | | | | 60,362,778.30 | | | | 3,097,725.68 | | | | 30,482,065.75 | | | | 52,462,510.48 | | | | 146,405,080.21 | |
| (1) Disposal or scrapping | | | | | | | 60,362,778.30 | | | | 3,097,725.68 | | | | 30,482,065.75 | | | | 52,462,510.48 | | | | 146,405,080.21 | |
| 4. Closing balance | | | 3,322,858,747.46 | | | | 2,514,507,849.84 | | | | 293,514,359.28 | | | | 858,141,632.68 | | | | 1,978,237,156.74 | | | | 8,967,259,746.00 | |
| II. Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 697,063,935.39 | | | | 1,930,585,429.86 | | | | 91,402,504.08 | | | | 816,330,726.11 | | | | 1,597,313,171.67 | | | | 5,132,695,767.11 | |
| 2. Increase in current period | | | 47,272,574.88 | | | | 116,333,912.72 | | | | 5,385,989.21 | | | | 49,730,775.83 | | | | 79,653,709.71 | | | | 298,376,962.35 | |
| (1) Addition | | | 47,272,574.88 | | | | 116,333,912.72 | | | | 5,385,989.21 | | | | 49,730,775.83 | | | | 79,653,709.71 | | | | 298,376,962.35 | |
| 3. Decrease in current period | | | | | | | 53,725,056.82 | | | | 2,796,324.73 | | | | 27,437,965.46 | | | | 46,662,059.94 | | | | 130,621,406.95 | |
| (1) Disposal or scrapping | | | | | | | 53,725,056.82 | | | | 2,796,324.73 | | | | 27,437,965.46 | | | | 46,662,059.94 | | | | 130,621,406.95 | |
| 4. Closing balance | | | 744,336,510.27 | | | | 1,993,194,285.76 | | | | 93,992,168.56 | | | | 838,623,536.48 | | | | 1,630,304,821.44 | | | | 5,300,451,322.51 | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | | | | | 20,498,458.32 | | | | 121,239.11 | | | | 7,833,847.80 | | | | 15,462,584.08 | | | | 43,916,129.31 | |
| 2. Increase in current period | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Decrease in current period | | | | | | | 970,406.75 | | | | 274.21 | | | | 455,627.15 | | | | 941,910.44 | | | | 2,368,218.55 | |
| (1) Disposal or scrapping | | | | | | | 970,406.75 | | | | 274.21 | | | | 455,627.15 | | | | 941,910.44 | | | | 2,368,218.55 | |
| 4. Closing balance | | | | | | | 19,528,051.57 | | | | 120,964.90 | | | | 7,378,220.65 | | | | 14,520,673.64 | | | | 41,547,910.76 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Closing book value | | | 2,578,522,237.19 | | | | 501,785,512.51 | | | | 199,401,225.82 | | | | 12,139,875.55 | | | | 333,411,661.66 | | | | 3,625,260,512.73 | |
| 2. Opening book value | | | 2,619,616,721.79 | | | | 573,119,380.95 | | | | 204,678,873.20 | | | | 57,825,718.59 | | | | 386,928,850.43 | | | | 3,842,169,544.96 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Temporary idle fixed assets |
| ¨ | Applicable | √ | Not applicable |
| (3). | Fixed assets acquired from operating leasing |
| ¨ | Applicable | √ | Not applicable |
| (4). | Fixed assets without certificate of title |
| √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | |
| | | | | | Reasons for failure to get |
| Items | | Carrying value | | | the certificates of title |
| Factories and office buildings of Guizhou Yonghui Logistics Center | | | 276,703,004.97 | | | Processing |
| Rail interface of the underground passage at Nanqiaosi Station, Chongqing Xuanhui Real Estate | | | 25,097,831.32 | | | The Group only has the right to use without ownership. |
| Yonghui Northeast Warehouse Center | | | 184,559,451.27 | | | Processing |
On June 30, 2024, the Group had no temporarily idle fixed assets, no finance lease-in fixed assets, and no operating lease-out fixed assets.
| (5). | Impairment test of fixed assets |
| ¨ | Applicable | √ | Not applicable |
Other notes:
| ¨ | Applicable | √ | Not applicable |
Disposal of fixed asset
| ¨ | Applicable | √ | Not applicable |
| 24. | Construction in progress |
Itemized list
| √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Construction in progress | | | 219,563,980.39 | | | | 240,333,156.71 | |
| Total | | | 219,563,980.39 | | | | 240,333,156.71 | |
Other notes:
None
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Construction in progress
| (1). | Construction in progress |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing balance
Impairment | | | Opening balance
Impairment | |
| Items | | Book balance | | | provision | | | Carrying value | | | Book balance | | | provision | | | Carrying value | |
| Store decoration | | | 51,553,935.14 | | | | | | | | 51,553,935.14 | | | | 93,794,839.46 | | | | | | | | 93,794,839.46 | |
| Phase II of Sichuan Pengzhou Industrial Park | | | 168,010,045.25 | | | | | | | | 168,010,045.25 | | | | 146,538,317.25 | | | | | | | | 146,538,317.25 | |
| Total | | | 219,563,980.39 | | | | | | | | 219,563,980.39 | | | | 240,333,156.71 | | | | | | | | 240,333,156.71 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Current changes in major projects under construction |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Project name | | Budget amount | | | Opening
balance | | | Increase
in current
period | | | Amount of
transferred
fixed assets of
current period | | | Other
decreased
amount of
current
period | | | Closing
balance | | | Proportion of
accumulative
total project
investment in
the budget | | | Construction
progress | | | Accumulated
amount of
interest
capitalization | | | Including:
amount of
capitalization
of current
interest | | | Interest
capitalization
rate in the
current period | | | Source
of funds | |
| | | | | | | | | | | | | | | | | | | | | (%) | | | (%) | | | | | | | | | (%) | | | | |
| Phase II of Sichuan Pengzhou Industrial Park | | | 311,482,500.00 | | | | 146,538,317.25 | | | | 21,471,728.00 | | | | | | | | | | | | 168,010,045.25 | | | | 53.94 | | | | 99 | | | | | | | | | | | | | | | | Self-funded | |
| Total | | | 311,482,500.00 | | | | 146,538,317.25 | | | | 21,471,728.00 | | | | | | | | | | | | 168,010,045.25 | | | | / | | | | / | | | | | | | | | | | | / | | | | / | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Provision of impairment losses of construction in progress in current period |
| ¨ | Applicable | √ | Not applicable |
| (4). | Impairment test of work in progress |
| ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
Engineering materials
| ¨ | Applicable | √ | Not applicable |
| 25. | Productive biological assets |
| (1). | Productive biological assets measured at cost |
| √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Planting | | | | |
| | | industry | | | | |
| | | Persimmon trees | | | | |
| Items | | (matured) | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 12,727,696.62 | | | | 12,727,696.62 | |
| 2. Increase in current period | | | | | | | | |
| (1) Purchased | | | | | | | | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 12,727,696.62 | | | | 12,727,696.62 | |
| II. Accumulated depreciation | | | | | | | | |
| 1. Opening balance | | | 636,384.83 | | | | 636,384.83 | |
| 2. Increase in current period | | | 318,192.42 | | | | 318,192.42 | |
| (1) Provision | | | 318,192.42 | | | | 318,192.42 | |
| 3. Decrease in current period | | | | | | | | |
| 4. Closing balance | | | 954,577.25 | | | | 954,577.25 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Planting | | | | |
| | | industry | | | | |
| | | Persimmon trees | | | | |
| Items | | (matured) | | | Total | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | | | | | | |
| 2. Increase in current period | | | | | | | | |
| 3.Decrease in current period | | | | | | | | |
| 4.Closing balance | | | | | | | | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 11,773,119.37 | | | | 11,773,119.37 | |
| 2. Opening book value | | | 12,091,311.79 | | | | 12,091,311.79 | |
| (2). | Impairment test of productive biological assets measured at cost |
| ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
| (3). | Productive biological assets measured at fair value |
| ¨ | Applicable | √ | Not applicable |
Other disclosures
| ¨ | Applicable | √ | Not applicable |
| (1). | Situation of oil and gas assets |
| ¨ | Applicable | √ | Not applicable |
| (2). | Impairment test of oil and gas assets |
| ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | Houses and | | | | |
| Items | | buildings | | | Total | |
| I. Original book value | | | | | | | | |
| 1. Opening balance | | | 31,073,994,780.13 | | | | 31,073,994,780.13 | |
| 2. Increase in current period | | | 232,868,988.99 | | | | 232,868,988.99 | |
| (1) Additions | | | 232,868,988.99 | | | | 232,868,988.99 | |
| 3. Decrease in current period | | | 1,602,818,533.74 | | | | 1,602,818,533.74 | |
| (1) Disposal | | | 1,602,818,533.74 | | | | 1,602,818,533.74 | |
| 4. Closing balance | | | 29,704,045,235.38 | | | | 29,704,045,235.38 | |
| II. Accumulated depreciation | | | | | | | | |
| 1. Opening balance | | | 13,575,044,732.54 | | | | 13,575,044,732.54 | |
| 2. Increase in current period | | | 982,787,501.40 | | | | 982,787,501.40 | |
| (1) Provision | | | 982,787,501.40 | | | | 982,787,501.40 | |
| 3. Decrease in current period | | | 910,667,749.56 | | | | 910,667,749.56 | |
| (1) Disposal | | | 910,667,749.56 | | | | 910,667,749.56 | |
| 4. Closing balance | | | 13,647,164,484.38 | | | | 13,647,164,484.38 | |
| III. Provision for impairment | | | | | | | | |
| 1. Opening balance | | | 465,778,138.23 | | | | 465,778,138.23 | |
| 2. Increase in current period | | | | | | | | |
| (1) Provision | | | | | | | | |
| 3. Decrease in current period | | | 106,576,549.66 | | | | 106,576,549.66 | |
| (1) Disposal | | | 106,576,549.66 | | | | 106,576,549.66 | |
| 4. Closing balance | | | 359,201,588.57 | | | | 359,201,588.57 | |
| IV. Book value | | | | | | | | |
| 1. Closing book value | | | 15,697,679,162.43 | | | | 15,697,679,162.43 | |
| 2. Opening book value | | | 17,033,171,909.36 | | | | 17,033,171,909.36 | |
| (2). | Impairment test of right-of-use assets |
| | ¨ | Applicable | √ | Not applicable |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
| (1). | Information about intangible assets |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Land use right | | | Patent
rights | | | Non-patented
technologies | | | Software | | | Sales network | | | Total | |
| I. Original book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 688,614,068.17 | | | | 159,739.89 | | | | 30,222,292.35 | | | | 1,539,744,808.26 | | | | 120,952,830.18 | | | | 2,379,693,738.85 | |
| 2. Increase in current period | | | 3,975,000.00 | | | | | | | | | | | | 309,734.51 | | | | | | | | 4,284,734.51 | |
| (1) Acquisition | | | 3,975,000.00 | | | | | | | | | | | | 309,734.51 | | | | | | | | 4,284,734.51 | |
| 3. Decrease in current period | | | | | | | | | | | | | | | 18,408,998.03 | | | | | | | | 18,408,998.03 | |
| (1) Disposal | | | | | | | | | | | | | | | 18,408,998.03 | | | | | | | | 18,408,998.03 | |
| 4. Closing balance | | | 692,589,068.17 | | | | 159,739.89 | | | | 30,222,292.35 | | | | 1,521,645,544.74 | | | | 120,952,830.18 | | | | 2,365,569,475.33 | |
| II. Accumulated amortization | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | 174,911,827.76 | | | | 71,885.72 | | | | 18,482,064.68 | | | | 1,056,880,063.76 | | | | 42,202,893.09 | | | | 1,292,548,735.01 | |
| 2. Increase in current period | | | 7,546,622.44 | | | | 7,587.65 | | | | 3,006,945.75 | | | | 131,342,411.57 | | | | 3,132,641.53 | | | | 145,036,208.94 | |
| (1) Provision | | | 7,546,622.44 | | | | 7,587.65 | | | | 3,006,945.75 | | | | 131,342,411.57 | | | | 3,132,641.53 | | | | 145,036,208.94 | |
| 3. Decrease in current period | | | | | | | | | | | | | | | 10,414,793.78 | | | | | | | | 10,414,793.78 | |
| (1) Disposal | | | | | | | | | | | | | | | 10,414,793.78 | | | | | | | | 10,414,793.78 | |
| 4. Closing balance | | | 182,458,450.20 | | | | 79,473.37 | | | | 21,489,010.43 | | | | 1,177,807,681.55 | | | | 45,335,534.62 | | | | 1,427,170,150.17 | |
| III. Provision for impairment | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Opening balance | | | | | | | | | | | | | | | | | | | 49,196,666.66 | | | | 49,196,666.66 | |
| 2. Increase in current period | | | | | | | | | | | | | | | | | | | | | | | | |
| 3. Decrease in current period | | | | | | | | | | | | | | | | | | | | | | | | |
| 4. Closing balance | | | | | | | | | | | | | | | | | | | 49,196,666.66 | | | | 49,196,666.66 | |
| IV. Book value | | | | | | | | | | | | | | | | | | | | | | | | |
| 1. Closing book value | | | 510,130,617.97 | | | | 80,266.52 | | | | 8,733,281.92 | | | | 343,837,863.19 | | | | 26,420,628.90 | | | | 889,202,658.50 | |
| 2. Opening book value | | | 513,702,240.41 | | | | 87,854.17 | | | | 11,740,227.67 | | | | 482,864,744.50 | | | | 29,553,270.43 | | | | 1,037,948,337.18 | |
Intangible assets formed through internal research and development accounted for 6.64% of the balance of intangible assets at the end of the period
| (2). | Data resources recognized as intangible assets |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Conditions of land use right with incomplete certificates of title |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | |
| Items | | Carrying value | | | Reasons for failure to get
the certificates of title |
| Guizhou Logistics Park | | | 44,576,187.50 | | | In the process of handling |
| (4). | Impairment test of intangible assets |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1). | Original book value of goodwill |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | | |
| | | | | | Increase in | | | | | | | |
| | | | | | the current | | | | | | | |
| | | | | | period | | | Decrease in | | | | |
| | | | | | Formed by | | | the current | | | | |
| Name of invested entity or | | Opening | | | business | | | period | | | Closing | |
| matter forming goodwill | | balance | | | merger | | | Disposal | | | balance | |
| Shanghai Dongzhan International Trade Co., Ltd. | | | 3,661,378.25 | | | | | | | | | | | | 3,661,378.25 | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| Total | | | 309,118,158.17 | | | | | | | | | | | | 309,118,158.17 | |
| (2). | Provision for goodwill impairment |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | | |
| | | | | | Increase in | | | Decrease in | | | | |
| | | | | | the current | | | the current | | | | |
| Name of invested entity or | | Opening | | | period | | | period | | | Closing | |
| matter forming goodwill | | balance | | | Provision | | | Disposal | | | balance | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| Total | | | 305,456,779.92 | | | | | | | | | | | | 305,456,779.92 | |
| (3). | Information about the asset group or asset group portfolio of the goodwill |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Changes in asset group or portfolio of asset groups
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| (4). | Specific method for determining recoverable amount |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| | ¨ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| | ¨ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| | ¨ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| | ¨ | Applicable | √ | Not applicable |
| (5). | Performance commitments and corresponding impairment of goodwill |
There were performance commitments and the reporting period or the previous reporting period was within the performance commitment period when goodwill was formed
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 30. | Long-term prepaid expenses |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | | | | | |
| | | | | | | | | Amortization | | | | | | | |
| | | | | | Increase in | | | amount in | | | | | | | |
| | | Opening | | | current | | | current | | | Other | | | | |
| Items | | balance | | | period | | | period | | | decreases | | | Closing balance | |
| Renovation costs of rented store | | | 2,261,232,000.32 | | | | 110,856,543.00 | | | | 297,079,295.91 | | | | 39,338,417.89 | | | | 2,035,670,829.52 | |
| Decoration expenses for Nantong Logistics Park project | | | 32,271,084.86 | | | | 482,403.40 | | | | 3,712,706.91 | | | | | | | | 29,040,781.35 | |
| Decoration expenses for East China Logistics Park | | | 8,992,617.45 | | | | | | | | 1,031,223.79 | | | | | | | | 7,961,393.66 | |
| Total | | | 2,302,495,702.63 | | | | 111,338,946.40 | | | | 301,823,226.61 | | | | 39,338,417.89 | | | | 2,072,673,004.53 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
The decrease in long-term prepaid expenses for the year is due to the closure of certain stores.
| 31. | Deferred income tax assets/deferred income tax liabilities |
| (1). | Deferred income tax assets not offset |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | Closing balance | | | Opening balance | |
| | | Deductible | | | | | | Deductible | | | | |
| | | temporary | | | Deferred | | | temporary | | | Deferred | |
| Items | | differences | | | tax asset | | | differences | | | tax asset | |
| Provision for impairment of assets | | | 937,809,402.50 | | | | 209,282,039.17 | | | | 1,065,423,597.99 | | | | 224,564,688.82 | |
| Unrealized profits in internal transaction | | | | | | | | | | | 17,967,274.91 | | | | 4,491,818.73 | |
| Deductible loss | | | 1,040,009,200.13 | | | | 258,070,025.74 | | | | 1,163,338,051.11 | | | | 278,018,136.79 | |
| Lease liabilities | | | 14,607,967,460.13 | | | | 3,008,678,958.29 | | | | 15,429,510,847.49 | | | | 3,207,973,110.11 | |
| Losses on changes in fair value | | | 74,867,324.92 | | | | 13,860,492.17 | | | | | | | | | |
| Provision for impairment of credit | | | 111,784,402.74 | | | | 24,307,399.36 | | | | 256,322,532.76 | | | | 60,263,888.18 | |
| Estimated liabilities | | | 18,270,764.28 | | | | 3,494,610.75 | | | | 20,928,407.74 | | | | 3,970,261.70 | |
| Reward points program | | | 17,161,774.15 | | | | 3,490,081.00 | | | | 35,524,886.63 | | | | 6,797,072.18 | |
| Total | | | 16,807,870,328.85 | | | | 3,521,183,606.48 | | | | 17,989,015,598.63 | | | | 3,786,078,976.51 | |
| (2). | Deferred tax liabilities not offset |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | Closing balance | | | Opening balance | |
| | | Temporary | | | | | | Temporary | | | | |
| | | taxable | | | Deferred tax | | | taxable | | | Deferred tax | |
| Items | | difference | | | liabilities | | | difference | | | liabilities | |
| Estimated value added of the assets in business combination not under same control | | | 263,565,590.92 | | | | 65,891,397.73 | | | | 323,468,871.86 | | | | 80,867,217.97 | |
| Profits and losses from changes in fair value | | | 582,268,510.20 | | | | 126,865,492.85 | | | | 591,995,024.21 | | | | 139,919,503.91 | |
| One-time deduction of fixed assets | | | 184,567,549.43 | | | | 37,631,379.11 | | | | 177,129,438.92 | | | | 33,014,184.07 | |
| Receivable from finance lease payments | | | 36,223,225.64 | | | | 7,223,480.48 | | | | 58,131,714.98 | | | | 11,596,643.50 | |
| Right-of-use assets | | | 11,181,412,910.52 | | | | 2,308,265,013.20 | | | | 11,843,353,983.51 | | | | 2,482,192,036.14 | |
| Total | | | 12,248,037,786.71 | | | | 2,545,876,763.37 | | | | 12,994,079,033.48 | | | | 2,747,589,585.59 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Deferred income tax assets or deferred income tax liabilities listed in net amount after offset |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | Amount | | | Closing | | | Amount | | | Closing | |
| | | not Offset in | | | Balance of | | | not Offset in | | | Balance of | |
| | | the Period of | | | Offset Deferred | | | the Period of | | | Offset Deferred | |
| | | Deferred Income | | | Income Tax | | | Deferred Income | | | Income Tax | |
| | | Tax Assets and | | | Assets or | | | Tax Assets and | | | Assets or | |
| Items | | Liabilities | | | Liabilities | | | Liabilities | | | Liabilities | |
| Deferred tax asset | | | 2,487,013,654.72 | | | | 1,034,169,951.76 | | | | 2,672,905,882.80 | | | | 1,113,173,093.71 | |
| Deferred tax liabilities | | | 2,487,013,654.72 | | | | 58,863,108.65 | | | | 2,672,905,882.80 | | | | 74,683,702.79 | |
| (4). | Details of unrecognized deferred income tax assets |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Deductible temporary differences | | | 1,951,011,222.41 | | | | 2,116,332,923.41 | |
| Deductible loss | | | 9,590,320,612.90 | | | | 9,245,677,968.30 | |
| Total | | | 11,541,331,835.31 | | | | 11,362,010,891.71 | |
| (5). | Deductible losses of unconfirmed deferred income tax assets will be expired in the following listed year |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Year | | Closing Balance | | | Opening
Balance | | | Comments | |
| Year 2024 | | | 1,355,525,634.30 | | | | 1,378,421,768.85 | | | | | |
| Year 2025 | | | 1,046,529,849.67 | | | | 1,161,064,446.27 | | | | | |
| Year 2026 | | | 2,915,134,391.42 | | | | 2,979,528,314.54 | | | | | |
| Year 2027 | | | 1,873,003,057.49 | | | | 1,912,125,772.80 | | | | | |
| Year 2028 | | | 1,653,703,044.71 | | | | 1,814,537,665.84 | | | | | |
| Year 2029 | | | 746,424,635.31 | | | | | | | | | |
| Total | | | 9,590,320,612.90 | | | | 9,245,677,968.30 | | | | / | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 32. | Other non-current assets |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 33. | Assets with ownership or usage restrictions |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | |
| | | End of the period | | Opening |
| Items | | Book balance | | | Carrying
value | | | Restricted
type | | Restricted
situation | | Book balance | | | Carrying
value | | | Restricted
type | | Restricted
situation |
| Monetary funds | | 174,430,956.12 | | | 174,430,956.12 | | | Freeze | | Judicial freeze, deposit | | 141,300,533.68 | | | 141,300,533.68 | | | Freeze | | Judicial freeze, deposit |
| Total | | 174,430,956.12 | | | 174,430,956.12 | | | / | | / | | 141,300,533.68 | | | 141,300,533.68 | | | / | | / |
Other notes:
On June 30, 2024, cash and cash equivalents with a book value of RMB25,914,705.51 (December 31, 2023: RMB28,990,792.66) were used as deposit for lease guarantees.
On June 30, 2024, cash and cash equivalents with a book value of RMB148,516,250.61 (December 31, 2023: RMB112,309,741.02) were frozen due to litigation cases.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Classification of short-term loans |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | 4,400,540,277.78 | | | | 5,130,220,089.04 | |
| Total | | | 4,400,540,277.78 | | | | 5,130,220,089.04 | |
Descriptions for categories of short-term loans:
The Group had no overdue short-term borrowings on June 30, 2024 and December 31, 2023.
| (2). | Expired unliquidated short-term loans |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 35. | Trading financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 36. | Derivative financial liabilities |
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| (1). | List of accounts payable |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Payment for goods | | | 7,572,133,519.53 | | | | 9,816,260,354.84 | |
| Total | | | 7,572,133,519.53 | | | | 9,816,260,354.84 | |
The Group had no significant accounts payable with an aging of more than one year on June 30, 2024 and December 31, 2023.
| (2). | Significant accounts payable with an aging of more than one year or overdue |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1). | Presentation of advance receipts |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Advance payment of rent and other expenses from the lessee | | | 276,593,321.13 | | | | 106,067,963.44 | |
| Total | | | 276,593,321.13 | | | | 106,067,963.44 | |
There were no significant advance receipts with an aging of more than one year on June 30, 2024.
| (2). | Important accounts collected in advance with more than one-year aging |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Amounts and reasons for significant changes in book value during the reporting period |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Advance payments from customers | | | 4,686,482,996.02 | | | | 4,780,629,293.96 | |
| Reward points program | | | 36,696,238.90 | | | | 41,156,582.21 | |
| Advance payment of supplier service fees | | | 17,545,550.80 | | | | 29,055,710.03 | |
| Total | | | 4,740,724,785.72 | | | | 4,850,841,586.20 | |
| (2). | Significant contractual liabilities with more than 1-year aging |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | |
| Items | | Closing balance | | | Reason for outstanding
payment or carry-over |
| Advance payments from customers | | | 2,918,569,054.70 | | | Fulfillment obligations not occurred |
| Total | | | 2,918,569,054.70 | | | / |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Amounts and reasons for significant changes in book value during the reporting period |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 41. | Employee compensation payable |
| (1). | List of payrolls payable |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | | |
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| I. Short-term payrolls | | | 550,539,081.65 | | | | 3,179,665,236.05 | | | | 3,209,432,947.00 | | | | 520,771,370.70 | |
| II. Post-employment welfare – defined contribution plan | | | 37,879,030.53 | | | | 355,099,591.42 | | | | 365,690,054.63 | | | | 27,288,567.32 | |
| III. Dismiss welfare | | | 14,439,931.54 | | | | 51,701,683.69 | | | | 53,290,075.24 | | | | 12,851,539.99 | |
| Total | | | 602,858,043.72 | | | | 3,586,466,511.16 | | | | 3,628,413,076.87 | | | | 560,911,478.01 | |
| (2). | List of short-term payrolls |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| I. Salaries, bonuses, allowances and subsidies | | | 493,391,459.53 | | | | 2,782,216,194.50 | | | | 2,806,689,743.46 | | | | 468,917,910.57 | |
| II. Employee services and benefits | | | 2,133,508.21 | | | | 100,633,324.68 | | | | 101,115,730.79 | | | | 1,651,102.10 | |
| III. Social Insurance | | | 20,631,696.32 | | | | 207,407,053.73 | | | | 213,175,542.51 | | | | 14,863,207.54 | |
| Include: medical insurance premiums | | | 18,748,561.71 | | | | 192,159,677.15 | | | | 197,741,872.28 | | | | 13,166,366.58 | |
| Work injury insurance premium | | | 906,544.95 | | | | 11,362,073.08 | | | | 11,485,327.80 | | | | 783,290.23 | |
| Maternity insurance premiums | | | 976,589.66 | | | | 3,885,303.50 | | | | 3,948,342.43 | | | | 913,550.73 | |
| IV. Housing provident fund | | | 5,842,224.09 | | | | 69,331,068.62 | | | | 70,057,914.25 | | | | 5,115,378.46 | |
| V. Labor union expenditure and employee education expenses | | | 28,540,193.50 | | | | 20,077,594.52 | | | | 18,394,015.99 | | | | 30,223,772.03 | |
| Total | | | 550,539,081.65 | | | | 3,179,665,236.05 | | | | 3,209,432,947.00 | | | | 520,771,370.70 | |
| (3). | List of defined contribution plans |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Opening balance | | | Increase in the
current period | | | Decrease in the
current period | | | Closing balance | |
| 1. Basic endowment insurance | | | 36,568,712.33 | | | | 343,255,855.62 | | | | 353,574,639.40 | | | | 26,249,928.55 | |
| 2. Unemployment insurance premium | | | 1,310,318.20 | | | | 11,843,735.80 | | | | 12,115,415.23 | | | | 1,038,638.77 | |
| Total | | | 37,879,030.53 | | | | 355,099,591.42 | | | | 365,690,054.63 | | | | 27,288,567.32 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| VAT | | | 152,708,596.47 | | | | 152,072,740.55 | |
| Corporate Income Tax | | | 86,059,831.96 | | | | 22,148,345.90 | |
| Personal income tax | | | 9,804,299.01 | | | | 11,793,228.40 | |
| Urban maintenance and construction tax | | | 10,795,101.80 | | | | 9,338,612.66 | |
| Maintenance fees for river and sea embankments | | | 11,100,124.34 | | | | 19,298,999.79 | |
| Housing property tax | | | 4,264,678.83 | | | | 4,357,111.68 | |
| Education Surcharge | | | 8,734,841.38 | | | | 7,772,496.16 | |
| Others | | | 9,865,489.78 | | | | 18,667,333.83 | |
| Total | | | 293,332,963.57 | | | | 245,448,868.97 | |
Other notes:
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Other payables | | | 1,459,013,244.36 | | | | 1,725,134,598.87 | |
| Total | | | 1,459,013,244.36 | | | | 1,725,134,598.87 | |
| | ¨ | Applicable | √ | Not applicable |
Dividends payable
| ¨ | Applicable | √ | Not applicable |
Other payables
| (1). | Other payables listed by nature of payment |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Accrued expenses for store rent, electricity, freight, and other expenses | | | 820,348,315.25 | | | | 982,418,440.74 | |
| Equipment and engineering payments | | | 88,303,993.68 | | | | 139,990,137.09 | |
| Deposits and guarantees | | | 387,583,107.62 | | | | 443,441,619.45 | |
| Others | | | 162,777,827.81 | | | | 159,284,401.59 | |
| Total | | | 1,459,013,244.36 | | | | 1,725,134,598.87 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Significant other payables with an aging of more than one year or overdue |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 44. | Liabilities held for sale |
| | ¨ | Applicable | √ | Not applicable |
| 45. | Non-current liabilities due within one year |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Long-term borrowings due within one year | | | 350,086,641.67 | | | | 300,334.58 | |
| Lease liabilities due within 1 year | | | 1,844,403,373.70 | | | | 1,792,051,529.61 | |
| Total | | | 2,194,490,015.37 | | | | 1,792,351,864.19 | |
Other notes:
None
| 46. | Other current liabilities |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Amount of tax to be written off | | | 442,244,527.06 | | | | 457,882,012.38 | |
| Total | | | 442,244,527.06 | | | | 457,882,012.38 | |
The increases and reductions of short-term bonds payable:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| (1). | Classification of long-term loans |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Credit loan | | | | | | | 349,889,789.58 | |
| Total | | | | | | | 349,889,789.58 | |
No long-term borrowings as of June 30, 2024.
Other disclosures
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ | Applicable | √ | Not applicable |
| (2). | Specifics of payable bonds: (excluding preferred shares, perpetual bonds, and other financial instruments classified as financial liabilities) |
| | ¨ | Applicable | √ | Not applicable |
| (3). | Explanation of convertible bonds |
| | ¨ | Applicable | √ | Not applicable |
Accounting treatment and basis for judgment of conversion rights
| | ¨ | Applicable | √ | Not applicable |
| (4). | Description on other financial instruments classified as financial liabilities |
Basic information of Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Table of change in Preferred Shares, Perpetual Capital Securities and other financial instruments issued to the public
| | ¨ | Applicable | √ | Not applicable |
Descriptions of the other financial tools in financial liabilities
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Houses and buildings | | | 21,055,555,926.19 | | | | 22,573,513,713.62 | |
| Less: Lease liabilities due within one year | | | 1,844,403,373.70 | | | | 1,792,051,529.61 | |
| Total | | | 19,211,152,552.49 | | | | 20,781,462,184.01 | |
Other notes:
None
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Itemized list
| ¨ | Applicable | √ | Not applicable |
Long-term accounts payable
| ¨ | Applicable | √ | Not applicable |
Special accounts payable
| ¨ | Applicable | √ | Not applicable |
| 51. | Long-term payroll payable |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | |
| Items | | Opening balance | | | Closing balance | | | Cause |
| Pending Litigation and Arbitration | | | 37,797,080.80 | | | | 23,539,437.34 | | | Litigation involved |
| Total | | | 37,797,080.80 | | | | 23,539,437.34 | | | / |
Other descriptions, including the descriptions of relevant important assumptions and estimations of important accrued liabilities:
The year-end balance of pending lawsuits resulted from disputes arising from housing leases and payment of goods.
Deferred income
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | |
| Items | | Opening
balance | | | Increase in
the current
period | | | Decrease in
the current
period | | | Closing
balance | | | Cause |
| Governmental subsidy | | | 99,470,899.92 | | | | | | | | 6,714,673.62 | | | | 92,756,226.30 | | | Received governmental subsidy related to assets |
| Total | | | 99,470,899.92 | | | | | | | | 6,714,673.62 | | | | 92,756,226.30 | | | / |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 54. | Other non-current liabilities |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Related party borrowing | | | 46,977,316.08 | | | | 46,931,643.83 | |
| Total | | | 46,977,316.08 | | | | 46,931,643.83 | |
Other notes:
In the fiscal year 2023, the Group’s subsidiary extended loans to ParknShop (China) Investment Co., Ltd. totaling RMB46,250,000.00, with an interest rate of 4.75% and due on May 8, 2026. As of June 30, 2024, the outstanding principal balance of the loan has reached RMB46,250,000.00, with unpaid interest for the quarter of RMB727,316.08.
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | Increase/Decrease (+, -) | |
| | | Opening balance | | | New
issue | | | Share
donation | | | Share
converted from
reserved funds | | | Others | | | Subtotal | | | Closing balance | |
| Total number of shares | | | 9,075,036,993.00 | | | | | | | | | | | | | | | | | | | | | | | | 9,075,036,993.00 | |
Other notes:
There was no change in share capital during the current year.
| 56. | Other equity instruments |
| (1) | Basic information of preferred shares, perpetual capital securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
| (2) | Table of change in preferred shares, perpetual capital securities and other financial instruments issued to the public |
| | ¨ | Applicable | √ | Not applicable |
Other descriptions for change situations and reasons on increase and decrease of equity instruments in current period, and relevant accounting treatment basis:
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | |
| | | | | | Increase in the | | | Decrease in the | | | | |
| Items | | Opening balance | | | current period | | | current period | | | Closing balance | |
Capital premium
(share capital premium) | | | 3,372,208,364.38 | | | | | | | | | | | | 3,372,208,364.38 | |
| Other capital reserves | | | 943,116,799.27 | | | | | | | | 67,624,053.93 | | | | 875,492,745.34 | |
| Total | | | 4,315,325,163.65 | | | | | | | | 67,624,053.93 | | | | 4,247,701,109.72 | |
Other descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
Other capital surpluses decreased by RMB67,624,053.93, which was the difference between the newly acquired long-term equity investment in Hubei Yonghui Zhongbai Co., Ltd. by the Company when purchasing minority equity interests, and the net assets calculated based on the new shareholding ratio from the date of purchase. Therefore, the capital surplus was adjusted.
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | |
| | | | | | Increase in the | | | Decrease in the | | | | |
| Items | | Opening balance | | | current period | | | current period | | | Closing balance | |
| Equity incentive buyback | | | 488,768,297.30 | | | | | | | | | | | | 488,768,297.30 | |
| Total | | | 488,768,297.30 | | | | | | | | | | | | 488,768,297.30 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 59. | Other comprehensive income |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | |
| | | Amount of current period | |
| | | | | | | Less: | | Less: | | | | | | | | | |
| | | | | | | transferring | | transferring | | | | | | | | | |
| | | | | | | other | | other | | | | | | | | | |
| | | | | | | comprehensive | | comprehensive | | | | | | | | | |
| | | | | Amount | | income | | income | | | | | | | | | |
| | | | | before | | recorded in the | | recorded in the | | | | | | | | | |
| | | | | income tax | | last period into | | last period into | | | | Attributable | | Attributable | | | |
| | | | | in the | | the profit and | | the retained | | Less: | | to parent | | to minority | | | |
| | | Opening | | current | | loss of current | | earnings of | | income tax | | company | | shareholders | | Closing | |
| Items | | balance | | period | | period | | current period | | expense | | after tax | | after tax | | balance | |
| I. Other comprehensive income that cannot be re-classified into profits and losses | | | | | | | | | | | | | | | | | |
| II. Other comprehensive income to be re-classified into profits and losses | | 5,073,713.42 | | 6,624,440.16 | | | | | | | | 6,624,440.16 | | | | 11,698,153.58 | |
| Including: other comprehensive incomes that can be transferred into profit and loss under the equity method | | 5,403,581.79 | | 6,545,793.66 | | | | | | | | 6,545,793.66 | | | | 11,949,375.45 | |
| Balance arising from the translation of foreign currency financial statements | | -329,868.37 | | 78,646.50 | | | | | | | | 78,646.50 | | | | -251,221.87 | |
| Total of other comprehensive income | | 5,073,713.42 | | 6,624,440.16 | | | | | | | | 6,624,440.16 | | | | 11,698,153.58 | |
Other descriptions: including the descriptions for the adjustment of transferring losses and profits of cash flow hedging in force into initially recognized amount of arbitrage project:
None
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | | | | |
| | | | | | Increase in the | | | Decrease in the | | | | |
| Items | | Opening balance | | | current period | | | Current period | | | Closing balance | |
| Statutory surplus reserve | | | 1,132,840,649.96 | | | | 1,842,697.22 | | | | | | | | 1,134,683,347.18 | |
| Total | | | 1,132,840,649.96 | | | | 1,842,697.22 | | | | | | | | 1,134,683,347.18 | |
Surplus reserves descriptions, including the descriptions for change situations and reasons on increase and decrease in current period:
| Note: | according to the Company Law and the article of associations, the statutory surplus reserve is appropriated by the Company by 10% of the net profit. The Company may stop appropriation if the accumulative balance of the statutory reserve fund has already accounted for over 50% of the Company’s registered capital. |
After appropriating the legal accumulation fund, the Company is allowed to appropriate any accumulation fund. Upon approval, the Company may convert its Discretionary Surplus Reserves to make good previous years’ losses or to increase the capital of the Company.
The increase in retained earnings for the current year is due to the Company’s sale of a 65% equity interest in Yonghui Yunjin Technology Co., Ltd during the reporting period, while retaining a 35% equity interest. The sale of shares required a change from the cost method to the equity method for the long-term equity investment. The cost of the remaining long-term equity investment needs to be compared with the proportionate share of the identifiable net assets fair value of the invested entity as calculated based on the remaining shareholding ratio. As the cost of the remaining long-term equity investment is lower than the proportionate share of the identifiable net assets fair value of the invested entity as calculated based on the remaining shareholding ratio, an increase of RMB1,842,697.22 in retained earnings has been made while adjusting the cost of the long-term equity investment.
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Current period | | | Last year | |
| Undistributed profits at the end of last period before adjustment | | | -8,100,437,582.18 | | | | -6,751,820,069.61 | |
| Total opening undistributed profits during adjustment (increase is indicated by “+”, and decrease is indicated by “-”) | | | | | | | | |
| Undistributed profits at the beginning of the year after adjustment | | | -8,100,437,582.18 | | | | -6,751,820,069.61 | |
| Add: net profit attributable to the owner of parent company in current period | | | 275,314,748.17 | | | | -1,329,052,123.15 | |
| Less: appropriation to statutory surplus reserves | | | 1,842,697.22 | | | | 19,565,389.42 | |
| Undistributed profit at the end of the period | | | -7,826,965,531.23 | | | | -8,100,437,582.18 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 63. | Operating revenue and operating costs |
| (1). | Operating revenue and costs |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | |
| Items | | Amount of current period | | | Amount of last period | |
| | | Revenue | | | Cost | | | Revenue | | | Cost | |
| Main business | | | 35,363,792,874.93 | | | | 29,476,447,372.26 | | | | 39,055,616,949.01 | | | | 32,603,525,911.65 | |
| Other business | | | 2,415,394,040.13 | | | | 151,797,879.83 | | | | 2,971,782,622.77 | | | | 182,639,592.22 | |
| Total | | | 37,779,186,915.06 | | | | 29,628,245,252.09 | | | | 42,027,399,571.78 | | | | 32,786,165,503.87 | |
| (2). | Operating Revenue Deduction Statement |
| | | | | | | | Unit: ’0,000 Yuan Currency: RMB |
| | | | | | | | | | | | |
| Items | | Current
year | | | Specific deductions | | Last year | | | Specific deductions | |
| Operating revenue amount | | | 3,777,918.69 | | | | | | 4,202,739.96 | | | | |
| Total amount of deducted items from operating revenue | | | 5,427.73 | | | | | | 7,520.22 | | | | |
| Percentage of total amount of items deducted from operating income to operating income (%) | | | 0.14 | | | | | | 0.18 | | | | |
| I. Non-core Business Income | | | | | | | | | | | | | |
| Other business income unrelated to normal operations, such as rental of fixed assets, intangible assets, packing materials, sale of materials, non-monetary asset exchanges using materials, income from entrusted management services, and other income included in the main operating income but unrelated to the normal operations of the listed company. | | | 5,187.12 | | | Income from selling waste paper and scraps: RMB51.8712 million | | | 7,087.56 | | | Income from selling waste paper and scraps: RMB70.8756 million. | |
| 2. Income from non-qualified financial business activities, such as interests income from funds borrowed; income generated from non-qualified financial businesses introduced in the current and previous fiscal years, such as guarantee, factoring, microloans, finance leasing, pawnbroking, etc., excluding finance leasing activities conducted for the purpose of selling main products | | | | | | | | | | | | | |
| 3. Income generated from new trade business in the current and previous fiscal years | | | | | | | | | | | | | |
| 4. Income generated from related-party transactions unrelated to the Company’s existing normal business operations | | | 240.61 | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. | | | 432.66 | | | This part includes income earned by the Group from providing financial sharing services and information system services to related parties, which is unrelated to the core business and is deducted. | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | | | | Unit: ’0,000 Yuan Currency: RMB |
| | | | | | | | | | | | | |
| Items | | Current
year | | | Specific deductions | | | Last year | | | Specific deductions | |
| 5. Income of subsidiary companies consolidated under the same control from the beginning of the period to the consolidation date | | | | | | | | | | | | | |
| 6. Income generated from business activities that have not formed or have difficulty forming a stable business model Subtotal of non-core business income | | | 5,427.73 | | | | | | 7,520.22 | | | | |
| II. Income without Substantive Commercial Nature | | | | | | | | | | | | | |
| 1. Income generated from transactions or events that do not significantly change the future cash flow of the company in terms of risk, timing, or amount | | | | | | | | | | | | | |
| 2. Income generated from transactions without genuine business activities, such as false income realized through self- trading, and false income generated through the use of internet technology or other methods to construct transactions | | | | | | | | | | | | | |
| 3. Income generated from business activities with unfair transaction prices | | | | | | | | | | | | | |
| 4. Income generated from subsidiary companies or businesses acquired during the current fiscal year at unfair consideration or non-transaction methods | | | | | | | | | | | | | |
| 5. Income involved in non-standard audit opinions in the audit report | | | | | | | | | | | | | |
| 6. Income generated from other transactions or events without commercial rationality | | | | | | | | | | | | | |
| Subtotal of income without substantive commercial nature | | | | | | | | | | | | | |
| III. Other Income Unrelated to or without Substantive Commercial Nature of the Core Business | | | | | | | | | | | | | |
| Operating revenue after deductions | | | 3,772,490.96 | | | | | | | | | 4,195,219.74 | |
| Note 1: | Deducted from the income other than normal operations in the first half of the current year is income from selling waste paper and scraps in the amount of RMB51.8712 million (first half of 2023: RMB70.8756 million). Yonghui Superstores Co., Ltd.’s main business includes the sale of fresh products, food supplies, clothing, and related promotional services, logistics and distribution, property purchase and rental, etc. The above-mentioned income is unrelated to the core business and is deducted. |
| Note 2: | Deducted from the income generated from related-party transactions unrelated to current normal business operations in the first half of the current year is RMB2.4061 million (first half of 2023: RMB4.3266 million), which represents income earned from providing financial sharing services and information system services to related parties, unrelated to the main business, and is deducted accordingly. |
| Note 3: | The Group’s factoring and small loans business has been conducted since 2017 and is not a newly added non-financial business in the current and previous fiscal years, so the related income does not require deduction. |
| Note 4: | Apart from the above, the Group has no other non-core business income or income without substantive commercial nature that needs to be deducted. |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Breakdown of operating revenue and operating cost |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | |
| | | Group | | | Total | |
| | | Operating | | | | | | Operating | | | | |
| Contract classification | | revenue | | | Operating costs | | | revenue | | | Operating costs | |
| Product type Fresh and processed products | | | 13,596,885,995.78 | | | | 11,903,432,875.45 | | | | 13,596,885,995.78 | | | | 11,903,432,875.45 | |
| Food supplies | | | 21,766,906,879.15 | | | | 17,573,014,496.81 | | | | 21,766,906,879.15 | | | | 17,573,014,496.81 | |
| Others | | | 1,776,390,603.79 | | | | 52,828,347.95 | | | | 1,776,390,603.79 | | | | 52,828,347.95 | |
| Lease income | | | 639,003,436.34 | | | | 98,969,531.88 | | | | 639,003,436.34 | | | | 98,969,531.88 | |
| By operating region Southeast China | | | 6,427,535,804.92 | | | | 4,769,034,600.81 | | | | 6,427,535,804.92 | | | | 4,769,034,600.81 | |
| North China | | | 4,082,992,931.51 | | | | 3,206,678,311.47 | | | | 4,082,992,931.51 | | | | 3,206,678,311.47 | |
| East China | | | 8,563,959,925.32 | | | | 6,846,491,229.48 | | | | 8,563,959,925.32 | | | | 6,846,491,229.48 | |
| West China | | | 7,521,982,806.85 | | | | 5,925,882,778.05 | | | | 7,521,982,806.85 | | | | 5,925,882,778.05 | |
| Southwest China | | | 6,425,025,561.88 | | | | 5,092,167,436.15 | | | | 6,425,025,561.88 | | | | 5,092,167,436.15 | |
| South China | | | 1,698,236,904.96 | | | | 1,350,472,932.18 | | | | 1,698,236,904.96 | | | | 1,350,472,932.18 | |
| Central China | | | 3,059,452,979.62 | | | | 2,437,517,963.95 | | | | 3,059,452,979.62 | | | | 2,437,517,963.95 | |
| Classification by time of transfer of goods | | | | | | | | | | | | | | | | |
| Transfer at a certain time point | | | 35,433,284,698.58 | | | | 29,476,494,376.14 | | | | 35,433,284,698.58 | | | | 29,476,494,376.14 | |
| During a certain period Transfer within a certain period | | | 1,706,898,780.14 | | | | 52,781,344.07 | | | | 1,706,898,780.14 | | | | 52,781,344.07 | |
| Lease income | | | 639,003,436.34 | | | | 98,969,531.88 | | | | 639,003,436.34 | | | | 98,969,531.88 | |
| Total | | | 37,779,186,915.06 | | | | 29,628,245,252.09 | | | | 37,779,186,915.06 | | | | 29,628,245,252.09 | |
Other disclosures
| | √ | Applicable | ¨ | Not applicable |
The income recognized in current year and included in the opening book value of contract liabilities are as follows:
| | | | |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | January to June | | | January to June | |
| | | 2024 | | | 2023 | |
| Recognition of revenue at a specific point in time | | | 1,110,027,357.68 | | | | 1,237,824,598.88 | |
| (4). | Description of performance obligations |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Description of allocating to the residual fulfillment obligations |
| | ¨ | Applicable | √ | Not applicable |
| (6). | Major contract changes or significant adjustment of transaction prices |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Urban maintenance and construction tax | | | 30,837,493.34 | | | | 30,224,028.02 | |
| Education Surcharge | | | 23,317,253.51 | | | | 23,473,635.36 | |
| Housing property tax | | | 16,046,811.03 | | | | 12,233,432.76 | |
| Land use tax | | | 2,513,622.21 | | | | 2,249,474.55 | |
| Stamp duty | | | 22,477,131.60 | | | | 20,579,327.84 | |
| Foundation for water works | | | 11,986,635.81 | | | | 11,410,917.59 | |
| Others | | | 454,886.43 | | | | 200,685.98 | |
| Total | | | 107,633,833.93 | | | | 100,371,502.10 | |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 2,880,594,188.34 | | | | 3,298,346,067.52 | |
| Depreciation and amortization | | | 1,458,050,920.96 | | | | 1,546,031,542.55 | |
| Water and electricity fees and fuel expenses | | | 608,985,748.55 | | | | 627,635,107.71 | |
| Freight and warehousing service fees | | | 478,260,546.20 | | | | 499,580,891.81 | |
| Rent and property management fees | | | 288,671,357.82 | | | | 275,364,898.84 | |
| Business publicity expense | | | 112,805,821.22 | | | | 224,460,006.45 | |
| Cleaning fees | | | 152,528,438.72 | | | | 202,946,171.75 | |
| Low-cost consumables | | | 117,717,666.73 | | | | 128,622,613.18 | |
| Repair fees | | | 69,506,617.58 | | | | 74,456,441.67 | |
| Platform service fee | | | 217,728,041.48 | | | | 205,040,784.90 | |
| Office expenses such as car, travel, and communication expenses | | | 78,388,682.46 | | | | 127,971,945.84 | |
| Others | | | 50,285,161.20 | | | | 54,026,475.08 | |
| Total | | | 6,513,523,191.26 | | | | 7,264,482,947.30 | |
| 66. | Administrative expenses |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 573,653,959.88 | | | | 589,789,650.94 | |
| Depreciation and amortization | | | 123,092,060.60 | | | | 128,857,321.13 | |
| Costs of wear and tear of commodities | | | 96,991,238.74 | | | | 107,243,763.55 | |
| Rent and property management fees | | | 1,675,276.68 | | | | 8,658,070.59 | |
| System service fees | | | 28,676,404.73 | | | | 33,947,944.54 | |
| Office expenses such as car, travel, and communication expenses | | | 29,549,034.18 | | | | 39,083,400.83 | |
| Consulting, audit, legal, and other intermediary service expenses | | | 20,617,714.83 | | | | 16,198,318.70 | |
| Others | | | 14,027,948.99 | | | | 21,656,032.29 | |
| Total | | | 888,283,638.63 | | | | 945,434,502.57 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 67. | Research and development expenses |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Employee compensation | | | 108,010,813.37 | | | | 176,930,343.92 | |
| Office expenses such as car, travel, and communication expenses | | | 12,499,970.51 | | | | 12,239,962.34 | |
| Depreciation and amortization | | | 13,174,267.92 | | | | 18,191,112.79 | |
| Total | | | 133,685,051.80 | | | | 207,361,419.05 | |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Interest expense | | | 606,283,991.18 | | | | 664,816,098.55 | |
| Less: interest income | | | 55,067,138.02 | | | | 80,001,194.06 | |
| Exchange gains and losses | | | -132,827.17 | | | | -1,247,541.28 | |
| Service fees and others | | | 78,805,801.02 | | | | 83,583,111.02 | |
| Total | | | 629,889,827.01 | | | | 667,150,474.23 | |
| Note: | This year, interest expenses include interest expenditure on lease liabilities amounting to RMB524,690,119.64. |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Classification by nature | | Amount of
current period | | | Amount of
last period | |
| Governmental subsidies related to daily activities | | | 47,691,190.82 | | | | 74,554,542.27 | |
| Return of individual income tax withheld service changes withheld and remitted | | | 1,605,423.72 | | | | 1,649,696.31 | |
| Total | | | 49,296,614.54 | | | | 76,204,238.58 | |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Long-term equity investment income measured with equity method | | | 83,807,009.41 | | | | 57,662,606.55 | |
| Investment income for disposing long-term equity investment production | | | -1,645,980.82 | | | | 3,856,561.78 | |
| Investment income from trading financial assets | | | 151,360,829.36 | | | | 71,228,233.15 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Amount of
current period | | | Amount of
last period | |
| Investment income of holding trading financial assets | | | 54,198.62 | | | | -15,176,626.99 | |
| Investment income from other non-current financial assets acquired | | | 42,055,645.75 | | | | | |
| Income from investment in financial products | | | 349,407.35 | | | | 4,210,732.47 | |
| Total | | | 275,981,109.67 | | | | 121,781,506.96 | |
| 71. | Income from net exposure hedging |
| | ¨ | Applicable | √ | Not applicable |
| 72. | Fair value changes in equity investments |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| Sources generating income from changes in fair value | | Amount of
current period | | | Amount of
last period | |
| Trading financial assets | | | -183,828,045.27 | | | | -21,006,851.52 | |
| Total | | | -183,828,045.27 | | | | -21,006,851.52 | |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Bad debt loss of accounts receivable | | | 2,293,980.93 | | | | 18,213,399.64 | |
| Bad debt loss/(income) of other receivables | | | 2,345,420.21 | | | | -1,501,573.28 | |
| Bad debt losses on loans | | | 7,811,203.42 | | | | 12,477,896.74 | |
| Bad debt income of factoring receivable | | | -27,454,601.29 | | | | -10,491,157.39 | |
| Total | | | -15,003,996.73 | | | | 18,698,565.71 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 75. | Gains on disposal of assets |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Loss on disposal of fixed assets | | | -40,962,600.08 | | | | -87,102,461.25 | |
| Gains on disposals of rights-of-use-assets | | | 264,831,811.96 | | | | 260,274,865.64 | |
| Total | | | 223,869,211.88 | | | | 173,172,404.39 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | |
| Items | | Amount of
current period | | | Amount of last
period | | | Amount
included in the
non-recurring
profit and loss
of the current
period | |
| Compensation income | | | 67,310,740.27 | | | | 87,267,620.59 | | | | | |
| Cash overage | | | 316,490.04 | | | | 369,949.67 | | | | | |
| Accounts payable that can’t be paid | | | 2,465,078.51 | | | | 22,449,283.15 | | | | 2,465,078.51 | |
| Others | | | 15,839,435.88 | | | | 21,478,311.24 | | | | 15,839,435.88 | |
| Total | | | 85,931,744.70 | | | | 131,565,164.65 | | | | 18,304,514.39 | |
Governmental subsidies included in current profits and losses
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 77. | Non-operating expenses |
| | √ | Applicable | ¨ | Not applicable |
| | | | | | Unit: Yuan Currency: RMB |
| | | | | | | | | | |
| Items | | Amount of
current period | | | Amount of
last period | | | Amount
included in the
non-recurring
profit and loss
of the current
period | |
| Total losses on disposal of non-current assets | | | 12,125,324.17 | | | | 5,065,333.67 | | | | 12,125,324.17 | |
| External donation | | | 100,000.00 | | | | 10,000.00 | | | | 100,000.00 | |
| Compensation and litigation expenses, etc | | | 6,308,770.69 | | | | 8,130,676.08 | | | | 6,308,770.69 | |
| Others | | | 1,863,003.67 | | | | 4,259,072.47 | | | | 1,854,698.27 | |
| Total | | | 20,397,098.53 | | | | 17,465,082.22 | | | | 20,388,793.13 | |
| (1) | Table of income tax expenses |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| Items | | Amount of
current period | | | Amount of
last period | |
| Current income tax expenses | | | 75,638,855.12 | | | | 108,811,509.65 | |
| Deferred income tax expenses | | | 37,317,232.86 | | | | 70,830,833.55 | |
| Total | | | 112,956,087.98 | | | | 179,642,343.20 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Adjustment of accounting profits and income tax expenses |
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | |
| | | Amount of | |
| Items | | current period | |
| Total profit | | | 323,783,654.06 | |
| Income tax expense calculated as per legal/applicable tax rate | | | 80,945,913.52 | |
| Impact on different applicable rates in subsidiary | | | -51,377,356.06 | |
| Impact on adjustment of income tax in last period | | | -3,643,232.88 | |
| Impact on nontaxable income | | | -55,239,323.36 | |
| Impact on nondeductible cost, expense and loss | | | 1,454,614.86 | |
| Impact on deductible loss of unrecognized assets from deferred income tax in the previous period | | | -22,226,450.28 | |
| Impact on deductible transient difference or deductible loss of unconfirmed assets from deferred income tax in the current period | | | 185,525,754.36 | |
| Profit/(Loss) attributable to Cooperative Enterprises and Joint Ventures | | | -22,483,832.18 | |
| Others | | | | |
| Income tax expenses | | | 112,956,087.98 | |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 79. | Other comprehensive income |
| | √ | Applicable | ¨ | Not applicable |
See the Note for details
| 80. | Cash flow statement items |
| (1). | Cash relating to operating activities |
Other cash received relating to operating activities
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Governmental subsidy | | | 42,581,940.82 | | | | 73,759,935.26 | |
| Interest income of bank deposit | | | 53,216,780.90 | | | | 130,739,421.49 | |
| Income from compensation, etc. | | | 67,310,740.27 | | | | 87,267,620.59 | |
| Deposits and guarantees, etc. | | | 153,794,473.11 | | | | 152,441,130.67 | |
| Cash overage | | | 316,490.04 | | | | 369,949.67 | |
| Repayments of loans from small loan and factoring companies in Chongqing | | | 444,087,845.55 | | | | 394,552,963.71 | |
| Receipt of receivables/payables and other payments | | | 14,597,004.20 | | | | 258,046,137.94 | |
| Total | | | 775,905,274.89 | | | | 1,097,177,159.33 | |
Other cash paid relating to operating activities
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Sales expenses, administrative expenses, and research and development expenses | | | 2,531,968,771.64 | | | | 2,911,290,601.10 | |
| Financial expenses – financial service fees | | | 78,805,801.02 | | | | 83,583,111.02 | |
| Expenditure on donation | | | 100,000.00 | | | | 10,000.00 | |
| Penalties, compensation, overdue fine and other non-operating expenses | | | 8,171,774.36 | | | | 12,389,748.55 | |
| Payment of letters of guarantee and security for costs | | | 29,205,789.92 | | | | 29,744,884.66 | |
| Operating transactions such as store petty cash, lease deposits, etc. | | | 15,362,499.97 | | | | 29,128,312.43 | |
| Chongqing microloan and factoring companies’ loan disbursements. | | | 808,475,439.33 | | | | | |
| Other transactions | | | 121,769,481.50 | | | | 51,402,119.57 | |
| Total | | | 2,785,384,118.41 | | | | 3,926,024,216.66 | |
| (2). | Cash relating to investment activities |
Cash received relating to important investment activities
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Cash received from the transfer of trading financial assets, other equity investments, and the recovery of long-term equity investments | | | 592,415,179.14 | | | | 117,983,558.39 | |
| Joint venture dividends | | | 39,414,400.00 | | | | 129,235,200.00 | |
| Net cash received from the disposal of subsidiaries and other business entities | | | 22,050,815.89 | | | | | |
| Financial products recovered | | | 699,782,018.02 | | | | 1,034,299,771.32 | |
| Receipt of investment income from financial management | | | 168,259,678.17 | | | | 4,762,030.06 | |
| Total | | | 1,521,922,091.22 | | | | 1,286,280,559.77 | |
Cash paid relating to important investment activities
| | √ | Applicable | ¨ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | | | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | 255,739,326.16 | | | | 335,772,028.32 | |
| Purchase of bank wealth management, asset management, and trust products | | | 2,880,000,000.00 | | | | 600,000,000.00 | |
| Total | | | 3,135,739,326.16 | | | | 935,772,028.32 | |
Other cash received relating to investment activities
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Financial products recovered | | | 699,782,018.02 | | | | 1,034,299,771.32 | |
| Receipt of investment income from financial management | | | 168,259,678.17 | | | | 4,762,030.06 | |
| Total | | | 868,041,696.19 | | | | 1,039,061,801.38 | |
Other cash paid relating to investment activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Purchase of bank wealth management, asset management, and trust products | | | 2,880,000,000.00 | | | | 600,000,000.00 | |
| Total | | | 2,880,000,000.00 | | | | 600,000,000.00 | |
| (3). | Cash relating to financing activities |
Other cash received relating to financing activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Receipt of lease payments from finance leases | | | 39,661,515.99 | | | | 40,032,392.75 | |
| Total | | | 39,661,515.99 | | | | 40,032,392.75 | |
Other cash paid relating to financing activities
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Share buy-backs | | | | | | | 225,284,643.05 | |
| Cash paid to acquire minority interests | | | 100,000.00 | | | | | |
| Payment of fixed rent for non-exempt lease contracts | | | 1,375,882,145.08 | | | | 1,311,690,189.62 | |
| Total | | | 1,375,982,145.08 | | | | 1,536,974,832.67 | |
Changes in liabilities generated from financing activities
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| | | | | | Increase in the current period | | | Decrease in the current period | | | | |
| | | Opening | | | Cash | | | Non-cash | | | Cash | | | Non-cash | | | Closing | |
| Items | | balance | | | changes | | | changes | | | changes | | | changes | | | balance | |
| Short-term loans | | | 5,130,220,089.04 | | | | 1,600,000,000.00 | | | | 76,376,993.21 | | | | 2,406,056,804.47 | | | | | | | | 4,400,540,277.78 | |
| Short-term borrowings and long-term borrowings due within one year | | | 350,190,124.16 | | | | | | | | 5,216,878.33 | | | | 5,320,360.82 | | | | | | | | 350,086,641.67 | |
| Lease liabilities due within one year and lease liabilities | | | 22,573,513,713.62 | | | | | | | | 272,723,123.82 | | | | 1,375,982,145.08 | | | | 414,698,766.17 | | | | 21,055,555,926.19 | |
| Total | | | 28,053,923,926.82 | | | | 1,600,000,000.00 | | | | 354,316,995.36 | | | | 3,787,359,310.37 | | | | 414,698,766.17 | | | | 25,806,182,845.64 | |
| (4). | Explanation of reporting cash flows on a net basis |
| | ¨ | Applicable | √ | Not applicable |
| (5). | Significant activities and financial effects that do not involve cash inflows or outflows in the current period but affect the financial position of the enterprise or may affect the future cash flows of the enterprise |
| | ¨ | Applicable | √ | Not applicable |
| 81. | Supplementary information for cash flow statement |
| (1) | Supplementary data to cash flow statement |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Supplementary information | | current period | | | last period | |
| 1. Cash flows converted from net profits for business operation activities: | | | | | | | | |
| Net profit | | | 210,827,566.08 | | | | 322,343,694.59 | |
| Plus: provision for impairment of assets Credit impairment loss | | | -15,003,996.73 | | | | 18,698,565.71 | |
| Depreciation of fixed assets, depreciation of oil & gas assets, and depreciation of productive biological assets | | | 298,695,154.77 | | | | 347,205,824.59 | |
| Amortization of right-of-use assets | | | 982,787,501.40 | | | | 897,618,483.03 | |
| Amortisation of intangibles | | | 145,036,208.94 | | | | 144,807,552.41 | |
| Depreciation and amortization of investment properties | | | 5,428,009.59 | | | | 5,425,202.10 | |
| Amortization of long-term deferred expenses | | | 301,823,226.61 | | | | 298,096,821.08 | |
| Losses on the disposal of fixed assets, intangible assets and other long-term assets (profit is indicated by “-”) | | | -223,869,211.88 | | | | -173,172,404.39 | |
| Loss on scrapping of fixed assets (profit is indicated by “-”) | | | 12,125,324.17 | | | | 5,065,333.67 | |
| Loss on changes in fair value (profit is indicated by “-”) | | | 183,828,045.27 | | | | 21,006,851.52 | |
| Financial expenses (profit is indicated by “-”) | | | 606,228,920.37 | | | | 657,084,299.60 | |
| Investment loss (profit is indicated by “-”) | | | -275,981,109.67 | | | | -121,781,506.96 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Amount of | | | Amount of | |
| Supplementary information | | current period | | | last period | |
| Decrease in deferred income tax assets (increase is indicated by “-”) | | | 53,137,827.00 | | | | 91,059,398.59 | |
| Increase in deferred income tax liabilities (decrease is indicated by “-”) | | | -15,820,594.14 | | | | -20,228,565.04 | |
| Decrease of inventory (increase is indicated by “-”) | | | 2,568,683,440.45 | | | | 3,742,775,640.67 | |
| Decrease of operational receivables (increase is indicated by “-”) | | | 555,954,192.41 | | | | -303,249,518.51 | |
| Increase in operational payables (decrease is indicated by “-”) | | | -2,454,074,632.76 | | | | -3,345,570,547.82 | |
| Others | | | | | | | | |
| Net cash flow from operating activities | | | 2,939,805,871.88 | | | | 2,587,185,124.84 | |
| 2. Major investment and financing activities that do not involve cash receipts and payments: | | | | | | | | |
| Conversion of debts into capital | | | | | | | | |
| Convertible bonds due within one year | | | | | | | | |
| Fixed assets under financing lease | | | | | | | | |
| 3. Net change in cash and cash equivalents: | | | | | | | | |
| Closing balance of cash | | | 4,885,936,321.31 | | | | 4,831,938,292.70 | |
| Minus: opening balance of cash | | | 5,696,636,200.67 | | | | 7,443,008,300.63 | |
| Add: closing balance of cash equivalents | | | | | | | | |
| Minus: opening balance of cash equivalents | | | | | | | | |
| Net increase in cash and cash equivalents | | | -810,699,879.36 | | | | -2,611,070,007.93 | |
| (2) | Net cash paid in current period and acquired from subsidiary |
| | ¨ | Applicable | √ | Not applicable |
| (3) | Net cash received from disposal of subsidiaries during the current period |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount | |
| Cash or cash equivalents received for disposal of subsidiaries during the current period | | | 377,762,864.53 | |
| Yonghui Yunjin Technology Co., Ltd. | | | 377,762,864.53 | |
| Less: cash and cash equivalents held by subsidiaries on the date of losing the control right | | | 355,712,048.64 | |
| Yonghui Yunjin Technology Co., Ltd. | | | 355,712,048.64 | |
| Add: cash or cash equivalents received for disposal of subsidiaries in the last period | | | | |
| Net cash received from the disposal of subsidiaries | | | 22,050,815.89 | |
Other notes:
During the reporting period, the Company sold 65% of its equity interest in Yonghui Yunjin Technology Co., Ltd (hereinafter referred to as “Yunjin Technology”) to Shanghai Paihui Technology Co., Ltd for a total transfer price of RMB377,762,864.53. After the completion of this transaction, the Company still holds a 35% equity interest in Yunjin Technology.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4) | Composition of cash and cash equivalents |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Closing balance | | | Opening balance | |
| I. Cash | | | 4,885,936,321.31 | | | | 5,696,636,200.67 | |
| Including: cash on hand | | | 50,711,775.13 | | | | 72,725,636.77 | |
| Bank deposit ready for payment at any time | | | 4,642,050,124.51 | | | | 5,376,687,857.46 | |
| Other monetary funds ready for payment at any time | | | 193,174,421.67 | | | | 247,222,706.44 | |
| II. Cash equivalents | | | | | | | | |
| Including: bond investments due in three months | | | | | | | | |
| III. Closing balance of cash and cash equivalents | | | 4,885,936,321.31 | | | | 5,696,636,200.67 | |
| Including: restricted cash and cash equivalents used by parent company or subsidiaries | | | 174,430,956.12 | | | | 141,300,533.68 | |
| (5) | Situation where the use of cash and cash equivalents is restricted but still presented as cash and cash equivalents |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | | |
| Items | | current period | | | Reason | |
| Monetary funds | | | 148,516,250.61 | | | | Judicial frozen | |
| Monetary funds | | | 25,914,705.51 | | | | Deposit | |
| Total | | | 174,430,956.12 | | | | / | |
| (6) | Monetary funds other than cash and cash equivalents |
| | ¨ | Applicable | √ | Not applicable |
Other notes:
| | ¨ | Applicable | √ | Not applicable |
| 82. | Notes to items in statement of changes in equity |
Description for adjustment on item name of “Others”, adjustment amount and other matters at the end of last year:
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 83. | Foreign currency monetary items |
| (1). | Monetary items of foreign currency |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan
| | | Closing | | | | | | Closing | |
| | | balance of | | | Conversion | | | balance | |
| | | foreign | | | exchange | | | converted | |
| Items | | currency | | | rate | | | into RMB | |
| Monetary funds Including: USD | | | 782,290.38 | | | | 7.13 | | | | 5,575,227.08 | |
| EUR | | | 6,880.74 | | | | 7.66 | | | | 52,718.17 | |
| HKD | | | 3,941,008.51 | | | | 0.91 | | | | 3,596,879.65 | |
| JPY | | | 33.00 | | | | 0.04 | | | | 1.48 | |
| GBP | | | 16,710.13 | | | | 9.04 | | | | 151,109.71 | |
| CAD | | | 0.17 | | | | 7.95 | | | | 1.35 | |
| Account receivable | | | | | | | | | | | | |
| USD | | | 69,318.49 | | | | 7.13 | | | | 494,019.01 | |
| EUR | | | 2,475.58 | | | | 7.66 | | | | 18,967.15 | |
| GBP | | | 20,776.75 | | | | 9.04 | | | | 187,884.15 | |
| Accounts payable | | | | | | | | | | | | |
| USD | | | 3,094,768.92 | | | | 7.13 | | | | 22,055,799.14 | |
| EUR | | | 281,108.74 | | | | 7.66 | | | | 2,153,770.83 | |
| NZD | | | 287,496.87 | | | | 5.23 | | | | 1,502,861.14 | |
| GBP | | | 20,776.75 | | | | 9.04 | | | | 187,884.15 | |
| AUD | | | 294,052.37 | | | | 5.28 | | | | 1,552,302.46 | |
Other notes:
| (2). | Descriptions of entities running businesses overseas: including description of main operating place, recording currency and selection basis, and the reason for change of recording currency of major entities running businesses overseas |
| | ¨ | Applicable | √ | Not applicable |
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Interest expenses on lease liabilities | | | 524,690,119.64 | | | | 580,622,044.90 | |
| Simplified approach for recognizing short-term lease expenses in profit or loss | | | 20,041,030.92 | | | | 32,270,207.07 | |
| Variable lease payments not included in the measurement of lease liabilities | | | 12,221,393.38 | | | | 12,506,007.51 | |
| Income from the sublease of the right to use the assets | | | 651,330,538.82 | | | | 620,614,275.75 | |
| Total cash outflow related to lease | | | 1,408,144,569.38 | | | | 1,356,466,404.20 | |
| Note: | The lease assets leased by the Group include buildings and structures, machinery and equipment, transportation equipment, and other equipment used in the operation process. The lease terms for buildings and structures are usually 5-20 years, while the lease terms for machinery and equipment, transportation equipment, and other equipment are usually 1 year. The lease agreements usually stipulate that the area of leased assets subleased by the Group shall not exceed a certain percentage. Some lease agreements include renewal options, termination options, and variable lease payment terms. Impact of variable lease terms on future potential cash outflows see “Future potential cash outflows not included in lease liability measurement” |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Variable lease payments not included in the measurement of lease liabilities
| | √ | Applicable | ¨ | Not applicable |
The potential future cash outflows that are not included in the measurement of lease liabilities by the Group mainly arise from the risk exposures, such as variables lease payments, renewal and termination options in lease contracts, lease residual value guarantees, and leases committed but not yet commenced.
Leases that have been committed but not yet commenced
The anticipated future cash outflows for leases committed but not yet commenced by the Group are as follows:
Unit: Yuan Currency: RMB
| Items | | Closing Balance | | | Opening Balance | |
| Within 1 year (including 1 year) | | | 779,920.00 | | | | 9,653,725.75 | |
| 1-2 years (including 2 years) | | | 2,105,436.00 | | | | 9,611,881.52 | |
| 2-3 years (including 3 years) | | | 2,123,016.00 | | | | 9,813,489.13 | |
| Over 3 years | | | 29,194,678.24 | | | | 30,419,809.90 | |
| Total | | | 34,203,050.24 | | | | 59,498,906.30 | |
Simplified treatment of lease expenses for short-term leases or leases of low-value assets
| | ¨ | Applicable | √ | Not applicable |
Lease-back transaction and basis of judgment
| | ¨ | Applicable | √ | Not applicable |
Total cash outflows related to leasing: RMB1,408,144,569.38 (in RMB).
Operating lease as lessor
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | | | | | | Including
related income
from variable lease
payments that are
not included in the | |
| Items | | | Lease income | | | | rental income | |
| Lease income | | | 647,885,809.51 | | | | | |
| Total | | | 647,885,809.51 | | | | | |
Finance lease as lessor
| | √ | Applicable | ¨ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unit: Yuan Currency: RMB
| | | | | | | | | Income from | |
| | | | | | | | | variable lease | |
| | | | | | | | | payments not | |
| | | | | | | | | included in the | |
| | | Sales gains or | | | Financing | | | net investment | |
| Items | | losses | | | income | | | in the lease | |
| Leases | | | 9,040,724.90 | | | | 3,444,729.31 | | | | | |
| Total | | | 9,040,724.90 | | | | 3,444,729.31 | | | | | |
Reconciliation table of undiscounted leasing receipts and net investment in the lease
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Closing | | | Opening | |
| Items | | Balance | | | Balance | |
| Total undiscounted leasing receipts | | | 356,888,970.86 | | | | 339,474,576.68 | |
| Minus: Unrealized financing income | | | 71,592,677.39 | | | | 62,701,073.71 | |
| Net investment in the lease | | | 285,296,293.47 | | | | 276,773,502.97 | |
Undiscounted leasing receipts in the next five years
| | √ | Applicable | ¨ | Not applicable |
Unit: Yuan Currency: RMB
| | | Undiscounted leasing receipts | |
| | | per year | |
| | | Closing | | | Opening | |
| Items | | Balance | | | Balance | |
| Year 1 | | | 51,297,595.58 | | | | 64,217,997.44 | |
| Year 2 | | | 34,923,847.54 | | | | 39,688,354.50 | |
| Year 3 | | | 31,888,334.97 | | | | 33,232,676.94 | |
| Year 4 | | | 30,444,312.09 | | | | 30,840,565.86 | |
| Year 5 | | | 29,606,723.91 | | | | 29,763,412.10 | |
| Total undiscounted leasing receipts after five years | | | 178,728,156.77 | | | | 141,731,569.84 | |
| (3) | Recognition of sales profit or loss on finance lease as a producer or dealer |
| | ¨ | Applicable | √ | Not applicable |
Other disclosures
None
| | ¨ | Applicable | √ | Not applicable |
| | ¨ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
VIII. Research and Development Expenses
| (1). | Listed by nature of expenses |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Items | | Amount of
current period | | | Amount of
last period | |
| Internal software development, operation and maintenance | | | 133,685,051.80 | | | | 208,427,137.67 | |
| Total | | | 133,685,051.80 | | | | 208,427,137.67 | |
| Wherein: Incurred R&D expenses | | | 133,685,051.80 | | | | 207,361,419.05 | |
| Capitalized R&D expenses | | | | | | | 1,065,718.62 | |
| (2). | Development expenses that meet the capitalization criteria for research and development projects |
| | ☐ | Applicable | √ | Not applicable |
Significant capitalized research and development projects
| | ☐ | Applicable | √ | Not applicable |
Impairment provision for development expenses
| | ☐ | Applicable | √ | Not applicable |
| (3). | Significant externally purchased research projects |
| | ☐ | Applicable | √ | Not applicable |
| IX. | Changes in Consolidation Scope |
| 1. | Business combination not under the same control |
| | ☐ | Applicable | √ | Not applicable |
| 2. | Business combination under the same control |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 4. | Disposal of subsidiaries |
Existence of transactions or events during the period resulting in loss of control over subsidiaries
| | √ | Applicable | ☐ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
Name of
Subsidiary | | Time point
of losing
control right | | Consideration
received on
the date of
loss of control | | Loss of
control at
the disposal
proportion | | Method of
disposal on the
date of loss of
control | | Basis for
determining
the date of
loss of control | | Balance between the disposal price and the net assets of the subsidiary entitled in the consolidated financial statement
corresponding to the
disposal of the
investment | | Proportion of residual
equities on the
date of losing
control right | | Carrying value of remaining equity at the financial
statement level
on the date of
loss of control | | Fair value of remaining equity at the financial
statement level
on the date of
loss of control | | Re-measurement of the gains or losses arising
from the
remaining equity
at fair value | | Methods and key assumptions used for determining the fair value of remaining equity at the financial
statement level
on the date of
loss of control | | Amount of other comprehensive income related to the equity investment in the subsidiary transferred to investment
income or
retained
earnings |
| | | | | | | (%) | | | | | | | | (%) | | | | | | | | | | |
| Yonghui Yunjin Technology Co., Ltd. | | April 30, 2024 | | 37,776.29 | | 65 | | Equity transfer | | Agreed terms of equity transfer agreement | | 0.00 | | 35 | | 20,341.08 | | 20,341.08 | | 0.00 | | Market approach | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | √ | Applicable | ☐ | Not applicable |
During the reporting period, the Company sold 65% of its equity interest in Yonghui Yunjin Technology Co., Ltd (hereinafter referred to as “Yunjin Technology”) to Shanghai Paihui Technology Co., Ltd for a total transfer price of RMB377,762,864.53. After the completion of this transaction, the Company still holds a 35% equity interest in Yunjin Technology.
Whether the situations exist that investment for the subsidiary is disposed in steps by deal for many times and the control right has lost in the reporting period
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
| 5. | Changes in the combination scope for other reasons |
Descriptions for change in combination ranges caused by other reasons (e.g. newly establishment of subsidiary, clearing of subsidiary, etc.), and relevant situations:
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| X. | Interests in Other Entities |
| (1). | Constitution of the enterprise group |
| | √ | Applicable | ☐ | Not applicable |
Unit: ‘0,000 Yuan Currency: RMB
| | | Principal
Place of | | Registered | | Registered | | Nature of | | Shareholding
ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | RMB50 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Xiamen Yonghui Minsheng Superstores Co., Ltd. | | Xiamen, Fujian | | RMB41.67 million | | Xiamen, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Xiamen Yonghui Commercial Co., Ltd. | | Xiamen, Fujian | | RMB10 million | | Xiamen, Fujian | | Commercial retail | | 100 | | | | Investment establishment |
| Fujian Strait Food Development Co., Ltd. | | Fuzhou, Fujian | | RMB53 million | | Fuzhou, Fujian | | Commercial trade | | 100 | | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal
Place of | | Registered | | Registered | | Nature of | | Shareholding
ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | Fuzhou, Fujian | | RMB10 million | | Fuzhou, Fujian | | Commercial trade | | 100 | | | Investment establishment |
| Guangdong Yonghui Superstores Co., Ltd. | | Guangzhou, Guangdong | | RMB200 million | | Guangzhou, Guangdong | | Commercial retail | | | | 50 | | Investment establishment |
| Fujian Yonghui Logistics Co., Ltd. | | Fuzhou, Fujian | | RMB300 million | | Fuzhou, Fujian | | Logistic distribution | | 95 | | 5 | | Investment establishment |
| Fujian Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | RMB800 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | Investment establishment |
| Shenzhen Yonghui Superstores Co., Ltd. | | Shenzhen, Guangdong | | RMB200 million | | Shenzhen, Guangdong | | Commercial retail | | | | 50 | | Investment establishment |
| Fujian Yonghui Import and Export Trade Co., Ltd. | | Pingtan, Fujian | | RMB10 million | | Pingtan, Fujian | | Commercial trade | | | | 100 | | Investment establishment |
| Fujian Yongjin Trading Co., Ltd. | | Fuzhou, Fujian | | RMB30 million | | Fuzhou, Fujian | | Commercial trade | | 49 | | 51 | | Investment establishment |
| Jiangxi Yonghui Superstores Co., Ltd. | | Nanchang, Jiangxi | | RMB20 million | | Nanchang, Jiangxi | | Commercial retail | | 100 | | | Investment establishment |
| Chongqing Yonghui Superstores Co., Ltd. | | Chongqing | | RMB714.4 million | | Chongqing | | Commercial retail | | 100 | | | Investment establishment |
| Yonghui Logistics Co., Ltd. | | Chongqing | | RMB100 million | | Chongqing | | Logistic distribution | | 90 | | 10 | | Investment establishment |
| Sichuan Yonghui Store Co., Ltd. | | Chengdu, Sichuan | | RMB1 billion | | Chengdu, Sichuan | | Commercial retail | | 100 | | | Investment establishment |
| Guizhou Yonghui Superstores Co., Ltd. | | Guiyang, Guizhou | | RMB200 million | | Guiyang, Guizhou | | Commercial retail | | 100 | | | Investment establishment |
| Chengdu Yonghui Business Development Co., Ltd. | | Chengdu, Sichuan | | RMB130 million | | Chengdu, Sichuan | | Logistic distribution | | 80 | | 20 | | Investment establishment |
| Chongqing Xuanhui Real Estate Development Co., Ltd. | | Chongqing | | RMB100 million | | Chongqing | | Real estate | | | | 100 | | Investment establishment |
| Shaanxi Yonghui Superstores Co., Ltd. | | Xi’an, Shaanxi | | RMB10 million | | Xi’an, Shaanxi | | Commercial retail | | 100 | | | Investment establishment |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | Fuping, Shaanxi | | RMB37 million | | Fuping, Shaanxi | | Food sales | | 100 | | | Investment establishment |
| Guansu Yonghui Superstores Co., Ltd. | | Lanzhou, Gansu | | RMB10 million | | Lanzhou, Gansu | | Commercial retail | | 100 | | | Investment establishment |
| Qinghai Yonghui Superstores Co., Ltd. | | Xining, Qinghai | | RMB20 million | | Xining, Qinghai | | Commercial retail | | 100 | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal
Place of | | Registered | | Registered | | Nature of | | Shareholding
ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Baotou Yonghui Superstores Co., Ltd. | | Beijing | | RMB50 million | | Beijing | | Commercial retail | | 100 | | | | Investment establishment |
| Yonghui Holdings Co., Ltd. | | Hong Kong | | HKD30 million | | Hong Kong | | Investment | | 100 | | | | Investment establishment |
| LOHAS Life International Business Co., Ltd. | | Hong Kong | | HKD100,000 | | Hong Kong | | Commercial trade | | | | 100 | | Investment establishment |
| Yonghui Japan Co., Ltd. | | Japan | | JPY95 million | | Japan | | Commercial trade | | | | 80 | | Investment establishment |
| Tianjin Yonghui Superstores Co., Ltd. | | Tianjin | | RMB10 million | | Tianjin | | Commercial retail | | | | 100 | | Investment establishment |
| Anhui Yonghui Superstores Co., Ltd. | | Hefei, Anhui | | RMB285.08 million | | Hefei, Anhui | | Commercial retail | | 100 | | | Investment establishment |
| Anhui Yonghui Logistics Co., Ltd. | | Feidong, Anhui | | RMB50 million | | Feidong, Anhui | | Logistic distribution | | 100 | | | Investment establishment |
| Jiangsu Yonghui Superstores Co., Ltd. | | Nanjing, Jiangsu | | RMB200 million | | Nanjing, Jiangsu | | Commercial retail | | 100 | | | Investment establishment |
| Zhejiang Yonghui Superstores Co., Ltd. | | Hangzhou, Zhejiang | | RMB120 million | | Hangzhou, Zhejiang | | Commercial retail | | 100 | | | Investment establishment |
| Jiangsu Yonghui Business Management Co., Ltd. | | Nanjing, Jiangsu | | RMB30 million | | Nanjing, Jiangsu | | Commercial trade | | 100 | | | Investment establishment |
| Ningbo Yonghui Superstores Co., Ltd. | | Ningbo, Zhejiang | | RMB20 million | | Ningbo, Zhejiang | | Commercial retail | | 100 | | | Investment establishment |
| East China Yonghui Logistics Co., Ltd. | | Kunshan, Jiangsu | | RMB50 million | | Kunshan, Jiangsu | | Logistic distribution | | 100 | | | Investment establishment |
| Jiaxing Yonghui Superstores Co., Ltd. | | Jiaxing, Zhejiang | | RMB40 million | | Jiaxing, Zhejiang | | Commercial retail | | 100 | | | Investment establishment |
| Henan Yonghui Superstores Co., Ltd. | | Zhengzhou, Henan | | RMB80.86 million | | Zhengzhou, Henan | | Commercial retail | | 100 | | | Investment establishment |
| Shanxi Yonghui Superstores Co., Ltd. | | Taiyuan, Shanxi | | RMB50 million | | Taiyuan, Shanxi | | Commercial retail | | 100 | | | Investment establishment |
| Heilongjiang Yonghui Superstores Co., Ltd. | | Harbin, Heilongjiang | | RMB100 million | | Harbin, Heilongjiang | | Commercial retail | | 100 | | | Investment establishment |
| Jilin Yonghui Superstores Co., Ltd. | | Changchun, Jilin | | RMB300 million | | Changchun, Jilin | | Commercial retail | | 100 | | | Investment establishment |
| Liaoning Yonghui Superstores Co., Ltd. | | Shenyang, Liaoning | | RMB600 million | | Shenyang, Liaoning | | Commercial retail | | 100 | | | Investment establishment |
| Liaoning Yonghui Logistics Co., Ltd. | | Shenyang, Liaoning | | RMB100 million | | Shenyang, Liaoning | | Logistic distribution | | | | 100 | | Investment establishment |
| Songyuan Yonghui Superstores Co., Ltd. | | Songyuan, Jilin | | RMB10 million | | Songyuan, Jilin | | Commercial retail | | | | 55 | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal
Place of | | Registered | | Registered | | Nature of | | Shareholding
ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Shanghai Yonghui Superstores Co., Ltd. | | Shanghai | | RMB300 million | | Shanghai | | Commercial retail | | 100 | | | | Investment establishment |
| Shanghai Baoshan Yonghui Superstores Co., Ltd. | | Shanghai | | RMB20 million | | Shanghai | | Commercial retail | | | | 100 | | Investment establishment |
| Shanghai Yonghui Yangpu Superstores Co., Ltd. | | Shanghai | | RMB40 million | | Shanghai | | Commercial retail | | | | 100 | | Investment establishment |
| Shanghai Songjiang Yonghui Superstores Co., Ltd. | | Shanghai | | RMB1 million | | Shanghai | | Commercial retail | | | | 100 | | Investment establishment |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | Fuping, Shaanxi | | RMB200 million | | Fuping, Shaanxi | | Commercial trade | | 100 | | | Investment establishment |
| Xizang Yonghui Superstores Co., Ltd. | | Lhasa, Xizang | | RMB20 million | | Lhasa, Xizang | | Commercial retail | | 100 | | | Investment establishment |
| Guizhou Yonghui Logistics Co., Ltd. | | Guiyang, Guizhou | | RMB50 million | | Guiyang, Guizhou | | Logistic distribution | | 100 | | | Investment establishment |
| Chengde Yonghui Renhe Superstores Co., Ltd. | | Chengde, Hebei | | RMB10 million | | Chengde, Hebei | | Commercial retail | | | | 51 | | Investment establishment |
| Hebei Yonghui Superstores Co., Ltd. | | Shijiazhuang, Hebei | | RMB200 million | | Shijiazhuang, Hebei | | Commercial retail | | 100 | | | | Investment establishment |
| Gansu Minxian Yonghui Agricultural Development Co., Ltd. | | Minxian, Gansu | | RMB20 million | | Minxian, Gansu | | Food sales | | | | 51 | | Investment establishment |
| Shandong Yonghui Superstores Co., Ltd. | | Jinan, Shandong | | RMB50 million | | Jinan, Shandong | | Commercial retail | | 100 | | | | Investment establishment |
| Fuzhou Dongzhan International Trade Co., Ltd. | | Fuzhou, Fujian | | RMB30 million | | Fuzhou, Fujian | | Commercial trade | | | | 100 | | Investment establishment |
| Ruilingtong Marketing Services (Shanghai) Co., Ltd. | | Shanghai | | RMB10 million | | Shanghai | | Business services | | | | 57 | | Investment establishment |
| Guangdong PARK&YH Superstores Co., Ltd. | | Shenzhen, Guangdong | | RMB850 million | | Shenzhen, Guangdong | | Commercial retail | | 50 | | | | Investment establishment |
| Beijing Yonghui Superstores Co., Ltd. | | Beijing | | RMB600 million | | Beijing | | Commercial retail | | 100 | | | | Investment establishment |
| Hubei Yonghui Zhongbai Superstores Co., Ltd. | | Wuhan, Hubei | | RMB100 million | | Wuhan, Hubei | | Commercial retail | | 100 | | | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal
Place of | | Registered | | Registered | | Nature of | | Shareholding
ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Yunnan Yonghui Superstores Co., Ltd. | | Kunming, Yunnan | | RMB50 million | | Kunming, Yunnan | | Commercial retail | | 100 | | | | Investment establishment |
| Ningxia Yonghui Superstores Co., Ltd. | | Yinchuan, Ningxia | | RMB10 million | | Yinchuan, Ningxia | | Commercial retail | | 100 | | | | Investment establishment |
| Hunan Yonghui Superstores Co., Ltd. | | Changsha, Hunan | | RMB40 million | | Changsha, Hunan | | Commercial retail | | 100 | | | Investment establishment |
| Guangxi Yonghui Superstores Co., Ltd. | | Nanning, Guangxi | | RMB20 million | | Nanning, Guangxi | | Commercial retail | | 100 | | | Investment establishment |
| Beijing Yonghui Commercial Co., Ltd. | | Beijing | | RMB112.42 million | | Beijing | | Commercial retail | | | | 100 | | Consolidation not under the same control |
| Shanghai Dongzhan International Trade Co., Ltd. | | Shanghai | | RMB43.55 million | | Shanghai | | Commercial trade | | 100 | | | Consolidation not under the same control |
| Shanghai Yinjie International Trade Co., Ltd. | | Shanghai | | RMB1 million | | Shanghai | | Commercial trade | | | | 100 | | Consolidation not under the same control |
| Guangzhou PARK&YH Superstores Co., Ltd. | | Guangzhou, Guangdong | | RMB218.74 million | | Guangzhou, Guangdong | | Commercial retail | | | | 48.34 | | Consolidation not under the same control |
| Jiangmen ParknShop Supermarket Co., Ltd. | | Jiangmen, Guangdong | | RMB5 million | | Jiangmen, Guangdong | | Commercial retail | | | | 48.34 | | Consolidation not under the same control |
| Dongguan DG Mall Supermarket Co., Ltd. | | Dongguan, Guangdong | | RMB2.5 million | | Dongguan, Guangdong | | Commercial retail | | | | 48.34 | | Consolidation not under the same control |
| Yonghui Yunchuang Technology Co., Ltd. | | Shanghai | | RMB2.25 billion | | Shanghai | | Business services | | 46.6 | | | Consolidation not under the same control |
| Fujian Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | RMB10 million | | Fuzhou, Fujian | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Shenzhen Yonghui Yunchuang Technology Co., Ltd. | | Shenzhen, Guangdong | | RMB10 million | | Shenzhen, Guangdong | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Fujian Yunwang Technology Co., Ltd. | | Fuzhou, Fujian | | RMB100 million | | Fuzhou, Fujian | | Commercial retail | | | | 27.96 | | Consolidation not under the same control |
| Chongqing Yonghui Yunchuang Technology Co., Ltd. | | Chongqing | | RMB10 million | | Chongqing | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Fuzhou Yonghui Yunchuang Technology Co., Ltd. | | Fuzhou, Fujian | | RMB11.3 million | | Fuzhou, Fujian | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal
Place of | | Registered | | Registered | | Nature of | | Shareholding
ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Beijing Yonghui Yunchuang Technology Co., Ltd. | | Beijing | | RMB10 million | | Beijing | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Beijing Huichuang Youpin Technology Co., Ltd. | | Beijing | | RMB10 million | | Beijing | | Commercial retail | | | | 46.6 | | Combination not under same control |
| Jiangsu Yonghui Yunchuang Technology Co., Ltd. | | Nanjing, Jiangsu | | RMB10 million | | Nanjing, Jiangsu | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Anhui Yonghui Yunchuang Technology Co., Ltd. | | Hefei, Anhui | | RMB10 million | | Hefei, Anhui | | Commercial retail | | | | 46.6 | | Consolidation not under the same control |
| Xiamen Yongyun Technology Co., Ltd. | | Xiamen, Fujian | | RMB10 million | | Xiamen, Fujian | | Commercial retail | | | | 27.96 | | Consolidation not under the same control |
| Shanghai Yonghui Yunchuang Technology Co., Ltd. | | Shanghai | | RMB10 million | | Shanghai | | Technical service | | | | 46.6 | | Consolidation not under the same control |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | Fuzhou, Fujian | | RMB89.55 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | Consolidation under the same control |
| Fujian Yonghui Commercial Co., Ltd. | | Fuzhou, Fujian | | RMB35.1 million | | Fuzhou, Fujian | | Commercial retail | | 100 | | | Consolidation under the same control |
| Jiangsu Yunfu Supply Chain Management Co., Ltd. | | Nanjing, Jiangsu | | RMB10 million | | Nanjing, Jiangsu | | Food sales | | | | 100 | | Investment establishment |
| Shandong Fuping Supply Chain Management Co., Ltd. | | Weifang, Shandong | | RMB10 million | | Weifang, Shandong | | Commercial retail | | | | 100 | | Investment establishment |
| Hainan Fuli Supply Chain Management Co., Ltd. | | Sanya, Hainan | | RMB10 million | | Sanya, Hainan | | Commercial retail | | | | 100 | | Investment establishment |
| Anhui Fuwan Supply Chain Management Co., Ltd. | | Hefei, Anhui | | RMB10 million | | Hefei, Anhui | | Commercial retail | | | | 100 | | Investment establishment |
| Zhuhai Fuyue Supply Chain Management Co., Ltd. | | Zhuhai, Guangdong | | RMB10 million | | Zhuhai, Guangdong | | Commercial retail | | | | 100 | | Investment establishment |
| Hebei Fuji Supply Chain Management Co., Ltd. | | Shijiazhuang, Hebei | | RMB10 million | | Shijiazhuang, Hebei | | Commercial retail | | | | 100 | | Investment establishment |
| Guangdong Fuyue Supply Chain Management Co., Ltd. | | Guangzhou, Guangdong | | RMB30 million | | Guangzhou, Guangdong | | Commercial retail | | | | 100 | | Investment establishment |
| Zhejiang Yunfu Supply Chain Management Co., Ltd. | | Hangzhou, Zhejiang | | RMB30 million | | Hangzhou, Zhejiang | | Food sales | | | | 100 | | Investment establishment |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Principal
Place of | | Registered | | Registered | | Nature of | | Shareholding
ratio (%) | | Acquisition |
| Name of Subsidiary | | Business | | capital | | address | | business | | Direct | | Indirect | | method |
| Fuzhou Fuping Supply Chain Management Co., Ltd. | | Fuzhou, Fujian | | RMB30 million | | Fuzhou, Fujian | | Food sales | | | | 100 | | Investment establishment |
| Shanghai Yunfu Supply Chain Management Co., Ltd. | | Shanghai | | RMB30 million | | Shanghai | | Food sales | | | | 100 | | Investment establishment |
| Sichuan Yunfu Supply Chain Management Co., Ltd. | | Chengdu, Sichuan | | RMB10 million | | Chengdu, Sichuan | | Food sales | | | | 100 | | Investment establishment |
| Yunnan Fuping Yunshang Supply Chain Management Co., Ltd. | | Kunming, Yunnan | | RMB10 million | | Kunming, Yunnan | | Food sales | | | | 100 | | Investment establishment |
| Baotou Yonghui Commercial Co., Ltd. | | Baotou, Inner Mongolia | | RMB50 million | | Baotou, Inner Mongolia | | Commercial retail | | 100 | | | Investment establishment |
| Beijing Yonghui Technology Co., Ltd. | | Beijing | | RMB10 million | | Beijing | | Technical service | | 100 | | | Investment establishment |
| Fujian Yuntong Supply Chain Co., Ltd. | | Fuzhou, Fujian | | RMB100 million | | Fuzhou, Fujian | | Commercial trade | | 100 | | | Investment establishment |
| Fujian Yongyuehui Business Management Co., Ltd. | | Fuzhou, Fujian | | RMB100 million | | Fuzhou, Fujian | | Commercial trade | | 100 | | | Investment establishment |
| Guangxi Fuyue Supply Chain Management Co., Ltd. | | Nanning, Guangxi | | RMB10 million | | Nanning, Guangxi | | Commercial retail | | | | 100 | | Investment establishment |
| Zhangzhou Yonghui Digital Business Co., Ltd. | | Zhangzhou, Fujian | | RMB10 million | | Zhangzhou, Fujian | | Commercial retail | | | | 100 | | Investment establishment |
| Sichuan Huipeng E-commerce Co., Ltd. | | Chengdu, Sichuan | | RMB100 million | | Chengdu, Sichuan | | Commercial retail | | 100 | | | Investment establishment |
| Anhui Yonghui Business Management Co., Ltd. | | Fuyang, Anhui | | RMB10 million | | Fuyang, Anhui | | Commodity distribution | | | | 100 | | Investment establishment |
| Yonghui Technology Co., Ltd. | | Fuzhou, Fujian | | RMB50 million | | Fuzhou, Fujian | | Technical service | | 100 | | | Investment establishment |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
None
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Basis on being controllable of the invested company with half or less voting rights as well as on being uncontrollable of the invested company but with half or more voting rights:
Although the Group only holds less than 50% of the equity interest in Guangdong ParknShop Yonghui Superstores Co., Ltd (“Guangdong ParknShop”) and its subsidiaries, Guangdong ParknShop is a Sino-foreign joint venture where the highest governing body is the Board of Directors, consisting of six directors. The Group has the right to appoint the chairman and two additional directors. Major operational decisions require approval by more than half (including half) of the directors. If the attending directors reach a consensus of equal number of approvals and rejections, the Board of Directors shall vote again on the resolution, and all attending directors shall vote according to the chairman’s voting result. Therefore, the Group considers it as a subsidiary.
The control basis on important structured bodies within the consolidation scope:
None
Basis for determining whether the company is an agent or a bailor:
None
Other notes:
None
| (2). | Important non-wholly-owned subsidiaries |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Name of Subsidiary | | Shareholding
ratio of
minority
shareholders | | | Profit and loss
attributable to
minority
shareholders
in this term | | | Dividends
assigned to
shareholders
in this term | | | Closing
balance of
equity of
minority
shareholders | |
| | | | (%) | | | | | | | | | | | | | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 50.00 | | | | -24,859,175.77 | | | | | | | | -54,025,565.64 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 53.40 | | | | -33,988,576.23 | | | | | | | | 71,847,410.52 | |
Illustration on the difference between the shareholding ratio in subsidiaries and voting right ratio:
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Main financial information of important non-wholly-owned subsidiaries |
| | √ | Applicable | ☐ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Closing balance | | | Opening balance | |
| Name of Subsidiary | | Current
assets | | | Non-
current
asset | | | Total
assets | | | Current
liabilities | | | Non-
current
liabilities | | | Total
liabilities | | | Current
assets | | | Non-
current
asset | | | Total
assets | | | Current
liabilities | | | Non-
current
liabilities | | | Total
liabilities | |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 162,539.55 | | | | 89,545.05 | | | | 252,084.60 | | | | 200,918.91 | | | | 98,323.30 | | | | 299,242.21 | | | | 158,952.25 | | | | 97,647.21 | | | | 256,599.46 | | | | 203,660.21 | | | | 95,067.51 | | | | 298,727.72 | |
| Yonghui Yunchuang Technology Co., Ltd. | | | 95,863.18 | | | | 523.35 | | | | 96,386.53 | | | | 101,958.28 | | | | | | | | 101,958.28 | | | | 353,002.45 | | | | 622.97 | | | | 353,625.42 | | | | 359,274.29 | | | | | | | | 359,274.29 | |
| | | Amount of current period | | Amount of last period |
| Name of Subsidiary | | Operating
revenue | | Net profit | | Total
comprehensive
income | | Cash flow
from
operating
activities | | Operating
revenue | | Net profit | | Total
comprehensive
income | | Cash flow
from
operating
activities |
| Guangdong PARK&YH Superstores Co., Ltd. | | | 154,070.34 | | | -5,029.35 | | | -5,029.35 | | | 21,031.46 | | | 170,760.69 | | | -5,654.11 | | | -5,654.11 | | | 14,764.27 |
| Yonghui Yunchuang Technology Co., Ltd. | | | 4,912.57 | | | 77.12 | | | 77.12 | | | -183.37 | | | 3,549.42 | | | 3,597.62 | | | 3,597.62 | | | -2,342.35 |
Other notes:
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Important limitations on using Company’s assets and paying off liabilities of the Company (Group): |
| | ☐ | Applicable | √ | Not applicable |
| (5). | Financial support and other support provided to the structured entities that are included in the consolidated financial statement: |
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
| 2. | Transactions controlling the subsidiaries in case of equity shares change of subsidiaries |
| | √ | Applicable | ☐ | Not applicable |
| (1). | Description on changes in equity of subsidiaries |
| | ☐ | Applicable | √ | Not applicable |
| (2). | Influences of transactions on minority equity and equity attributable to the parent company |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| | | Hubei Yonghui Zhongbai
Superstores Co., Ltd. | |
| Purchase cost/disposal consideration | | | | |
| – Cash | | | 100,000.00 | |
| – Fair value of the non-cash assets | | | | |
| Total purchase cost/disposal consideration | | | 100,000.00 | |
| Less: subsidiary’s net asset shares calculated according to the ratio of acquired/disposed equities | | | -67,524,053.93 | |
| Difference | | | 67,624,053.93 | |
| Including: adjusting capital reserves | | | 67,624,053.93 | |
| Adjusting surplus reserves | | | | |
| Adjusting undistributed profits | | | | |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| 3. | Equities in Cooperative Enterprises and Joint Ventures |
| | √ | Applicable | ☐ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1). | Important cooperative enterprises and joint ventures |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
Names of cooperative
enterprises and joint | | Principal Place of | | Registered | | Nature of | | Shareholding
ratio (%) | | | Accounting
treatment
method for
investment in
cooperative
enterprises and
joint |
ventures | | Business | | address | | business | | Direct | | Indirect | | | ventures |
| Zhongbai Holdings Group Co., Ltd. | | Wuhan, Hubei | | Wuhan, Hubei | | Commercial retail | | | 9.85 | | | Equity method |
| Fujian OneBank Limited | | Pingtan, Fujian | | Pingtan, Fujian | | Finance | | 29.8 | | | | Equity method |
| Chengdu Hongqi Chain Co., Ltd. | | Chengdu, Sichuan | | Chengdu, Sichuan | | Commercial retail | | 21.00 | | | | Equity method |
Description on the difference between the shareholding ratio in cooperative enterprises or joint ventures and voting right:
None
Basis for having significant influence with less than 20% voting rights, or having 20% or more voting rights but not having significant influence: According to the provisions of the Articles of Association of Zhongbai Group, there are five non-independent directors in the Board of Directors, and the Company holds one seat. Therefore, the management of the Group thinks that it can exert significant influence over Zhongbai Group, making Zhongbai an affiliated business of the Company.
| (2). | Main financial information of important cooperative enterprises |
| | ☐ | Applicable | √ | Not applicable |
| (3). | Main financial information of important joint ventures |
| | √ | Applicable | ☐ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Closing balance/amount
of current period | | Opening balance/incurred amount
of last period | |
| | | Zhongbai
Group | | OneBank | | Hongqi
Chain | | Zhongbai
Group | | OneBank | | Hongqi
Chain | |
| Current assets | | | 331,686.51 | | | 3,011,703.07 | | | 455,823.12 | | | 346,921.76 | | | 2,680,623.74 | | | 452,686.41 | |
| Non-current asset | | | 774,493.53 | | | 516,880.60 | | | 353,853.97 | | | 799,764.29 | | | 656,790.65 | | | 358,342.97 | |
| Total assets | | | 1,106,180.04 | | | 3,528,583.67 | | | 809,677.09 | | | 1,146,686.05 | | | 3,337,414.39 | | | 811,029.38 | |
| | | | | | | | | | | | | | | | | | | | |
| Current liabilities | | | 656,307.95 | | | 2,338,331.82 | | | 338,628.38 | | | 667,933.80 | | | 1,670,431.30 | | | 345,821.85 | |
| Non-current liabilities | | | 231,805.77 | | | 945,117.10 | | | 50,136.41 | | | 241,604.00 | | | 1,434,692.08 | | | 54,087.02 | |
| Total liabilities | | | 888,113.72 | | | 3,283,448.92 | | | 388,764.79 | | | 909,537.80 | | | 3,105,123.38 | | | 399,908.87 | |
| | | | | | | | | | | | | | | | | | | | |
| Minority interests | | | 3,646.32 | | | | | | 64.73 | | | 6,640.86 | | | | | | 66.74 | |
| Shareholders’ equity attributable to the parent company | | | 214,420.00 | | | 245,134.75 | | | 420,847.57 | | | 230,507.39 | | | 232,291.01 | | | 411,053.77 | |
| | | | | | | | | | | | | | | | | | | | |
| Net asset share calculated as per shareholding ratio | | | 21,304.97 | | | 73,050.16 | | | 88,377.99 | | | 22,704.98 | | | 69,222.72 | | | 86,321.29 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Closing balance/amount
of current period | | | Opening balance/incurred amount
of last period | |
| | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | | | Zhongbai
Group | | | OneBank | | | Hongqi
Chain | |
| Adjustments | | | 9,517.23 | | | | 140.27 | | | | 81,678.71 | | | | 9,517.23 | | | | 140.27 | | | | 81,678.71 | |
| – Goodwill | | | | | | | | | | | | | | | | | | | | | | | | |
| – Unrealized profits in internal transaction | | | | | | | | | | | | | | | | | | | | | | | | |
| – Others | | | 9,517.23 | | | | 140.27 | | | | 81,678.71 | | | | 9,517.23 | | | | 140.27 | | | | 81,678.71 | |
| Book value on equity investment of joint ventures | | | 30,822.20 | | | | 73,190.43 | | | | 170,056.70 | | | | 32,222.21 | | | | 69,362.99 | | | | 168,000.00 | |
| Fair value of equity investment of joint ventures with public offer | | | 22,613.13 | | | | | | | | 132,232.80 | | | | 29,323.26 | | | | | | | | 142,228.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating revenue | | | 571,050.88 | | | | 41,407.73 | | | | 518,638.99 | | | | 631,244.40 | | | | 36,218.90 | | | | 500,286.99 | |
| Net profit | | | -14,327.52 | | | | 10,647.17 | | | | 26,655.79 | | | | 1,378.56 | | | | 3,085.17 | | | | 25,678.89 | |
| Net profits under discontinued operations | | | | | | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income | | | | | | | 2,196.58 | | | | | | | | | | | | 2,022.70 | | | | | |
| Total comprehensive income | | | -14,327.52 | | | | 12,843.75 | | | | 26,655.79 | | | | 1,378.56 | | | | 5,107.87 | | | | 25,678.89 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual dividend received from joint ventures | | | | | | | | | | | 3,541.44 | | | | | | | | | | | | 12,623.52 | |
| (4). | Financial information summary of unimportant cooperative enterprises and joint ventures |
| | √ | Applicable | ☐ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
| | | Closing
balance/amount
of current
period | | Opening
balance/incurred
amount of last
period | |
| Cooperative enterprises: | | | | | | | |
| Total book value of investment | | | 3,170.68 | | | 4,805.49 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | |
| – Net profit | | | -1,634.81 | | | -2,413.86 | |
| – Other comprehensive income | | | | | | | |
| – Total comprehensive income | | | -1,634.81 | | | -2,413.86 | |
| | | | | | | | |
| Joint ventures: | | | | | | | |
| Total book value of investment | | | 71,091.96 | | | 48,775.81 | |
| Total of the following items calculated as per the shareholding ratio | | | | | | | |
| – Net profit | | | 2,644.53 | | | 1,765.30 | |
| – Other comprehensive income | | | | | | | |
| – Total comprehensive income | | | 2,644.53 | | | 1,765.30 | |
As there is no obligation to bear additional losses for Fuzhou Yijiu San San Bean Products Co., Ltd., its net loss is recognized only up to the carrying value of long-term equity investments and other long-term equity interests that essentially represent its net investment, with a write-down to zero.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (5). | Description on significant limitations of the ability to transfer funds to the Company by cooperative enterprises and joint ventures |
| | ☐ | Applicable | √ | Not applicable |
| (6). | Excess loss occurred to cooperative enterprises and joint ventures |
| | √ | Applicable | ☐ | Not applicable |
Unit: ’0,000 Yuan Currency: RMB
Names of cooperative
enterprises and joint
ventures | | Accumulated
unrecognized
losses
accumulated
in the
previous period | | Unconfirmed
losses this term
(or net profit
shared
this term) | | Accumulated
unconfirmed
losses at the
end of term | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | | 1,017.46 | | | 409.16 | | | 1,426.62 | |
| Total | | | 1,017.46 | | | 409.16 | | | 1,426.62 | |
| (7). | Unconfirmed commitment related to cooperative enterprise investment |
| | ☐ | Applicable | √ | Not applicable |
| (8). | Contingent liability related to cooperative enterprise or joint venture investment |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| 5. | Equity in structured entities not included in the consolidated financial statement |
Description on the structured main body that is not included in the combined financial statement:
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| 1. | Governmental subsidy recognized as receivables at the end of the reporting period |
| | ☐ | Applicable | √ | Not applicable |
Reasons for not receiving the expected amounts of governmental subsidy at estimated time
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 2. | Liabilities related to governmental subsidies |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Item | | Opening
balance | | | Newly
increased
subsidy
amount in
current period | | | Amount of
non-operating
income
included in
current period | | | Transferred
to other
comprehensive
income in
the current
period | | | Other
changes in
current period | | | Closing
balance | | | Related to
assets/income |
| Deferred income | | | 99,470,899.92 | | | | | | | | | | | | 6,714,673.62 | | | | | | | | 92,756,226.30 | | | Asset-related |
| Total | | | 99,470,899.92 | | | | | | | | | | | | 6,714,673.62 | | | | | | | | 92,756,226.30 | | | / |
| 3. | Governmental subsidies recognized in the current profit and loss |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
| Types | | | Amount of
current period | | | Amount of
last period | |
| Income-related | | | | 40,976,517.20 | | | | 69,402,691.77 | |
| Asset-related | | | | 6,714,673.62 | | | | 5,151,850.50 | |
| Total | | | | 47,691,190.82 | | | | 74,554,542.27 | |
Other notes:
Major governmental subsidy information as follows:
Unit: Yuan Currency: RMB
| Items | | Recorded
in other
comprehensive
income for
the year | | | Related to
assets/income |
| Supply subsidies | | | 16,312,911.92 | | | Income-related |
| Reward subsidies | | | 8,599,652.00 | | | Income-related |
| Enterprise support subsidies | | | 6,662,605.60 | | | Income-related |
| Employment and skill subsidies | | | 3,261,186.34 | | | Income-related |
| XII. | Risks Related to Financial Instruments |
| 1. | Risks of financial instruments |
| | √ | Applicable | ☐ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Classification of financial instruments
The Group’s main financial instruments include cash and cash equivalents, accounts receivable, other receivables, trading financial assets, non-current assets due within one year, long-term receivables, other non-current financial assets, accounts payable, other payables, short-term borrowings, non-current liabilities due within one year, long-term borrowings, lease liabilities, other non-current liabilities. Details of the financial instruments are disclosed in the relevant notes. The risks associated with these financial instruments and the risk management policies adopted by the Group to mitigate these risks are described below. The Management of the Group manages and monitors these risk exposures to ensure that the risks are kept within limits. The book values of various financial instruments on the balance sheet date are as follows:
Financial assets as of June 30, 2024
Unit: Yuan Currency: RMB
| Items | | Financial assets
measured at
fair value
with changes
included in
current profits
and losses | | | Financial assets
measured at
amortized costs | | | Total | |
| Monetary funds | | | | | | | 5,060,367,277.43 | | | | 5,060,367,277.43 | |
| Trading financial assets | | | 2,709,808,027.29 | | | | | | | | 2,709,808,027.29 | |
| Account receivable | | | | | | | 340,365,769.57 | | | | 340,365,769.57 | |
| Other receivables | | | | | | | 499,763,124.04 | | | | 499,763,124.04 | |
| Non-current assets due within one year | | | | | | | 39,294,201.28 | | | | 39,294,201.28 | |
| Long-term receivables | | | | | | | 246,002,092.19 | | | | 246,002,092.19 | |
| Other non-current financial assets | | | 3,302,565,585.85 | | | | | | | | 3,302,565,585.85 | |
| Total | | | 6,012,373,613.14 | | | | 6,185,792,464.51 | | | | 12,198,166,077.65 | |
Financial assets as of December 31, 2023
Unit: Yuan Currency: RMB
| Items | | Financial assets
measured at
fair value
with changes
included in
current profits
and losses | | | Financial assets
measured at
amortized costs | | | Total | |
| Monetary funds | | | | | | | 5,839,069,618.08 | | | | 5,839,069,618.08 | |
| Loans and advances | | | | | | | 557,908,591.96 | | | | 557,908,591.96 | |
| Trading financial assets | | | 735,971,777.07 | | | | | | | | 735,971,777.07 | |
| Factoring receivable | | | | | | | 68,688,964.38 | | | | 68,688,964.38 | |
| Account receivable | | | | | | | 421,742,480.93 | | | | 421,742,480.93 | |
| Other receivables | | | | | | | 563,971,664.48 | | | | 563,971,664.48 | |
| Non-current assets due within one year | | | | | | | 49,380,092.40 | | | | 49,380,092.40 | |
| Long-term receivables | | | | | | | 227,393,410.57 | | | | 227,393,410.57 | |
| Other non-current financial assets | | | 3,651,480,119.24 | | | | | | | | 3,651,480,119.24 | |
| Total | | | 4,387,451,896.31 | | | | 7,728,154,822.80 | | | | 12,115,606,719.11 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Financial liabilities
Unit: Yuan Currency: RMB
| Items | | Financial assets
measured at
amortized cost
as of June 30,
2024. | | | Financial assets
measured at
amortized cost
as of
December 31,
2023. | |
| Short-term loans | | | 4,400,540,277.78 | | | | 5,130,220,089.04 | |
| Accounts payable | | | 7,572,133,519.53 | | | | 9,816,260,354.84 | |
| Other payables | | | 638,664,929.11 | | | | 742,716,158.13 | |
| Non-current liabilities due within one year | | | 2,194,490,015.37 | | | | 1,792,351,864.19 | |
| Long-term borrowings | | | | | | | 349,889,789.58 | |
| Lease liabilities | | | 19,211,152,552.49 | | | | 20,781,462,184.01 | |
| Other non-current liabilities | | | 46,977,316.08 | | | | 46,931,643.83 | |
| Total | | | 34,063,958,610.36 | | | | 38,659,832,083.62 | |
Risks of financial instruments
The Group faces various risks related to financial instruments in its day-to-day activities, including credit risk, liquidity risk, and market risk. An overview of the risk management policies of the Group regarding these risks is as follows.
The Board of Directors is responsible for establishing the risk management framework for the Group, formulating risk management policies and guidelines, and overseeing the implementation of risk management measures. The Group has established risk management policies to identify and analyze the risks it faces. These risk management policies provide specific guidelines for managing various aspects of risk, including market risk, credit risk, and liquidity risk. The Group periodically assesses the market environment and changes in its business activities to determine whether updates are required for the risk management policies and systems. The risk management for the Group is conducted by the Risk Management Committee in accordance with the policies approved by the Board of Directors. The Risk Management Committee identifies, evaluates, and mitigates relevant risks through close cooperation with other business departments within the Group. The Group’s internal audit department conducts regular audits of risk management controls and procedures, and reports the audit findings to the Group’s Audit Committee.
The Group diversifies its investment and business portfolio appropriately to mitigate financial instrument risks. It also reduces risks concentrated in a single industry, specific geographical area, or specific counterparties by developing corresponding risk management policies.
Credit risk
The Group only trades with recognized third party with good reputation. According to the Group’s policy, credit checks are conducted on all customers who request credit transactions. Furthermore, the Group continuously monitors the balance of accounts receivable to ensure it does not face significant bad debt risks. For transactions not settled in the functional currency of the relevant operating unit, the Group does not provide credit terms unless specifically approved by the Group’s credit control department.
As the counterparties for cash and fund product transactions are reputable banks with high credit ratings, the credit risk associated with these financial instruments is low.
The Group’s other financial assets include debt investments, accounts receivable, other receivables, and long-term receivables. The credit risk of these financial assets arises from the default of counterparties, and the maximum exposure to risk is equal to the carrying value of these instruments.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The maximum credit risk exposure to the Group on each balance sheet date is the total amount receivable from customers, net of impairment allowances.
Since the Group only trades with recognized and reputable third parties, no collateral is required. Credit risk concentrations are managed based on customers/counterparties, geographical areas, and industries. As of June 30, 2024, the Group has exposed to concentration of specific credit risk, where 29.69% (December 31, 2023: 32.64%) of the Group’s accounts receivable is attributable to the five largest customers with the highest balances.
Criteria for determining a significant increase in credit risk
The Group assesses on each balance sheet date whether there has been a significant increase in credit risk of the relevant financial instruments since initial recognition. When determining whether there is a significant increase in credit risk after initial recognition, the Group considers obtaining reasonable and supportable information without incurring unnecessary additional costs or efforts. This includes qualitative and quantitative analysis based on the Group’s historical data, external credit risk ratings, and forward-looking information. Based on a single financial instrument or a combination of financial instruments with similar credit risk characteristics, the Group compares the default risk of financial instruments on the balance sheet date with the default risk on the initial recognition date to determine the change of the default risk of financial instruments during the expected duration of the financial instruments.
When the following qualitative criteria are triggered, the Group considers that there has been a significant increase in credit risk for financial instruments:
| · | The qualitative criteria primarily include significant adverse changes in the debtor’s business or financial condition |
and the occurrence of credit-impaired assets on the watchlist.
To determine if credit impairment has occurred, the Group applies criteria consistent with its internal credit risk management objectives, considering both quantitative and qualitative indicators. The Group considers the following factors primarily when assessing whether a debtor has incurred credit impairment:
| (1) | The issuer or debtor experiences significant financial difficulties. |
| (2) | The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.; |
| (3) | The creditor, due to economic or contractual considerations relating to the debtor’s financial difficulties, grants the debtor concessions that would not otherwise be made; |
| (4) | The debtor is likely to become bankrupt or carry out other financial reorganizations; |
| (5) | The financial difficulties of the issuer or the debtor cause the disappearance of active market for the financial asset; |
| (6) | For a financial asset that has been purchased at a substantial discount or an original financial asset, the discount has reflected the fact that a credit loss has occurred. |
Credit impairment of financial instrument may be caused by the joint action of multiple events, instead of an individually identifiable event.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Liquidity risk
The Group’s objective is to maintain a balance between the continuity and flexibility of financing by utilizing various financing methods. The Group generates funds for operating financing through operations and borrowings.
The maturity period of financial liabilities based on non-discounted contractual cash flows is analyzed as follows:
June 30, 2024
Unit: Yuan Currency: RMB
| Items | | Within 1 year | | | 1-5 years | | | Over 5 years | | | Total | |
| Short-term loans | | | 4,416,148,888.89 | | | | | | | | | | | | 4,416,148,888.89 | |
| Accounts payable | | | 7,572,133,519.53 | | | | | | | | | | | | 7,572,133,519.53 | |
| Other payables | | | 638,664,929.11 | | | | | | | | | | | | 638,664,929.11 | |
| Non-current liabilities due within one year | | | 3,105,511,095.17 | | | | | | | | | | | | 3,105,511,095.17 | |
| Lease liabilities | | | | | | | 10,658,713,831.21 | | | | 13,979,149,512.43 | | | | 24,637,863,343.64 | |
| Other non-current liabilities | | | | | | | 51,108,661.57 | | | | | | | | 51,108,661.57 | |
| Total | | | 15,732,458,432.70 | | | | 10,709,822,492.78 | | | | 13,979,149,512.43 | | | | 40,421,430,437.91 | |
December 31, 2023
Unit: Yuan Currency: RMB
| Items | | Within 1 year | | | 1-5 years | | | Over 5 years | | | Total | |
| Short-term loans | | | 5,167,567,595.15 | | | | | | | | | | | | 5,167,567,595.15 | |
| Accounts payable | | | 9,816,260,354.84 | | | | | | | | | | | | 9,816,260,354.84 | |
| Other payables | | | 742,716,158.13 | | | | | | | | | | | | 742,716,158.13 | |
| Non-current liabilities due within one year | | | 3,106,586,868.31 | | | | | | | | | | | | 3,106,586,868.31 | |
| Long-term borrowings | | | 11,870,864.58 | | | | 352,370,268.75 | | | | | | | | 364,241,133.33 | |
| Lease liabilities | | | | | | | 11,895,367,512.33 | | | | 17,064,177,174.51 | | | | 28,959,544,686.84 | |
| Other non-current liabilities | | | | | | | 53,149,100.00 | | | | | | | | 53,149,100.00 | |
| Total | | | 18,845,001,841.01 | | | | 12,300,886,881.08 | | | | 17,064,177,174.51 | | | | 48,210,065,896.60 | |
Market risk
Interest rate risks
The Group’s bank borrowings are fixed-rate, so the Group does not face the risk of market interest rate fluctuations.
Exchange rate risk
The Group is exposed to transactional currency risk. Such risks are caused by sales or purchases made by business units in currencies other than their functional currencies. The Group focuses its main business throughout China, which are settled in RMB. Therefore, the Group faces a low risk of currency fluctuations.
Equity instrument investment price risk
The equity instrument investment price risk refers to the risk of a decrease in the fair value of equity securities due to changes in stock index levels and individual security values. As of June 30, 2024, the Group has exposed to equity instrument investment price risk due to certain individual equity instrument investments classified at fair value through profit or loss and whose changes are recognized in the current period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The following table demonstrates the sensitivity of the Group’s net profit and other comprehensive income after tax to a 5% change in the fair value of equity instrument investments (based on the carrying value on the balance sheet date), assuming all other variables remain constant.
| June 30, 2024 | | | | | | | | | |
| | | | | | | Increase/ | | Increase/ | |
| | | Carrying value | | | | (Decrease) | | (Decrease) | |
| | | of equity | | Increase/ | | in other | | in total | |
| | | instrument | | (Decrease) in | | comprehensive | | shareholders’ | |
| Items | | investments | | net profit | | income after tax | | equity | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | 348,110,366.74 | | 17,405,518.34/
-17,405,518.34 | | | | 17,405,518.34/
-17,405,518.34 | |
| December 31, 2023 | | | | | | | | | |
| | | | | | | Increase/ | | Increase/ | |
| | | Carrying value | | | | (Decrease) | | (Decrease) | |
| | | of equity | | Increase/ | | in other | | in total | |
| | | instrument | | (Decrease) in | | comprehensive | | shareholders’ | |
| Items | | investments | | net profit | | income after tax | | equity | |
| USA-equity instrument investments measured at fair value with changes in fair value recognized in profit or loss | | 388,932,227.74 | | 19,446,611.39/
-19,446,611.39 | | | | 19,446,611.39/
-19,446,611.39 | |
Capital management
The Group’s primary objective of capital management is to ensure the Group’s ability to continue as a going concern and maintain healthy capital ratios to support business development and maximize shareholder value.
The Group manages its capital structure and makes adjustments based on the economic situation and changes in the risk characteristics of the relevant assets. To maintain or adjust the capital structure, the Group may adjust the distribution of profits to shareholders, return capital to shareholders, or issue new shares. Capital management objectives, policies, or procedures have not changed for the year 2024 and 2023.
The Group manages capital using the debt-to-equity ratio, which has been 87.06% as of June 30, 2024 (December 31, 2023: 88.6%), which the Group’s management believes that it is in line with its capital management requirements.
| (1) | The Company is engaged in hedging activities for risk management |
| | ☐ | Applicable | √ | Not applicable |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| (2) | The Company is engaged in qualifying hedging activities and applies hedge accounting. |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| (3) | The Company is engaged in hedging activities for risk management and expects to achieve risk management objectives but does not apply hedge accounting. |
| | ☐ | Applicable | √ | Not applicable |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| 3. | Financial asset transfers |
| (1) | Classification of transfer methods |
| | ☐ | Applicable | √ | Not applicable |
| (2) | Financial assets derecognized due to transfer |
| | ☐ | Applicable | √ | Not applicable |
| (3) | Financial assets still involved in the transfer |
| | ☐ | Applicable | √ | Not applicable |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| XIII. | Fair Value Disclosures |
| 1. | Closing fair value of assets and liabilities measured at fair value |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | Unit: Yuan Currency: RMB | |
| | | Closing fair value | |
| | | Primary | | Secondary | | Tertiary | | | |
| | | fair value | | fair value | | fair value | | | |
| Items | | calculation | | calculation | | calculation | | Total | |
| I. Continuous fair value calculation | | | | | | | | | |
| (I) Trading financial assets | | 855,878,482.46 | | 1,505,819,178.09 | | 348,110,366.74 | | 2,709,808,027.29 | |
| 1. Financial assets measured at fair value and booked into current profits and losses | | 855,878,482.46 | | 1,505,819,178.09 | | 348,110,366.74 | | 2,709,808,027.29 | |
| (1) Debt instrument investment | | | | | | | | – | |
| (2) Equity instrument investment | | | | | | 348,110,366.74 | | 348,110,366.74 | |
| (3) Fund products | | 855,878,482.46 | | | | | | 855,878,482.46 | |
| (4) Structured deposits | | | | 1,505,819,178.09 | | | | 1,505,819,178.09 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Closing fair value | |
| | | Primary | | Secondary | | Tertiary | | | |
| | | fair value | | fair value | | fair value | | | |
| Items | | calculation | | calculation | | calculation | | Total | |
| 2. Financial assets that are specified to be measured at fair value and whose changes are booked into current profits and losses | | | | | | | | | |
| (1) Debt instrument investment | | | | | | | | | |
| (2) Equity instrument investment | | | | | | | | | |
| (II) Other creditors’ investments | | | | | | | | | |
| (III) Investment in other equity instruments | | | | | | | | | |
| (IV) Investment properties | | | | | | | | | |
| 1. The right to use land for lease | | | | | | | | | |
| 2. Buildings for lease | | | | | | | | | |
| 3. Land use right held and transferred after preparation for increment | | | | | | | | | |
| (V) Biological assets | | | | | | | | | |
| 1. Consumable biological assets | | | | | | | | | |
| 2. Productive biological assets | | | | | | | | | |
| (VI) Other non-current financial assets | | | | | | 3,302,565,585.85 | | 3,302,565,585.85 | |
| Total assets measured at fair value continuously | | 855,878,482.46 | | 1,505,819,178.09 | | 3,650,675,952.59 | | 6,012,373,613.14 | |
The Group recognizes the transfer between levels based on the occurrence date of the events that cause the transfer between levels.
For financial instruments traded in active markets, the Group determines their fair value based on their quoted market prices. For financial instruments that are not traded in active markets, the Group uses valuation techniques to determine their fair value, and the valuation model used is the market approach model.
The Financial Department of the Group is led by the Financial Manager and is responsible for formulating policies and procedures for fair value measurement of financial instruments. The financial manager reports directly to the Chief Financial Officer and the Audit Committee. On each balance sheet date, the financial department analyzes the value changes of financial instruments and determines the main input values applicable to the valuation. The valuation must be reviewed and approved by the Chief Financial Officer. The valuation process and results are discussed with the Audit Committee annually for the purpose of mid-term and annual financial reporting.
Fair value refers to the amount at which both parties to a transaction who are familiar with the condition exchange their assets or clear off their debts under fair conditions instead of the amount induced by forced selling or liquidation. The following methods and assumptions are used to estimate the fair values. Long-term receivables, long and short-term borrowings, etc., are valued at fair value using the discounted cash flow method, using the market yield of other financial instruments with similar contractual terms, credit risks, and remaining maturities as the discount rate. On June 30, 2024, the Group assessed the self-non-compliance risk of borrowings, both long-term and short-term, as not significant.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Listed equity instrument investments are valued at market quotations. Non-listed equity instruments are measured at fair value using market approach, based on unobservable market prices or rates assumptions. The Group determines comparable listed companies based on industry, scale, leverage, and strategy, and calculates appropriate market multiples, such as price-earnings multiples, for each selected comparable listed company. Adjustments are made by giving consideration to specific facts and circumstances of the entity, including liquidity and scale differences with the comparable listed companies. The Group believes that the fair value and its changes estimated using valuation techniques are reasonable and represent the most appropriate values as of the balance sheet date.
| 2. | Basis for determination of market price for measurement of fair value of the first level on an ongoing concern or not |
| | ☐ | Applicable | √ | Not applicable |
| 3. | For continuous and discontinuous secondary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| | √ | Applicable | ☐ | Not applicable |
The trading financial assets held by the Group are financial products without active market quotations. Their fair value is determined based on factors such as the type of financial product, credit rating, historical experience information, and expected yield by contract.
| 4. | For continuous and discontinuous tertiary fair value calculating projects, adopt the valuation technique and the qualitative and quantitative information of important parameters |
| | √ | Applicable | ☐ | Not applicable |
Equity instrument
investment | | Fair value at end
of year | | Valuation
techniques | | Unobservable
Inputs | | Range interval
(weighted average) | |
| Dalian Wanda Commercial Management Group Co., Ltd. | | June 30, 2024: 3,297,681,281.00 | | Market approach | | Price-to-book ratio, liquidity discount | | Lower price-to-book ratio, higher liquidity discount, lower fair value | |
| | | December 31, 2023: 3,646,595,814.39 | | Market approach | | Price-earnings ratio, liquidity discount | | Lower price-earnings ratio, higher liquidity discount, and lower fair value | |
| Advantage Solutions Inc. | | June 30, 2024: 348,110,366.74 | | Market approach | | Marketability Discount | | Higher liquidity discount, lower fair value | |
| | | December 31, 2023: 388,932,227.74 | | Market approach | | Marketability Discount | | Higher liquidity discount, lower fair value | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | June 30, 2024: 4,884,304.85 | | Market approach | | Price-to-book ratio | | Lower price-to-book ratio, lower fair value | |
| | | December 31, 2023: 4,884,304.85 | | Market approach | | Price-to-book ratio | | Lower price-to-book ratio, lower fair value | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 5. | Continuous tertiary fair value calculating projects, adjustment information among book values at term start and term end as well as sensitivity analysis on unobserved parameters |
| | √ | Applicable | ☐ | Not applicable |
| | | Opening
balance | | Other changes | | Transferred-
out from
level 3 | | Current gains
or losses are
recognized in
profit or loss | | Closing balance | | Changes in
unrealized gains
or losses on
assets held at
the end of the
year that are
recognized in
profit or loss | |
| Equity instrument investment | | 388,932,227.74 | | | | | | -40,821,861.00 | | 348,110,366.74 | | -40,821,861.00 | |
| Other non-current financial assets | | 3,651,480,119.24 | | -348,914,533.39 | | | | | | 3,302,565,585.85 | | | |
| Total | | 4,040,412,346.98 | | -348,914,533.39 | | | | -40,821,861.00 | | 3,650,675,952.59 | | -40,821,861.00 | |
| 6. | For continuous fair value calculating items, the transfer reasons and the policy of determining the transfer time point shall be described if transferring occurs among levels in the term |
| | ☐ | Applicable | √ | Not applicable |
| 7. | Estimate technology change occurred in the current year and change reasons |
| | ☐ | Applicable | √ | Not applicable |
| 8. | Financial asset not measured in fair value and fair value of financial liabilities |
| | √ | Applicable | ☐ | Not applicable |
| | | Carrying value | | Fair value | |
| Financial liabilities | | | | | |
| Non-current liabilities due within one year | | 350,086,641.67 | | 348,867,651.20 | |
The Management has assessed cash and cash equivalents, loans and advances, accounts receivable financing, accounts receivable, and accounts payable, among others, and determined that due to their short remaining terms, their fair values are approximately equal to their carrying amounts.
Fair value refers to the amount at which both parties to a transaction who are familiar with the condition exchange their assets or clear off their debts under fair conditions instead of the amount induced by forced selling or liquidation. The following methods and assumptions are used to estimate the fair values.
Long-term receivables, long and short-term borrowings, etc., are valued at fair value using the discounted cash flow method, using the market yield of other financial instruments with similar contractual terms, credit risks, and remaining maturities as the discount rate. On December 31, 2023, the Group assessed the self-non-compliance risk of borrowings, both long-term and short-term, as not significant.
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| XIV. | Affiliated Parties and Affiliated Transactions |
| 1. | Parent company of the Company |
| | ☐ | Applicable | √ | Not applicable |
| 2. | Subsidiaries of the Company |
For details on the Company’s subsidiaries, please refer to the notes
| | √ | Applicable | ☐ | Not applicable |
For details of subsidiaries, please refer to Section X.1. Equity in subsidiaries.
| 3. | Cooperative enterprises and joint ventures of the Company |
See Note for significant cooperative enterprises and joint ventures of the Company
| | √ | Applicable | ☐ | Not applicable |
For details of important cooperative enterprises and joint venture, please refer to section X, 3, Equities in Cooperative Enterprises and Joint Venture
The information of other cooperative enterprises and joint ventures that have related-party transaction with the Company in this term, or had related-party transaction with the Company at earlier term and have formed balances
| | √ | Applicable | ☐ | Not applicable |
Names of cooperative enterprises
and joint ventures | | Relation to the Company |
| Yonghui Fresh Food Development Co., Ltd. | | The Group’s shareholding ratio of 32.33% |
| Yonghui Yunjin Technology Co., Ltd. | | The Group holds a 35.00% stake in the subsidiary. |
| Zhongbai Holdings Group Co., Ltd. | | The Group’s shareholding ratio of 9.85% |
| Fujian OneBank Limited | | The Group’s shareholding ratio of 29.80% |
| Chengdu Hongqi Chain Co., Ltd. | | The Group’s shareholding ratio of 21.00% |
| Xiangcun Gaokao Agricultural Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Fuzhou Yijiu San San Bean Products Co., Ltd. | | The Group’s shareholding ratio of 42.00% |
| Beijing Friendship Messenger Trading Co., Ltd. | | The Group’s shareholding ratio of 30.00% |
| Fujian Minwei Industrial Co., Ltd. | | The Group’s shareholding ratio of 17.59% |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | The Group’s shareholding ratio of 20.00% |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 40.00% |
| 1233 International Supply Chain Management Co., Ltd. | | The Group’s shareholding ratio of 40.00% |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. | | The Group’s shareholding ratio of 15.53% |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | The Group’s shareholding ratio of 9.32% |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| 4. | Other affiliated parties |
| | √ | Applicable | ☐ | Not applicable |
| Name of other affiliated parties | | Relationship of other affiliated
parties with the Company |
| Tencent Technology (Shenzhen) Co., Ltd | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Shenzhen Tencent Computer System Co., Ltd. | | Related company of shareholder Linzhi Tencent Technology Co., Ltd., holding 5.27% equity of the Company |
| Songyuan Rongtong Real Estate Development Co., Ltd. | | Minority shareholder of the Company’s sub-subsidiary |
| PARKnSHOP (China) Investment Co., Ltd. | | Minority shareholder of the Company’s subsidiary |
| Beijing Jingdong Century Trade Co., Ltd. | | Enterprise holding an 8.11% equity interest in the Company |
| Beijing Jingdong Century Information Technology Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.21% equity in the Company |
| Jiangsu Jingdong Information Technology Co., Ltd. | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.21% equity in the Company |
| Dada Group Limited | | Entities controlled by the ultimate controlling party of Beijing Jingdong Century Trading Co., Ltd. and Suqian Hanbang Investment Management Co., Ltd., which together hold a total of 13.21% equity in the Company |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | |
| Name of other affiliated parties | | Relationship of other affiliated
parties with the Company |
| Sanming Xuanhui Property Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Companies controlled by Zhang Xuansong, a natural person holding 8.72% equity interest in the Company |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. | | Original cooperative enterprise of the Company |
| Origin Country Network Technology (Shanghai) Co., Ltd. | | Original cooperative enterprise of the Company |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | Companies in which the Company holds a 15% equity interest |
| Directors, Supervisors, Chief Financial Officer, and Board Secretary | | Key Management Staff |
| Zhang Xuansong | | Natural person holding an 8.72% equity interest in the Company |
| 5. | Affiliated transactions |
| (1). | Related transactions for purchasing and selling commodities and providing and accepting labor service |
Table for goods procurement/labor service acceptance
| | √ | Applicable | ☐ | Not applicable |
| | | | | Unit: Yuan Currency: RMB | |
| | | | | | |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | Amount of
last period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Commodity purchase | | 463,510,123.48 | | 733,580,585.67 | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Commodity purchase | | 362,183,030.12 | | 307,843,225.89 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Commodity purchase | | 245,161,150.21 | | 180,928,778.86 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Commodity purchase | | 434,352,578.47 | | 496,006,867.85 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Commodity purchase | | | | 3,704,000.35 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Commodity purchase | | | | 6,997.83 | |
| Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | Commodity purchase | | 14,738,401.52 | | 18,211,966.51 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Commodity purchase | | | | 7,471,015.84 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | Amount of
last period | |
| Beijing Jingdong Century Trade Co., Ltd. | | Commodity purchase | | 80,089,699.33 | | 47,300,407.38 | |
| Fujian Minwei Industrial Co., Ltd. | | Commodity purchase | | 35,124.96 | | 94,253.03 | |
| Dada Group Limited and its subsidiaries | | Labor service acceptance | | 150,070,067.67 | | 219,407,022.42 | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Labor service acceptance | | 4,557,169.83 | | 5,622,211.00 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | 3,644,824.25 | | 31,647.89 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | | | 15,844,626.82 | |
| Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | Labor service acceptance | | 72,615,430.85 | | 66,989,588.97 | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | Labor service acceptance | | 38,806,621.80 | | 80,331,785.76 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Labor service acceptance | | 226,140.37 | | | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Labor service acceptance | | 6,770,362.48 | | 8,279,235.31 | |
| Chengdu Hongqi Chain Co., Ltd. | | Labor service acceptance | | | | 110,745.21 | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Labor service acceptance | | 1,215,707.27 | | | |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Labor service acceptance | | 777,236.50 | | | |
| Shenzhen Tencent Computer System Co., Ltd. | | Labor service acceptance | | 797,020.93 | | | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | Labor service acceptance | | 750,843.59 | | | |
| Beijing Jingdong Century Information Technology Co., Ltd. | | Labor service acceptance | | 374,355.53 | | | |
| PARKnSHOP (China) Investment Co., Ltd. | | Usage fee for funds | | 1,107,512.42 | | 1,519,033.70 | |
| Tencent Cloud Computing (Beijing) Co., Ltd. | | Procurement of assets | | | | 5,445,769.70 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Procurement of assets | | 28,539.18 | | 628,664.57 | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | Procurement of assets | | 37,882.12 | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Table for goods sale/labor service rendering
| | √ | Applicable | ☐ | Not applicable |
| | | | | Unit: Yuan Currency: RMB | |
| | | | | | |
| Affiliated parties | | Content of related
transaction | | Amount of
current period | | Amount of last
period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Sales of goods | | 29,182,846.19 | | 36,219,540.62 | |
| Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | Sales of goods | | 529,200.40 | | 599,676.35 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Sales of goods | | 5,224,591.89 | | 885,118.70 | |
| Beijing JD Century Trading Co., Ltd. and its subsidiaries | | Sales of goods | | 1,510,665.14 | | 51,336,794.78 | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Provision of labor services | | 1,702,373.35 | | 6,469,633.53 | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Provision of labor services | | 3,264,671.48 | | 6,027,312.07 | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | Provision of labor services | | 37,735.85 | | 40,371.70 | |
| Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | Provision of labor services | | 14,150.94 | | | |
| Shanghai Xuanhui Business Service Technology Co., Ltd. | | Provision of labor services | | 106,132.08 | | 70,754.72 | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Provision of labor services | | | | 4,575.07 | |
| Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | Provision of labor services | | | | 10,188.68 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Provision of labor services | | | | 223,290.11 | |
| Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | Provision of labor services | | 31,698.11 | | 28,679.30 | |
| Tencent Technology (Shenzhen) Co., Ltd | | Provision of labor services | | | | 1,596.82 | |
| Fujian OneBank Limited | | Provision of labor services | | | | 618,236.97 | |
| Beijing Friendship Messenger Trading Co., Ltd. | | Provision of labor services | | 115,302.16 | | 108,018.87 | |
| Fujian OneBank Limited | | Interest income | | 2,790,353.03 | | 11,129,694.80 | |
| Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | Interest income | | | | 931,572.97 | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | Interest income | | | | 1,227,526.38 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Content of related | | Amount of | | | Amount of last | |
| Affiliated parties | | transaction | | current period | | | period | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | Interest income | | | | | | | 11,106.69 | |
Affiliated transaction description on purchase and sale of goods, supply and labor service acceptance
| | ☐ | Applicable | √ | Not applicable |
| (2). | Related entrusted management/contracting and mandatory management/outsourcing conditions |
Table for trustee management and contracting of the Company:
| | ☐ | Applicable | √ | Not applicable |
Description of the condition of affiliated trusteeship/contracting
| | ☐ | Applicable | √ | Not applicable |
Table for entrusting management and contracting-out of the Company:
| | ☐ | Applicable | √ | Not applicable |
Description on affiliated management/contracting condition
| | ☐ | Applicable | √ | Not applicable |
The Company is the lessor:
| | √ | Applicable | ☐ | Not applicable |
| | | | | Unit: Yuan Currency: RMB | |
| | | | | Confirmed | | | Confirmed | |
| | | | | leasing income | | | leasing income | |
| | | | | in current | | | in previous | |
| Name of lessee | | Type of leased assets | | period | | | period | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse leasing | | | 10,369,460.28 | | | | 10,966,106.06 | |
| Yonghui Yunjin Technology Co., Ltd. | | Office land – Chongqing Xuanhui Real Estate Company | | | 52,998.51 | | | | | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Warehouse leasing | | | 205,605.40 | | | | | |
| 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | Commercial land – Fuzhou MIXC | | | | | | | 2,128,974.45 | |
| Fujian Lingyu Jinhua Brand Management Co., Ltd. and its subsidiaries | | Commercial land – Chongqing Xuanhui Real Estate Company | | | | | | | 380,462.25 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The Company as the Leasee:
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | Simplified rental fees for | | | Variable lease payments not | | | | | | | | | | | | | | | |
| | | | | short-term leases and low-value | | | included in the measurement of | | | | | | | Interest expense on lease | | | | | | |
| | | | | asset leases (if applicable) | | | lease liabilities (if applicable) | | Rent paid | | | liabilities assumed | | | Increased right-of-use assets | |
| | | | | Amount of | | Amount of | | | Amount of | | Amount of | | Amount of | | Amount of | | | Amount of | | Amount of | | | Amount of | | Amount of | |
| Name of Lessor | | Type of leased assets | | current period | | last period | | | current period | | last period | | current period | | last period | | | current period | | last period | | | current period | | last period | |
| Yonghui (Pucheng) Real Estate Development Co., Ltd. | | Commercial land – Pucheng Xinghua Store | | | | | | | | | | | 1,411,739.92 | | 1,344,659.40 | | | 480,074.74 | | 519,835.51 | | | | | | |
| Zhang Xuansong | | Commercial land – Daru Shijia Store | | | | | | | | | | | / | | 2,978,952.68 | | | / | | 584,115.86 | | | | | | |
| Zhang Xuansong | | Office building – Zuohai Office Building | | | | | | | | | | | 1,683,251.43 | | 1,683,251.43 | | | 153,488.55 | | 19,385.99 | | | 15,484,756.27 | | 3,330,930.47 | |
| Fuzhou Xuanhui Property Development Co., Ltd. | | Commercial land – Fuzhou Minhou Nantong Branch Store | | | | | | | | | | | 669,317.10 | | 455,662.78 | | | 584,194.58 | | 576,442.13 | | | | | | |
| Sanming Xuanhui Property Development Co., Ltd. | | Commercial land – Yongjia Tiandi Store | | | | | | | | | | | 730,514.28 | | 365,257.14 | | | 470,428.86 | | 461,935.21 | | | | | | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Commercial land and office building – Park Store | | | | | | | | | | | 2,270,112.76 | | 2,185,161.14 | | | 489,090.28 | | 1,249,663.21 | | | 33,428.57 | | 6,150,237.91 | |
| Fujian Xuanhui Real Estate Development Co., Ltd. | | Commercial land – Quangang Yongjia Store, Quanzhou | | | | | | | | | | | 1,099,148.28 | | 1,099,148.28 | | | 572,077.27 | | 593,198.63 | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse Leasing – Beijing Logistics Warehouse | | 2,587,155.96 | | 2,587,155.96 | | | | | | | 2,587,155.96 | | 2,587,155.96 | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse Leasing – Shaanxi Logistics Warehouse | | 36,628.69 | | | | | | | | | 36,628.69 | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | Warehouse Leasing – Anhui Logistics Warehouse | | 220,183.50 | | | | | | | | | 220,183.50 | | 146,789.00 | | | | | 11,486.57 | | | | | 844,100.73 | |
Descriptions of affiliated leases condition
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Related-party guarantee |
The Company as the guarantor
| | ☐ | Applicable | √ | Not applicable |
The Company as the guaranteed party
| | ☐ | Applicable | √ | Not applicable |
Description of affiliated guarantee
| | ☐ | Applicable | √ | Not applicable |
| (5). | Fund inter-bank lending for affiliated parties |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | Unit: Yuan Currency: RMB |
| | | Lending | | | | | | | |
| Affiliated parties | | amount | | | Starting date | | Due date | | Explanation |
| Borrowings | | | | | | | | | | |
| PARKnSHOP (China) Investment Co., Ltd. | | | 46,250,000.00 | | | May 9, 2023 | | May 8, 2026 | | Borrowings |
| | | | | | | | | | | |
| | | Lending | | | | | | | |
| Affiliated parties | | amount | | | Starting date | | Due date | | Explanation |
| Lendings | | | | | | | | | | |
| Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 259,602.00 | | | January 5, 2024 | | May 17, 2025 | | Group borrowings |
| (a) | In the fiscal year 2023, the Group’s subsidiary extended loans to PARKnSHOP (China) Investment Co., Ltd. totaling RMB46,250,000.00, with an interest rate of 4.75% and due on May 8, 2026. The original total loan amount was RMB46,250,000.00, with an interest rate of 4.75% and a start date of May 9, 2019, due on May 8, 2023. |
| (b) | In 2024, Fuzhou Yijiu Sansan Bean Products Co., Ltd. and its subsidiaries borrowed a total of RMB259,602.00 from the Group, with an annual interest rate of 4.785%. In 2023, Fuzhou Yijiu Sansan Bean Products Co., Ltd. and its subsidiaries borrowed a total of RMB393,862.51 from the Group, with an annual interest rate of 4.785% -4.875%. The earliest start date is May 11, 2023, and the latest due date is November 27, 2024. The balance of RMB12,167,876.40 will expire on February 24, 2024 at the latest. |
| (6). | Assets transferring and debt restructuring of affiliated parties |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (7). | Remuneration for key management personnel |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: ‘0,000 Yuan Currency: RMB | |
| | | | |
| | | Amount of | | | Amount of | |
| Items | | current period | | | last period | |
| Remuneration for key management personnel | | | 971.80 | | | | 1,322.56 | |
| (8). | Other related transactions |
| | ☐ | Applicable | √ | Not applicable |
| 6. | Unsettled items related to receivables, payables, and affiliated parties |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | |
| | | | | Closing balance | | | Opening balance | |
| | | | | Book | | | Bad debt | | | Book | | | Bad debt | |
| Items | | Affiliated parties | | balance | | | provision | | | balance | | | provision | |
| Account receivable | | Dada Group Limited and its subsidiaries | | | 14,766,910.10 | | | | 147,669.10 | | | | 34,181,676.55 | | | | 341,816.77 | |
| Account receivable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 5,526,578.21 | | | | 55,265.78 | | | | 898,414.49 | | | | 8,984.14 | |
| Account receivable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 1,518,962.81 | | | | 15,189.63 | | | | 1,443,456.91 | | | | 14,434.57 | |
| Account receivable | | Jiangsu Jingdong Information Technology Co., Ltd. | | | 284,794.41 | | | | 2,847.94 | | | | 284,794.41 | | | | 2,847.94 | |
| Account receivable | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 3,836,713.40 | | | | 38,367.13 | | | | 4,964,630.51 | | | | 49,646.31 | |
| Account receivable | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 1,145,222.48 | | | | 11,452.22 | | | | 6,014,103.25 | | | | 60,141.03 | |
| Other receivables | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 14,081,094.25 | | | | 14,081,094.25 | | | | 13,821,492.25 | | | | 13,821,492.25 | |
| Other receivables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 100,000.00 | | | | 1,000.00 | | | | 100,000.00 | | | | 1,000.00 | |
| Other receivables | | Fujian OneBank Limited | | | | | | | | | | | 866,128.40 | | | | 8,661.28 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing balance | | | Opening balance | |
| | | | | Book | | | Bad debt | | | Book | | | Bad debt | |
| Items | | Affiliated parties | | balance | | | provision | | | balance | | | provision | |
| Other receivables | | Dada Group Limited and its subsidiaries | | | 25,119.99 | | | | 251.20 | | | | 59,547.55 | | | | 595.48 | |
| Other receivables | | Beijing Jingdong Century Trade Co., Ltd. | | | 100,000.00 | | | | 1,000.00 | | | | 100,000.00 | | | | 1,000.00 | |
| Other receivables | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 80,000.00 | | | | 800.00 | | | | | | | | | |
| Other receivables | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | | 12,963.40 | | | | 129.63 | | | | | | | | | |
| Other receivables | | Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | 1,412,271.74 | | | | 14,122.72 | | | | 3,969,595.64 | | | | 39,695.96 | |
| Prepaid accounts | | Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | | 45,254.57 | | | | | | | | 3,451,908.28 | | | | | |
| Prepaid accounts | | Beijing Friendship Messenger Trading Co., Ltd. | | | 34,526,826.22 | | | | | | | | 65,514,899.66 | | | | | |
| Prepaid accounts | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 13,821,422.50 | | | | | | | | 14,798,339.15 | | | | | |
| Prepaid accounts | | Zhang Xuansong | | | 618,685.15 | | | | | | | | | | | | | |
| Prepaid accounts | | Dada Group Limited and its subsidiaries | | | 821,017.72 | | | | | | | | 785,961.95 | | | | | |
| Prepaid accounts | | Origin Country Network Technology (Shanghai) Co., Ltd. | | | | | | | | | | | 27,422.02 | | | | | |
| Prepaid accounts | | Shanghai Xuanhui Business Service Technology Co., Ltd. | | | | | | | | | | | 16,249.99 | | | | | |
| Prepaid accounts | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 11,066.00 | | | | | | | | 11,066.00 | | | | | |
| Prepaid accounts | | Shenzhen Tencent Computer System Co., Ltd. | | | | | | | | | | | 854,716.98 | | | | | |
| Factoring receivable | | Fujian Minwei Industrial Co., Ltd. | | | | | | | | | | | 15,426,841.79 | | | | 4,628,052.54 | |
| Factoring receivable | | Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | | | | | | | | | | 14,108,990.51 | | | | 8,465,394.31 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | √ | Applicable | ☐ | Not applicable |
| | | | | Unit: Yuan Currency: RMB | |
| | | | | | |
| | | | | Closing book | | | Opening | |
| Project name | | Affiliated parties | | balance | | | book balance | |
| Accounts payable | | Yonghui Fresh Food Development Co., Ltd. and its subsidiaries | | | 184,768,108.45 | | | | 229,634,343.19 | |
| Accounts payable | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 106,340,804.39 | | | | 122,803,359.27 | |
| Accounts payable | | Xiangcun Gaoke Agricultural Co., Ltd. and its subsidiaries | | | 123,624.48 | | | | 125,955.03 | |
| Accounts payable | | Fujian Xingyuan Agriculture and Animal Husbandry Technology Co., Ltd. and its subsidiaries | | | 1,061,874.21 | | | | 1,686,624.04 | |
| Accounts payable | | Dada Group Limited and its subsidiaries | | | 5,556,279.36 | | | | 14,294,741.03 | |
| Accounts payable | | Fuzhou Yijiu San San Bean Products Co., Ltd. and its subsidiaries | | | 2,376.69 | | | | 2,376.69 | |
| Accounts payable | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 127,142.17 | | | | 105,692.17 | |
| Accounts payable | | Fujian Minwei Industrial Co., Ltd. and its subsidiaries | | | 40,586.73 | | | | 40,586.73 | |
| Accounts payable | | Origin Country Network Technology (Shanghai) Co., Ltd. | | | | | | | 52,775.50 | |
| Accounts payable | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 7,694.03 | | | | 221,734.15 | |
| Other payables | | Dada Group Limited and its subsidiaries | | | 33,341,458.78 | | | | 30,723,535.72 | |
| Other payables | | Shanghai Xuanhui Business Service Technology Co., Ltd. and its subsidiaries | | | 10,124,587.83 | | | | 29,694,435.19 | |
| Other payables | | Yunda Online (Shenzhen) Technology Development Co., Ltd. and its subsidiaries | | | 14,029,846.33 | | | | 18,188,135.48 | |
| Other payables | | Songyuan Rongtong Real Estate Development Co., Ltd. | | | 1,778,060.52 | | | | 1,778,060.52 | |
| Other payables | | Zhang Xuansong | | | | | | | 1,880,742.05 | |
| Other payables | | Fujian Xuanhui Real Estate Development Co., Ltd. and its subsidiaries | | | 2,364,085.73 | | | | 1,957,896.72 | |
| Other payables | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 352,488.32 | | | | 360,465.62 | |
| Other payables | | Fujian Lianchuang Zhiye Construction Engineering Co., Ltd. | | | 3,583,222.42 | | | | 5,936,687.77 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | Closing book | | | Opening | |
| Project name | | Affiliated parties | | balance | | | book balance | |
| Other payables | | 1233 International Supply Chain Management Co., Ltd. and its subsidiaries | | | 4,557,182.69 | | | | 2,453,667.80 | |
| Other payables | | Yonghui Yunjin Technology Co., Ltd. and its subsidiaries | | | 12,086,596.06 | | | | | |
| Contract liabilities | | Beijing JD Century Trading Co., Ltd. and its subsidiaries | | | 244,184.92 | | | | 174,642.44 | |
| Contract liabilities | | Zhongbai Holdings Group Co., Ltd. and its subsidiaries | | | 4,211,475.72 | | | | 4,199,706.23 | |
| Lease liabilities | | Fujian Xuanhui Real Estate Development Co., Ltd. | | | 43,116,037.94 | | | | 44,738,883.88 | |
| Lease liabilities | | Zhang Xuansong | | | 33,342,178.29 | | | | 20,320,479.21 | |
| Lease liabilities | | Fuzhou Xuanhui Property Development Co., Ltd. | | | 24,436,332.68 | | | | 24,521,455.20 | |
| Lease liabilities | | Yonghui (Pucheng) Real Estate Development Co., Ltd. | | | 19,579,741.55 | | | | 20,511,406.73 | |
| Lease liabilities | | Sanming Xuanhui Property Development Co., Ltd. | | | 19,634,154.02 | | | | 19,894,239.44 | |
| Other non-current liabilities | | PARKnSHOP (China) Investment Co., Ltd. | | | 46,977,316.08 | | | | 46,931,643.83 | |
| | √ | Applicable | ☐ | Not applicable |
| | | | | Unit: Yuan Currency: RMB | |
| | | | | | |
| | | | | Closing book | | | Opening book | |
| Project name | | Affiliated parties | | balance | | | balance | |
| Cash deposits and balances | | Fujian OneBank Limited | | | 300,043,925.36 | | | | 300,053,572.33 | |
| 7. | Commitment of affiliated parties |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| 1. | Various equity instruments |
| | ☐ | Applicable | √ | Not applicable |
Outstanding stock options or other equity instruments at the end of the period
| | ☐ | Applicable | √ | Not applicable |
| 2. | Condition of equity-settled share-based payment |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| 3. | Condition of cash-settled share-based payment |
| | ☐ | Applicable | √ | Not applicable |
| 4. | Share-based payment expenses for the current period |
| | ☐ | Applicable | √ | Not applicable |
| 5. | Condition of modification and termination of share-based payment |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| XVI. | Commitments and Contingencies |
| | ☐ | Applicable | √ | Not applicable |
| (1). | Important contingencies existed on the balance sheet date |
| | ☐ | Applicable | √ | Not applicable |
| (2). | The descriptions shall be given to significant contingencies which do not require separate disclosure by the Company: |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| XVII. | Events Occurring after the Balance Sheet Date |
| 1. | Important non-adjusting events |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| 4. | Description of other events occurring after the balance sheet date |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| XVIII. | Other Important Matters |
| 1. | Correction of accounting error at earlier stage |
| (1). | Retrospective restatement |
| | ☐ | Applicable | √ | Not applicable |
| (2). | Prospective application |
| | ☐ | Applicable | √ | Not applicable |
| 2. | Major debt restructuring |
| | ☐ | Applicable | √ | Not applicable |
| (1). | Non-monetary assets exchange |
| | ☐ | Applicable | √ | Not applicable |
| (2). | Other assets replacements |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| (1). | Determination basis and accounting policy of reporting division |
| | ☐ | Applicable | √ | Not applicable |
| (2). | Financial information of report segments |
| | ☐ | Applicable | √ | Not applicable |
| (3). | The Company shall explain the reason if there is no report segment or it can not disclose the total assets and total balance in the report segments. |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| 7. | Other significant transactions and matters having effect on investor’s decision |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| XIX. | Notes to Main Items in the Parent Company’s Financial Statements |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Closing book | | | Opening book | |
| Aging | | balance | | | balance | |
| Within 1 year | | | 26,699,866.70 | | | | 74,112,527.39 | |
| Sub-total within one year | | | 26,699,866.70 | | | | 74,112,527.39 | |
| 1-2 years | | | 567,124.20 | | | | 265,984.71 | |
| 2-3 years | | | 303,395.81 | | | | 728,520.59 | |
| Over 3 years | | | 759,574.59 | | | | 330,998.34 | |
| Total | | | 28,329,961.30 | | | | 75,438,031.03 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2). | Classified disclosure by bad-debt provision method |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | | | | | | | | |
| | | Closing balance | | | Opening balance | |
| | | Book balance | | | Bad debt provision | | | | | | Book balance | | | Bad debt provision | | | | |
| | | | | | | | | | | | Proportion of | | | | | | | | | | | | | | | Proportion of | | | | |
| | | | | | | | | | | | bad-debt | | | Carrying | | | | | | | | | | | | bad-debt | | | Carrying | |
| Category | | Amount | | | Ratio | | | Amount | | | provision | | | value | | | Amount | | | Proportion | | | Amount | | | provision | | | value | |
| | | | | | % | | | | | | (%) | | | | | | | | | (%) | | | | | | (%) | | | | |
| Provision made on a collective basis | | 28,329,961.30 | | | 100.00 | | | 2,358,613.08 | | | 8.33 | | | 25,971,348.22 | | | 75,438,031.03 | | | 100.00 | | | 5,720,723.07 | | | 7.58 | | | 69,717,307.96 | |
| Among which: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from sales | | 25,967,860.03 | | | 91.67 | | | 1,663,945.98 | | | 6.41 | | | 24,303,914.05 | | | 73,450,045.37 | | | 97.36 | | | 5,184,891.32 | | | 7.06 | | | 68,265,154.05 | |
| Supplier service fees and rentals | | 1,505,506.79 | | | 5.31 | | | 686,101.16 | | | 45.57 | | | 819,405.63 | | | 1,056,996.54 | | | 1.41 | | | 526,521.87 | | | 49.81 | | | 530,474.67 | |
| Portfolio 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accounts receivable from affiliated parties | | 856,594.48 | | | 3.02 | | | 8,565.94 | | | 1.00 | | | 848,028.54 | | | 930,989.12 | | | 1.23 | | | 9,309.88 | | | 1.00 | | | 921,679.24 | |
| Total | | 28,329,961.30 | | | / | | | 2,358,613.08 | | | / | | | 25,971,348.22 | | | 75,438,031.03 | | | / | | | 5,720,723.07 | | | / | | | 69,717,307.96 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Provision of bad debts due to specific consideration:
| | ☐ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | √ | Applicable | ☐ | Not applicable |
Combined provision items: Combination 1
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Closing balance | |
| | | | | | | | | Proportion | |
| | | Account | | | Bad debt | | | of bad-debt | |
| Name | | receivable | | | provision | | | provision | |
| | | | | | | | | (%) | |
| Sub-total within one year | | | 26,246,694.27 | | | | 1,574,801.71 | | | | 6.00 | |
| 1-2 years | | | 564,770.20 | | | | 146,840.25 | | | | 26.00 | |
| 2-3 years | | | 63,202.20 | | | | 29,705.03 | | | | 47.00 | |
| Over 3 years | | | 598,700.15 | | | | 598,700.15 | | | | 100.00 | |
| Total | | | 27,473,366.82 | | | | 2,350,047.14 | | | | 8.55 | |
Explanation of the provision for bad debt based on portfolio composition:
| | ☐ | Applicable | √ | Not applicable |
Combined provision items: Combination 2
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Closing balance | |
| | | | | | | | | Proportion | |
| | | Account | | | Bad debt | | | of bad-debt | |
| Name | | receivable | | | provision | | | provision | |
| | | | | | | | | (%) | |
| Receivable related parties | | | 856,594.48 | | | | 8,565.94 | | | | 1.00 | |
| Total | | | 856,594.48 | | | | 8,565.94 | | | | 1.00 | |
Explanation of the provision for bad debt based on portfolio composition:
| | √ | Applicable | ☐ | Not applicable |
Please refer to V, 13 for details on accounts receivable
Provision for bad debts based on the general model of expected credit losses
| | ☐ | Applicable | √ | Not applicable |
Basis for stage classification and bad debt provision ratio
None
Description of significant changes in the book balance of accounts receivable due to changes in loss provision in the current period:
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (3). | Situation of the provision of bad debts |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered | | | Charge-off | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | or Reversed | | | or write-off | | | changes | | | balance | |
| Bad-debt provision for accounts receivable | | | 5,720,723.07 | | | | | | | | 3,359,097.37 | | | | 3,012.62 | | | | | | | | 2,358,613.08 | |
| Total | | | 5,720,723.07 | | | | | | | | 3,359,097.37 | | | | 3,012.62 | | | | | | | | 2,358,613.08 | |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ☐ | Applicable | √ | Not applicable |
| (4). | Receivables actually verified and cancelled in the current period |
| | √ | Applicable | ☐ | Not applicable |
| Unit: Yuan Currency: RMB | |
| | |
| Items | | Write-off amount | |
| Accounts receivable actually written off | | | 3,012.62 | |
Significant write-off of accounts receivable during the year
| | ☐ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of receivables:
| | ☐ | Applicable | √ | Not applicable |
| (5). | Accounts receivable and contract assets of the top five ending balances collected by the debtor |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | | | | | | | | | | Proportion to | | | | |
| | | | | | | | | | | | the total | | | | |
| | | | | | | | | Closing | | | closing | | | | |
| | | | | | | | | balance of | | | balance of | | | | |
| | | Closing | | | Closing | | | accounts | | | accounts | | | Closing | |
| | | balance of | | | balance of | | | receivable | | | receivable | | | balance of | |
| | | accounts | | | contract | | | and contract | | | and contract | | | bad-debt | |
| Unit name | | receivable | | | assets | | | assets | | | assets | | | provision | |
| | | | | | | | | | | | (%) | | | | |
| Client I | | | 3,283,344.91 | | | | | | | | 3,283,344.91 | | | | 11.59 | | | | 197,000.69 | |
| Client II | | | 2,752,978.00 | | | | | | | | 2,752,978.00 | | | | 9.72 | | | | 165,178.68 | |
| Client III | | | 2,202,411.90 | | | | | | | | 2,202,411.90 | | | | 7.77 | | | | 132,144.71 | |
| Client IV | | | 1,310,462.97 | | | | | | | | 1,310,462.97 | | | | 4.63 | | | | 78,627.78 | |
| Client V | | | 1,087,743.54 | | | | | | | | 1,087,743.54 | | | | 3.84 | | | | 65,264.61 | |
| Total | | | 10,636,941.32 | | | | | | | | 10,636,941.32 | | | | 37.55 | | | | 638,216.47 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
Itemized list
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| Items | | Closing balance | | | Opening balance | |
| Other receivables | | | 9,918,509,928.96 | | | | 10,036,094,493.61 | |
| Total | | | 9,918,509,928.96 | | | | 10,036,094,493.61 | |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
Interest receivable
| (1). | Classification of interest receivable |
| | ☐ | Applicable | √ | Not applicable |
| (2). | Significant overdue interest |
| | ☐ | Applicable | √ | Not applicable |
| (3). | Classified disclosure by bad-debt provision method |
| | ☐ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ☐ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ☐ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ☐ | Applicable | √ | Not applicable |
| (4). | Provision for bad debts based on the general model of expected credit losses |
| | ☐ | Applicable | √ | Not applicable |
| (5). | Situation of the provision of bad debts |
| | ☐ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (6). | Interest on receivables actually written off in the current period |
| | ☐ | Applicable | √ | Not applicable |
Significant accrued interest write-off situations
| | ☐ | Applicable | √ | Not applicable |
Write-off explanation:
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
Dividends receivable
| | ☐ | Applicable | √ | Not applicable |
| (2). | Significant dividend receivable of more than 1 year |
| | ☐ | Applicable | √ | Not applicable |
| (3). | Classified disclosure by bad-debt provision method |
| | ☐ | Applicable | √ | Not applicable |
Provision of bad debts due to specific consideration:
| | ☐ | Applicable | √ | Not applicable |
Explanation for individual bad debt provision:
| | ☐ | Applicable | √ | Not applicable |
Provision of bad debts using provision matrix:
| | ☐ | Applicable | √ | Not applicable |
| (4). | Provision for bad debts based on the general model of expected credit losses |
| | ☐ | Applicable | √ | Not applicable |
| (5). | Situation of the provision of bad debts |
| | ☐ | Applicable | √ | Not applicable |
Where the amount of bad debt provision recovered or turned back in the current period is important:
| | ☐ | Applicable | √ | Not applicable |
| (6). | Dividends on receivables actually written off in the current period |
| | ☐ | Applicable | √ | Not applicable |
Significant accrued dividends write-off situations
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Write-off explanation:
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
Other receivables
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Closing book | | | Opening book | |
| Aging | | balance | | | balance | |
| Within 1 year | | | 9,871,373,632.11 | | | | 9,980,892,464.22 | |
| Sub-total within one year | | | 9,871,373,632.11 | | | | 9,980,892,464.22 | |
| 1-2 years | | | 6,527,861.76 | | | | 15,184,320.75 | |
| 2-3 years | | | 16,797,552.56 | | | | 8,126,621.90 | |
| Over 3 years | | | 42,769,089.87 | | | | 50,151,367.12 | |
| Total | | | 9,937,468,136.30 | | | | 10,054,354,773.99 | |
| (2). | Classification by nature of payment |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Closing book | | | Opening book | |
| Nature of payment | | balance | | | balance | |
| Various types of deposits and guarantees receivable | | | 56,463,557.29 | | | | 58,577,363.02 | |
| Purchases and store petty cash payments | | | 2,666,000.00 | | | | 3,397,659.18 | |
| Receivables from affiliated parties | | | 15,682,502.17 | | | | 17,958,742.01 | |
| Other receivables | | | 14,324,658.23 | | | | 8,004,724.09 | |
| Intra-group receivables | | | 9,848,331,418.61 | | | | 9,966,416,285.69 | |
| Total | | | 9,937,468,136.30 | | | | 10,054,354,773.99 | |
| (3). | Provision of bad debts |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB |
| | | |
| | | Phase I | | Phase II | | Phase III | | | |
| | | | | Expected | | Expected | | | |
| | | | | credit loss | | credit loss | | | |
| | | | | within | | within | | | |
| | | Expected | | the whole | | the whole | | | |
| | | credit loss | | duration | | duration | | | |
| | | over | | (no credit | | (credit | | | |
| | | the next | | impairment | | impairment | | | |
| Bad debt provision | | 12 months | | occurred) | | incurred) | | Total | |
| Balance as of January 1, 2024 | | | 744,551.23 | | | 468,135.19 | | | 17,047,593.96 | | | 18,260,280.38 | |
| Balance as of January 1, 2024 in the current period | | | | | | | | | | | | | |
| – Transferred to Phase II | | | -76,956.32 | | | 76,956.32 | | | | | | | |
| – Transferred to Phase III | | | | | | -535.00 | | | 535.00 | | | | |
| – Reversed to Phase II | | | | | | | | | | | | | |
| – Reversed to Phase I | | | | | | | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | Phase I | | Phase II | | Phase III | | | |
| | | | | Expected | | Expected | | | |
| | | | | credit loss | | credit loss | | | |
| | | | | within | | within | | | |
| | | Expected | | the whole | | the whole | | | |
| | | credit loss | | duration | | duration | | | |
| | | over | | (no credit | | (credit | | | |
| | | the next | | impairment | | impairment | | | |
| Bad debt provision | | 12 months | | occurred) | | incurred) | | Total | |
| Provision of the current period | | | 665,616.20 | | | 7,743.97 | | | 259,602.00 | | | 932,962.17 | |
| Provision reversed in current period | | | 82,192.57 | | | 152,842.64 | | | | | | 235,035.21 | |
| Charge-off of the current period | | | | | | | | | | | | | |
| Write-off of the current period | | | | | | | | | | | | | |
| Other changes | | | | | | | | | | | | | |
| Balance as of June 30, 2024 | | | 1,251,018.54 | | | 399,457.84 | | | 17,307,730.96 | | | 18,958,207.34 | |
Basis for stage classification and bad debt provision ratio
| (1) | The Company handles other receivables using the general model for expected credit losses. On each balance sheet date, the credit risk of these receivables is assessed and categorized into three stages to calculate the expected credit losses. |
The Company respectively measures the expected credit losses of financial instruments in different stages. If the credit risk of a financial instrument has not increased significantly since initial recognition, in the first stage, the Company measures the loss provision based on the expected credit loss within the next 12 months; if the credit risk of a financial instrument has increased significantly after initial recognition but no credit reduction has occurred, in the second stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument; if the financial instrument has suffered credit impairment since initial recognition, in the third stage, the Company measures the loss provision based on the expected credit loss in the whole duration of the instrument.
| (2) | The Company divides other receivables into payment nature and aging portfolio based on credit risk characteristics and calculates expected credit losses based on the portfolio. For other receivables classified into portfolios, the Company calculates expected credit losses based on default risk exposure and expected credit loss rates within the next 12 months or the entire duration. |
| (3) | Provision for significant bad debt risk on other receivables with large amounts and significant impact on profitability. Provision for bad debt is recognized based on the expected credit loss throughout the entire remaining period. |
Explanation of significant changes in the book value of other receivables with provision changes in the current period:
| | ☐ | Applicable | √ | Not applicable |
Basis for provision for bad debt and assessment of significant increase in credit risk of financial instruments during the period:
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (4). | Situation of the provision of bad debts |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Increase and decrease of current period | |
| | | | | | | | | Provision | | | | | | | | | | |
| | | Opening | | | | | | Recovered | | | Charge-off | | | Other | | | Closing | |
| Category | | balance | | | Provision | | | or Reversed | | | or write-off | | | changes | | | balance | |
| Bad-debt provision for other receivables | | | 18,260,280.38 | | | | 932,962.17 | | | | 235,035.21 | | | | | | | | | | | | 18,958,207.34 | |
| Total | | | 18,260,280.38 | | | | 932,962.17 | | | | 235,035.21 | | | | | | | | | | | | 18,958,207.34 | |
Significant reversal or recovery of bad-debt provision of current year is:
| | ☐ | Applicable | √ | Not applicable |
Other disclosures
| (5). | Other receivables actually verified and cancelled of current year |
| | ☐ | Applicable | √ | Not applicable |
Where the other receivables written off is important:
| | ☐ | Applicable | √ | Not applicable |
Descriptions for verification and write-off of other receivables:
| | ☐ | Applicable | √ | Not applicable |
| (6). | Other receivables of top five companies with the greatest closing amount based on the debtor’s categorizing |
| | √ | Applicable | ☐ | Not applicable |
| | | | Unit: Yuan Currency: RMB | |
| | | | | |
| | | | | | | Proportion | | | | | | | | |
| | | | | | | in total | | | | | | | | |
| | | | | | | closing | | | | | | | Closing | |
| | | | | | | balance of | | | | | | | balance of | |
| | | | | | other | | | Nature of | | | | bad-debt | |
| Unit name | | | Closing balance | | | receivables | | | receivable | | Aging | | provision | |
| | | | | | | (%) | | | | | | | | |
| No. 1 | | | | 1,096,247,020.66 | | | | 11.03 | | | Intra-group receivables | | Within 1 year | | | | |
| No. 2 | | | | 1,071,976,622.43 | | | | 10.79 | | | Intra-group receivables | | Within 1 year | | | | |
| No. 3 | | | | 984,305,537.34 | | | | 9.90 | | | Intra-group receivables | | Within 1 year | | | | |
| No. 4 | | | | 750,925,695.77 | | | | 7.56 | | | Intra-group receivables | | Within 1 year | | | | |
| No. 5 | | | | 747,257,783.09 | | | | 7.52 | | | Intra-group receivables | | Within 1 year | | | | |
| Total | | | | 4,650,712,659.29 | | | | 46.80 | | | / | | / | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (7). | Reported under other receivables due to centralized cash management |
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
| 3. | Long-term equity investment |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| | | Closing balance | | | Opening balance | |
| | | | | | Impairment | | | | | | | | | Impairment | | | | |
| Items | | Book balance | | | provision | | | Carrying value | | | Book balance | | | provision | | | Carrying value | |
| Investment in subsidiaries | | | 8,164,707,680.11 | | | | | | | | 8,164,707,680.11 | | | | 8,674,607,680.11 | | | | | | | | 8,674,607,680.11 | |
| Investment in cooperative enterprises and joint ventures | | | 3,924,254,026.93 | | | | 757,903,054.21 | | | | 3,166,350,972.72 | | | | 3,653,918,821.42 | | | | 757,903,054.21 | | | | 2,896,015,767.21 | |
| Total | | | 12,088,961,707.04 | | | | 757,903,054.21 | | | | 11,331,058,652.83 | | | | 12,328,526,501.53 | | | | 757,903,054.21 | | | | 11,570,623,447.32 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (1) | Investment in subsidiaries |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | |
| Investee | | Opening
balance | | Increase in the
current period | | Decrease in
the current
period | | Closing
balance | | Depreciation
provision
accrued in
current period | | Closing
balance of
provision for
impairment | |
| Fujian Yonghui Superstores Co., Ltd. | | 800,000,000.00 | | | | | | 800,000,000.00 | | | | | |
| Chongqing Yonghui Superstores Co., Ltd. | | 714,400,000.00 | | | | | | 714,400,000.00 | | | | | |
| Beijing Yonghui Superstores Co., Ltd. | | 600,000,000.00 | | | | | | 600,000,000.00 | | | | | |
| Liaoning Yonghui Superstores Co., Ltd. | | 600,000,000.00 | | | | | | 600,000,000.00 | | | | | |
| Sichuan Yonghui Store Co., Ltd. | | 1,000,000,000.00 | | | | | | 1,000,000,000.00 | | | | | |
| Jilin Yonghui Superstores Co., Ltd. | | 300,000,000.00 | | | | | | 300,000,000.00 | | | | | |
| Shanghai Yonghui Superstores Co., Ltd. | | 300,000,000.00 | | | | | | 300,000,000.00 | | | | | |
| Anhui Yonghui Superstores Co., Ltd. | | 285,080,000.00 | | | | | | 285,080,000.00 | | | | | |
| Fujian Yonghui Logistics Co., Ltd. | | 285,000,000.00 | | | | | | 285,000,000.00 | | | | | |
| Guangdong PARK&YH Superstores Co., Ltd. | | 370,000,000.00 | | | | | | 370,000,000.00 | | | | | |
| Guizhou Yonghui Superstores Co., Ltd. | | 200,000,000.00 | | | | | | 200,000,000.00 | | | | | |
| Hebei Yonghui Superstores Co., Ltd. | | 200,000,000.00 | | | | | | 200,000,000.00 | | | | | |
| Jiangsu Yonghui Superstores Co., Ltd. | | 200,000,000.00 | | | | | | 200,000,000.00 | | | | | |
| Zhejiang Yonghui Superstores Co., Ltd. | | 120,000,000.00 | | | | | | 120,000,000.00 | | | | | |
| Chengdu Yonghui Business Development Co., Ltd. | | 104,000,000.00 | | | | | | 104,000,000.00 | | | | | |
| Yonghui Logistics Co., Ltd. | | 90,000,000.00 | | | | | | 90,000,000.00 | | | | | |
| Fuzhou Minhou Yonghui Superstores Co., Ltd. | | 89,521,504.19 | | | | | | 89,521,504.19 | | | | | |
| Henan Yonghui Superstores Co., Ltd. | | 80,860,000.00 | | | | | | 80,860,000.00 | | | | | |
| Shanghai Dongzhan International Trade Co., Ltd. | | 59,210,296.00 | | | | | | 59,210,296.00 | | | | | |
| Hubei Yonghui Zhongbai Superstores Co., Ltd. | | 55,000,000.00 | | 100,000.00 | | | | 55,100,000.00 | | | | | |
| Fujian Strait Food Development Co., Ltd. | | 53,000,000.00 | | | | | | 53,000,000.00 | | | | | |
| Fujian Minhou Yonghui Commercial Co., Ltd. | | 50,000,000.00 | | | | | | 50,000,000.00 | | | | | |
| Anhui Yonghui Logistics Co., Ltd. | | 50,000,000.00 | | | | | | 50,000,000.00 | | | | | |
| Shandong Yonghui Superstores Co., Ltd. | | 50,000,000.00 | | | | | | 50,000,000.00 | | | | | |
| Xiamen Yonghui Minsheng Superstores Co., Ltd. | | 41,670,000.00 | | | | | | 41,670,000.00 | | | | | |
| Hunan Yonghui Superstores Co., Ltd. | | 40,000,000.00 | | | | | | 40,000,000.00 | | | | | |
| Fujian Yonghui Commercial Co., Ltd. | | 37,398,045.18 | | | | | | 37,398,045.18 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Investee | | Opening
balance | | Increase in the
current period | | Decrease in
the current
period | | Closing
balance | | Depreciation
provision
accrued in
current period | | Closing
balance of
provision for
impairment | |
| Jiangsu Yonghui Business Management Co., Ltd. | | 30,000,000.00 | | | | | | 30,000,000.00 | | | | | |
| Fuping Yonghui Modern Agricultural Development Co., Ltd. | | 31,010,000.00 | | | | | | 31,010,000.00 | | | | | |
| Yonghui Holdings Co., Ltd. | | 25,277,999.95 | | | | | | 25,277,999.95 | | | | | |
| Ningbo Yonghui Superstores Co., Ltd. | | 20,000,000.00 | | | | | | 20,000,000.00 | | | | | |
| Guangxi Yonghui Superstores Co., Ltd. | | 60,000,000.00 | | | | | | 60,000,000.00 | | | | | |
| Xiamen Yonghui Commercial Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Fujian Yonghui Modern Agriculture Development Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Jiangxi Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Shaanxi Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Shanxi Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Heilongjiang Yonghui Superstores Co., Ltd. | | 100,000,000.00 | | | | | | 100,000,000.00 | | | | | |
| Yunnan Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Ningxia Yonghui Superstores Co., Ltd. | | 60,000,000.00 | | | | | | 60,000,000.00 | | | | | |
| Chongqing Boyuan Xunke Technology Co., Ltd. | | 10,000,000.00 | | | | 10,000,000.00 | | | | | | | |
| Fujian Yongjin Trading Co., Ltd. | | 4,900,000.00 | | | | | | 4,900,000.00 | | | | | |
| Fuping Yunshang Supply Chain Management Co., Ltd. | | 200,000,000.00 | | | | | | 200,000,000.00 | | | | | |
| Guizhou Yonghui Logistics Co., Ltd. | | 50,000,000.00 | | | | | | 50,000,000.00 | | | | | |
| Yonghui Yunjin Technology Co., Ltd. | | 500,000,000.00 | | | | 500,000,000.00 | | | | | | | |
| Xizang Yonghui Superstores Co., Ltd. | | 20,000,000.00 | | | | | | 20,000,000.00 | | | | | |
| Guansu Yonghui Superstores Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Qinghai Yonghui Superstores Co., Ltd. | | 20,000,000.00 | | | | | | 20,000,000.00 | | | | | |
| Beijing Yonghui Technology Co., Ltd. | | 10,000,000.00 | | | | | | 10,000,000.00 | | | | | |
| Fujian Yuntong Supply Chain Co., Ltd. | | 100,000,000.00 | | | | | | 100,000,000.00 | | | | | |
| Fujian Yongyuehui Business Management Co., Ltd. | | 100,000,000.00 | | | | | | 100,000,000.00 | | | | | |
| East China Yonghui Logistics Co., Ltd. | | 50,000,000.00 | | | | | | 50,000,000.00 | | | | | |
| Yonghui Yunchuang Technology Co., Ltd. | | 338,279,834.79 | | | | | | 338,279,834.79 | | | | | |
| Sichuan Huipeng E-commerce Co., Ltd. | | 100,000,000.00 | | | | | | 100,000,000.00 | | | | | |
| Total | | 8,674,607,680.11 | | 100,000.00 | | 510,000,000.00 | | 8,164,707,680.11 | | | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| (2) | Investment in cooperative enterprises and joint ventures |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | | | | | | | | | |
| | | Increase/decrease in the current period | |
| Investment unit | | Opening
balance | | Increased
investment | | Decreased
investment | | Investment
profit and loss recognized
with the
equity method | | Other
comprehensive
income
adjustments | | Other
equity
changes | | Declare the
distribution
of cash
dividends
or
profits | | Provision of
impairment
losses | | Others | | Closing balance | | Closing
balance of
provision for
impairment | |
| I. Cooperative enterprises | | | | | | | | | | | | | | | | | | | | | | | |
| Yonghui Fresh Food Development Co., Ltd. | | 48,054,895.86 | | | | | | -16,348,071.33 | | | | | | | | | | | | 31,706,824.53 | | | |
| Subtotal | | 48,054,895.86 | | | | | | -16,348,071.33 | | | | | | | | | | | | 31,706,824.53 | | | |
| II. Joint ventures | | | | | | | | | | | | | | | | | | | | | | | |
| Chengdu Hongqi Chain Co., Ltd. | | 1,680,000,000.00 | | | | | | 55,981,365.54 | | | | | | -35,414,400.00 | | | | | | 1,700,566,965.54 | | 358,226,870.98 | |
| Fujian OneBank Limited | | 693,629,939.95 | | | | | | 31,728,570.67 | | 6,545,793.66 | | | | | | | | | | 731,904,304.28 | | | |
| Xiangcun Gaokao Agricultural Co., Ltd. | | | | | | | | | | | | | | | | | | | | | | 399,676,183.23 | |
| 1233 International Supply Chain Management Co., Ltd. | | 195,862,085.24 | | | | | | 9,983,006.32 | | | | | | | | | | | | 205,845,091.56 | | | |
| Fujian Minwei Industrial Co., Ltd. | | 118,430,151.93 | | | | | | 9,103,969.47 | | | | | | | | | | | | 127,534,121.40 | | | |
| Fujian Xingyuan Agricultural and Animal Husbandry Technology Co., Ltd. | | 39,513,111.16 | | | | | | -8,498,155.96 | | | | | | | | | | | | 31,014,955.20 | | | |
| Beijing Friendship Messenger Trading Co., Ltd. | | 68,309,218.94 | | | | | | 14,435,065.64 | | | | | | | | | | | | 82,744,284.58 | | | |
| Sichuan Yongchuang Yaohui Supply Chain Management Co., Ltd. | | 52,216,364.13 | | | | | | 3,173,042.89 | | | | | | -4,000,000.00 | | | | | | 51,389,407.02 | | | |
| Yonghui Yunjin Technology Co., Ltd. | | | | | | | | 234,245.40 | | | | | | | | | | 203,410,773.21 | | 203,645,018.61 | | | |
| Subtotal | | 2,847,960,871.35 | | | | | | 116,141,109.97 | | 6,545,793.66 | | | | -39,414,400.00 | | | | 203,410,773.21 | | 3,134,644,148.19 | | 757,903,054.21 | |
| Total | | 2,896,015,767.21 | | | | | | 99,793,038.64 | | 6,545,793.66 | | | | -39,414,400.00 | | | | 203,410,773.21 | | 3,166,350,972.72 | | 757,903,054.21 | |
| (3). | Impairment testing of long-term equity investments |
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Recoverable amount is determined as the net amount of fair value minus disposal costs
| | ☐ | Applicable | √ | Not applicable |
The recoverable amount was determined based on the present value of expected future cash flows
| | ☐ | Applicable | √ | Not applicable |
The reasons for the significant differences between the aforementioned information and the information used in previous years’ impairment tests or external information
| | ☐ | Applicable | √ | Not applicable |
The reasons for significant differences between the information used in previous impairment testing and the actual situation in the current year
| | ☐ | Applicable | √ | Not applicable |
Other notes:
| | ☐ | Applicable | √ | Not applicable |
| 4. | Operating revenues and operating costs |
| (1). | Operating revenue and costs |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | |
| | Amount of current period | | Amount of last period | |
| Items | | Revenue | | Cost | | Revenue | | Cost | |
| Main business | | 2,927,558,099.56 | | 2,607,306,404.18 | | 3,491,588,879.97 | | 3,153,538,358.73 | |
| Other business | | 305,964,099.88 | | 5,307,404.30 | | 216,778,238.69 | | 12,573,258.53 | |
| Total | | 3,233,522,199.44 | | 2,612,613,808.48 | | 3,708,367,118.66 | | 3,166,111,617.26 | |
| (2). | Breakdown of operating revenue and operating cost |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | |
| | | The Company | | Total | |
| Contract classification | | Operating
revenue | | Operating costs | | Operating
revenue | | Operating costs | |
| Product type Fresh and processed products | | 1,913,274,705.78 | | 1,771,366,746.49 | | 1,913,274,705.78 | | 1,771,366,746.49 | |
| Food supplies | | 1,014,283,393.78 | | 835,939,657.69 | | 1,014,283,393.78 | | 835,939,657.69 | |
| Others | | 279,681,383.42 | | 2,243,066.84 | | 279,681,383.42 | | 2,243,066.84 | |
| Lease income | | 26,282,716.46 | | 3,064,337.46 | | 26,282,716.46 | | 3,064,337.46 | |
| Classification by time of transfer of goods Transfer at a certain time point | | 3,043,561,262.97 | | 2,607,306,404.18 | | 3,043,561,262.97 | | 2,607,306,404.18 | |
| Transfer within a certain period of time | | 163,678,220.01 | | 2,243,066.84 | | 163,678,220.01 | | 2,243,066.84 | |
| Lease income | | 26,282,716.46 | | 3,064,337.46 | | 26,282,716.46 | | 3,064,337.46 | |
| Total | | 3,233,522,199.44 | | 2,612,613,808.48 | | 3,233,522,199.44 | | 2,612,613,808.48 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| (3). | Description of performance obligations |
| | ☐ | Applicable | √ | Not applicable |
| (4). | Description of allocating to the residual fulfillment obligations |
| | ☐ | Applicable | √ | Not applicable |
| (5). | Major contract changes or significant adjustment of transaction prices |
| | ☐ | Applicable | √ | Not applicable |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| Items | | Amount of
current period | | Amount of
last period | |
| Long-term equity investment measured by cost method | | 85,114,058.47 | | | |
| Long-term equity investment income measured with equity method | | 99,793,038.64 | | 57,922,149.43 | |
| Investment income for disposing long-term equity investment production | | 48,800,715.92 | | | |
| Investment income of holding trading financial assets | | 111,220.32 | | 230,121.43 | |
| Investment income from disposal of non-current assets | | 42,055,645.75 | | | |
| Total | | 275,874,679.10 | | 58,152,270.86 | |
Other notes:
None
| | ☐ | Applicable | √ | Not applicable |
| XX. | Supplementary Information |
| 1. | Detailed statement of current non-recurring profit and loss |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan Currency: RMB | |
| | | | |
| Items | | Amount | | Explanation | |
| Non-current assets disposal profit and loss, including the charge against of the impairment preparation for withdrawing assets | | 210,097,906.89 | | | |
| Governmental subsidies recognized in the current profits and losses except those that are closely related to the Company’s normal operation, comply with national policies, are entitled under established criteria, and have a continuous impact on the Company’s profit and loss | | 49,296,614.54 | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Items | | Amount | | Explanation | |
| Gain or loss from the fair value changes of financial assets and financial liabilities held by non-financial enterprises, and from the disposal of financial assets and financial liabilities, excluding effective hedging transactions related to the Company’s normal operation | | 9,992,035.81 | | | |
| Other non-operating income and expenditures except the items above | | 10,041,045.43 | | | |
| Less: income tax impact amount | | 26,532,091.61 | | | |
| Impact amount of minority shareholders’ equity (after-tax) | | 7,443,246.44 | | | |
| Total | | 245,452,264.62 | | | |
If items not listed in the “Interpretative Announcement on Non-recurring Gains and Losses for Companies Disclosing Securities Publicly No. 1 – Non-recurring Gains and Losses” are recognized as non-recurring gains and losses which are significant in amount, or if non-recurring gains and losses listed in the “Interpretative Announcement on Non-recurring Gains and Losses for Companies Disclosing Securities Publicly No. 1 – Non-recurring Gains and Losses” are defined as recurring gains and losses, the reasons shall be explained.
| | ☐ | Applicable | √ | Not applicable |
Other disclosures
| | ☐ | Applicable | √ | Not applicable |
| 2. | Returns on equity and earnings per share |
| | √ | Applicable | ☐ | Not applicable |
| | | Weighted
average
return on | | Earnings per share | |
| Profits during the reporting period | | equity | | Basic EPS | | Diluted EPS | |
| | | (%) | | | | | |
| Net profits attributable to the Company’s ordinary shareholders | | 4.53 | | 0.03 | | 0.03 | |
| Net profits attributable to the Company’s ordinary shareholders after the deduction of the non-recurring profits and losses | | 0.49 | | 0.00 | | 0.00 | |
| 3. | Accounting data difference arising from foreign and domestic accounting standards |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| Chairman: Zhang Xuansong |
| Approved by the Board of Directors and submitted on August 22, 2024 |
Revision Information
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| B. | SUPPLEMENTARY FINANCIAL INFORMATION OF THE TARGET GROUP |
Set out below is supplemental financial information of the Target Group for each of the three years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 (the “Relevant Periods”) which is required for an accountants’ report under Chapter 4 of and Appendix D2 to the Listing Rules but not disclosed in the Target Group’s published consolidated financial statements.
| 1. | Maturity analysis of loans and borrowings |
| | | As at | | | | | | | |
| | | June 30, | | As at December 31, | |
| | | 2024 | | 2023 | | 2022 | | 2021 | |
| | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | |
| Carrying amount is repayable as follows: | | | | | | | | | |
| Within one year | | 4,750,627 | | 5,130,520 | | 6,669,727 | | 10,977,588 | |
| More than one year but within two years | | 46,977 | | 349,890 | | 2,070,085 | | 130,152 | |
| More than two years but within five years | | – | | 46,932 | | – | | 890,918 | |
| | | 4,797,604 | | 5,527,342 | | 8,739,812 | | 11,998,658 | |
| 2. | Aging analysis of trade payables |
As of December 31, 2021, 2022, and 2023 and June 30, 2024, the aging of all trade payables are within one year based on the date of the trade payables recognized.
The aggregate amounts of remuneration of the of directors of the Target Group for the years ended December 31, 2021, 2022, and 2023 and the six-month ended June 30, 2024 are as follows:
| | | For the six months ended June 30, 2024 | |
| | | Directors’
fees | | Salaries,
allowances
and other
benefits | | Retirement
scheme
contributions | | Total | |
| | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | |
| Executive directors | | | | | | | | | |
| Mr. Li Songfeng | | – | | 1,817 | | 27 | | 1,844 | |
| Mr. Wu Kaizhi | | – | | 675 | | – | | 675 | |
| Mr. Zhang Xuansong | | – | | 189 | | 17 | | 206 | |
| | | | | | | | | | |
| | | – | | 2,681 | | 44 | | 2,725 | |
| | | | | | | | | | |
| Independent non-executive directors | | | | | | | | | |
| Mr. Liu Kun | | 75 | | – | | – | | 75 | |
| Mrs. Li Xuhong | | 75 | | – | | – | | 75 | |
| Mr. Sun Baowen | | 75 | | – | | – | | 75 | |
| | | | | | | | | | |
| | | 225 | | – | | – | | 225 | |
| | | | | | | | | | |
| Total | | 225 | | 2,681 | | 44 | | 2,950 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | For the year ended December 31, 2023 | |
| | | Directors’
fees | | Salaries,
allowances
and other
benefits | | Retirement
scheme
contributions | | Total | |
| | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | |
| Executive director | | | | | | | | | |
| Mr. Li Songfeng | | – | | 3,634 | | 54 | | 3,688 | |
| Mr. Zhang Xuansong | | – | | 652 | | 33 | | 686 | |
| | | | | | | | | | |
| | | – | | 4,287 | | 88 | | 4,374 | |
| | | | | | | | | | |
| Independent non-executive directors | | | | | | | | | |
| Mr. Liu Kun | | 200 | | – | | – | | 200 | |
| Mrs. Li Xuhong | | 200 | | – | | – | | 200 | |
| Mr. Sun Baowen | | 200 | | – | | – | | 200 | |
| | | | | | | | | | |
| | | 600 | | – | | – | | 600 | |
| | | | | | | | | | |
| Total | | 600 | | 4,287 | | 88 | | 4,974 | |
| | | For the year ended December 31, 2022 | |
| | | Directors’
fees | | Salaries,
allowances
and other
benefits | | Retirement
scheme
contributions | | Total | |
| | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | |
| Executive director | | | | | | | | |
| Mr. Li Songfeng | | – | | 3,917 | | 54 | | 3,971 | |
| Mr. Zhang Xuansong | – | | 635 | | 33 | | 668 | |
| | | – | | 4,552 | | 87 | | 4,639 | |
| | | | | | | | | |
| Independent non-executive directors | | | | | | | | | |
| Mr. Liu Kun | | 200 | | – | | – | | 200 | |
| Mrs. Li Xuhong | | 200 | | – | | – | | 200 | |
| Mr. Sun Baowen | | 200 | | – | | – | | 200 | |
| | | | | | | | | | |
| | | 600 | | – | | – | | 600 | |
| | | | | | | | | | |
| Total | | 600 | | 4,552 | | 87 | | 5,239 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | For the year ended December 31, 2021 | |
| | | Directors’
fees | | Salaries,
allowances
and other
benefits | | Retirement
scheme
contributions | | Total | |
| | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | |
| Executive director | | | | | | | | |
| Mr. Li Guo (Resigned in December 2021) | – | | 5,441 | | 34 | | 5,475 | |
| Mr. Zhang Xuansong | – | | 632 | | 53 | | 4,090 | |
| Mr. Li Songfeng | | – | | 4,037 | | 32 | | 664 | |
| | | | | | | | | | |
| | | – | | 10,110 | | 119 | | 10,229 | |
| | | | | | | | | | |
| Independent non-executive directors | | | | | | | | | |
| Mrs. Fang Qing | | 200 | | – | | – | | 200 | |
| Mr. Liu Xiaopeng | 83 | | – | | – | | 83 | |
| Mrs. Xu Ping | | 200 | | – | | – | | 200 | |
| Mr. Sun Baowen | | 117 | | – | | – | | 117 | |
| | | | | | | | | | |
| | | 600 | | – | | – | | 600 | |
| | | | | | | | | | |
| Total | | 600 | | 10,110 | | 119 | | 10,829 | |
| 4. | Individuals with highest emoluments |
During the years ended December 31, 2021, 2022, and 2023 and the six-months ended June 30, 2024, of the five individuals with the highest emoluments of the Target Group, 1, 1, 1 and 1 is director whose emolument is disclosed in “3. Directors’ emoluments”.
The aggregate of the emoluments in respect of the other 4, 4, 4 and 4 individuals are as follows:
| | | For the
six months
ended
June 30, | | For the year ended December 31, | |
| | | 2024 | | 2023 | | 2022 | | 2021 | |
| | | RMB’000 | | RMB’000 | | RMB’000 | | RMB’000 | |
| Salaries, allowances and other benefits | | 4,623 | | 9,778 | | 10,892 | | 13,070 | |
| Retirement scheme contributions | | 55 | | 163 | | 185 | | 183 | |
| | | | | | | | | | |
| | | 4,678 | | 9,941 | | 11,077 | | 13,253 | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
The emoluments of the above individuals with the highest emoluments are within the following bands:
| | | | | | | | | | |
| | | For the
six months
ended
June 30, | | For the year ended December 31, | |
| | | 2024 | | 2023 | | 2022 | | 2021 | |
| HKD1,000,001 to HKD1,500,000 | | 4 | | – | | – | | – | |
| HKD2,000,001 to HKD2,500,000 | | – | | 1 | | – | | – | |
| HKD2,500,001 to HKD3,000,000 | | – | | 3 | | – | | – | |
| HKD3,000,001 to HKD3,500,000 | | – | | – | | 3 | | 1 | |
| HKD3,500,001 to HKD4,000,000 | | – | | – | | 1 | | 1 | |
| HKD4,000,001 to HKD4,500,000 | | – | | – | | – | | 1 | |
| HKD4,500,001 to HKD5,000,000 | | – | | – | | – | | 1 | |
| | | | | | | | | | |
| | | 4 | | 4 | | 4 | | 4 | |
| C. | DIFFERENCES BETWEEN ACCOUNTING POLICIES ADOPTED BY THE COMPANY (IFRS) AND THE TARGET GROUP (CASBE) |
As described in the section headed “Letter from the Board – Waiver from Strict Compliance with Requirements under the Listing Rules” of this circular, the Company has applied to The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) for, and been granted, a waiver from the requirement to include in this circular an accountants’ report on the Target Group in accordance with Rule 14.67(6)(a)(i) and Chapter 4 of the Rules Governing the Listing of Securities on the Stock Exchange.
Instead, Section A of this Appendix contains a copy of the English translation of:
| (a) | Consolidated financial statements of the Target Group for the three financial years ended December 31, 2021, 2022 and 2023, which were prepared in accordance with CASBE and audited by Ernst & Young Hua Ming LLP (Special General Partnership) (安永華明會計師事務所(特殊普通合夥)) (“EY”); and |
| (b) | Unaudited interim consolidated financial statements of the Target Group for the six months ended June 30, 2024, which were prepared in accordance with CASBE. |
The financial information included in Section A of this Appendix are referred hereinafter as “Target Group Historical Financial Information”. The Target Group Historical Financial Information cover the financial positions of the Target Group as at December 31, 2021, 2022 and 2023 and June 30, 2024 and the financial performance of the Target Group for each of the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 (the “Relevant Periods”).
The accounting policies adopted in the preparation of the Target Group Historical Financial Information are substantially consistent with the accounting policies adopted by the Company, which comply with IFRS except for the classification and presentation of certain the account captions.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Basis of Preparation
The reconciliation information for the Relevant Periods is set out by providing a reconciliation between the “Unadjusted Financial Information under CASBE” of the Target Group which are extracted from the Target Group Historical Financial Information and the adjusted financial information of the Relevant Periods as if it had been prepared in accordance with the accounting policies adopted by the Company which are in compliance with IFRS. As the Company’s interest in the Target Company will be accounted for as investment in associates using the equity method in the Group’s consolidated financial statements upon Completion, the statement of cash flows and the statement of change of equity of the Target Group will have no impact on the Group’s statement of cash flows and the statement of change of equity. Further, there is no material difference between IFRS and CASBE in terms of the classification of the activities in the cash flow statement and the statement of change of equity. Therefore, the reconciliation information of the Relevant Periods will only cover the Target Group’s consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position.
Reconciliation Process
The Reconciliation has been prepared by the directors of the Company by comparing the accounting policies adopted by the Target Group for the preparation of the Target Group Historical Financial Information and the accounting policies adopted by the Company, and quantifying the relevant material financial effects of such differences, where appropriate. Your attention is drawn to the fact that as the Reconciliation has not been subject to an independent audit and accordingly, no opinion is expressed by an auditor or reporting accountants on whether it presents a true and fair view of the Target Group’s consolidated financial position as at December 31, 2021, 2022 and 2023 and June 30, 2024, nor its consolidated results for the years and period then ended under the accounting policies adopted by the Company.
KPMG was engaged by the Company to conduct work in accordance with the Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” (“HKSAE 3000”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).
The work conducted by KPMG consisted primarily of:
| (i) | comparing the “Unadjusted Financial Information under CASBE” as set out in the section entitled “Target Group Unaudited Adjusted Financial Information under the Company’s Accounting Policies” with the Target Group Historical Financial Information prepared under CASBE; |
| (ii) | considering the adjustments made and evidence supporting the adjustments made in arriving at the “Adjusted Financial Information under the Company’s Accounting Policies” as set out in the section entitled “Target Group Unaudited Adjusted Financial Information under the Company’s Accounting Policies”, which included examining the differences between the Target Group’s accounting policies under CASBE and the Company’s accounting policies under IFRS; and |
| (iii) | checking the arithmetic accuracy of the computation of the “Target Group Unaudited Adjusted Financial Information under the Company’s Accounting Policies”. |
KPMG’s engagement did not involve independent examination of any of the underlying financial information on which the “Target Group’s Unaudited Adjusted Financial Information under the Company’s Accounting Policies” is based. The work carried out in accordance with HKSAE 3000 is different in scope from an audit or a review conducted in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements issued by the HKICPA and consequently, KPMG did not express an audit opinion nor a review conclusion on the Reconciliation. KPMG’s engagement was intended solely for the use of the Directors in connection with this circular and may not be suitable for another purpose. KPMG has not audited or reviewed the Target Group’s financial information for any period.
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Based on the work performed, KPMG has concluded that:
| (i) | the “Unadjusted Financial Information under CASBE” as set out in the section entitled “Target Group Unaudited Adjusted Financial Information under the Company’s Accounting Policies” is in agreement with the Target Group Historical Financial Information prepared under CASBE; |
| (ii) | the adjustments reflect, in all material respects, the differences between the Target Group’s accounting policies and the Company’s accounting policies; and |
| (iii) | the computation of the Target Group Unaudited Adjusted Financial Information under the Company’s Accounting Policies is arithmetically accurate. |
Target Group Unaudited Adjusted Financial Information under the Company’s Accounting Policies
The Target Group Historical Financial Information have been prepared and presented in accordance with CASBE. There are no material differences between the Target Group Historical Financial Information compared to that applying the Company’s accounting policies under IFRS, except for the classification and presentation of certain account caption.
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF PROFIT OR LOSS UNDER THE COMPANY’S ACCOUNTING POLICIES FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2024
| | | | | | | |
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Total operating income | | | | | | | | | | | | | | |
| Operating Revenue | | | 37,779,187 | | | | – | | | | 37,779,187 | | | Revenue |
| Less: operating cost | | | (29,628,245 | ) | | | – | | | | (29,628,245 | ) | | Cost of sales |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | 8,150,942 | | | Gross profit |
| | | | – | | | | 116,924 | | | | 116,924 | | | Other income |
| Taxes and surcharges | | | (107,634 | ) | | | 107,634 | | | | – | | | |
| Selling expenses | | | (6,513,523 | ) | | | – | | | | (6,513,523 | ) | | Selling and distribution expenses |
| Administrative expenses | | | (888,284 | ) | | | (241,319 | ) | | | (1,129,603 | ) | | General and administrative expenses |
| Research and development expenses | | | (133,685 | ) | | | 133,685 | | | | – | | | |
| | | | – | | | | 230,123 | | | | 230,123 | | | Other net income |
| Finance expenses | | | (629,890 | ) | | | 629,890 | | | | – | | | |
| Plus: other income | | | 49,297 | | | | (49,297 | ) | | | – | | | |
| Investment income (loss is indicated by ‘–’) | | | 275,981 | | | | (275,981 | ) | | | – | | | |
| Income from fair value variation (loss filled with “–”) | | | (183,828 | ) | | | 183,828 | | | | – | | | |
| Credit impairment losses (loss is indicated by “–”) | | | 15,004 | | | | – | | | | 15,004 | | | Reversal of credit loss on trade and other receivables and loans and advances granted |
| Gains from disposal of assets (loss is indicated by “–”) | | | 223,869 | | | | (223,869 | ) | | | – | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Operating profit (loss is indicated by “–”) | | | 258,249 | | | | 611,618 | | | | 869,867 | | | Operating profit |
| Plus: non-operating income | | | 85,932 | | | | (85,932 | ) | | | – | | | |
| Less: Non-operating expenses | | | (20,397 | ) | | | 20,397 | | | | – | | | |
| | | | – | | | | (635,410 | ) | | | (635,410 | ) | | Finance costs |
| | | | – | | | | 5,520 | | | | 5,520 | | | Finance income |
| | | | | | | | | | | | | | | |
| | | | 65,535 | | | | (695,425 | ) | | | (629,890 | ) | | Net finance cost |
| | | | – | | | | 83,807 | | | | 83,807 | | | Share of profit of equity-accounted investees, net of tax |
| | | | | | | | | | | | | | | |
| Total profit (total loss is indicated by “–”) | | | 323,784 | | | | – | | | | 323,784 | | | Profit before taxation |
| Less: income tax expense | | | 112,956 | | | | – | | | | 112,956 | | | Income tax expenses |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | 210,828 | | | | – | | | | 210,828 | | | Profit for the period |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Net profit attributable to the owners of the Parent Company (net loss is indicated by “–”) | | | 275,315 | | | | – | | | | 275,315 | | | Equity shareholders of the Company |
| Minority interest income (net loss is indicated by “–”) | | | (64,487 | ) | | | – | | | | (64,487 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | 210,828 | | | | – | | | | 210,828 | | | Profit for the period |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME UNDER THE COMPANY’S ACCOUNTING POLICIES FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2024
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Net profit | | | 210,828 | | | | – | | | | 210,828 | | | Profit for the period |
| | | | | | | | | | | | | | | |
| Items that may be reclassified subsequently to profit or loss: | | | | | | | | | | | | | | Items that may be reclassified subsequently to profit or loss: |
| Other comprehensive income that can be converted into losses and profits under the equity method | | | 6,546 | | | | – | | | | 6,546 | | | Equity-accounted investees
– share of other comprehensive income |
| Balance arising from the translation of foreign currency financial statements | | | 79 | | | | – | | | | 79 | | | Exchange differences on translation of financial statements of foreign operations |
| | | | | | | | | | | | | | | |
| Other comprehensive income to be re-classified into profit and loss | | | 6,625 | | | | – | | | | 6,625 | | | Other comprehensive income for the period |
| | | | | | | | | | | | | | | |
| Total comprehensive income for the period | | | 217,453 | | | | – | | | | 217,453 | | | Total comprehensive income for the period |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Total comprehensive income attributable to the owners of the Parent Company | | | 281,940 | | | | – | | | | 281,940 | | | Equity shareholders of the Company |
| Total comprehensive income attributable to minority shareholders | | | (64,487 | ) | | | – | | | | (64,487 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Total comprehensive income for the period | | | 217,453 | | | | – | | | | 217,453 | | | Total comprehensive income for the period |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF PROFIT OR LOSS UNDER THE COMPANY’S ACCOUNTING POLICIES FOR THE YEAR ENDED DECEMBER 31, 2023
| | | | | | | |
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Total operating income | | | | | | | | | | | | | | |
| Operating Revenue | | | 78,642,172 | | | | – | | | | 78,642,172 | | | Revenue |
| Less: operating cost | | | (61,939,819 | ) | | | – | | | | (61,939,819 | ) | | Cost of sales |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | 16,702,353 | | | Gross profit |
| | | | – | | | | 352,739 | | | | 352,739 | | | Other income |
| Taxes and surcharges | | | (217,915 | ) | | | 217,915 | | | | – | | | |
| Selling expenses | | | (14,680,133 | ) | | | – | | | | (14,680,133 | ) | | Selling and distribution expenses |
| Administrative expenses | | | (1,887,146 | ) | | | (536,182 | ) | | | (2,423,328 | ) | | General and administrative expenses |
| Research and development expenses | | | (318,267 | ) | | | 318,267 | | | | – | | | |
| | | | – | | | | 512,735 | | | | 512,735 | | | Other net income |
| Finance expenses | | | (1,323,053 | ) | | | 1,323,053 | | | | – | | | |
| Plus: other income | | | 185,516 | | | | (185,516 | ) | | | – | | | |
| Investment income (loss is indicated by ‘–’) | | | 396,294 | | | | (396,294 | ) | | | – | | | |
| Income from fair value variation (loss filled with “–”) | | | (76,343 | ) | | | 76,343 | | | | – | | | |
| Credit impairment losses (loss is indicated by “–”) | | | (88,874 | ) | | | – | | | | (88,874 | ) | | Credit loss on trade and other receivables and loans and advances granted |
| Assets impairment losses (loss is indicated by “–”) | | | (523,083 | ) | | | – | | | | (523,083 | ) | | Impairment loss on non-current assets |
| Gains from disposal of assets (loss is indicated by “–”) | | | 354,869 | | | | (354,869 | ) | | | – | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| | | | | | | |
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Operating profit (loss is indicated by “–”) | | | (1,475,782 | ) | | | 1,328,191 | | | | (147,591 | ) | | Operating loss |
| Plus: non-operating income | | | 281,697 | | | | (281,697 | ) | | | – | | | |
| Less: Non-operating expenses | | | (167,332 | ) | | | 167,332 | | | | – | | | |
| | | | – | | | | (1,438,291 | ) | | | (1,438,291 | ) | | Finance costs |
| | | | – | | | | 115,238 | | | | 115,238 | | | Finance income |
| | | | | | | | | | | | | | | |
| | | | 114,365 | | | | (1,437,418 | ) | | | (1,323,053 | ) | | Net finance cost |
| | | | – | | | | 109,227 | | | | 109,227 | | | Share of profit of equity-accounted investees, net of tax |
| | | | | | | | | | | | | | | |
| Total profit (total loss is indicated by “–”) | | | (1,361,417 | ) | | | – | | | | (1,361,417 | ) | | Loss before taxation |
| Less: income tax expense | | | 103,312 | | | | – | | | | 103,312 | | | Income tax expenses |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | (1,464,729 | ) | | | – | | | | (1,464,729 | ) | | Loss for the year |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Net profit attributable to the owners of the Parent Company (net loss is indicated by “–”) | | | (1,329,051 | ) | | | – | | | | (1,329,051 | ) | | Equity shareholders of the Company |
| Minority interest income (net loss is indicated by “–”) | | | (135,678 | ) | | | – | | | | (135,678 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | (1,464,729 | ) | | | – | | | | (1,464,729 | ) | | Loss for the year |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME UNDER THE COMPANY’S ACCOUNTING POLICIES FOR THE YEAR ENDED DECEMBER 31, 2023
| | | | | | | |
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | RMB’000 | | | (Note 1)
RMB’000 | | | RMB’000 | | | |
| Net Loss | | | (1,464,729 | ) | | | – | | | | (1,464,729 | ) | | Loss for the year |
| | | | | | | | | | | | | | | |
| Items that may be reclassified subsequently to profit or loss: | | | | | | | | | | | | | | Items that may be reclassified subsequently to profit or loss: |
| Other comprehensive income that can be converted into losses and profits under the equity method | | | 4,618 | | | | – | | | | 4,618 | | | Equity-accounted investees
– share of other comprehensive income |
| Balance arising from the translation of foreign currency financial statements | | | 16 | | | | – | | | | 16 | | | Exchange differences on translation of financial statements of foreign operations |
| | | | | | | | | | | | | | | |
| Other comprehensive income to be re-classified into profit and loss | | | 4,634 | | | | – | | | | 4,634 | | | Other comprehensive income for the year |
| | | | | | | | | | | | | | | |
| Total comprehensive income for the year | | | (1,460,095 | ) | | | – | | | | (1,460,095 | ) | | Total comprehensive income for the year |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Total comprehensive income attributable to the owners of the Parent Company | | | (1,324,417 | ) | | | – | | | | (1,324,417 | ) | | Equity shareholders of the Company |
| Total comprehensive income attributable to minority shareholders | | | (135,678 | ) | | | – | | | | (135,678 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Total comprehensive income for the year | | | (1,460,095 | ) | | | – | | | | (1,460,095 | ) | | Total comprehensive income for the year |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF PROFIT OR LOSS UNDER THE COMPANY’S ACCOUNTING POLICIES FOR THE YEAR ENDED DECEMBER 31, 2022
| | | | | | | |
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | RMB’000 | | | (Note 1)
RMB’000 | | | RMB’000 | | | |
| Total operating income | | | | | | | | | | | | | | |
| Operating Revenue | | | 90,090,819 | | | | – | | | | 90,090,819 | | | Revenue |
| Less: operating cost | | | (72,360,590 | ) | | | – | | | | (72,360,590 | ) | | Cost of sales |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | 17,730,229 | | | Gross profit |
| Taxes and surcharges | | | (204,291 | ) | | | 204,291 | | | | – | | | |
| | | | – | | | | 405,037 | | | | 405,037 | | | Other income |
| Selling expenses | | | (15,849,738 | ) | | | – | | | | (15,849,738 | ) | | Selling and distribution expenses |
| Administrative expenses | | | (2,046,416 | ) | | | (686,189 | ) | | | (2,732,605 | ) | | General and administrative expenses |
| Research and development expenses | | | (481,898 | ) | | | 481,898 | | | | – | | | |
| | | | – | | | | (428,526 | ) | | | (428,526 | ) | | Other net loss |
| Finance expenses | | | (1,538,197 | ) | | | 1,538,197 | | | | – | | | |
| Plus: other income | | | 211,947 | | | | (211,947 | ) | | | – | | | |
| Investment income (loss is indicated by ‘–’) | | | (105,278 | ) | | | 105,278 | | | | – | | | |
| Income from fair value variation (loss filled with “–”) | | | (594,680 | ) | | | 594,680 | | | | – | | | |
| Credit impairment losses (loss is indicated by “–”) | | | (119,961 | ) | | | – | | | | (119,961 | ) | | Credit loss on trade and other receivables and loans and advances granted |
| Assets impairment losses (loss is indicated by “–”) | | | (635,208 | ) | | | – | | | | (635,208 | ) | | Impairment loss on non-current assets |
| Gains from disposal of assets (loss is indicated by “–”) | | | 335,708 | | | | (335,708 | ) | | | – | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unadjusted Financial Information
under CASBE | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | | (Note 1) | | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Operating profit (loss is indicated by “–”) | | | (3,297,783 | ) | | | 1,667,011 | | | | (1,630,772 | ) | | Operating loss |
| Plus: non-operating income | | | 332,093 | | | | (332,093 | ) | | | – | | | |
| Less: Non-operating expenses | | | (252,787 | ) | | | 252,787 | | | | – | | | |
| | | | – | | | | (1,741,980 | ) | | | (1,741,980 | ) | | Finance costs |
| | | | – | | | | 203,782 | | | | 203,782 | | | Finance income |
| | | | | | | | | | | | | | | |
| | | | 79,306 | | | | (1,617,504 | ) | | | (1,538,198 | ) | | Net finance cost |
| | | | – | | | | (49,507 | ) | | | (49,507 | ) | | Share of loss of equity-accounted investees, net of tax |
| | | | | | | | | | | | | | | |
| Total profit (total loss is indicated by “–”) | | | (3,218,477 | ) | | | – | | | | (3,218,477 | ) | | Loss before taxation |
| Less: income tax expense | | | (218,801 | ) | | | – | | | | (218,801 | ) | | Income tax expenses |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | (2,999,676 | ) | | | – | | | | (2,999,676 | ) | | Loss for the year |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Net profit attributable to the owners of the Parent Company (net loss is indicated by “–”) | | | (2,763,167 | ) | | | – | | | | (2,763,167 | ) | | Equity shareholders of the Company |
| Minority interest income (net loss is indicated by “–”) | | | (236,509 | ) | | | – | | | | (236,509 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | (2,999,676 | ) | | | – | | | | (2,999,676 | ) | | Loss for the year |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME UNDER THE COMPANY’S ACCOUNTING POLICIES FOR THE YEAR ENDED DECEMBER 31, 2022
| | | | | | | |
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Net Loss | | | (2,999,676 | ) | | | – | | | | (2,999,676 | ) | | Loss for the year |
| | | | | | | | | | | | | | | |
| Items that may be reclassified subsequently to profit or loss: | | | | | | | | | | | | | | Items that may be reclassified subsequently to profit or loss: |
| Other comprehensive income that can be converted into losses and profits under the equity method | | | (867 | ) | | | – | | | | (867 | ) | | Equity-accounted investees
– share of other comprehensive income |
| Balance arising from the translation of foreign currency financial statements | | | (187 | ) | | | – | | | | (187 | ) | | Exchange differences on translation of financial statements of foreign operations |
| | | | | | | | | | | | | | | |
| Other comprehensive income to be re-classified into profit and loss | | | (1,054 | ) | | | – | | | | (1,054 | ) | | Other comprehensive income for the year |
| | | | | | | | | | | | | | | |
| Total comprehensive income for the year | | | (3,000,730 | ) | | | – | | | | (3,000,730 | ) | | Total comprehensive income for the year |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Total comprehensive income attributable to the owners of the Parent Company | | | (2,764,221 | ) | | | – | | | | (2,764,221 | ) | | Equity shareholders of the Company |
| Total comprehensive income attributable to minority shareholders | | | (236,509 | ) | | | – | | | | (236,509 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | |
| Total comprehensive income for the year | | | (3,000,730 | ) | | | – | | | | (3,000,730 | ) | | Total comprehensive income for the year |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF PROFIT OR LOSS UNDER THE COMPANY’S ACCOUNTING POLICIES FOR THE YEAR ENDED DECEMBER 31, 2021
Unadjusted Financial Information
under CASBE | | | Reclassification | | | Adjusted Financial Information under
the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Total operating income | | | | | | | | | | | | | | |
| Operating Revenue | | | 91,061,894 | | | | – | | | | 91,061,894 | | | Revenue |
| Less: operating cost | | | (74,027,212 | ) | | | – | | | | (74,027,212 | ) | | Cost of sales |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | 17,034,682 | | | Gross profit |
| Taxes and surcharges | | | (212,940 | ) | | | 212,940 | | | | – | | | |
| | | | – | | | | 411,699 | | | | 411,699 | | | Other income |
| Selling expenses | | | (16,629,508 | ) | | | – | | | | (16,629,508 | ) | | Selling and distribution expenses |
| Administrative expenses | | | (2,155,456 | ) | | | (641,047 | ) | | | (2,796,503 | ) | | General and administrative expenses |
| Research and development expenses | | | (428,107 | ) | | | 428,107 | | | | – | | | |
| | | | – | | | | (206,696 | ) | | | (206,696 | ) | | Other net loss |
| Finance expenses | | | (1,551,694 | ) | | | 1,551,694 | | | | – | | | |
| Plus: other income | | | 183,458 | | | | (183,458 | ) | | | – | | | |
| Investment income (loss is indicated by ‘–’) | | | 192,013 | | | | (192,013 | ) | | | – | | | |
| Income from fair value variation (loss filled with “–”) | | | (378,527 | ) | | | 378,527 | | | | – | | | |
| Credit impairment losses (loss is indicated by “–”) | | | (157,430 | ) | | | – | | | | (157,430 | ) | | Credit loss on trade and other receivables and loans and advances granted |
| Assets impairment losses (loss is indicated by “–”) | | | (777,436 | ) | | | – | | | | (777,436 | ) | | Impairment loss on non-current assets |
| Gains from disposal of assets (loss is indicated by “–”) | | | 53,364 | | | | (53,364 | ) | | | – | | | |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Unadjusted Financial Information under CASBE | | Reclassification | | | Adjusted Financial Information under the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Operating profit (loss is indicated by “–”) | | | (4,827,581 | ) | | | 1,706,389 | | | | (3,121,192 | ) | | Operating loss |
| Plus: non-operating income | | | 343,946 | | | | (343,946 | ) | | | – | | | |
| Less: Non-operating expenses | | | (238,437 | ) | | | 238,437 | | | | – | | | |
| | | | – | | | | (1,844,328 | ) | | | (1,844,328 | ) | | Finance costs |
| | | | – | | | | 292,634 | | | | 292,634 | | | Finance income |
| | | | | | | | | | | | | | | |
| | | | 105,509 | | | | (1,657,203 | ) | | | (1,551,694 | ) | | Net finance cost |
| | | | – | | | | (49,186 | ) | | | (49,186 | ) | | Share of loss of equity-accounted investees, net of tax |
| | | | | | | | | | | | | | | |
| Total profit (total loss is indicated by “–”) | | | (4,722,072 | ) | | | – | | | | (4,722,072 | ) | | Loss before taxation |
| Less: income tax expense | | | (227,494 | ) | | | – | | | | (227,494 | ) | | Income tax expenses |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | (4,494,578 | ) | | | – | | | | (4,494,578 | ) | | Loss for the year |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Net profit attributable to the owners of the Parent Company (net loss is indicated by “–”) | | | (3,943,871 | ) | | | – | | | | (3,943,871 | ) | | Equity shareholders of the Company |
| Minority interest income (net loss is indicated by “–”) | | | (550,707 | ) | | | – | | | | (550,707 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Net profit (net loss is indicated by “–”) | | | (4,494,578 | ) | | | – | | | | (4,494,578 | ) | | Loss for the year |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME UNDER THE COMPANY’S
ACCOUNTING POLICIES FOR THE YEAR ENDED DECEMBER 31, 2021
| Unadjusted Financial Information | | | | | Adjusted Financial Information under |
| under CASBE | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Net Loss | | | (4,494,578 | ) | | | – | | | | (4,494,578 | ) | | Loss for the year |
| | | | | | | | | | | | | | | |
| Items that may be reclassified subsequently to profit or loss: | | | | | | | | | | | | | | Items that may be reclassified subsequently to profit or loss: |
| Other comprehensive income that can be converted into losses and profits under the equity method | | | 2,449 | | | | – | | | | 2,449 | | | Equity-accounted investees – share of other comprehensive income |
| Balance arising from the translation of foreign currency financial statements | | | (370 | ) | | | – | | | | (370 | ) | | Exchange differences on translation of financial statements of foreign operations |
| | | | | | | | | | | | | | | |
| Other comprehensive income to be re-classified into profit and loss | | | 2,079 | | | | – | | | | 2,079 | | | Other comprehensive income for the year |
| | | | | | | | | | | | | | | |
| Total comprehensive income for the year | | | (4,492,499 | ) | | | – | | | | (4,492,499 | ) | | Total comprehensive income for the year |
| | | | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | | | Attributable to: |
| Total comprehensive income attributable to the owners of the Parent Company | | | (3,941,792 | ) | | | – | | | | (3,941,792 | ) | | Equity shareholders of the Company |
| Total comprehensive income attributable to minority shareholders | | | (550,707 | ) | | | – | | | | (550,707 | ) | | Non-controlling interests |
| Total comprehensive income for the year | | | (4,492,499 | ) | | | – | | | | (4,492,499 | ) | | Total comprehensive income for the year |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNDER THE COMPANY’S ACCOUNTING POLICIES AT JUNE 30, 2024
| Unadjusted Financial Information | | | | | Adjusted Financial Information under |
| under CASBE | | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | | RMB’000 | | | | RMB’000 | | | | RMB’000 | | | |
| Current assets | | | | | | | | | | | | | | Current assets |
| Monetary funds | | | 5,060,367 | | | | (174,431 | ) | | | 4,885,936 | | | Cash and cash equivalents |
| | | | – | | | | 174,431 | | | | 174,431 | | | Restricted cash |
| Trading financial assets | | | 2,709,808 | | | | – | | | | 2,709,808 | | | Other investments |
| Accounts receivable | | | 340,366 | | | | 2,833,930 | | | | 3,174,296 | | | Trade and other receivables |
| Advance payments | | | 1,033,704 | | | | (1,033,704 | ) | | | – | | | |
| Other receivables | | | 499,763 | | | | (499,763 | ) | | | – | | | |
| Inventories | | | 5,700,299 | | | | – | | | | 5,700,299 | | | Inventories |
| Non-current assets due within one year | | | 39,294 | | | | (39,294 | ) | | | – | | | |
| Other current assets | | | 1,261,169 | | | | (1,261,169 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current assets | | | 16,644,770 | | | | – | | | | 16,644,770 | | | Total current assets |
| | | | | | | | | | | | | | | |
| Non-current assets | | | | | | | | | | | | | | Non-current assets |
| Long-term receivables | | | 246,002 | | | | – | | | | 246,002 | | | Trade and other receivables |
| Long term equity investments | | | 3,483,320 | | | | – | | | | 3,483,320 | | | Interests in equity-accounted investees |
| Other non-current financial assets | | | 3,302,566 | | | | – | | | | 3,302,566 | | | Other investments |
| Investment properties | | | 294,720 | | | | – | | | | 294,720 | | | Investment properties |
| Fixed assets | | | 3,625,261 | | | | 2,304,010 | | | | 5,929,271 | | | Property, plant and equipment |
| Construction in progress | | | 219,564 | | | | (219,564 | ) | | | – | | | |
| Productive biological assets | | | 11,773 | | | | (11,773 | ) | | | – | | | |
| Right-of-use assets | | | 15,697,679 | | | | 51,013 | | | | 15,748,692 | | | Right-of-use assets |
| Intangible assets | | | 889,203 | | | | (51,013 | ) | | | 838,190 | | | Intangible assets |
| Goodwill | | | 3,661 | | | | – | | | | 3,661 | | | Goodwill |
| Long term deferred expenses | | | 2,072,673 | | | | (2,072,673 | ) | | | – | | | |
| Deferred tax assets | | | 1,034,170 | | | | – | | | | 1,034,170 | | | Deferred tax assets |
| | | | | | | | | | | | | | | |
| Total non-current assets | | | 30,880,592 | | | | – | | | | 30,880,592 | | | Total non-current assets |
| | | | | | | | | | | | | | | |
| Total assets | | | 47,525,362 | | | | – | | | | 47,525,362 | | | Total assets |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Unadjusted Financial Information | | | | | Adjusted Financial Information under |
| under CASBE | | | Reclassification | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | | RMB’000 | | | | RMB’000 | | | | RMB’000 | | | |
| Current liabilities | | | | | | | | | | | | | | Current liabilities |
| Short-term loans | | | 4,400,540 | | | | 350,087 | | | | 4,750,627 | | | Loans and borrowings |
| Accounts payable | | | 7,572,136 | | | | 2,669,442 | | | | 10,241,578 | | | Trade and other payables |
| Accounts collected in advance | | | 276,593 | | | | – | | | | 276,593 | | | Receipts in advance |
| Contract liabilities | | | 4,740,725 | | | | – | | | | 4,740,725 | | | Contract liabilities |
| Payroll payable | | | 560,911 | | | | (560,911 | ) | | | – | | | |
| Taxes payable | | | 293,333 | | | | (207,273 | ) | | | 86,060 | | | Current taxation |
| Other payables | | | 1,459,013 | | | | (1,459,013 | ) | | | – | | | |
| Non-current liabilities due within one year | | | 2,194,490 | | | | (2,194,490 | ) | | | – | | | |
| | | | – | | | | 1,844,403 | | | | 1,844,403 | | | Lease liabilities |
| Other current liabilities | | | 442,245 | | | | (442,245 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current liabilities | | | 21,939,986 | | | | – | | | | 21,939,986 | | | Total current liabilities |
| | | | | | | | | | | | | | | |
| Non-current liabilities | | | | | | | | | | | | | | Non-current liabilities |
| Lease liabilities | | | 19,211,153 | | | | – | | | | 19,211,153 | | | Lease liabilities |
| | | | – | | | | 70,516 | | | | 70,516 | | | Other payables |
| Estimated liabilities | | | 23,539 | | | | (23,539 | ) | | | – | | | |
| Deferred income | | | 92,756 | | | | – | | | | 92,756 | | | Deferred income |
| Deferred tax liabilities | | | 58,863 | | | | – | | | | 58,863 | | | Deferred tax liabilities |
| Other non-current liabilities | | | 46,977 | | | | (46,977 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total non-current liabilities | | | 19,433,288 | | | | – | | | | 19,433,288 | | | Total non-current liabilities |
| | | | | | | | | | | | | | | |
| Total liabilities | | | 41,373,274 | | | | – | | | | 41,373,274 | | | Total liabilities |
| | | | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | | | Equity |
| Paid-in capital (or capital stock) | | | 9,075,037 | | | | – | | | | 9,075,037 | | | Share capital |
| Capital reserves | | | 4,247,701 | | | | – | | | | 4,247,701 | | | Additional paid-in capital |
| Less: Treasury shares | | | (488,768 | ) | | | 488,768 | | | | – | | | |
| Other comprehensive income | | | 11,698 | | | | (11,698 | ) | | | – | | | |
| Surplus reserves | | | 1,134,683 | | | | (1,134,683 | ) | | | – | | | |
| Undistributed profits | | | (7,826,966 | ) | | | – | | | | (7,826,966 | ) | | Retained earnings |
| | | | – | | | | 657,613 | | | | 657,613 | | | Other reserves |
| | | | | | | | | | | | | | | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | 6,153,385 | | | | – | | | | 6,153,385 | | | Equity attributable to equity shareholders of the Company |
| | | | | | | | | | | | | | | |
| Minority interests | | | (1,297 | ) | | | – | | | | (1,297 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Total equity | | | 6,152,088 | | | | – | | | | 6,152,088 | | | Total equity |
| | | | | | | | | | | | | | | |
| Total liabilities and total equity | | | 47,525,362 | | | | – | | | | 47,525,362 | | | Total liabilities and total equity |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION UNDER THE COMPANY’S ACCOUNTING POLICIES AT DECEMBER 31, 2023
| Unadjusted Financial Information | | | | | Adjusted Financial Information under |
| under CASBE | | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | | RMB’000 | | | | RMB’000 | | | | RMB’000 | | | |
| Current assets | | | | | | | | | | | | | | Current assets |
| Monetary funds | | | 5,839,070 | | | | (141,301 | ) | | | 5,697,769 | | | Cash and cash equivalents |
| | | | – | | | | 141,301 | | | | 141,301 | | | Restricted cash |
| Loans and advances (short-term) | | | 537,340 | | | | – | | | | 537,340 | | | Loans and advances granted |
| Trading financial assets | | | 735,972 | | | | – | | | | 735,972 | | | Other investments |
| Factoring receivables | | | 68,689 | | | | (68,689 | ) | | | – | | | |
| Account receivable | | | 421,742 | | | | 3,232,632 | | | | 3,654,374 | | | Trade and other receivables |
| Advance payments | | | 1,185,220 | | | | (1,185,220 | ) | | | – | | | |
| Other receivables | | | 563,972 | | | | (563,972 | ) | | | – | | | |
| Inventories | | | 8,268,983 | | | | – | | | | 8,268,983 | | | Inventories |
| Non-current assets due within one year | | | 49,380 | | | | (49,380 | ) | | | – | | | |
| Other current assets | | | 1,365,371 | | | | (1,365,371 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current assets | | | 19,035,739 | | | | – | | | | 19,035,739 | | | Total current assets |
| | | | | | | | | | | | | | | |
| Non-current assets | | | | | | | | | | | | | | Non-current assets |
| Loans and advances | | | 20,568 | | | | – | | | | 20,568 | | | Loans and advances granted |
| Long-term receivables | | | 227,393 | | | | – | | | | 227,393 | | | Trade and other receivables |
| Long term equity investments | | | 3,231,665 | | | | – | | | | 3,231,665 | | | Interests in equity-accounted investees |
| Other non-current financial assets | | | 3,651,480 | | | | – | | | | 3,651,480 | | | Other investments |
| Investment properties | | | 300,148 | | | | – | | | | 300,148 | | | Investment properties |
| Fixed assets | | | 3,842,170 | | | | 2,554,920 | | | | 6,397,090 | | | Property, plant and equipment |
| Construction in progress | | | 240,333 | | | | (240,333 | ) | | | – | | | |
| Productive biological assets | | | 12,091 | | | | (12,091 | ) | | | – | | | |
| Right-of-use assets | | | 17,033,172 | | | | 51,370 | | | | 17,084,542 | | | Right-of-use assets |
| Intangible assets | | | 1,037,948 | | | | (51,370 | ) | | | 986,578 | | | Intangible assets |
| Goodwill | | | 3,661 | | | | – | | | | 3,661 | | | Goodwill |
| Long term deferred expenses | | | 2,302,496 | | | | (2,302,496 | ) | | | – | | | |
| Deferred tax assets | | | 1,113,173 | | | | – | | | | 1,113,173 | | | Deferred tax assets |
| | | | | | | | | | | | | | | |
| Total non-current assets | | | 33,016,298 | | | | – | | | | 33,016,298 | | | Total non-current assets |
| | | | | | | | | | | | | | | |
| Total assets | | | 52,052,037 | | | | – | | | | 52,052,037 | | | Total assets |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Unadjusted Financial Information | | | | | Adjusted Financial Information under |
| under CASBE | | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Current liabilities | | | | | | | | | | | | | | Current liabilities |
| Short-term loans | | | 5,130,220 | | | | 300 | | | | 5,130,520 | | | Loans and borrowings |
| Accounts payable | | | 9,816,258 | | | | 3,009,176 | | | | 12,825,434 | | | Trade and other payables |
| Accounts collected in advance | | | 106,068 | | | | – | | | | 106,068 | | | Receipts in advance |
| Contract liabilities | | | 4,850,842 | | | | – | | | | 4,850,842 | | | Contract liabilities |
| Payroll payable | | | 602,858 | | | | (602,858 | ) | | | – | | | |
| Taxes payable | | | 245,449 | | | | (223,301 | ) | | | 22,148 | | | Current taxation |
| Other payables | | | 1,725,135 | | | | (1,725,135 | ) | | | – | | | |
| Non-current liabilities due within one year | | | 1,792,352 | | | | (1,792,352 | ) | | | – | | | |
| | | | – | | | | 1,792,052 | | | | 1,792,052 | | | Lease liabilities |
| Other current liabilities | | | 457,882 | | | | (457,882 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current liabilities | | | 24,727,064 | | | | – | | | | 24,727,064 | | | Total current liabilities |
| | | | | | | | | | | | | | | |
| Non-current liabilities | | | | | | | | | | | | | | Non-current liabilities |
| Long-term borrowings | | | 349,890 | | | | – | | | | 349,890 | | | Loans and borrowings |
| Lease liabilities | | | 20,781,462 | | | | – | | | | 20,781,462 | | | Lease liabilities |
| | | | | | | | 84,729 | | | | 84,729 | | | Other payables |
| Estimated liabilities | | | 37,797 | | | | (37,797 | ) | | | – | | | |
| Deferred income | | | 99,471 | | | | – | | | | 99,471 | | | Deferred income |
| Deferred tax liabilities | | | 74,684 | | | | – | | | | 74,684 | | | Deferred tax liabilities |
| Other non-current liabilities | | | 46,932 | | | | (46,932 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total non-current liabilities | | | 21,390,236 | | | | – | | | | 21,390,236 | | | Total non-current liabilities |
| | | | | | | | | | | | | | | |
| Total liabilities | | | 46,117,300 | | | | – | | | | 46,117,300 | | | Total liabilities |
| | | | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | | | Equity |
| Paid-in capital (or capital stock) | | | 9,075,037 | | | | – | | | | 9,075,037 | | | Share capital |
| Capital reserves | | | 4,315,325 | | | | – | | | | 4,315,325 | | | Additional paid-in capital |
| Less: Treasury shares | | | (488,768 | ) | | | 488,768 | | | | – | | | |
| Other comprehensive income | | | 5,074 | | | | (5,074 | ) | | | – | | | |
| Surplus reserves | | | 1,132,841 | | | | (1,132,841 | ) | | | – | | | |
| Undistributed profits | | | (8,100,438 | ) | | | – | | | | (8,100,438 | ) | | Retained earnings |
| | | | – | | | | 649,147 | | | | 649,147 | | | Other reserves |
| | | | | | | | | | | | | | | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | 5,939,071 | | | | – | | | | 5,939,071 | | | Equity attributable to equity shareholders of the Company |
| Minority interests | | | (4,334 | ) | | | – | | | | (4,334 | ) | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Total equity | | | 5,934,737 | | | | – | | | | 5,934,737 | | | Total equity |
| | | | | | | | | | | | | | | |
| Total liabilities and total equity | | | 52,052,037 | | | | – | | | | 52,052,037 | | | Total liabilities and total equity |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION UNDER THE COMPANY’S ACCOUNTING POLICIES AT DECEMBER 31, 2022
| Unadjusted Financial Information | | | | | | Adjusted Financial Information under |
| under CASBE | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Current assets | | | | | | | | | | | | | | Current assets |
| Monetary funds | | | 7,615,941 | | | | (114,492 | ) | | | 7,501,449 | | | Cash and cash equivalents |
| | | | – | | | | 114,492 | | | | 114,492 | | | Restricted cash |
| Loans and advances (short-term) | | | 818,071 | | | | – | | | | 818,071 | | | Loans and advances granted |
| Trading financial assets | | | 890,827 | | | | – | | | | 890,827 | | | Other investments |
| Factoring receivables | | | 639,127 | | | | (639,127 | ) | | | – | | | |
| Account receivable | | | 530,611 | | | | 4,215,419 | | | | 4,746,030 | | | Trade and other receivables |
| Advance payments | | | 1,389,235 | | | | (1,389,235 | ) | | | – | | | |
| Other receivables | | | 649,676 | | | | (649,676 | ) | | | – | | | |
| Inventories | | | 10,466,589 | | | | – | | | | 10,466,589 | | | Inventories |
| Non-current assets due within one year | | | 43,535 | | | | (43,535 | ) | | | – | | | |
| Other current assets | | | 1,493,846 | | | | (1,493,846 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current assets | | | 24,537,458 | | | | – | | | | 24,537,458 | | | Total current assets |
| | | | | | | | | | | | | | | |
| Non-current assets | | | | | | | | | | | | | | Non-current assets |
| Loans and advances | | | 76,991 | | | | – | | | | 76,991 | | | Loans and advances granted |
| Long-term receivables | | | 264,651 | | | | – | | | | 264,651 | | | Other receivables |
| Long term equity investments | | | 3,639,581 | | | | – | | | | 3,639,581 | | | Interests in equity-accounted investees |
| Other non-current financial assets | | | 3,918,000 | | | | – | | | | 3,918,000 | | | Other investments |
| Investment properties | | | 311,134 | | | | – | | | | 311,134 | | | Investment properties |
| Fixed assets | | | 4,114,413 | | | | 3,296,464 | | | | 7,410,877 | | | Property, plant and equipment |
| Construction in progress | | | 383,281 | | | | (383,281 | ) | | | – | | | |
| Productive biological assets | | | 12,728 | | | | (12,728 | ) | | | – | | | |
| Right-of-use assets | | | 19,417,724 | | | | 52,505 | | | | 19,470,229 | | | Right-of-use assets |
| Intangible assets | | | 1,313,823 | | | | (41,605 | ) | | | 1,272,218 | | | Intangible assets |
| Development expenditure | | | 10,900 | | | | (10,900 | ) | | | – | | | |
| Goodwill | | | 3,661 | | | | – | | | | 3,661 | | | Goodwill |
| Long term deferred expenses | | | 2,900,455 | | | | (2,900,455 | ) | | | – | | | |
| Deferred tax assets | | | 1,238,415 | | | | – | | | | 1,238,415 | | | Deferred tax assets |
| | | | | | | | | | | | | | | |
| Total non-current assets | | | 37,605,757 | | | | – | | | | 37,605,757 | | | Total non-current assets |
| | | | | | | | | | | | | | | |
| Total assets | | | 62,143,215 | | | | – | | | | 62,143,215 | | | Total assets |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Unadjusted Financial Information under | | | | | Adjusted Financial Information under |
| CASBE | | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Current liabilities | | | | | | | | | | | | | | Current liabilities |
| Short-term loans | | | 6,528,480 | | | | 141,247 | | | | 6,669,727 | | | Loans and borrowings |
| Accounts payable | | | 12,155,433 | | | | 3,325,600 | | | | 15,481,033 | | | Trade and other payables |
| Accounts collected in advance | | | 196,630 | | | | – | | | | 196,630 | | | Receipts in advance |
| Contract liabilities | | | 4,826,601 | | | | – | | | | 4,826,601 | | | Contract liabilities |
| Payroll payable | | | 758,315 | | | | (758,315 | ) | | | – | | | |
| Taxes payable | | | 229,607 | | | | (206,886 | ) | | | 22,721 | | | Current taxation |
| Other payables | | | 1,899,604 | | | | (1,899,604 | ) | | | – | | | |
| Non-current liabilities due within one year | | | 2,011,864 | | | | (2,011,864 | ) | | | – | | | |
| | | | – | | | | 1,870,617 | | | | 1,870,617 | | | Lease liabilities |
| Other current liabilities | | | 460,795 | | | | (460,795 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current liabilities | | | 29,067,330 | | | | – | | | | 29,067,330 | | | Total current liabilities |
| | | | | | | | | | | | | | | |
| Non-current liabilities | | | | | | | | | | | | | | Non-current liabilities |
| Long-term borrowings | | | 2,070,085 | | | | – | | | | 2,070,085 | | | Loans and borrowings |
| Lease liabilities | | | 23,110,834 | | | | – | | | | 23,110,834 | | | Lease liabilities |
| | | | – | | | | 7,384 | | | | 7,384 | | | Other payables |
| Estimated liabilities | | | 7,384 | | | | (7,384 | ) | | | – | | | |
| Deferred income | | | 104,500 | | | | – | | | | 104,500 | | | Deferred income |
| Deferred tax liabilities | | | 126,183 | | | | – | | | | 126,183 | | | Deferred tax liabilities |
| | | | | | | | | | | | | | | |
| Total non-current liabilities | | | 25,418,986 | | | | – | | | | 25,418,986 | | | Total non-current liabilities |
| | | | | | | | | | | | | | | |
| Total liabilities | | | 54,486,315 | | | | – | | | | 54,486,315 | | | Total liabilities |
| | | | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | | | Equity |
| Paid-in capital (or capital stock) | | | 9,075,037 | | | | – | | | | 9,075,037 | | | Share capital |
| Capital reserves | | | 4,292,123 | | | | – | | | | 4,292,123 | | | Additional paid-in capital |
| Less: Treasury shares | | | (263,484 | ) | | | 263,484 | | | | – | | | |
| Other comprehensive income | | | 440 | | | | (440 | ) | | | – | | | |
| Surplus reserves | | | 1,113,275 | | | | (1,113,275 | ) | | | – | | | |
| Undistributed profits | | | (6,751,820 | ) | | | – | | | | (6,751,820 | ) | | Retained earnings |
| | | | – | | | | 850,231 | | | | 850,231 | | | Other reserves |
| | | | | | | | | | | | | | | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | 7,465,571 | | | | – | | | | 7,465,571 | | | Equity attributable to equity shareholders of the Company |
| Minority interests | | | 191,329 | | | | – | | | | 191,329 | | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Total equity | | | 7,656,900 | | | | – | | | | 7,656,900 | | | Total equity |
| | | | | | | | | | | | | | | |
| Total liabilities and total equity | | | 62,143,215 | | | | – | | | | 62,143,215 | | | Total liabilities and total equity |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
UNAUDITED ADJUSTED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION UNDER THE COMPANY’S ACCOUNTING POLICIES AT DECEMBER 31, 2021
| Unadjusted Financial Information | | | | | | Adjusted Financial Information under |
| under CASBE | | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Current assets | | | | | | | | | | | | | | Current assets |
| Monetary funds | | | 9,163,128 | | | | (452,918 | ) | | | 8,710,210 | | | Cash and cash equivalents |
| | | | – | | | | 452,918 | | | | 452,918 | | | Restricted cash |
| Loans and advances (short-term) | | | 568,806 | | | | – | | | | 568,806 | | | Loans and advances granted |
| Trading financial assets | | | 1,560,918 | | | | – | | | | 1,560,918 | | | Other investments |
| Factoring receivables | | | 1,411,455 | | | | (1,411,455 | ) | | | – | | | |
| Account receivable | | | 477,000 | | | | 6,153,139 | | | | 6,630,139 | | | Trade and other receivables |
| Advance payments | | | 1,972,321 | | | | (1,972,321 | ) | | | – | | | |
| Other receivables | | | 742,369 | | | | (742,369 | ) | | | – | | | |
| Inventories | | | 10,791,491 | | | | – | | | | 10,791,491 | | | Inventories |
| Non-current assets due within one year | | | 41,563 | | | | (41,563 | ) | | | – | | | |
| Other current assets | | | 1,985,431 | | | | (1,985,431 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current assets | | | 28,714,482 | | | | – | | | | 28,714,482 | | | Total current assets |
| | | | | | | | | | | | | | | |
| Non-current assets | | | | | | | | | | | | | | Non-current assets |
| Loans and advances | | | 245,811 | | | | – | | | | 245,811 | | | Loans and advances granted |
| Long-term receivables | | | 73,044 | | | | – | | | | 73,044 | | | Other receivables |
| Long term equity investments | | | 4,773,553 | | | | – | | | | 4,773,553 | | | Interests in equity-accounted investees |
| Other non-current financial assets | | | 4,100,000 | | | | – | | | | 4,100,000 | | | Other investments |
| Investment properties | | | 321,941 | | | | – | | | | 321,941 | | | Investment properties |
| Fixed assets | | | 4,646,074 | | | | 3,904,452 | | | | 8,550,526 | | | Property, plant and equipment |
| Construction in progress | | | 410,335 | | | | (410,335 | ) | | | – | | | |
| Productive biological assets | | | 11,628 | | | | (11,628 | ) | | | – | | | |
| Right-of-use assets | | | 21,967,161 | | | | 50,077 | | | | 22,017,238 | | | Right-of-use assets |
| Intangible assets | | | 1,525,435 | | | | (50,077 | ) | | | 1,475,358 | | | Intangible assets |
| Goodwill | | | 3,661 | | | | – | | | | 3,661 | | | Goodwill |
| Long term deferred expenses | | | 3,482,489 | | | | (3,482,489 | ) | | | – | | | |
| Deferred tax assets | | | 1,036,025 | | | | – | | | | 1,036,025 | | | Deferred tax assets |
| | | | | | | | | | | | | | | |
| Total non-current assets | | | 42,597,157 | | | | – | | | | 42,597,157 | | | Total non-current assets |
| | | | | | | | | | | | | | | |
| Total assets | | | 71,311,639 | | | | – | | | | 71,311,639 | | | Total assets |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
| Unadjusted Financial Information | | | | | Adjusted Financial Information under |
| under CASBE | | | Reclassification | | | the Company’s Accounting Policies |
| | | | | | (Note 1) | | | | | | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | | | |
| Current liabilities | | | | | | | | | | | | | | Current liabilities |
| Short-term loans | | | 10,947,557 | | | | 30,031 | | | | 10,977,588 | | | Loans and borrowings |
| Notes payable | | | 33,000 | | | | (33,000 | ) | | | – | | | |
| Accounts payable | | | 12,518,577 | | | | 4,012,695 | | | | 16,531,272 | | | Trade and other payables |
| Accounts collected in advance | | | 199,816 | | | | – | | | | 199,816 | | | Receipts in advance |
| Contract liabilities | | | 4,303,074 | | | | – | | | | 4,303,074 | | | Contract liabilities |
| Payroll payable | | | 665,286 | | | | (665,286 | ) | | | – | | | |
| Taxes payable | | | 202,850 | | | | (162,709 | ) | | | 40,141 | | | Current taxation |
| Other payables | | | 2,761,266 | | | | (2,761,266 | ) | | | – | | | |
| Non-current liabilities due within one year | | | 2,069,851 | | | | (2,069,851 | ) | | | – | | | |
| | | | – | | | | 2,039,820 | | | | 2,039,820 | | | Lease liabilities |
| Other current liabilities | | | 390,434 | | | | (390,434 | ) | | | – | | | |
| | | | | | | | | | | | | | | |
| Total current liabilities | | | 34,091,711 | | | | – | | | | 34,091,711 | | | Total current liabilities |
| | | | | | | | | | | | | | | |
| Non-current liabilities | | | | | | | | | | | | | | Non-current liabilities |
| Long-term borrowings | | | 1,021,070 | | | | – | | | | 1,021,070 | | | Loans and borrowings |
| Lease liabilities | | | 24,826,561 | | | | – | | | | 24,826,561 | | | Lease liabilities |
| | | | – | | | | 3,628 | | | | 3,628 | | | Other payables |
| Estimated liabilities | | | 3,628 | | | | (3,628 | ) | | | – | | | |
| Deferred income | | | 118,370 | | | | – | | | | 118,370 | | | Deferred income |
| Deferred tax liabilities | | | 172,895 | | | | – | | | | 172,895 | | | Deferred tax liabilities |
| | | | | | | | | | | | | | | |
| Total non-current liabilities | | | 26,142,524 | | | | – | | | | 26,142,524 | | | Total non-current liabilities |
| | | | | | | | | | | | | | | |
| Total liabilities | | | 60,234,235 | | | | – | | | | 60,234,235 | | | Total liabilities |
| | | | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | | | Equity |
| Paid-in capital (or capital stock) | | | 9,075,037 | | | | – | | | | 9,075,037 | | | Share capital |
| Capital reserves | | | 4,276,145 | | | | – | | | | 4,276,145 | | | Additional paid-in capital |
| Other comprehensive income | | | 1,494 | | | | (1,494 | ) | | | – | | | |
| Surplus reserves | | | 1,103,807 | | | | (1,103,807 | ) | | | – | | | |
| Undistributed profits | | | (3,797,685 | ) | | | – | | | | (3,797,685 | ) | | Retained earnings |
| | | | – | | | | 1,105,301 | | | | 1,105,301 | | | Other reserves |
| | | | | | | | | | | | | | | |
| Total Equity (or shareholders’ equity) attributable to parent company | | | 10,658,798 | | | | – | | | | 10,658,798 | | | Equity attributable to equity shareholders of the Company |
| Minority interests | | | 418,606 | | | | – | | | | 418,606 | | | Non-controlling interests |
| | | | | | | | | | | | | | | |
| Total equity | | | 11,077,404 | | | | – | | | | 11,077,404 | | | Total equity |
| | | | | | | | | | | | | | | |
| Total liabilities and total equity | | | 71,311,639 | | | | – | | | | 71,311,639 | | | Total liabilities and total equity |
| APPENDIX II | FINANCIAL INFORMATION OF THE TARGET GROUP |
Note:
| 1. | To align with the presentation of the consolidated financial statements of the Target Group with that of the Group, reclassification adjustments are made to the “Unadjusted Financial Information under CASBE” as at and for the years ended December 31, 2021, 2022 and 2023, and the six months ended June 30, 2024 which are extracted from the Target Group Historical Financial Information. Such reclassifications are made according to the Company’s accounting policies under IFRS by splitting or re-grouping certain account captions of the Target Group. These reclassifications do not have any impact on the net profit nor the net assets of the Target Group. |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
| A. | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
INTRODUCTION
The following is the unaudited pro forma financial information of the Group (the “Unaudited Pro Forma Financial Information”) as if the Acquisition had been completed on June 30, 2024 for the unaudited pro forma consolidated statement of financial position of the Group as at June 30, 2024, and as if the Acquisition had been completed at the beginning of the six months ended June 30, 2024 for the unaudited pro forma consolidated statement of profit or loss, the unaudited pro forma consolidated statement of profit or loss and other comprehensive income and the unaudited pro forma consolidated statement of cash flows for the six months ended June 30, 2024. Details of the Acquisition are set out in the section entitled “Letter from the Board” contained in this circular.
The Unaudited Pro Forma Financial Information of the Group is based on the unaudited consolidated statement of financial position of the Group as at June 30, 2024, and the unaudited consolidated statement of profit or loss, the unaudited consolidated statement of profit or loss and other comprehensive income and the unaudited consolidated statement of cash flows for the six months ended June 30, 2024 as extracted from the Company’s interim financial report for the six months ended June 30, 2024, after making unaudited pro forma adjustments to reflect the effect of the Acquisition.
The Unaudited Pro Forma Financial Information is based on a number of assumptions, estimates and uncertainties. Among other key assumptions, the Directors of the Company have assumed that the Company would be able to raise sufficient funding through internal resources, bank borrowings and/or external financing to finance the Acquisition.
The Unaudited Pro Forma Financial Information of the Group has been prepared in accordance with paragraph 4.29 of the Listing Rules for the purpose of illustrating the effect of the Acquisition only. Because of its hypothetical nature, such Unaudited Pro Forma Financial Information may not give a true picture of the financial position or results of the Group had the Acquisition been completed as at the specified date or any future dates.
The Unaudited Pro Forma Financial Information of the Group should be read in conjunction with the historical financial information of the Group set out in the interim financial report of the Company for the six months ended June 30, 2024 and with other financial information included elsewhere in this circular.
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE GROUP AS AT JUNE 30, 2024
| | | Unaudited
consolidated
statement of
financial
position of the
Group as at
June 30, 2024 | | | Unaudited
pro forma
adjustments in
respect of the
Acquisition | | | Unaudited
pro forma
consolidated
statement of
financial
position of the
Group as at
June 30, 2024 | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | |
| | | Note 1 | | | Note 2 & 3 | | | | |
| ASSETS | | | | | | | | | | | | |
| Non-current assets | | | | | | | | | | | | |
| Property, plant and equipment | | | 1,047,687 | | | | – | | | | 1,047,687 | |
| Right-of-use assets | | | 3,684,817 | | | | – | | | | 3,684,817 | |
| Intangible assets | | | 12,333 | | | | – | | | | 12,333 | |
| Goodwill | | | 21,247 | | | | – | | | | 21,247 | |
| Deferred tax assets | | | 116,577 | | | | – | | | | 116,577 | |
| Other investments | | | 106,102 | | | | – | | | | 106,102 | |
| Trade and other receivables | | | 173,136 | | | | – | | | | 173,136 | |
| Term deposits | | | 103,308 | | | | – | | | | 103,308 | |
| Interests in equity-accounted investees | | | 14,814 | | | | 6,270,118 | | | | 6,284,932 | |
| | | | | | | | | | | | | |
| | | | 5,280,021 | | | | | | | | 11,550,139 | |
| | | | | | | | | | | | | |
| Current assets | | | | | | | | | | | | |
| Other investments | | | 350,913 | | | | – | | | | 350,913 | |
| Inventories | | | 1,949,849 | | | | – | | | | 1,949,849 | |
| Trade and other receivables | | | 1,614,148 | | | | – | | | | 1,614,148 | |
| Cash and cash equivalents | | | 6,233,089 | | | | (6,270,118 | ) | | | (37,029 | ) |
| Restricted cash | | | 1,965 | | | | – | | | | 1,965 | |
| Term deposits | | | 283,007 | | | | – | | | | 283,007 | |
| | | | | | | | | | | | | |
| | | | 10,432,971 | | | | | | | | 4,162,853 | |
| | | | | | | | | | | | | |
| Total assets | | | 15,712,992 | | | | | | | | 15,712,992 | |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
| | | Unaudited
consolidated
statement of
financial
position of the
Group as at
June 30, 2024 | | | Unaudited
pro forma
adjustments in
respect of the
Acquisition | | | Unaudited
pro forma
consolidated
statement of
financial
position of the
Group as at
June 30, 2024 | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | |
| | | Note 1 | | | Note 2 & 3 | | | | |
| LIABILITIES | | | | | | | | | |
| Non-current liabilities | | | | | | | | | | | | |
| Contract liabilities | | | 39,299 | | | | – | | | | 39,299 | |
| Loans and borrowings | | | 6,414 | | | | – | | | | 6,414 | |
| Other payables | | | 32,786 | | | | – | | | | 32,786 | |
| Lease liabilities | | | 1,481,836 | | | | – | | | | 1,481,836 | |
| Deferred income | | | 37,480 | | | | – | | | | 37,480 | |
| | | | | | | | | | | | | |
| | | | 1,597,815 | | | | | | | | 1,597,815 | |
| | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | |
| Contract liabilities | | | 344,422 | | | | – | | | | 344,422 | |
| Loans and borrowings | | | 713 | | | | – | | | | 713 | |
| Trade and other payables | | | 3,328,888 | | | | – | | | | 3,328,888 | |
| Lease liabilities | | | 455,453 | | | | – | | | | 455,453 | |
| Deferred income | | | 6,685 | | | | – | | | | 6,685 | |
| Current taxation | | | 254,235 | | | | – | | | | 254,235 | |
| | | | | | | | | | | | | |
| | | | 4,390,396 | | | | | | | | 4,390,396 | |
| | | | | | | | | | | | | |
| Total liabilities | | | 5,988,211 | | | | | | | | 5,988,211 | |
| | | | | | | | | | | | | |
| Net assets | | | 9,724,781 | | | | | | | | 9,724,781 | |
| | | | | | | | | | | | | |
| EQUITY | | | | | | | | | | | | |
| Share capital | | | 95 | | | | – | | | | 95 | |
| Additional paid-in capital | | | 5,543,845 | | | | – | | | | 5,543,845 | |
| Other reserves | | | 1,260,576 | | | | – | | | | 1,260,576 | |
| Retained earnings | | | 2,892,259 | | | | – | | | | 2,892,259 | |
| | | | | | | | | | | | | |
| Equity attributable to equity shareholders of the Company | | | 9,696,775 | | | | | | | | 9,696,775 | |
| Non-controlling interests | | | 28,006 | | | | – | | | | 28,006 | |
| | | | | | | | | | | | | |
| Total equity | | | 9,724,781 | | | | | | | | 9,724,781 | |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF PROFIT OR LOSS OF THE GROUP FOR THE SIX MONTHS ENDED JUNE 30, 2024
| | | Unaudited
consolidated
statement of
profit or loss
of the Group
for the six
months ended
June 30, 2024 | | | Unaudited
pro forma
adjustments in
respect of the
Acquisition | | | Unaudited
pro forma of
consolidated
statement of
profit or loss
of the Group
for the six
months ended
June 30, 2024 | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | |
| | | Note 1 | | | Note 4 | | | | |
| Revenue | | | 7,758,743 | | | | – | | | | 7,758,743 | |
| Cost of sales | | | (4,368,957 | ) | | | – | | | | (4,368,957 | ) |
| | | | | | | | | | | | | |
| Gross profit | | | 3,389,786 | | | | – | | | | 3,389,786 | |
| Other income | | | 12,698 | | | | – | | | | 12,698 | |
| Selling and distribution expenses | | | (1,522,088 | ) | | | – | | | | (1,522,088 | ) |
| General and administrative expenses | | | (418,573 | ) | | | – | | | | (418,573 | ) |
| Other net income | | | 41,696 | | | | – | | | | 41,696 | |
| Credit loss on trade and other receivables | | | (3,606 | ) | | | – | | | | (3,606 | ) |
| Impairment loss on non-current assets | | | (5,104 | ) | | | – | | | | (5,104 | ) |
| | | | | | | | | | | | | |
| Operating profit | | | 1,494,809 | | | | – | | | | 1,494,809 | |
| | | | | | | | | | | | | |
| Finance income | | | 74,606 | | | | – | | | | 74,606 | |
| Finance costs | | | (40,595 | ) | | | – | | | | (40,595 | ) |
| | | | | | | | | | | | | |
| Net finance income | | | 34,011 | | | | – | | | | 34,011 | |
| | | | | | | | | | | | | |
| Share of profit of equity-accounted investees, net of tax | | | 301 | | | | 48,543 | | | | 48,844 | |
| | | | | | | | | | | | | |
| Profit before taxation | | | 1,529,121 | | | | | | | | 1,577,664 | |
| | | | | | | | | | | | | |
| Income tax expense | | | (351,742 | ) | | | – | | | | (351,742 | ) |
| | | | | | | | | | | | | |
| Profit for the period | | | 1,177,379 | | | | | | | | 1,225,922 | |
| | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | |
| Equity shareholders of the Company | | | 1,170,102 | | | | 48,543 | | | | 1,218,645 | |
| Non-controlling interests | | | 7,277 | | | | – | | | | 7,277 | |
| | | | | | | | | | | | | |
| Profit for the period | | | 1,177,379 | | | | | | | | 1,225,922 | |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME OF THE GROUP FOR THE SIX MONTHS ENDED JUNE 30, 2024
| | | Unaudited
consolidated
statement of
profit or loss
and other
comprehensive
income of
the Group
for the six
months ended
June 30, 2024 | | | Unaudited
pro forma
adjustments in
respect of the
Acquisition | | | Unaudited
pro forma of
consolidated
statement of
profit or loss
and other
comprehensive
income of
the Group
for the six
months ended
June 30, 2024 | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | |
| | | Note 1 | | | Note 4 | | | | |
| Profit for the period | | | 1,177,379 | | | | 48,543 | | | | 1,225,922 | |
| | | | | | | | | | | | | |
| Items that may be reclassified subsequently to profit or loss: | | | | | | | | | | | | |
| Exchange differences on translation of financial statements of foreign operations | | | 6,845 | | | | 23 | | | | 6,868 | |
| Equity-accounted investees – share of other comprehensive income | | | – | | | | 1,925 | | | | 1,925 | |
| | | | | | | | | | | | | |
| Other comprehensive income for the period | | | 6,845 | | | | | | | | 8,793 | |
| Total comprehensive income for the period | | | 1,184,224 | | | | | | | | 1,234,715 | |
| | | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | |
| Equity shareholders of the Company | | | 1,178,043 | | | | 50,491 | | | | 1,228,534 | |
| Non-controlling interests | | | 6,181 | | | | | | | | 6,181 | |
| | | | | | | | | | | | | |
| Total comprehensive income for the period | | | 1,184,224 | | | | | | | | 1,234,715 | |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS OF THE GROUP FOR THE SIX MONTHS ENDED JUNE 30, 2024
| | | Unaudited
consolidated
statement of
cash flows of
the Group
for the six
months ended
June 30, 2024 | | | Unaudited
pro forma
adjustments in
respect of the
Acquisition | | | Unaudited
pro forma of
consolidated
statement of
cash flows of
the Group
for the six
months ended
June 30, 2024 | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | |
| | | Note 1 | | | Note 2 | | | | |
| Cash flows from operating activities | | | | | | | | | | | | |
| Cash generated from operations | | | 1,649,204 | | | | – | | | | 1,649,204 | |
| Income tax paid | | | (355,448 | ) | | | – | | | | (355,448 | ) |
| | | | | | | | | | | | | |
| Net cash from operating activities | | | 1,293,756 | | | | | | | | 1,293,756 | |
| | | | | | | | | | | | | |
| Cash flows from investing activities | | | | | | | | | | | | |
| Payment for purchases of property, plant, equipment and intangible assets | | | (302,784 | ) | | | – | | | | (302,784 | ) |
| Proceeds from disposal of property, plant and equipment and intangible assets | | | 3,166 | | | | – | | | | 3,166 | |
| Refund of prepayments | | | – | | | | – | | | | – | |
| Payment for purchases of other investments | | | (4,176,438 | ) | | | – | | | | (4,176,438 | ) |
| Proceeds from disposal of other investments | | | 4,077,046 | | | | – | | | | 4,077,046 | |
| Acquisition of interests in equity-accounted investees | | | – | | | | (6,270,118 | ) | | | (6,270,118 | ) |
| Placement of term deposits | | | (256,855 | ) | | | – | | | | (256,855 | ) |
| Maturity of term deposits | | | 181,299 | | | | – | | | | 181,299 | |
| Interest income | | | 68,249 | | | | – | | | | 68,249 | |
| Investment income from other investments | | | 18,360 | | | | – | | | | 18,360 | |
| | | | | | | | | | | | | |
| Net cash used in investing activities | | | (387,957 | ) | | | | | | | (6,658,075 | ) |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
| | | Unaudited
consolidated
statement of
cash flows of
the Group
for the six
months ended
June 30, 2024 | | | Unaudited
pro forma
adjustments in
respect of the
Acquisition | | | Unaudited
pro forma of
consolidated
statement of
cash flows of
the Group
for the six
months ended
June 30, 2024 | |
| | | RMB’000 | | | RMB’000 | | | RMB’000 | |
| | | Note 1 | | | Note 2 | | | | |
| Cash flows from financing activities | | | | | | | | | | | | |
| Proceeds from subscription of restricted share units and exercise of share options | | | 468 | | | | – | | | | 468 | |
| Payment of capital element and interest element of lease liabilities | | | (414,592 | ) | | | – | | | | (414,592 | ) |
| Payment for repurchase of shares | | | (36,914 | ) | | | – | | | | (36,914 | ) |
| Dividends paid to equity shareholders of the Company | | | (643,176 | ) | | | – | | | | (643,176 | ) |
| Dividends paid to non-controlling interests | | | (1,612 | ) | | | – | | | | (1,612 | ) |
| | | | | | | | | | | | | |
| Net cash used in financing activities | | | (1,095,826 | ) | | | | | | | (1,095,826 | ) |
| | | | | | | | | | | | | |
| Net decrease in cash and cash equivalents | | | (190,027 | ) | | | | | | | (6,460,145 | ) |
| Cash and cash equivalents at the beginning of the period | | | 6,415,441 | | | | | | | | 6,415,441 | |
| Effect of movements in exchange rates on cash held | | | 1,318 | | | | | | | | 1,318 | |
| | | | | | | | | | | | | |
| Cash and cash equivalents at the end of the period | | | 6,226,732 | | | | | | | | (43,386 | ) |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP
| 1. | The financial information of the Group as at and for the six months ended June 30, 2024 are extracted from the Company’s interim financial report for the six months ended June 30, 2024. |
| 2. | On September 23, 2024 (Hong Kong time), the Purchaser (a wholly-owned subsidiary of the Company) entered into the Share Purchase Agreements with the Sellers, pursuant to which, the Purchaser has conditionally agreed to acquire and the Sellers have conditionally agreed to sell the 2,668,135,376 Target Shares (representing approximately 29.4% of the entire issued share capital of the Target Company), at the Consideration in the amount of RMB6,270,118,000. |
| | |
| | The Consideration shall be satisfied by cash and funded partly by the internal financial resources of the Group and partly by external financing. The Company is in the course of liaising with the external banks and going through the banks’ credit approval procedures to confirm the borrowing amount and arrangement. For the purpose of this Unaudited Pro Forma Financial Information, the Consideration is assumed to be fully funded by internal resources. The adjustment in connection with the payment of the Consideration is not expected to have a continuing effect on the Group. |
| | |
| | Interest income will decrease in line with the decrease of Cash and cash equivalents of the Group as the Consideration is assumed to be fully funded by internal resources. The Unaudited Pro Forma Financial Information has not considered the potential decrease in interest income. |
| 3. | Upon the completion of the Acquisition, the Group will hold 29.4% of the Target Company’s entire issued share capital. On the ground that the Group is able to exercise significant influence over the Target Company, the Company’s interest in the Target Company will be accounted for as investment in associates using the equity method in the Group’s consolidated financial statements upon Completion in accordance with IAS 28 “Investments in Associates and Joint Ventures” (“IAS 28”). Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Group’s share of the acquisition-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). |
| | |
| | The Group will estimate its share of the fair value of the net identifiable assets of the Target Group as at the date of the completion. The excess of the consideration over the Group’s share of the fair value of the Target Group’s net identifiable assets will be accounted for as goodwill, which will be included in the carrying amount of the investment. In the opinion of the Directors, the fair values of the net identifiable assets of the Target Group are subject to change upon completion of the Acquisition, as the fair values of the identifiable assets and liabilities being acquired shall be assessed on the actual date of completion. |
| | |
| | For illustrative purpose, the Directors of the Company estimated the fair value of the Target Group’s net identifiable assets on June 30, 2024 and calculated the pro forma goodwill as follows, assuming the Acquisition had been completed on June 30, 2024: |
| | | Note | | | RMB’000 | |
| Carrying amounts of the Target Group’s net assets based on the Adjusted Financial Information under the Company’s Policies as at June 30, 2024 | | (i) | | | | 6,152,088 | |
| Fair value adjustments on intangible assets, properties, and land-use rights held by the Target Group | | (ii) | | | | 9,148,051 | |
| Effect of deferred tax liabilities estimated at corporate income tax rate of 25% | | (iii) | | | | (2,287,013 | ) |
| | | | | | | | |
| Estimated fair value of the Target Group’s net identifiable assets as at June 30, 2024 | | | | | | 13,013,126 | |
| | | | | | | | |
| The Group’s ownership interest upon completion of the Acquisition | | | | | | 29.4 | % |
| The Group’s share of 29.40% of the Target Group’s net identifiable assets | | | | | | 3,825,859 | |
| Total consideration | | 2 | | | | 6,270,118 | |
| | | | | | | | |
| Pro forma goodwill arising from the Acquisition | | | | | | 2,444,259 | |
| (i) | The amount is extracted from the Adjusted Financial Information under the Company’s Policies in Appendix II to this circular. |
| (ii) | The amount was determined by the Directors of the Company with reference to a preliminary valuation result. |
| (iii) | Deferred tax liabilities are recognised for temporary differences arising from the recognised fair value adjustments on Target Group’s intangible assets, properties, land use rights above and based on a corporate income tax rate of 25%. |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
For the purpose of this Unaudited Pro Forma Financial Information, the investment is recorded at RMB6,270,118,000, being the total consideration paid/payable by the Company, as the total consideration paid exceeds the estimated fair value of the Target Group’s net identifiable assets at June 30 2024.
With reference to paragraph 42 of IAS 28, goodwill that forms part of the carrying amount of the net investment in an associate is not separately recognised and it is not tested for impairment separately by applying the requirements for goodwill impairment testing in IAS 36 Impairment of Assets (“IAS 36”). Instead, the entire carrying amount of the investment is tested for impairment in accordance with IAS 36 as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount whenever application of paragraphs 41A, 41B and 41C of IAS 28 indicates that the net investment may be impaired. For illustrative purpose, the directors of the Company considered if there is an indicator that the recoverable amount (i.e. higher of value in use and fair value less costs of disposal) is less than the carrying amount of the investment. With reference to the stock price of the Target Company in an active market and the most recent business operation of the Target Company, the directors of the Company assessed that there is no indicator that causes the doubt of recoverability of the investment exists and no impairment test is considered necessary. The Directors will adopt the same key assumptions, accounting policies and/or valuation method in assessing the impairment of the investment in future financial periods.
| 4. | The pro forma adjustments represents the share of the Target Group’s profit and other comprehensive income under the equity method assuming the Acquisition had been completed on January 1, 2024. |
The Group’s share of the Target Group’s profit and other comprehensive income is calculated as the following:
| | | Note | | | For the six
months ended
June 30, 2024 | |
| | | | | | (RMB’000) | |
| Share of the Target Group’s profit | | | | | | | |
| The Target Group’s profit for the period | | (i) | | | | 210,828 | |
| Additional depreciation and amortisation arising from the fair value adjustments made to the intangible assets, properties and land-use right held by the Target Group | | (ii) | | | | (60,955 | ) |
| Effect of deferred tax expense estimated at corporate income tax rate of 25% | | | | | | 15,239 | |
| | | | | | | | |
| The Target Group’s profit for the period for the purpose of equity method | | | | | | 165,112 | |
| | | | | | | | |
| The Group’s ownership interest upon completion of the Acquisition | | | | | | 29.4 | % |
| The Group’s share of the Target Group’s profit for the period under equity method | | | | | | 48,543 | |
| | | | | | | | |
| Share of the Target Group’s other comprehensive income | | | | | | | |
| The Target Group’s other comprehensive income for the period | | | | | | | |
| – other comprehensive income that can be converted into losses and profits under the equity method | | (i) | | | | 6,546 | |
| – balance arising from the translation of foreign currency financial statements | | (i) | | | | 79 | |
| | | | | | | | |
| The Group’s ownership interest upon completion of the Acquisition | | | | | | 29.4 | % |
| The Group’s share of the Target Group’s other comprehensive income for the period under equity method | | | | | | | |
| – other comprehensive income that can be converted into losses and profits under the equity method | | | | | | 1,925 | |
| – balance arising from the translation of foreign currency financial statements | | | | | | 23 | |
| (i) | These amounts are extracted from the Adjusted Financial Information under the Company’s Policies in Appendix II to this circular. |
| (ii) | The amount represents the additional depreciation and amortisation of the intangible assets, properties and land-use right held by the Target Group. It is calculated based on the estimated fair value adjustments of these assets and corresponding expected useful lives after the acquisition date, assuming the Acquisition had been completed on January 1, 2024. |
| | | The adjustments in respect of the Group’s share of the Target Group’s profit and other comprehensive income are expected to have a continuing effect on the Group. |
| | | |
| 5. | No adjustment has been made to the Unaudited Pro Forma Financial Information for acquisition-related costs (including fees to legal advisers, reporting accountants, valuer, printer and other expenses) as the Directors of the Company determined that such costs are insignificant. |
| 6. | No adjustment has been made to the Unaudited Pro Forma Financial Information to reflect any trading results or other transactions of the Group or the Target Group entered into subsequent to June 30, 2024. |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
| B. | INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
The following is the text of a report received from the reporting accountants, KPMG, Certified Public Accountants, Hong Kong, in respect of the Group’s pro forma financial information for the purpose of incorporation in this circular.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION
TO THE DIRECTORS OF MINISO GROUP HOLDING LIMITED
We have completed our assurance engagement to report on the compilation of pro forma financial information of MINISO Group Holding Limited (the “Company”) and its subsidiaries (collectively the “Group”) by the directors of the Company (the “Directors”) for illustrative purposes only. The pro forma financial information consists of the unaudited pro forma consolidated statement of financial position as at June 30, 2024 and the unaudited pro forma consolidated statement of profit or loss, pro forma statement of profit or loss and other comprehensive income and pro forma consolidated statement of cash flows for the six months ended June 30, 2024 and related notes as set out in Part A of Appendix III to the circular dated November 22, 2024 (the “Circular”) issued by the Company. The applicable criteria on the basis of which the Directors have compiled the pro forma financial information are described in Part A of Appendix III to the Circular.
The pro forma financial information has been compiled by the Directors to illustrate the impact of the proposed acquisition of Yonghui Superstores Co., Ltd1 (永輝超市股 有限公司) (the “Target Company”) (the “Proposed Acquisition”) on the Group’s financial position as at June 30, 2024 and the Group’s financial performance and cash flows for the six months ended June 30, 2024 as if the Proposed Acquisition had taken place at June 30, 2024 and January 1, 2024, respectively. As part of this process, information about the Group’s financial position at June 30, 2024 and financial performance and cash flows for the six months ended June 30, 2024 has been extracted by the Directors from the interim report of the Group for the six months ended June 30, 2024, on which a review report has been published.
Directors’ Responsibilities for the Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
| 1 | English translation is for identification purpose only. |
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
Our firm applies Hong Kong Standard on Quality Management 1 “Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements”, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements (“HKSAE”) 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountants plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the pro forma financial information in accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in an investment circular is solely to illustrate the impact of a significant event or transaction on the unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the events or transactions at January 1, 2024 or June 30, 2024 would have been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:
| · | the related pro forma adjustments give appropriate effect to those criteria; and |
| · | the pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information. |
The procedures selected depend on the reporting accountants’ judgement, having regard to the reporting accountants’ understanding of the nature of the Group, the event or transaction in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
| APPENDIX III | UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP |
Opinion
In our opinion:
| (a) | the pro forma financial information has been properly compiled on the basis stated; |
| (b) | such basis is consistent with the accounting policies of the Group, and |
| (c) | the adjustments are appropriate for the purposes of the pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules. |
KPMG
Certified Public Accountants
Hong Kong
November 22, 2024
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Set out below is the management discussion and analysis of the Group for each of the three years ended June 30, 2022 and 2023 and each of the six months ended December 31, 2023 and June 30, 2024 respectively, as extracted from the relevant sections in the annual reports of the Company (for the financial years ended June 30, 2022, 2023 and the six months ended December 31, 2023) and interim report of the Company (for the six months ended June 30, 2024) respectively. The Company has changed its financial year end date from June 30 to December 31 with effect from January 17, 2024.
| 1. | FOR THE YEAR ENDED JUNE 30, 2022 |
Business Overview
For the fiscal year ended June 30, 2022, the aggregate GMV of products sold through our MINISO store network reached approximately RMB18.4 billion. TOP TOY brand achieved a GMV of RMB595.6 million in the same fiscal year in multi-channels.
Brands and Products
In the fiscal year ended June 30, 2022, we launched an average of over 550 stock keeping units (“SKUs”) under the “MINISO” brand per month, and we offered consumers a wide selection of over 9,000 core SKUs, the vast majority of which are under the “MINISO” brand. Our MINISO product offering spans across 11 major categories, including home decor, small electronics, textile, accessories, beauty tools, toys, cosmetics, personal care, snacks, fragrance and perfumes, and stationery and gifts.
Under the TOP TOY brand, we offered around 3,800 SKUs as of June 30, 2022 across 8 major categories, including blind boxes, toy bricks, model figures, model kits, collectible dolls, Ichiban Kuji, sculptures, and other popular toys.
As of June 30, 2022, we have established co-branding relationships with IP licensors owning 75 popular brands. We also co-developed new IPs with talented independent artists into popular IP products. As of June 30, 2022, we had co-developed 190 IP products under our TOP TOY brand with 14 IP licensors.
Other Key Operating Data
The following tables set forth certain of our key operating data of MINISO stores in mainland China and overseas markets:
| | | For the fiscal year ended | |
| | | June 30, | |
| | | 2021 | | | 2022 | |
| MINISO stores in China(1) | | | | | | | | |
| Total GMV (RMB in millions) | | | 10,406 | | | | 10,400 | |
| Annualized average revenue per MINISO store (RMB in millions) | | | 2.5 | | | | 2.2 | |
| Number of transactions (in millions) | | | 305.7 | | | | 285.1 | |
| Sales volume of SKUs (in millions) | | | 904.0 | | | | 857.8 | |
| Average spending per transaction (RMB) | | | 34.0 | | | | 36.5 | |
| Average selling price (RMB) | | | 11.5 | | | | 12.1 | |
| MINISO stores in overseas markets(1) | | | | | | | | |
| Total GMV(2) (RMB in millions) | | | 4,860 | | | | 6,414 | |
| Asian countries excluding China(2) (RMB in millions) | | | 2,221 | | | | 2,435 | |
| Americas(2) (RMB in millions) | | | 1,813 | | | | 2,717 | |
| Europe (RMB in millions) | | | 276 | | | | 562 | |
| Others (RMB in millions) | | | 550 | | | | 700 | |
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
| | | For the fiscal year ended | |
| | | June 30, | |
| | | 2021 | | | 2022 | |
| Annualized average revenue per MINISO store(2) | | | 1.0 | | | | 1.4 | |
| Asian countries excluding China(2) (RMB in millions) | | | 1.0 | | | | 1.1 | |
| Americas(2) (RMB in millions) | | | 1.2 | | | | 2.3 | |
| Europe (RMB in millions) | | | 1.2 | | | | 1.3 | |
| Others (RMB in millions) | | | 0.6 | | | | 0.5 | |
Notes:
| (1) | Annualized average revenue per MINISO store is annualized revenue calculated by dividing (a) revenue of MINISO brand by (b) the average of number of stores at the beginning and the end of the relevant period. The data of total GMV, number of transactions, sales volume of SKUs, average spending per transaction and average selling price includes data from offline channels only. |
| (2) | Total GMV of MINISO stores in overseas markets increased from RMB4,860 million in the fiscal year ended June 30, 2021 to RMB6,414 million in the fiscal year ended June 30, 2022, mainly due to the recovery of international markets from the COVID-19 pandemic, especially in Asian countries excluding China and Americas, which were our largest and second largest overseas markets in terms of store count and GMV, respectively. A similar trend was seen in annualized average revenue per MINISO store. |
Our TOP TOY stores started operating in December 2020 in China. For the fiscal years ended June 30, 2021, and 2022, (i) total GMV of TOP TOY offline stores was RMB86.3 million and RMB519.2 million, respectively, (ii) annualized average revenue per TOP TOY store was RMB6.0 million and RMB5.3 million, respectively, (iii) number of transactions of TOP TOY stores was 0.6 million and 4.1 million, respectively, (iv) sales volume of SKUs of TOP TOY stores was RMB1.2 million and RMB7.6 million, respectively, (v) average spending per transaction in TOP TOY stores was RMB136.3 and RMB126.2, respectively, and (vi) average selling price in TOP TOY stores was RMB70.5 and RMB68.6, respectively. Annualized average revenue per TOP TOY store is annualized revenue calculated by dividing (a) revenue of TOP TOY brand by (b) the average of number of stores at the beginning and the end of the relevant period. The data of total GMV, number of transactions, sales volume of SKUs, average spending per transaction and average selling price includes data from offline channels only.
The following table sets forth the GMV through online channels of MINISO brand in China for the periods indicated:
| | | As of June 30, | |
| | | 2021 | | | 2022 | |
| | | | | | | |
| | | | (RMB in millions) | |
| MINISO brand in China | | | | | | | | |
| Total GMV through online channels(1) | | | 739 | | | | 687 | |
Note:
| (1) | Excludes GMV through online to offline (“O2O”) platforms which is accounted for in GMV through offline channels. |
Revenue
Our total revenue increased by 11.2% from RMB9,071.7 million for the fiscal year ended June 30, 2021 to RMB10,085.6 million for the fiscal year ended June 30, 2022, mainly attributable to an increase in revenue generated from sales of lifestyle products and pop toys, which increased by 12.0% from RMB8,036.7 million for the fiscal year ended June 30, 2021 to RMB8,997.7 million for the fiscal year ended June 30, 2022. The increase in revenue generated from sales of lifestyle products and pop toys was mainly due to (i) an increase in the number of MINISO stores and TOP TOY stores, and (ii) gradual recovery of business operations of MINISO stores from the COVID-19 pandemic in overseas markets in 2022 compared to the 2021.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
During the period, the total number of MINISO stores, including those in China and overseas markets, increased from 4,749 as of June 30, 2021 to 5,199 as of June 30, 2022. The number of TOP TOY stores increased from 33 as of June 30, 2021 to 97 as of June 30, 2022.
Cost of Sales
Our cost of sales increased by 5.6% from RMB6,641.0 million for the fiscal year ended June 30, 2021 to RMB7,015.9 million for the fiscal year ended June 30, 2022, mainly due to a corresponding increase in our revenue.
Gross Profit and Gross Margin
Gross profit increased by 26.3% from RMB2,430.7 million for the fiscal year ended June 30, 2021 to RMB3,069.8 million for the fiscal year ended June 30, 2022, and gross margin increased from 26.8% to 30.4% during the same period. The increase in gross profit and gross margin was mainly driven by (i) an increase in revenue contribution from the Company’s international operations, which generally have a higher gross margin than the Company’s domestic operations. International operations contributed 26.2% of our total revenue for the fiscal year ended June 30, 2022, compared to 19.6% for the fiscal year ended June 30, 2021, and (ii) higher gross margin contributed by newly launched products in relation to our execution of strategic brand upgrade of MINISO in China.
Other Income
Our other income decreased by 50.3% from RMB52.1 million for the fiscal year ended June 30, 2021 to RMB25.9 million for the fiscal year ended June 30, 2022, primarily due to a decrease in government grants. There are different types of government grants and the amount of which generally fluctuates from period to period.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 19.5% from RMB1,206.8 million for the fiscal year ended June 30, 2021 to RMB1,442.3 million for the fiscal year ended June 30, 2022. Excluding equity-settled share-based payment expenses, our selling and distribution expenses increased from RMB1,075.6 million to RMB1,390.3 million during the same period, which was primarily due to (i) increased personnel-related expenses; (ii) increased licensing expenses in relation to our enlarging IP library and enriching offerings of IP products; and (iii) increased promotion and advertising expense, mainly in connection with our strategic brand upgrade of MINISO in China.
General and Administrative Expenses
Our general and administrative expenses increased by 0.7% from RMB810.8 million for the fiscal year ended June 30, 2021 to RMB816.2 million for the fiscal year ended June 30, 2022. Excluding equity-settled share-based payment expenses, our general and administrative expenses increased by 18.9% from RMB660.7 million to RMB785.4 million during the same period, which was primarily due to (i) increased depreciation and amortization expenses, mainly related to the land use right of the Company’s headquarters building project; and (ii) increased personnel-related expenses, which were partially offset by decreased office operating expense as a result of expense control measures taken by the Company to tackle the resurgence of COVID-19 in China.
Other Net (Loss)/Income
Our other net income was RMB87.3 million for the fiscal year ended June 30, 2022, compared to other net loss of RMB40.4 million for the fiscal year ended June 30, 2021. This change was mainly attributable to a net foreign exchange gain of RMB14.0 million for the fiscal year ended June 30, 2022, compared to a net foreign exchange loss of RMB114.2 million for the fiscal year ended June 30, 2021.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Credit Loss on Trade and Other Receivables
Our credit loss on trade and other receivables was RMB20.8 million and RMB28.9 million for the fiscal years ended June 30, 2021 and 2022, respectively.
Impairment Loss on Non-current Assets
Our impairment loss on non-current assets was RMB2.9 million and RMB13.5 million for the fiscal years ended June 30, 2021 and 2022, respectively. We recorded impairment loss on non-current assets of directly operated stores.
Operating Profit
As a result of the foregoing, we recorded operating profit of RMB882.0 million for the fiscal year ended June 30, 2022, representing an increase of 119.9% from RMB401.0 million for the fiscal year ended June 30, 2021.
Net Finance Income
Our net finance income increased by 172.0% from RMB12.1 million for the fiscal year ended June 30, 2021 to RMB32.9 million for the fiscal year ended June 30, 2022, mainly due to an increase in interest income from bank deposits.
Fair Value Changes of Redeemable Shares with Other Preferential Rights
Our fair value changes of redeemable shares with other preferential rights were a loss of RMB1,625.3 million for the fiscal year ended June 30, 2021 and nil for the fiscal year ended June 30, 2022. The change was primarily due to the conversion of preferred shares into Class A ordinary shares upon the completion of our initial public offering in the United States and the termination of preferential rights attached to those preferred shares.
Share of Loss of Equity-accounted Investee, Net of Tax
Our share of loss of equity-accounted investee, net of tax was a loss of RMB8.2 million for the fiscal year ended June 30, 2022, compared to RMB4.0 million for the fiscal year ended June 30, 2021. We had share of loss of equity-accounted investee, net of tax for the fiscal years ended June 30, 2021 and 2022 due to our investment into and share of 20% of loss of a company which was established to acquire the land use right of a parcel of land in Guangzhou for the purpose of establishing a new headquarters building for our Group in August 2020. In October 2021, we acquired the remaining 80% equity interest in this company and we currently own 100% equity interests of the then equity-accounted investee.
Income Tax Expense
We recorded income tax expense of RMB267.1 million for the fiscal year ended June 30, 2022, compared to RMB213.3 million for the fiscal year ended June 30, 2021.
(Loss)/Profit for the Year
As a result of the foregoing, we recorded a profit for the year of RMB639.7 million for the fiscal year ended June 30, 2022, compared to a loss of RMB1,429.4 million for the fiscal year ended June 30, 2021.
Current Ratio
Our current ratio decreased from 2.6 as of June 30, 2021 to 2.1 as of June 30, 2022, primarily due to a decrease in total current assets of RMB1,126.5 million, which was a result of a decrease in inventories of RMB308.0 million, and a decrease in cash and cash equivalents of RMB1,423.2 million, partially offset by an increase in term deposits of RMB236.9 million.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Liquidity and Capital Resources
As at June 30, 2022, our cash, cash equivalents, restricted cash, term deposits, and other investments decreased by 15.3% from RMB6,878.3 million as at June 30, 2021, to RMB5,828.3 million. The decrease was primarily attributable to (i) the increase of net cash used in investing activities, mainly relating to the construction of the headquarters building and (ii) the increase of net cash used in financing activities, mainly from dividends paid to our Shareholders.
Significant Investments
We did not make or hold any significant investments during the fiscal year ended June 30, 2022.
Material Acquisitions and Disposals
On October 27, 2021, we acquired 80% equity interest in YGF Investment V Limited (“YGF Investment”), which owns the land use right of a parcel of land in Guangzhou for the purpose of establishing a new headquarters building for our Group, at a total consideration of RMB694.5 million. Upon the completion, YGF Investment became a wholly-owned subsidiary of the Company. We have also consolidated the financial results of YGF Investment into our financial statements since the completion of this acquisition.
Save as disclosed above, we did not have any material acquisitions or disposals of subsidiaries, consolidated affiliated entities or associated companies during the fiscal year ended June 30, 2022.
Pledge of Assets
As of June 30, 2022, none of our Group’s assets was pledged.
Cash Management Policy
We believe we can make better use of our cash by making appropriate investments in short-term investment products, which generate income without interfering with our business operation or capital expenditures. Our investment decisions with respect to financial products are made on a case-by-case basis and after due and careful consideration of a number of factors, including, but not limited to, the market conditions, the economic developments, the anticipated investment conditions, the investment cost, the duration of the investment and the expected benefit and potential loss of the investment. We have established a set of internal control measures which allow us to achieve reasonable returns on our investment while mitigating our exposure to high investment risks. These policies and measures were formulated by our senior management.
In order to make full use of idle funds, improve the utilization rate of surplus funds, and increase our income, under the premise of not affecting our normal business activities, subject to approval from our chief financial officer, we may purchase a certain amount of wealth management products from financial institutions. According to our internal policies, the manager of our treasury department should make proposals to invest in wealth management products to our chief financial officer and such proposals must be reviewed and approved by our chief financial officer. In assessing a proposal to invest in wealth management products, a number of criteria must be met, including but not limited to the following:
| · | the purchase of wealth management products is limited to low-risk products such as wealth management products with risk level below R2, principal-guaranteed products, and treasury notes issued by banks. The purchase of high-risk financial instruments such as securities and futures is strictly prohibited. |
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
| · | the expected return of the purchased wealth management products should be not lower than bank’s deposit interest rate for term deposits of the same period, the product structure should be relatively simple, and the purchases should be made from financial institutions with large operation scale, overall strength and good credit standing. |
| · | the treasury department is responsible for setting up a detailed ledger for wealth management products, the manager of the treasury department manages the financial products, and tracks the progress and safety of wealth management products. In the event of an abnormal situation, the manager of the treasury department should report the situation to the chief financial officer in a timely manner so that we can take effective measures immediately to reduce potential losses. |
Future Plans for Material Investments and Capital Assets
As of June 30, 2022, we did not have any detailed future plans for material investments and capital assets.
Gearing Ratio
As of June 30, 2022, our gearing ratio was 0.1%, compared with 0.3% as of June 30, 2021, calculated as loans and borrowings divided by total equity as of the end of the year and multiplied by 100%.
Foreign Exchange Risk
Our financial reporting currency is RMB and changes in foreign exchange rates can significantly affect our reported results and consolidated trends. In addition, our results of operations, including margins, are affected by the fluctuation in foreign exchange rates. Our international operations generate revenues primarily in U.S. dollars. Generally, a weakening of RMB against U.S. dollar has a positive effect on our results of operations, while a strengthening of RMB against U.S. dollar has the opposite effect. We have not used any derivative financial instruments to hedge exposure to such risk. To the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of RMB against U.S. dollar would have an adverse effect on RMB amount we receive from the conversion. Conversely, if we decide to convert RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on U.S. dollar amounts available to us.
Contingent Liabilities
Commitment of tax payments
In connection with the acquisition of land use right and the construction of the headquarters building in Guangzhou, we entered into a letter of intent on November 26, 2020 with the local government of the district where our new headquarters building is located and committed to pay an aggregate amount of tax levies of no less than RMB965 million to a local government in Guangzhou for a five-year period starting from January 1, 2021. If we fail to meet the committed amount for any of the five calendar years, we will have to compensate the shortfall. On January 25, 2021, MINISO (Guangzhou) Co., Ltd. provided a performance guarantee of RMB160 million issued by a commercial bank to this local government in respect of the commitment of tax payments for the calendar year of 2021, which was valid from April 1, 2021 to March 31, 2022. We have met the commitment for the calendar year of 2021 and therefore MINISO (Guangzhou) Co., Ltd. is not required to make any compensation to the local government under the above performance guarantee. As of March 31, 2022, the above performance guarantee has expired. Subsequently in April 2022, MINISO (Guangzhou) Co., Ltd. provided a performance guarantee of RMB175 million issued by a commercial bank to this local government in respect of the commitment of tax payments for the calendar year of 2022, which was valid from April 1, 2022 to March 31, 2023. Our Directors have assessed that, based on the projection of and actual relevant taxes and surcharges paid and payable during the calendar year of 2022 we are expected to meet the commitment for the calendar year of 2022 and thus it is not probable that we need to make such compensation to the local government under the above performance guarantee. No provision has therefore been made in respect of this matter as of June 30, 2022.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Lawsuit relating to IP dispute
For the fiscal year ended June 30, 2022, Ruimin Industry (Shanghai) Co., Ltd. initiated two legal proceedings against parties including one of the PRC subsidiaries of the Group and two of the Group’s suppliers relating to an IP dispute. The total amount claimed against the PRC subsidiary was RMB50 million. Based on the assessment of the Group’s litigation counsels, the probability of the subsidiary losing in these two cases is considered low, and even if the claimant were to prevail, the total compensation amount ordered by the courts is expected to be immaterial and significantly lower than the amount claimed. Therefore, no provision was made in respect of these two claims as of June 30, 2022.
Lawsuit relating to illicit competition
During the fiscal year ended June 30, 2022, Shenzhen Purcotton Technology Co., Ltd initiated a legal proceeding against certain PRC subsidiaries of the Group, one of the Group’s suppliers and a store operated by one of our franchisees relating to an illicit competition dispute. The total amount claimed against the PRC subsidiaries was approximately RMB30 million. Based on the assessment of the Group’s litigation counsels, the probability of the subsidiaries losing is considered low, and even if the claimant were to prevail, the total compensation amount ordered by the courts is expected to be immaterial and significantly lower than the amount claimed. Therefore, no provision was made in respect of the claim as of June 30, 2022.
Save as disclosed hereinabove, we had no other material contingent liabilities as of June 30, 2022.
Capital Commitment
As of June 30, 2022, our capital commitment was RMB842.9 million, compared with RMB128.6 million as of June 30, 2021, which is attributable mainly to the construction of the headquarters building.
Employees and Remuneration Policy
We had a total of 3,372 full-time employees as of June 30, 2022, including 1,976 in China and 1,396 in certain overseas countries. The following table sets forth the number of our employees categorized by function as of June 30, 2022.
| | | Number of | |
| Function | | Employees | |
| Product Development and Supply Chain Management | | | 668 | |
| General and Administrative | | | 482 | |
| Operations | | | 1,614 | |
| Sales and Marketing | | | 208 | |
| Technology | | | 218 | |
| Business Development | | | 102 | |
| Logistics | | | 80 | |
| | | | | |
| Total | | | 3,372 | |
Our total remuneration cost incurred for the fiscal year ended June 30, 2022 was RMB864.7 million, as compared to RMB916.2 million for the fiscal year ended June 30, 2021.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
The number of employees employed by the Company varies from time to time depending on needs and employees are remunerated based on industry practice. The remuneration policy and package of the Group’s employees are periodically reviewed. Apart from pension funds and in-house training programmes, discretionary bonuses, share awards and share options from the Company’s share incentive plan may be awarded to employees according to the assessment of individual performance.
| 2. | FOR THE YEAR ENDED JUNE 30, 2023 |
Business Overview
During the fiscal year ended June 30, 2023, the total number of MINISO stores in China and overseas markets increased from 5,199 as of June 30, 2022 to 5,791 as of June 30, 2023. The number of TOP TOY stores increased from 97 as of June 30, 2022 to 118 as of June 30, 2023. For the fiscal year ended June 30, 2023, the aggregate GMV of the Group reached approximately RMB21.4 billion.
Brands and Products
For the fiscal year ended June 30, 2023, we launched an average of around 530 SKUs in “MINISO” channels per month, and we offered consumers a wide selection of around 9,700 core SKUs, the vast majority of which are under the “MINISO” brand. Our MINISO product offering spans across 11 major categories, including home decor, small electronics, textile, accessories, beauty tools, toys, cosmetics, personal care, snacks, fragrance and perfumes, stationery and gifts.
Under the TOP TOY brand, we offered around 7,000 SKUs as of June 30, 2023 across 8 major categories, including blind boxes, toy bricks, model figures, model kits, collectible dolls, Ichiban Kuji, sculptures, and other popular toys.
As of June 30, 2023, we have established co-branding relationships with 80 IP licensors. We also co-developed new IP with talented independent artists into popular IP products.
Other Key Operating Data
The following tables set forth certain of our key operating data of MINISO stores in China and overseas markets, respectively:
| | | For the fiscal year ended | |
| | | June 30, | |
| | | 2022 | | | 2023 | |
| MINISO stores in China | | | | | | | | |
| Total GMV(1) (RMB in millions) | | | 10,400 | | | | 10,671 | |
| Annualized average revenue per MINISO store(2) (RMB in millions) | | | 2.2 | | | | 2.1 | |
| Number of transactions (in millions) | | | 285.1 | | | | 283.8 | |
| Sales volume of SKUs (in millions) | | | 857.8 | | | | 814.5 | |
| Average spending per transaction (RMB) | | | 36.5 | | | | 37.6 | |
| Average selling price (RMB) | | | 12.1 | | | | 13.1 | |
Notes:
| (1) | Includes GMV generated through MINISO O2O platforms. |
| (2) | Annualized average revenue per MINISO store is calculated by (a) revenue of MINISO brand in China dividing by (b) the average number of MINISO stores in China at the beginning and the end of the Reporting Period. |
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
| | | For the fiscal year ended | |
| | | June 30, | |
| | | 2022 | | | 2023 | |
| | | | | | | |
| | | (RMB in millions) | |
| MINISO stores in overseas markets | | | | | | | | |
| Total GMV | | | 6,414 | | | | 9,072 | |
| Asian countries excluding China | | | 2,435 | | | | 3,664 | |
| Americas | | | 2,717 | | | | 4,204 | |
| Europe | | | 562 | | | | 650 | |
| Others | | | 700 | | | | 554 | |
| Annualized average revenue per MINISO store(1) | | | 1.4 | | | | 1.8 | |
| Asian countries excluding China | | | 1.1 | | | | 1.6 | |
| Americas | | | 2.3 | | | | 3.0 | |
| Europe | | | 1.3 | | | | 0.8 | |
| Others | | | 0.5 | | | | 0.6 | |
Note:
| (1) | Annualized average revenue per MINISO store is calculated as (a) revenue of MINISO brand in overseas markets divided by (b) the average number of MINISO stores in overseas markets at the beginning and the end of the Reporting Period. |
The following table sets forth the GMV of MINISO brand in China through online channels for the periods indicated:
| | | For the fiscal year ended | |
| | | June 30, | |
| | | 2022 | | | 2023 | |
| | | | | | | |
| | | (RMB in millions) | |
| MINISO brand in China | | | | | | | | |
| Total GMV through online channels(1) | | | 687 | | | | 670 | |
Note:
| (1) | Excludes GMV through O2O platforms which is accounted for in GMV through offline channels. |
Our TOP TOY brand started operating in December 2020 in China. For the fiscal year ended June 30, 2023, our TOP TOY brand achieved a total GMV of RMB774 million through multi-channels. The following table sets forth certain of our key operating data of TOP TOY stores:
| | | For the fiscal year ended | |
| | | June 30, | |
| | | 2022 | | | 2023 | |
| TOP TOY stores | | | | | | | | |
| Total GMV (RMB in millions) | | | 519 | | | | 606 | |
| Annualized average revenue per TOP TOY store(1) (RMB in millions) | | | 5.3 | | | | 5.0 | |
| Number of transactions (in millions) | | | 4.1 | | | | 4.9 | |
| Sales volume of SKUs (in millions) | | | 7.6 | | | | 9.5 | |
| Average spending per transaction (RMB) | | | 126.2 | | | | 123.7 | |
| Average selling price (RMB) | | | 68.6 | | | | 63.9 | |
Note:
| (1) | Annualized average revenue per TOP TOY store is calculated as (a) revenue of TOP TOY brand divided by (b) the average number of TOP TOY stores at the beginning and the end of the Reporting Period. |
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Revenue
Our total revenue increased by 13.8% from RMB10,085.6 million for the fiscal year ended June 30, 2022 to RMB11,473.2 million for the fiscal year ended June 30, 2023, mainly attributable to (i) an increase of 44.6% in revenue from overseas markets, and (ii) an increase of 2.8% in revenue from China.
Cost of Sales
Our cost of sales was RMB7,030.2 million for the fiscal year ended June 30, 2023, compared to RMB7,015.9 million in fiscal year 2022.
Gross Profit and Gross Margin
Gross profit increased by 44.7% from RMB3,069.8 million for the fiscal year ended June 30, 2022 to RMB4,443.1 million for the fiscal year ended June 30, 2023, and gross margin increased from 30.4% to 38.7% during the same period. The increase in gross profit and gross margin was mainly driven by (i) a higher revenue contribution from the Company’s overseas markets of 33.3%, compared to 26.2% in fiscal year 2022, (ii) higher gross margin in China contributed by newly launched products in relation to our execution of strategic brand upgrade of MINISO, and the cost-saving measures that the Company adopted to reduce the costs of certain products, and (iii) higher gross margin of TOP TOY due to a shift in product mix towards more profitable products.
Other Income
Our other income decreased by 30.8% from RMB25.9 million for the fiscal year ended June 30, 2022 to RMB17.9 million for the fiscal year ended June 30, 2023, primarily due to the decrease in government grants.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 19.0% from RMB1,442.3 million for the fiscal year ended June 30, 2022 to RMB1,716.1 million for the fiscal year ended June 30, 2023. Excluding share-based compensation expenses, our selling and distribution expenses increased from RMB1,390.3 million to RMB1,671.3 million during the same period, which was primarily due to (i) increased personnel-related expenses, (ii) increased licensing expenses in relation to our growing IP library and enriched offerings of IP products, and (iii) increased promotion and advertising expenses, mainly in connection with our execution of strategic brand upgrade of MINISO in China.
General and Administrative Expenses
Our general and administrative expenses decreased by 22.4% from RMB816.2 million for the fiscal year ended June 30, 2022 to RMB633.6 million for the fiscal year ended June 30, 2023. Excluding equity-settled share-based payment expenses, our general and administrative expenses decreased by 21.6% from RMB785.4 million to RMB615.6 million during the same period, which was primarily due to (i) decreased personnel-related expenses in relation to our cost control measures among our corporate crew, and (ii) decreased depreciation and amortization expenses due to the capitalization of the depreciation of land use right in construction cost of our headquarters building.
Other Net Income
Our other net income increased by 30.7% from RMB87.3 million for the fiscal year ended June 30, 2022 to RMB114.1 million for the fiscal year ended June 30, 2023, primarily due to a net foreign exchange gain of RMB109.1 million in fiscal year 2023, compared to RMB14.0 million in fiscal year 2022, partially offset by a decrease in investment income from wealth management products as a result of reduced principal of such products.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Impairment Loss on Non-current Assets
Our impairment loss on non-current assets was RMB13.5 million and RMB3.4 million for the fiscal years ended June 30, 2022 and 2023, respectively. We recorded impairment loss on non-current assets of directly operated stores.
Operating Profit
As a result of the foregoing, we recorded operating profit of RMB2,223.0 million for the fiscal year ended June 30, 2023, representing an increase of 152.0% from RMB882.0 million for the fiscal year ended June 30, 2022.
Net Finance Income
Our net finance income increased by 235.7% from RMB32.9 million for the fiscal year ended June 30, 2022 to RMB110.6 million for the fiscal year ended June 30, 2023, mainly due to an increase in interest income as a result of increased principal in bank deposits.
Share of Loss of an Equity-accounted Investee, Net of Tax
For the fiscal year ended June 30, 2023, we did not record any share of loss of an equity-accounted investee, net of tax. For the fiscal year ended June 30, 2022, our share of loss of an equity-accounted investee, net of tax was RMB8.2 million, which was mainly due to our investment into and share of 20% of loss of a company which was established to acquire the land use right of a parcel of land in Guangzhou for the purpose of establishing a new headquarters building for our Group in August 2020. In October 2021, we acquired the remaining 80% equity interest in this company and we currently own 100% equity interests of the then equity-accounted investee.
Income Tax Expense
We recorded income tax expense of RMB551.8 million for the fiscal year ended June 30, 2023, compared to RMB267.1 million for the fiscal year ended June 30, 2022.
Profit for the Year
As a result of the foregoing, we recorded a profit for the year of RMB1,781.8 million for the fiscal year ended June 30, 2023, compared to a profit for the year of RMB639.7 million for the fiscal year ended June 30, 2022.
Current Ratio
Our current ratio increased from 2.1 as of June 30, 2022 to 2.5 as of June 30, 2023, primarily due to an increase in total current assets of RMB1,831.4 million mainly as a result of increased cash and cash equivalents and term deposits.
Liquidity and Capital Resources
During the fiscal year ended June 30, 2023, we funded our cash requirements principally through cash generated from our operations. As of June 30, 2023, our cash, cash equivalents, restricted cash, term deposits, and other investments recorded in current assets increased by 25.3% from RMB5,828.3 million as of June 30, 2022, to RMB7,303.3 million. The increase was primarily attributable to (i) the net cash generated from operating activities, and (ii) the proceeds from our Hong Kong Public Offering and exercise of the over-allotment option in fiscal year 2023.
Significant Investments
We did not make or hold any significant investments during the fiscal year ended June 30, 2023.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Material Acquisitions and Disposals
We did not have any material acquisitions or disposals of subsidiaries, consolidated affiliated entities or associated companies during the fiscal year ended June 30, 2023.
Pledge of Assets
As of June 30, 2023, none of our Group’s assets was pledged.
Cash Management Policy
We believe we can make better use of our cash by making appropriate investments in short-term investment products, which generate income without interfering with our business operation or capital expenditures. Our investment decisions with respect to financial products are made on a case-by-case basis and after due and careful consideration of a number of factors, including, but not limited to, the market conditions, the economic developments, the anticipated investment conditions, the investment cost, the duration of the investment and the expected benefit and potential loss of the investment. We have established a set of internal control measures which allow us to achieve reasonable returns on our investment while mitigating our exposure to high investment risks. These policies and measures were formulated by our senior management.
In order to make full use of idle funds, improve the utilization rate of surplus funds, and increase our income, under the premise of not affecting our normal business activities, subject to approval from our chief financial officer, we may purchase a certain amount of wealth management products from financial institutions. According to our internal policies, the manager of our treasury department should make proposals to invest in wealth management products to our chief financial officer and such proposals must be reviewed and approved by our chief financial officer. In assessing a proposal to invest in wealth management products, a number of criteria must be met, including but not limited to the following:
| · | the purchase of wealth management products is limited to low-risk products such as term deposits, principal-guaranteed and interest-paying products, treasury notes issued by banks, and wealth management products with risk level below R2. The purchase of high-risk financial instruments such as securities and futures is strictly prohibited. |
| · | the expected return of the purchased wealth management products should be not lower than bank’s deposit interest rate for term deposits of the same period, the product structure should be relatively simple, and the purchases should be made from financial institutions with large operation scale, overall strength and good credit standing. |
| · | the treasury department is responsible for setting up a detailed ledger for wealth management products, the manager of the treasury department manages the financial products, and tracks the progress and safety of wealth management products. In the event of an abnormal situation, the manager of the treasury department should report the situation to the chief financial officer in a timely manner so that we can take effective measures immediately to reduce potential losses. |
Future Plans for Material Investments or Capital Assets
As of June 30, 2023, we did not have any detailed future plans for material investments or capital assets.
Gearing Ratio
As of June 30, 2023, our gearing ratio was 0.1%, calculated as loans and borrowings divided by total equity as of the end of the year and multiplied by 100%.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Foreign Exchange Risk
Our financial reporting currency is RMB and changes in foreign exchange rates can significantly affect our reported results and consolidated trends. In addition, our results of operations, including margins, are affected by the fluctuation in foreign exchange rates. Our international operations generate revenues primarily in U.S. dollars. Generally, a weakening of RMB against U.S. dollar has a positive effect on our results of operations, while a strengthening of RMB against U.S. dollar has the opposite effect. We have not used any derivative financial instruments to hedge exposure to such risk. To the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of RMB against U.S. dollar would have an adverse effect on RMB amount we receive from the conversion. Conversely, if we decide to convert RMB into U.S. dollars for the purpose of making payments for dividends on our Shares or ADSs or for other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on U.S. dollar amounts available to us.
Contingent Liabilities
Commitment of tax payments
In connection with the acquisition of land use right and the construction of the headquarters building in Guangzhou, we entered into a letter of intent on November 26, 2020 with the local government of the district where our new headquarters building is located and committed to pay an aggregate amount of tax levies of no less than RMB965.0 million to the local government in Guangzhou for a five-year period starting from January 1, 2021. If we fail to meet the committed amount for any of the five calendar years, we will have to compensate for the shortfall.
In April 2022, Miniso (Guangzhou) Co., Ltd., (“MINISO Guangzhou”) provided a performance guarantee of RMB175.0 million issued by a commercial bank to this local government in respect of the commitment of tax payments for the calendar year of 2022, which was valid from April 1, 2022 to March 31, 2023. We have met the commitment for the calendar year of 2022 and therefore MINISO Guangzhou is not required to make any compensation to the local government under the above performance guarantee. As of March 31, 2023, the above performance guarantee has expired.
In March 2023, MINISO Guangzhou provided a performance guarantee of RMB190.0 million issued by a commercial bank to this local government in respect of the commitment of tax payments for the calendar year of 2023, which was valid from April 1, 2023 to March 31, 2024. The Directors have assessed that, based on the projection of and actual relevant taxes and surcharges paid and payable during the calendar year of 2023, we are expected to meet the commitment for the calendar year of 2023 and it thus is not probable that MINISO Guangzhou needs to make such compensation to the local government under the above performance guarantee. No provision has therefore been made in respect of this matter as of June 30, 2023.
Lawsuit relating to illicit competition
During the fiscal year ended June 30, 2022, Shenzhen Purcotton Technology Co., Ltd. initiated a legal proceeding against certain PRC subsidiaries of the Group, one of the Group’s suppliers and a store operated by one of the Group’s retail partners relating to an illicit competition dispute. The total amount claimed against the PRC subsidiaries was approximately RMB30.0 million. No provision was made in respect of this claim as of June 30, 2022 as the Directors believed the probability of losing the case was low based on the assessment of the Group’s litigation counsel at that time.
As of June 30, 2023, a provision amounting to RMB30.0 million was made based on the first instance judgment made by the court despite that the Group had filed an application of appeal to the court.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Securities class action
In August 2022, a putative federal securities class action was filed against the Company and certain of its officers and Directors, alleging that the Company made misleading misstatements or omissions regarding its business operations and financials in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934. The action is captioned In re MINISO Group Holding Limited Securities Litigation, 1:22-cv-09864 (S.D.N.Y.). In September 2023, the parties completed briefing on defendants’ motion to dismiss the action, and a decision is currently pending. This action otherwise remains in its preliminary stage, and we are unable to predict with certainty the outcome of the action or reliably estimate the potential losses, if any.
Capital Commitment
As of June 30, 2023, our capital commitment was RMB982.6 million, which was attributable to the construction of the headquarters building.
Employees and Remuneration Policy
We had a total of 3,696 full-time employees as of June 30, 2023, including 2,003 in China and 1,693 in certain overseas countries. The following table sets forth the number of our employees categorized by function as of June 30, 2023:
| Function | | Number of
Employees | |
| Product Development and Supply Chain Management | | | 779 | |
| General and Administrative | | | 436 | |
| Operations | | | 1,933 | |
| Sales and Marketing | | | 114 | |
| Technology | | | 177 | |
| Business Development | | | 128 | |
| Logistics | | | 129 | |
| | | | | |
| Total | | | 3,696 | |
Our total remuneration cost incurred for the fiscal year ended June 30, 2023 was RMB819.6 million, as compared to RMB864.7 million for the fiscal year ended June 30, 2022.
The number of employees employed by the Company varies from time to time depending on needs and employees are remunerated based on industry practice. The remuneration policy and package of the Group’s employees are periodically reviewed. Apart from pension funds and in-house training programmes, discretionary bonuses, share awards and share options from the Company’s share incentive plan may be awarded to employees according to the assessment of individual performance.
| 3. | FOR THE SIX MONTHS ENDED DECEMBER 31, 2023 |
Business Overview
During the six months ended December 31, 2023, the total number of MINISO stores in China and overseas markets increased from 5,791 as of June 30, 2023 to 6,413 as of December 31, 2023. The number of TOP TOY stores increased from 118 as of June 30, 2023 to 148 as of December 31, 2023. For the six months ended December 31, 2023, the aggregate GMV of the Group reached approximately RMB14.3 billion.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Brands and Products
For the six months ended December 31, 2023, we launched an average of around 930 SKUs in “MINISO” channels per month, and we offered consumers a wide selection of around 9,500 core SKUs, the vast majority of which are under the “MINISO” brand. Our MINISO product offering spans across 11 major categories, including home decor, small electronics, textile, accessories, beauty tools, toys, cosmetics, personal care, snacks, fragrance and perfumes, stationery and gifts.
Under the “TOP TOY” brand, we offered around 8,400 SKUs as of December 31, 2023 across major categories such as blind boxes, toy bricks, model figures, model kits, collectible dolls, Ichiban Kuji and other popular toys.
Other Key Operating Data
The following tables set forth certain of our key operating data of MINISO stores in China and overseas market, respectively:
| | | For the
year ended
June 30,
2023 | | | For the six
months ended
December 31,
2023 | |
| MINISO stores in China | | | | | | | | |
| Total GMV(1) (RMB in millions) | | | 10,671 | | | | 6,895 | |
| Average revenue per MINISO store for the year/period(2) (RMB in millions) | | | 2.1 | | | | 1.2 | |
| Number of transactions (in millions) | | | 283.8 | | | | 183.2 | |
| Sales volume of SKUs (in millions) | | | 814.5 | | | | 484.4 | |
| Average spending per transaction (RMB) | | | 37.6 | | | | 37.6 | |
| Average selling price (RMB) | | | 13.1 | | | | 14.2 | |
Notes:
| (1) | Includes GMV generated through MINISO offline stores and O2O platforms. |
| (2) | Average revenue per MINISO store for the year/period is calculated as (a) revenue of MINISO brand in China divided by (b) the average number of MINISO stores in China at the beginning and the end of the relevant period. |
| | | For the
year ended
June 30,
2023 | | | For the six
months ended
December 31,
2023 | |
| | | | | | | |
| | | (RMB in millions) | |
| MINISO stores in overseas markets | | | | | | | | |
| Total GMV | | | 9,072 | | | | 6,452 | |
| Asian countries excluding China | | | 3,664 | | | | 2,323 | |
| Americas | | | 4,204 | | | | 3,235 | |
| Europe | | | 650 | | | | 575 | |
| Others | | | 554 | | | | 319 | |
| Average revenue per MINISO store for the year/period(1) | | | 1.8 | | | | 1.2 | |
| Asian countries excluding China | | | 1.6 | | | | 0.9 | |
| Americas | | | 3.0 | | | | 2.1 | |
| Europe | | | 0.8 | | | | 0.7 | |
| Others | | | 0.6 | | | | 0.4 | |
Note:
| (1) | Average revenue per MINISO store for the year/period is calculated as (a) revenue of MINISO brand in overseas markets divided by (b) the average number of MINISO stores in overseas markets at the beginning and the end of the relevant period. |
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
The following table sets forth the GMV of MINISO brand in China through online channels for the periods indicated:
| | | For the
year ended
June 30,
2023 | | | For the six
months ended
December 31,
2023 | |
| | | | | | | |
| | | (RMB in millions) | |
| MINISO brand in China | | | | | | | | |
| Total GMV through online channels(1) | | | 670 | | | | 321 | |
Note:
| (1) | Excludes GMV through O2O platforms, which is counted as GMV through offline channels. |
Our TOP TOY brand started its operation in December 2020 in China. For the six months ended December 31, 2023, TOP TOY brand achieved a total GMV of RMB539.5 million through multi-channels. The following table sets forth certain of our key operating data of TOP TOY stores:
| | | For the
year ended
June 30,
2023 | | | For the six
months ended
December 31,
2023 | |
| TOP TOY stores | | | | | | | | |
| Total GMV (RMB in millions) | | | 606 | | | | 445 | |
| Average revenue per TOP TOY store for the year/period(1) (RMB in millions) | | | 5.0 | | | | 2.8 | |
| Number of transactions (in millions) | | | 4.9 | | | | 3.8 | |
| Sales volume of SKUs (in millions) | | | 9.5 | | | | 7.1 | |
| Average spending per transaction (RMB) | | | 123.7 | | | | 118.7 | |
| Average selling price (RMB) | | | 63.9 | | | | 62.5 | |
Note:
| (1) | Average revenue per TOP TOY store for the year/period is calculated as (a) revenue of TOP TOY brand divided by (b) the average number of TOP TOY stores at the beginning and the end of the relevant period. |
Revenue
Our total revenue was RMB7,632.5 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB11,473.2 million), which was consisted of 63.5% revenue generated in China and 36.5% revenue generated in overseas markets.
Cost of Sales
Our cost of sales was RMB4,391.4 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB7,030.2 million).
Gross Profit and Gross Margin
Our gross profit was RMB3,241.0 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB4,443.1 million), and gross margin was 42.5% for the six months ended December 31, 2023 (for the year ended June 30, 2023: 38.7%). The increase in gross margin was mainly attributable to (i) higher gross margin in overseas markets contributed by product optimization and higher revenue contribution from directly operated markets, (ii) higher gross margin in China contributed by newly launched products in relation to our execution of strategic brand upgrade of MINISO, and the cost-saving measures the Company adopted to reduce the costs of certain products, and (iii) higher gross margin of TOP TOY due to a shift in product mix towards more profitable products.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Other Income
Our other income was RMB19.0 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB17.9 million), which was mainly attributable to government grants and income from depositary bank.
Selling and Distribution Expenses
Our selling and distribution expenses were RMB1,363.1 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB1,716.1 million). Excluding share-based compensation expenses, our selling and distribution expenses were RMB1,321.6 million (for the year ended June 30, 2023: RMB1,671.3 million), which was primarily due to the increase in (i) personnel-related expenses, logistics expenses and IP licensing expenses in relation to the growth of the Company’s business, (ii) depreciation expenses of the right-of-use assets in relation to directly operated stores, and (iii) promotion and advertising expenses, mainly in connection with the Company’s brand upgrade and the opening of new stores in overseas markets.
General and Administrative Expenses
Our general and administrative expenses were RMB357.7 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB633.6 million). Excluding equity-settled share-based payment expenses, our general and administrative expenses were RMB352.8 million (for the year ended June 30, 2023: RMB615.6 million), which were primarily accounted for (i) personnel-related expenses in relation to the growth of our business, (ii) expenses in relation to operational services provided by the third-parties, and (iii) depreciation and amortization expenses.
Other Net Income
Our other net income was RMB21.1 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB114.1 million), which was primarily accounted for (i) the increase in fair value of an investment in an unlisted limited partnership enterprise, and (ii) investment income from other investments, partially offset by net foreign exchange loss.
Impairment Loss on Non-current Assets
Our impairment loss on non-current assets was RMB4.5 million and RMB3.4 million for the six months ended December 31, 2023 and for the year ended June 30, 2023, respectively. We recorded impairment loss on non-current assets of directly operated stores.
Operating Profit
As a result of the foregoing, we recorded operating profit of RMB1,553.7 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB2,223.0 million).
Net Finance Income
Our net finance income was RMB98.8 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB110.6 million), which was accounted for the interest income from bank deposits.
Income Tax Expense
We recorded income tax expense of RMB396.7 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB551.8 million).
Profit for the Year/Period
As a result of the foregoing, we recorded a profit for the period of RMB1,256.1 million for the six months ended December 31, 2023 (for the year ended June 30, 2023: RMB1,781.8 million).
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Current Ratio
Our current ratio was 2.3 as of December 31, 2023, compared to 2.5 as of June 30, 2023. The change in current ratio was primarily due to the increase in trade and other payables and lease liabilities.
SIX MONTHS ENDED DECEMBER 31, 2023 COMPARED TO SIX MONTHS ENDED DECEMBER 31, 2022
Revenue
Our total revenue increased by 44.9% from RMB5,266.9 million for the six months ended December 31, 2022 to RMB7,632.5 million for the six months ended December 31, 2023, mainly attributable to (i) an increase of 46.3% in revenue from overseas markets, and (ii) an increase of 44.1% in revenue from China.
Revenue generated from our operations in China was RMB4,843.1 million for the six months ended December 31, 2023, increasing by 44.1% from RMB3,360.2 million for the six months ended December 31, 2022. The year-over-year increase in revenue from the China market was primarily due to (i) a year-over-year increase of approximately 44.6% in revenue from MINISO in China, and (ii) a year-over-year increase of approximately 65.8% in revenue from TOP TOY in China. Revenue generated from overseas markets was RMB2,789.3 million for the six months ended December 31, 2023, increasing by 46.3% from RMB1,906.7 million for the six months ended December 31, 2022.
Cost of Sales
Our cost of sales was RMB4,391.4 million for the six months ended December 31, 2023, increased by 33.8% compared to cost of sales of RMB3,281.2 million for the six months ended December 31, 2022.
Gross Profit and Gross Margin
Gross profit increased by 63.2% from RMB1,985.7 million for the six months ended December 31, 2022 to RMB3,241.0 million for the six months ended December 31, 2023, and gross margin increased from 37.7% to 42.5% for the same periods. The increase in gross margin was mainly driven by (i) higher gross margin in overseas markets contributed by product optimization and higher revenue contribution from directly operated markets, (ii) higher gross margin in China contributed by newly launched products in relation to our execution of strategic brand upgrade of MINISO, and the cost-saving measures the Company adopted to reduce the costs of certain products, and (iii) higher gross margin of TOP TOY due to a shift in product mix towards more profitable products.
Other Income
Our other income increased by 32.7% from RMB14.3 million for the six months ended December 31, 2022 to RMB19.0 million for the six months ended December 31, 2023, primarily due to an increase in income from depositary bank.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 70.8% from RMB798.1 million for the six months ended December 31, 2022 to RMB1,363.1 million for the six months ended December 31, 2023. Excluding equity-settled share-based payment expenses, our selling and distribution expenses increased by 69.1% from RMB781.5 million to RMB1,321.6 million for the same periods. The increase was primarily attributable to (i) increased personnel-related expenses, logistics expenses and IP licensing expenses in relation to the growth of the Company’s business, (ii) increased depreciation expenses of the right-of-use assets in relation to directly operated stores, and (iii) increased promotion and advertising expenses, mainly in connection with the Company’s brand upgrade and the opening of new stores in overseas markets.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
General and Administrative Expenses
Our general and administrative expenses increased by 13.9% from RMB313.9 million for the six months ended December 31, 2022 to RMB357.7 million for the six months ended December 31, 2023. Excluding equity-settled share-based payment expenses, our general and administrative expenses increased by 16.1% from RMB304.0 million to RMB352.8 million for the same periods, which was primarily due to increased personnel-related expenses in relation to the growth of our business.
Other Net Income
Our other net income was RMB21.1 million for the six months ended December 31, 2023, compared to other net income of RMB72.9 million for the six months ended December 31, 2022. The decrease was mainly due to net foreign exchange loss, partially offset by net change in fair value of other investments.
Impairment Loss on Non-current Assets
For the six months ended December 31, 2022, we did not record any impairment loss on non-current assets. For the six months ended December 31, 2023, we recorded impairment loss on non-current assets of RMB4.5 million, which was related to our directly operated stores.
Operating Profit
As a result of the foregoing, we recorded operating profit of RMB1,553.7 million for the six months ended December 31, 2023, representing an increase of 62.3% from RMB957.1 million for the six months ended December 31, 2022.
Net Finance Income
Our net finance income increased by 104.3% from RMB48.3 million for the six months ended December 31, 2022 to RMB98.8 million for the six months ended December 31, 2023, mainly due to an increase in interest income as a result of increased principal in bank deposits.
Income Tax Expense
We recorded income tax expense of RMB396.7 million for the six months ended December 31, 2023, compared to RMB241.5 million for the six months ended December 31, 2022.
Profit for the Period
As a result of the foregoing, our profit for the period increased by 64.4% from RMB763.9 million for the six months ended December 31, 2022 to RMB1,256.1 million for the six months ended December 31, 2023.
Current Ratio
Our current ratio was 2.3 as of December 31, 2023, compared to 2.4 as of December 31, 2022. The change in current ratio was primarily due to an increase in trade and other payables and lease liabilities.
Liquidity and Capital Resources
During the six months ended December 31, 2023, we funded our cash requirements principally through cash generated from our operations. As of December 31, 2023, our cash, cash equivalents, restricted cash, term deposits, and other investments recorded in current assets were RMB6,887.0 million (as of June 30, 2023: RMB7,303.3 million).
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Significant Investments
We did not make or hold any significant investments during the six months ended December 31, 2023.
Material Acquisitions and Disposals
We did not have any material acquisitions or disposals of subsidiaries, consolidated affiliated entities or associated companies during the six months ended December 31, 2023.
Pledge of Assets
As of December 31, 2023, none of our Group’s assets was pledged.
Cash Management Policy
We believe we can make better use of our cash by making appropriate investments in short-term investment products, which generate income without interfering with our business operation or capital expenditures. Our investment decisions with respect to financial products are made on a case-by-case basis and after due and careful consideration of a number of factors, including, but not limited to, the market conditions, the economic developments, the anticipated investment conditions, the investment cost, the duration of the investment and the expected benefit and potential loss of the investment. We have established a set of internal control measures which allow us to achieve reasonable returns on our investment while mitigating our exposure to high investment risks. These policies and measures were formulated by our senior management.
In order to make full use of idle funds, improve the utilization rate of surplus funds, and increase our income, under the premise of not affecting our normal business activities, subject to approval from our chief financial officer, we may purchase a certain amount of wealth management products from financial institutions. According to our internal policies, the manager of our treasury department should make proposals to invest in wealth management products to our chief financial officer and such proposals must be reviewed and approved by our chief financial officer. In assessing a proposal to invest in wealth management products, a number of criteria must be met, including but not limited to the following:
| · | the purchase of wealth management products is limited to low-risk products such as term deposits, principal-guaranteed and interest-paying products, treasury notes issued by banks, and wealth management products with risk level below R2. The purchase of high-risk financial instruments such as securities and futures is strictly prohibited. |
| · | the expected return of the purchased wealth management products should be not lower than bank’s deposit interest rate for term deposits of the same period, the product structure should be relatively simple, and the purchases should be made from financial institutions with large operation scale, overall strength and good credit standing. |
| · | the treasury department is responsible for setting up a detailed ledger for wealth management products, the manager of the treasury department manages the financial products and tracks the progress and safety of wealth management products. In the event of an abnormal situation, the manager of the treasury department should report the situation to the chief financial officer in a timely manner so that we can take effective measures immediately to reduce potential losses. |
Future Plans for Material Investments or Capital Assets
As of December 31, 2023, we did not have any detailed future plans for material investments or capital assets.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Gearing Ratio
As of December 31, 2023, our gearing ratio was 0.1%, calculated as loans and borrowings divided by total equity as of the end of the period and multiplied by 100%.
Foreign Exchange Risk
Our financial reporting currency is RMB and changes in foreign exchange rates can significantly affect our reported results and consolidated trends. In addition, our results of operations, including profit margins, are affected by the fluctuation in foreign exchange rates. Our international operations generate revenues primarily in U.S. dollars. Generally, a weakening of RMB against U.S. dollar has a positive effect on our results of operations, while a strengthening of RMB against U.S. dollar has the opposite effect. We have not used any derivative financial instruments to hedge exposure to such risk. To the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of RMB against U.S. dollar would have an adverse effect on RMB amount we receive from the conversion. Conversely, if we decide to convert RMB into U.S. dollars for the purpose of making payments for dividends on our Shares or ADSs or for other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on U.S. dollar amounts available to us.
Contingent Liabilities
Commitment of tax payments
In connection with the acquisition of land use right and the construction of the headquarters building in Guangzhou, Miniso (Guangzhou) Co., Ltd. (“MINISO Guangzhou”) entered into a letter of intent on November 26, 2020 with the local government of the district where our new headquarters building is located and committed to pay an aggregate amount of tax levies of no less than RMB965.0 million to the local government in Guangzhou for a five-year period starting from January 1, 2021, with RMB160.0 million in 2021, RMB175.0 million in 2022, RMB190.0 million in 2023, RMB210.0 million in 2024 and RMB230.0 million in 2025. If we fail to meet the committed amount for any of the five calendar years, MINISO Guangzhou will have to compensate for the shortfall.
We had met the commitments for the calendar years of 2021 and 2022 and therefore MINISO Guangzhou was not required to make any compensation to the local government. In March 2023, MINISO Guangzhou provided a performance guarantee of RMB190.0 million issued by a commercial bank to this local government in respect of the commitment of tax payments for the calendar year of 2023, which is valid from April 1, 2023 to March 31, 2024. The Directors have assessed that, based on the projection of and actual relevant taxes and surcharges paid and payable during the calendar year of 2023, we have met the commitment for the calendar year of 2023 and thus it is not probable that MINISO Guangzhou needs to make any compensation to the local government under the above performance guarantee. As such, no provision has been made in respect of this matter as of December 31, 2023.
Lawsuit relating to illicit competition
During the year ended June 30, 2022, Shenzhen Purcotton Technology Co., Ltd. initiated a legal proceeding against certain PRC subsidiaries of the Group, one of the Group’s suppliers and a store operated by one of the Group’s franchisees relating to an illicit competition dispute. The total amount claimed against the PRC subsidiaries was approximately RMB30.0 million.
As of December 31, 2023, the final judgment has been made by the court that the first instance judgment should be upheld, and the application of appeal filed by the Group has been dismissed. We paid RMB30.0 million to the plaintiff during the six months ended December 31, 2023.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Securities class action
In August 2022, a putative federal securities class action was filed against the Company and certain of its officers and Directors, alleging that the Company made misleading misstatements or omissions regarding its business operations and financials in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934. The action is captioned In re MINISO Group Holding Limited Securities Litigation, 1:22-cv-09864 (S.D.N.Y.). Lead plaintiff was appointed in November 2022 and filed the operative complaint to the court. We and other defendants filed a motion to dismiss the complaint, and the motion was granted by the court in February 2024, with leave to amend. Plaintiffs have filed a motion for reconsideration of the court’s decision and intended to file a further amended complaint. As of December 31, 2023, the Directors are unable to assess the outcome of the action or reliably estimate the potential losses, if any.
Capital Commitment
As of December 31, 2023, our capital commitment was RMB837.2 million, which was attributable to the construction of the headquarters building.
Employees and Remuneration Policy
We had a total of 4,964 full-time employees as of December 31, 2023, including 2,375 in China and 2,589 in certain overseas countries. The following table sets forth the number of our employees categorized by function as of December 31, 2023:
| Function | | Number of
Employees | |
| Product Development and Supply Chain Management | | | 938 | |
| General and Administrative | | | 487 | |
| Operations | | | 2,948 | |
| Sales and Marketing | | | 137 | |
| Technology | | | 202 | |
| Business Development | | | 148 | |
| Logistics | | | 104 | |
| | | | | |
| Total | | | 4,964 | |
Our total remuneration cost incurred for the six months ended December 31, 2023 was RMB580.8 million, while it was RMB819.6 million for the year ended June 30, 2023.
The number of employees employed by the Company varies from time to time depending on needs and employees are remunerated based on industry practice. The remuneration policy and package of the Group’s employees are periodically reviewed. Apart from pension funds and in-house training programmes, discretionary bonuses, share awards and share options from the Company’s share incentive plan may be awarded to employees according to the assessment of individual performance.
| 4. | FOR THE SIX MONTHS ENDED JUNE 30, 2024 |
Business Overview
During the six months ended June 30, 2024, the total number of MINISO stores in mainland China and overseas markets increased from 6,413 as of December 31, 2023 to 6,868 as of June 30, 2024. The number of TOP TOY stores increased from 148 as of December 31, 2023 to 195 as of June 30, 2024. For the six months ended June 30, 2024, the aggregate GMV of the Group reached approximately RMB14.5 billion.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Brands and Products
For the six months ended June 30, 2024, we launched an average of around 940 SKUs in “MINISO” channels per month, and we offered consumers a wide selection of around 10,100 core SKUs, the vast majority of which are under the “MINISO” brand. Our MINISO product offering spans across 11 major categories, including home decor, small electronics, textile, accessories, beauty tools, toys, cosmetics, personal care, snacks, fragrance and perfumes, stationery and gifts.
Under the “TOP TOY” brand, we offered around 9,800 SKUs as of June 30, 2024 across major categories such as blind boxes, toy bricks, model figures, model kits, collectible dolls, Ichiban Kuji and other popular toys.
Other Key Operating Data
The following tables set forth certain of our key operating data of MINISO stores in mainland China and overseas markets, respectively:
| | | For the six months ended
June 30, | |
| | | 2023 | | | 2024 | |
| MINISO stores in mainland China | | | | | | | | |
| Total GMV(1) (RMB in millions) | | | 6,140 | | | | 7,097 | |
| Same-store(2) GMV Growth (%) | | | 28.1 | | | | (1.7 | ) |
| Number of transactions (in millions) | | | 163.4 | | | | 184.3 | |
| Sales volume of SKUs (in millions) | | | 461.8 | | | | 486.4 | |
| Average spending per transaction (RMB) | | | 37.6 | | | | 38.5 | |
| Average selling price (RMB) | | | 13.3 | | | | 14.6 | |
Notes:
| (1) | Includes GMV generated through MINISO offline stores and O2O platforms. |
| (2) | Includes stores that opened prior to the beginning of the comparative periods and remained open as of the end of the comparative periods and closed for less than 30 days during both comparative periods. |
| | | For the six months ended June 30, | |
| | | 2023 | | | 2024 | |
| MINISO stores in overseas markets | | | | | | | | |
| Total GMV (RMB in millions) | | | 4,538 | | | | 6,401 | |
| Asia excluding China | | | 1,777 | | | | 2,353 | |
| North America | | | 457 | | | | 844 | |
| Latin America | | | 1,730 | | | | 2,383 | |
| Europe | | | 321 | | | | 527 | |
| Others | | | 253 | | | | 294 | |
| Same-store(1) GMV Growth (%) | | | 32.1 | | | | 16.3 | |
| Asia excluding China | | | 25.4 | | | | 15.0 | |
| North America | | | 75.3 | | | | 12.3 | |
| Latin America | | | 40.0 | | | | 21.3 | |
| Europe | | | 11.8 | | | | 10.4 | |
| Others | | | 6.0 | | | | (1.2 | ) |
Note:
| (1) | Includes stores that opened prior to the beginning of the comparative periods, remained open as of the end of the comparative periods and closed for less than 30 days during both comparative periods. |
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
The following table sets forth the GMV of MINISO brand in mainland China through online channels for the periods indicated:
| | | For the six months ended
June 30, | |
| | | 2023 | | | 2024 | |
| | | | | | | |
| | | (RMB in millions) | |
| MINISO brand in mainland China | | | | | | | | |
| Total GMV through online channels(1) | | | 316 | | | | 345 | |
Note:
| (1) | Excludes GMV through O2O platforms which is counted as GMV through offline channels. |
Our TOP TOY brand started operating in December 2020 in mainland China. For the six months ended June 30, 2024, TOP TOY brand achieved a total GMV of RMB625.4 million through multi-channels. The following table sets forth certain key operating data of TOP TOY stores for the periods indicated:
| | | For the six months ended June 30, | |
| | | 2023 | | | 2024 | |
| TOP TOY stores | | | | | | | | |
| Total GMV (RMB in millions) | | | 369 | | | | 521 | |
| Same-store(1) GMV Growth (%) | | | 23.2 | | | | 13.6 | |
| Number of transactions (in millions) | | | 3.0 | | | | 4.7 | |
| Sales volume of SKUs (in millions) | | | 5.8 | | | | 8.9 | |
| Average spending per transaction (RMB) | | | 124.7 | | | | 111.2 | |
| Average selling price (RMB) | | | 64.3 | | | | 58.8 | |
Note:
| (1) | Includes stores that opened prior to the beginning of the comparative periods, remained open as of the end of the comparative periods and closed for less than 30 days during both comparative periods. |
Revenue
Our total revenue increased by 25.0% from RMB6,206.3 million for the six months ended June 30, 2023 to RMB7,758.7 million for the six months ended June 30, 2024, mainly attributable to an 18.8% year-over-year increase in average store count, and an around 7% same-store sales growth on group level.
Revenue from mainland China was RMB5,026.7 million for the six months ended June 30, 2024, increasing by 17.2% from RMB4,290.7 million for the six months ended June 30, 2023, primarily due to (i) an increase of 16.5% in revenue from MINISO’s offline stores in mainland China, which was primarily due to a 16.0% year-over-year growth in average store count, and the same-store sales were 98.3% of the prior year’s level, and (ii) an increase of 37.9% in revenue from TOP TOY, which was primarily powered by a strong same-store sales growth of 13.6% and a rapid growth in average store count.
Revenue from overseas markets was RMB2,732.0 million for the six months ended June 30, 2024, increasing by 42.6% from RMB1,915.7 million for the six months ended June 30, 2023, primarily due to an increase of 21.8% in average store count, coupled with a strong same-store sales growth of 16.3%. Revenue from overseas markets contributed 35.2% of the Company’s total revenue in the six months ended June 30, 2024, compared to 30.9% for the same period in 2023.
Cost of Sales
Our cost of sales increased by 16.5% from RMB3,748.9 million for the six months ended June 30, 2023 to RMB4,369.0 million for the six months ended June 30, 2024.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Gross Profit and Gross Margin
Our gross profit increased by 37.9% from RMB2,457.4 million for the six months ended June 30, 2023 to RMB3,389.8 million for the six months ended June 30, 2024, and gross margin increased from 39.6% to 43.7% for the same periods. The increase in gross margin was mainly driven by (i) higher revenue contribution from directly operated markets which accounted for 55.7% of revenue from overseas markets, compared to 45.7% in the same period of 2023, (ii) higher gross margin in mainland China contributed by newly launched products in relation to the Company’s execution of IP strategy and strategic brand upgrade of MINISO, and (iii) higher gross margin of TOP TOY due to a shift in product mix towards more profitable products.
Other Income
Our other income increased by 250.4% from RMB3.6 million for the six months ended June 30, 2023 to RMB12.7 million for the six months ended June 30, 2024, which was primarily due to an increase in income from depositary bank.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 65.8% from RMB918.0 million for the six months ended June 30, 2023 to RMB1,522.1 million for the six months ended June 30, 2024. Excluding equity-settled share-based payment expenses, our selling and distribution expenses increased by 66.4% from RMB889.8 million to RMB1,480.6 million for the same periods, which was primarily due to the Company’s investments into directly operated stores both in mainland China and overseas markets to pursue the future success of the Company’s business, especially in strategic overseas markets such as the U.S. market. As of June 30, 2024, the total number of directly operated stores in overseas markets was 343, nearly doubling such figure compared to a year ago. For the six months ended June 30, 2024, the revenue from directly operated stores increased 111.4%, while related expenses including rental and related expenses, depreciation and amortization expenses and payroll excluding share-based compensation expenses increased 82.7%. These new stores are expected to contribute more substantial sales in the second half of 2024. Promotion and advertising expenses increased 46.5% for the six months ended June 30, 2024, as a percentage of revenue stabilizing at around 3% in both comparative periods. Licensing expenses increased 24.2%, consistent with revenue growth. Logistics expenses increased 54.3%, reflecting the rising freight costs caused by the tension in international shipping during the six months ended June 30, 2024.
General and Administrative Expenses
Our general and administrative expenses increased by 30.9% from RMB319.7 million for the six months ended June 30, 2023 to RMB418.6 million for the six months ended June 30, 2024. Excluding equity-settled share-based payment expenses, our general and administrative expenses increased by 26.9% from RMB311.6 million to RMB395.6 million for the same periods, which was primarily due to the increase of personnel-related expenses in relation to the growth of the Company’s business.
Other Net Income
Our other net income was RMB41.7 million for the six months ended June 30, 2024, compared to other net income of RMB41.3 million for the six months ended June 30, 2023.
Impairment Loss on Non-current Assets
Our impairment loss on non-current assets was RMB3.4 million and RMB5.1 million for the six months ended June 30, 2023 and 2024, respectively. We recorded impairment loss on non-current assets of directly operated stores.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Operating Profit
As a result of the foregoing, our operating profit increased by 18.1% from RMB1,265.9 million for the six months ended June 30, 2023 to RMB1,494.8 million for the six months ended June 30, 2024.
Net Finance Income
Our net finance income decreased by 45.4% from RMB62.3 million for the six months ended June 30, 2023 to RMB34.0 million for the six months ended June 30, 2024, which was primarily due to a decrease in interest income as a result of decreased principal in bank deposits, and an increase in finance cost due to increased interest on lease liabilities.
Income Tax Expense
We recorded income tax expense of RMB351.7 million for the six months ended June 30, 2024, compared to RMB310.3 million for the six months ended June 30, 2023.
Profit for the Period
As a result of the foregoing, our profit for the period increased by 15.7% from RMB1,017.9 million for the six months ended June 30, 2023 to RMB1,177.4 million for the six months ended June 30, 2024.
Adjusted Net Profit (a non-IFRS measure)
Our adjusted net profit, which represents profit for the period excluding equity-settled share-based payment expenses, increased by 17.8% from RMB1,054.2 million for the six months ended June 30, 2023 to RMB1,241.9 million for the six months ended June 30, 2024. Adjusted net profit included a net foreign exchange loss of RMB12.4 million for the six months ended June 30, 2024, compared to a net foreign exchange gain of RMB54.9 million for the six months ended June 30, 2023. Excluding net foreign exchange loss and gain, adjusted net profit would have increased 25.5% year over year.
Adjusted EBITDA (a non-IFRS measure)
Our adjusted EBITDA, which represents adjusted net profit plus depreciation and amortization, finance costs and income tax expense, increased by 26.0% from RMB1,561.8 million for the six months ended June 30, 2023 to RMB1,967.4 million for the six months ended June 30, 2024.
Net Cash from Operating Activities and Free Cash Flow
Our net cash from operating activities increased by 4.9% year over year to RMB1,293.8 million for the six months ended June 30, 2024. Our capital expenditure was RMB302.8 million and free cash flow was RMB991.0 million for the six months ended June 30, 2024.
Current Ratio
Our current ratio was 2.4 as of June 30, 2024, compared to 2.3 as of December 31, 2023. The change in current ratio was primarily due to the increase in current portion of other investments and trade and other receivables.
Liquidity and Capital Resources
During the six months ended June 30, 2024, we funded our cash requirements principally through cash generated from our operations. As of June 30, 2024, our cash, cash equivalents, restricted cash, term deposits, and other investments recorded in current assets were RMB6,869.0 million (as of December 31, 2023: RMB6,887.0 million).
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Significant Investments
We did not make or hold any significant investments during the six months ended June 30, 2024.
Material Acquisitions and Disposals
We did not have any material acquisitions or disposals of subsidiaries, consolidated affiliated entities or associated companies during the six months ended June 30, 2024.
Pledge of Assets
As of June 30, 2024, none of our Group’s assets was pledged.
Future Plans for Material Investments or Capital Assets
As of June 30, 2024, we did not have any detailed future plans for material investments or capital assets.
Gearing Ratio
As of June 30, 2024, our gearing ratio was 0.1%, calculated as loans and borrowings divided by total equity as of the end of the period and multiplied by 100%.
Foreign Exchange Risk
Our financial reporting currency is RMB and changes in foreign exchange rates can significantly affect our reported results and consolidated trends. In addition, our results of operations, including margins, are affected by the fluctuation in foreign exchange rates. Our international operations generate revenues primarily in U.S. dollars. Generally, a weakening of RMB against U.S. dollar has a positive effect on our results of operations, while a strengthening of RMB against U.S. dollar has the opposite effect. We have not used any derivative financial instruments to hedge exposure to such risk. To the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of RMB against U.S. dollar would have an adverse effect on RMB amount we receive from the conversion. Conversely, if we decide to convert RMB into U.S. dollars for the purpose of making payments for dividends on our Shares or ADSs or for other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on U.S. dollar amounts available to us.
Contingent Liabilities
Commitment of Tax Payments
In connection with the acquisition of land use right and the construction of the headquarters building in Guangzhou, Miniso (Guangzhou) Co., Ltd. (“MINISO Guangzhou”) entered into a letter of intent on November 26, 2020 with the local government of the district where our new headquarters building is located and committed to pay an aggregate amount of tax levies of no less than RMB965.0 million to the local government in Guangzhou for a five-year period starting from January 1, 2021, with RMB160.0 million in 2021, RMB175.0 million in 2022, RMB190.0 million in 2023, RMB210.0 million in 2024 and RMB230.0 million in 2025. If we fail to meet the committed amount for any of the five calendar years, MINISO Guangzhou will have to compensate for the shortfall.
We had met the commitments for the calendar years of 2021, 2022 and 2023 and therefore MINISO Guangzhou was not required to make any compensation to the local government. In March 2024, MINISO Guangzhou provided a performance guarantee of RMB210.0 million issued by a commercial bank to this local government in respect of the commitment of tax payments for the calendar year of 2024, which is valid from April 1, 2024 to March 31, 2025. The Directors have assessed that, based on the projection of and actual relevant taxes and surcharges paid and payable during the calendar year of 2024, we expect to be able to meet the commitment for the calendar year of 2024 and thus it is not probable that MINISO Guangzhou needs to make any compensation to the local government under the above performance guarantee. As such, no provision has been made in respect of this matter as of June 30, 2024.
| APPENDIX IV | MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP |
Securities class action
In August 2022, a putative federal securities class action was filed against the Company and certain of its officers and Directors (“Defendants”), alleging that Defendants made misleading misstatements or omissions regarding the Company’s business operations and financials in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934. The action is captioned In re MINISO Group Holding Limited Securities Litigation, 1:22-cv-09864 (S.D.N.Y.). The lead plaintiff selection process was completed in November 2022 and an amended complaint was filed shortly thereafter. The court granted Defendants’ motion to dismiss in February 2024 with leave to amend. Plaintiffs filed a motion for reconsideration of the court’s decision in late March 2024, to which Defendants have timely responded. Decision on plaintiffs’ motion for reconsideration is pending. Because the case remains in its preliminary stage, Defendants are unable to predict the outcome of the action or estimate the potential losses, if any.
Capital Commitment
As of June 30, 2024, our capital commitment was RMB749.9 million, which was attributable to the construction of the headquarters building.
Employees and Remuneration Policy
We had a total of 5,245 full-time employees as of June 30, 2024, including 2,400 in mainland China and 2,845 in certain overseas countries and regions. The following table sets forth the number of employees categorized by function as of June 30, 2024:
| Function | | Number of
Employees | |
| Product Development and Supply Chain Management | | | 992 | |
| General and Administrative | | | 518 | |
| Operations | | | 3,090 | |
| Sales and Marketing | | | 182 | |
| Technology | | | 196 | |
| Business Development | | | 163 | |
| Logistics | | | 104 | |
| | | | | |
| Total | | | 5,245 | |
Our total remuneration cost incurred for the six months ended June 30, 2024 was RMB685.5 million, while it was RMB441.6 million for the six months ended June 30, 2023.
The number of employees employed by the Company varies from time to time depending on needs and employees are remunerated based on industry practice. The remuneration policy and package of the Group’s employees are periodically reviewed. Apart from pension funds and in-house training programmes, discretionary bonuses, share awards and share options from the Company’s share incentive plan may be awarded to employees according to the assessment of individual performance.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
The following management discussion and analysis of the results of the Target Company is an English translation of the extracts from the annual reports of the Target Company for the years ended December 31, 2021, 2022 and 2023 and the interim report of the Target Company for the six months ended 30 June 2023. The information is originally published in Chinese and the English translated version is provided for information purposes only. In case of discrepancies between the two versions, the Chinese version shall prevail.
The Directors wish to emphasise that the extracts reproduced below are not prepared for incorporation into this circular and the Group has not participated in their preparation. As such, the Directors do not express any view as to their truth, accuracy or completeness, and the Shareholders and investors should exercise caution and should not place undue reliance on such information.
| 1. | For the year ended December 31, 2021 |
SECTION 3 MANAGEMENT DISCUSSION AND ANALYSIS
| I. | Discussion and Analysis of Operations |
| (i) | Store expansion in various provinces and municipalities: |
During the Reporting Period, there were more than 50 stores in 7 provinces and municipalities directly under the central government, including Chongqing, Fujian, Sichuan, Anhui, Zhejiang, Guangdong and Jiangsu, 30 to 50 stores in 6 provinces and municipalities directly under the central government, including Hebei, Beijing, Henan, Guizhou, Shanghai and Shaanxi, and 118 stores in total in 16 provinces and municipalities directly under the central government. During the Reporting Period, the Company opened 75 new Bravo stores, closed 14 stores and newly contracted 47 stores. By the end of 2021, the Company operated a total of 1,057 supermarkets in 29 provinces and municipalities. In the fierce competitive environment in 2021, we recorded decline in revenue and profit to varying degrees in other provinces and municipalities except for Xizang, where we achieved revenue and profit growth for two consecutive years.
In May 2021, the Company began to introduce the membership-only wholesale store model on a trial basis. By the end of the year, we opened a total of 53 stores under this model, achieving a rapid growth of 32.9% in comparable same-store sales. In membership-only wholesale stores, the Company expands the store aisle to enhance shopping comfort; reduces the number of goods categories, with multi-faceted and large-pile display, making the goods speak for themselves; implements the “daily inventory clearance” policy under the support of the logistics circulation and distribution system, to ensure the freshness and quality of fresh food; establishes “on-site” bakery, roasting, handcrafting scenes, creating a good atmosphere. The frequency of user shopping in offline channels has increased significantly, while also attracting more new users and increasing store coverage. The proportion of young users in some wholesale stores has increased noticeably. “Quality and affordability” capture the most of users’ minds, followed by profile upgrade and abundant product categories.
| (ii) | Strategic transformation of omni-channel business |
During the Reporting Period, Yonghui Superstores recorded online sales of RMB13.13 billion, with an average daily order volume of 437,000 orders, accounting for 14.42%.
In particular, the self-operated home delivery business under “Yonghui Life (永輝生活)” has covered 1,000 stores, achieving sales of RMB7.1 billion, representing a year-on-year increase of 21.1% and an average daily order volume of 264,000 orders. The home delivery business operated on the third-party platform has covered 909 stores, achieving sales of RMB6.03 billion and an average daily order volume of 173,000 orders.
As of December 31, 2021, the number of members under “Yonghui Life” has exceeded 85.687 million, of which the total number of new registered users is 36.373 million, representing a year-on-year increase of 28.4%, with a peak of monthly active users reaching 10.707 million.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
The Company has established warehouse-end operation and distribution management standards, and completed the replication of home delivery warehouses centered on unified standard, digital management and tool empowerment to 441 stores across the country, to optimize service experience and significantly improve the on-time delivery rate to over 95.6%. Especially in Fujian, Sichuan and Chongqing, through continuous engagement in 2021, the replication of home delivery warehouses has reached 69.6% in these regions, with the on-time delivery rate of 96.0%, reaching the industry-leading level.
During the Reporting Period, the Company applied data algorithms to transform its procurement operations from the “governance based on human experience” to the direction of standardization, systematization and digitalization. The Company reformed its employment system of offline stores by digital means. Digitally-empowered model stores including Yonghui Superstores Fuzhou Olympic Sports Store, Chengdu Qinglong Square Store and Guose Tianxiang Store have completed the digital transformation of posts. Based on the underlying architecture of YUDOS, a self-developed system of the Company, the technical team completed the human-efficiency enhancement program covering the online management of store attendance record, personnel allocation and work scheduling and real-time visualization of employment data. The use of end tools enables the system to automatically recommend the phase-out or replacement of goods, accelerate the phase-out or replacement of leftover goods, and improve the inventory turnover and gross margin return on investment. Through rational spatial layout, the on-shelf and off-shelf of goods and shelf display design, it provides visual merchandising strategies for offline store operations in the flow side and sales side. The Company has completed the development of an autonomous and controllable full-link operating system – YHDOS, which integrates omni-channel procurement and sales collaboration, operation, business and finance management portals to lay a solid foundation for the digital transformation of all channels and quickly support the adjustment of organization and business strategy. The Company provided strong support for the Group’s business operation by achieving online failure response in less than 5 minutes and withstanding 4 times the peak traffic during the big offer. The Company completed the cloud migration, saving its cost of around RMB10 million every year.
| (iv) | Supply chain development |
During the Reporting Period, for the fresh product segment, the Company promoted the vertical management of the organization, adopted the long and short radius mechanism, and had a total of 600 direct procurement bases across the country. The place-of-origin warehouses include Fujian yellow croaker warehouse, Yunnan leafy vegetables warehouse, Shandong warehouse, Hebei egg warehouse (Guantao/Xinji), banana processing/mango processing warehouse, Northeast Panjin rice base, etc. The Company used digital tools to improve operational efficiency and quality. For example, the adoption of the must-sell product list tool in stores to effectively improve the out-of-stock rate of must-sell goods; net cage management system to reduce invalid SKUs; the freight and miscellaneous expense system to save freight and miscellaneous expenses of fresh products; over 10,000 pieces of data on the information interaction platform to form data assets.
For the food and supplies segment, the Company changed the role of the procurement team. Internally, they serve the stores as brand recommendation officers; externally, they serve as brand agents, and work together with brand owners to strengthen cooperation, deepen collaboration, and strive to build an efficient, agile and digital supply chain. In the pilot stores, the Company iteratively upgraded the theme settings, and focused on the further development of the supply chain of Superior Kids (優悅寶唄) (mother and baby), HOME APPLIANCE (電靚動力) (household appliances), Entertainment Planet (娛樂星球) (culture and game) and Bell Pet (鈴鐺寵物) (pet).
During the Reporting Period, the sales of products under the Company’s own brands amounted to RMB2.65 billion. The Company has built its own brand matrix: on the top of the existing 3+1 brands: Super Foodie ( 饞大獅), Tianqu Food (田趣), U-song (優頌) and Hui Xiang Sui (惠相隨), the Company grandly launched its own brand “Hui Ma Dao Jia (輝媽到家)” in August, expanding into the quick-cooked food segment, and first commenced such business in Jiangsu, Zhejiang and Shanghai markets. The Company received the gold medal of the 2021 Vertex Awards. In the “Everest Award” for China’s brands, it was granted three awards: the Best Private Label Retailer of the Year, the Best Private Label Design Award of the Year and the Best Private Label Single Product Award of the Year. At the same time, the U-song brand has been named as one of the “billion-level” brands.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (v) | Human resources and organization development |
In response to the Company’s digitization strategy, the human resources department quickly brought in talents for key positions. In 2021, the Company recruited 714 outstanding Internet talents in the industry, and the total number of employees in the technology team exceeded 900 at its peak. The Company has formulated its performance indicator dictionary, and formed an indicator system covering heads of first-level department and 17 key positions in provinces and districts; continued to carry out reform on organizational structure in the younger, flatter and flexible direction to build an organizational system of “agile front office, strong middle office and efficient back office”, and adjust the “region-based management system (戰區制度)” to “province-based management system (省區制度)”; continued to iterate on empowerment-focused training sessions, such as the “Fresh Food Manager Session” and “Fresh Food Seller Session” to support fresh food strategy, the “E-commerce Store Manager Session” to support e-commerce, the “New Store Operation Enhancement Project” to support the enhancement of new store operations, and the “1933 Elite Session” for college students to support the sustainable development of key talents. In 2021, a total of 22 sessions were held through the training center, and a total of 1,500 talents at all levels were conveyed. The Company adopted the development program of “content + software + service”. By the end of 2021, there were over 120 thousand registered users, 636 online courses, 25.69 million minutes of online learning by employees, 19.77 million online exams and over 6,000 daily active users. It strongly supported the digital development of training.
During the Reporting Period, the total value of the Company’s logistics operations amounted to RMB58.1 billion. The distribution scope of the logistics centers covers 29 provinces and cities in China, with a total logistics operation area of 750,000 square meters and approximately 2,620 employees. The logistics centers are classified according to the temperature zone, including a total of 19 normal temperature distribution centers (including transit warehouses), 14 constant temperature distribution centers (mainly including fruits and vegetables, frozen and refrigerated goods), and 1 production warehouse; serving customer stores, home delivery warehouses, online stores, processing plants, etc. With the construction concept of integrating processing logistics, trunk logistics and urban distribution logistics, the Company provided end-to-end supply chain services such as source direct sourcing, direct delivery from the factory and customized packaging, to improve the overall efficiency of the supply chain, empower science and technology, and speed up the construction of digital and automated logistics.
During the Reporting Period, the Company actively advanced the construction of logistics automation to enhance the delivery timeliness and accuracy. The ACR System of the HAIPICK in Sichuan, capable of sorting 210 items per hour, has been put into trial operation in December 2021 and connected with the automatic sorting line to further achieve the automatic and intelligent operation of the warehouse.
In 2021, the OTB project was promoted in collaboration with Big Tech, and the switchover of 6 logistics centers has been completed. The Company promoted the improvement of logistics operation efficiency through the online operation of the system, and further improved the store order fulfillment rate and order delivery timeliness, helped store order reference and potentially improved the accuracy of order volume with a focus on the transformation of the operation mode, the transparency and synchronization of logistics information and store order stocking visibility and other links.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (vii) | Social responsibility |
During the Reporting Period, the Company built 28 new testing stations, upgraded 14 sets of testing equipment, and tested nearly one million batches of fresh agricultural products, with a qualification rate of 99.4%. The Company also strengthened the supplier inspection and evaluation mechanism, and conducted a comprehensive evaluation in terms of quality management systems such as production environment, process standards, procedure control, inspection and testing. The Company conducted nearly 1,000 supplier admission evaluations and flight audits throughout the year, and implemented hierarchical control based on risk levels. The Company maintained strict standards on request for certificates and licenses, regularly re-examined and checked suppliers’ qualification certificates, and reviewed nearly 500,000 qualification certificates throughout the year.
Internal management:
| (1) | The Company strengthened the main responsibility of food safety, kept employees at all posts informed of the food safety responsibilities, and organized the responsible persons of key positions and key management personnel to sign about 20,000 copies of the Food Safety Responsibility Statement online; |
| (2) | The Company regularly carried out training on food safety expertise to enhance the food safety risk prevention and control ability of all employees, with more than 785,000 employees attending the online courses, and the Company also conducted monthly food safety training offline; and the “two-level audit and two-level self-inspection” mechanism was implemented to proactively eliminate food safety risks in stores. The Company and the provincial and district competent authorities have carried out 2,436 inspections and assessments to stores, and self-inspections were also conducted monthly by regions and weekly by stores; |
| (3) | The Company promoted the special improvement of food safety, and carried out special improvement for 10 themes such as “product shelf life, product quality, pest control, cleaning and disinfection, food safety guarantee measures in holidays” throughout the year; |
| (4) | The Company set up a food safety demonstration brand, and the stores in Fujian, Sichuan, Hunan and other provinces actively participated in the creation of the “Food Safety Demonstration City”. A total of 76 stores in various provinces and regions across the country have successfully been awarded the “Safe Meat and Vegetables Demonstration Supermarket”, and 62 stores have successfully been awarded the “Trustworthy Supermarket” or the “Assured Consumption Demonstration Unit”. |
In 2022, the Company planned to deepen the development of the science and technology department to increase investment in the digital platform of the “Food Safety Cloud Network”, and completed the digital traceability of the whole process of “place of origin/supplier-logistics-store”.
| 2. | Fighting against the pandemic |
After the outbreak of the pandemic in Putian, Xiamen and Quanzhou in Fujian Province in September 2021, Yonghui Superstores was entrusted by the Provincial Party Committee and the Provincial Government of Fujian, Fuzhou Municipal Committee and Municipal Government to guarantee the price stability of important daily necessities and the continuous supply of commodities through the implementation of actions such as securing the supply of people’s livelihood commodities and timely delivery of online orders. According to incomplete statistic, during the pandemic period, Fujian Yonghui Superstores despatched nearly 1,000 large logistics vehicles from Fuzhou Logistics Center to Putian, Xiamen, Quanzhou and other pandemic areas, and supplied more than 2,000 tons of fresh products such as vegetables and fruits, and millions of pieces of daily supplies such as food and daily necessities, sparing no effort to ensure adequate materials and stable prices in the epidemic areas.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
In December 2021, the outbreak of the novel coronavirus pandemic in Xi’an arouse the concern of the whole nation. Yonghui immediately activated its supply guarantee and price stabilization plan during the pandemic period, and made every effort to guarantee materials supply and stabilize prices while strictly preventing the pandemic. After the outbreak of the epidemic, Yonghui Shaanxi Logistics Warehouse, located in the suburb of Xi’an, held an emergency meeting. Due to the lockdown measures implemented in the communities where some employees lived, facing the difficult situation of less than 20 people on duty, the on-duty employees put up a dormitory in the logistics warehouse and stayed in the warehouse. The drivers of the carriers, labor service companies and logistics employees stuck to their posts on the front line of material supply, coordinated human resources, goods, vehicles and other resources to ensure the completion of material distribution. During the period from December 22 to December 29, Yonghui distributed 1,500 tons of materials by despatching 634 vehicles and delivered 125,000 pieces of commodities related to people’s livelihood.
Influenced by the macroeconomic situation and industrial regulatory policies, the Company’s Yunjin business began to transform to provide innovative financial services. By reducing and optimizing the asset business, the Company improved the efficiency of capital utilization to guarantee basic profits. As of the end of the Reporting Period, the total assets of the Company’s Yunjin business amounted to RMB2.449 billion, representing a year-on-year decrease of 44.12%. The revenue amounted to RMB410 million, representing a year-on-year decrease of 4.2%; and the profit reached RMB120 million. The Company has reserved sufficient funds for its Yunjin business and ensured its asset risk under control.
| II. | The Situation of the Industry in which the Company Operates during the Reporting Period |
According to the National Bureau of Statistics of China, in 2021, the total retail sales of consumer goods was RMB44,082.3 billion, representing an increase of 12.5% over the previous year, with an average growth rate of 3.9% in the previous two years. In particular, the retail sales of consumer goods other than automobiles amounted to RMB39,703.7 billion, representing an increase of 12.9%. After deducting the price factor, the total retail sales of consumer goods in 2021 increased by 10.7% over the previous year in real terms; by retail formats, the retail sales of superstores in retail units above designated size in 2021 increased by 6.0% over the previous year; the national online retail sales amounted to RMB13,088.4 billion, representing an increase of 14.1% over the last year. Among others, the online retail sales of physical goods recorded RMB10,804.2 billion, representing an increase of 12.0%, accounting for 24.5% of the total retail sales of consumer goods. Among the online retail sales of physical goods, food, clothing and consumer goods increased by 17.8%, 8.3% and 12.5%, respectively.
| III. | Business Engaged in by the Company during the Reporting Period |
Yonghui Superstores is one of the top 500 enterprises in China and a leading enterprise of “circulation” and “agricultural industrialization” at the national level. Yonghui Superstores is one of the first circulation enterprises to introduce fresh agricultural products into modern supermarkets in mainland China, and has been praised by seven ministries and commissions as a model for the promotion of “Wet Market Transforming into Food Supermarket” in China. Through the connecting agricultural produce with supermarkets, it has been recognized by the people for its fresh and affordable commodities, and is known as “A Supermarket for People’s Livelihood”. Since its inception, Yonghui Superstores has been developing with high quality. At present, Yonghui Superstores has developed more than 1,000 supermarket chains nationwide, covering 585 cities in 29 provinces, with an operating area of more than 8 million square meters, ranking second among the top 100 supermarkets in China in 2020 and the fourth among the top 100 chains in China in 2020.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| IV. | Analysis of Core Competitiveness during the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
The Company insists on building a platform-based enterprise of food supply chain based on smart middle office, adhering to the concept of “Becoming Perfect through Integration and Sharing” (融合共享, 成於至善), and building an entrepreneurship platform for the youth with Yonghui’s characteristic partnership system.
| V. | Main Operations during the Reporting Period |
As of the end of the Reporting Period, the Company achieved a total operating income of RMB91.062 billion, representing a year-on-year decrease of 2.29%, and the consolidated net profit attributable to shareholders of the listed company was RMB-3.944 billion.
| (I) | Analysis of principal businesses |
| 1. | Analysis of changes in relevant items in the income statement and cash flow statement |
| | | | | Unit: Yuan Currency: RMB | |
| | | | | | |
| Item | | Amount for the
current period | | Amount for
the same period
of last year | | Change | |
| | | | | | | (%) | |
| Operating income | | 91,061,894,312.13 | | 93,199,107,664.03 | | -2.29 | |
| Operating cost | | 74,027,212,258.30 | | 73,280,513,427.89 | | 1.02 | |
| Selling expenses | | 16,629,508,068.60 | | 15,438,729,869.72 | | 7.71 | |
| Administrative expenses | | 2,155,455,991.88 | | 2,293,027,943.94 | | -6.00 | |
| Finance cost | | 1,551,693,676.48 | | 223,461,312.38 | | 594.39 | |
| Research and development expenses | | 428,107,468.21 | | | | N/A | |
| Net cash flows from operating activities | | 5,826,920,929.25 | | 6,139,709,882.14 | | -5.09 | |
| Net cash flows from investment activities | | -915,087,930.10 | | -2,171,435,956.11 | | N/A | |
| Net cash flows from financing activities | | -6,855,907,963.31 | | 106,219,254.45 | | -6,554.49 | |
Reasons for the change in finance cost: the increase in interest expenses on lease liabilities due to the impact of the new lease standards;
Reasons for the change in research and development expenses: the increase in investment in research and development during the year;
Reasons for the change in net cash flows from operating activities: the decrease in net sales proceeds due to the decline in sales and gross profit during the period;
Reasons for the change in net cash flows from investing activities: the withdrawal of external investments and wealth management products during the period;
Reasons for the change in net cash flows from financing activities: the repurchase of shares and the inclusion of fixed rent paid for non-exempt lease contracts in the cash flows from financing activities in accordance with the new lease standards during the period.
Particulars of material changes in the Company’s business type, profit composition or profit sources during the period
| | ☐ | Applicable | √ | Not applicable |
| 2. | Revenue and cost analysis |
| | √ | Applicable | ☐ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Affected by the fierce competition in the industry, the Company’s revenue decreased by 2.29% as compared to the corresponding period of last year, while the cost increased by 1.12%, resulting in a 2.38% year-on-year decrease in gross profit margin.
| (1). | Principal businesses by sector, product, geographical region and sales model |
| | | | | | | | | Unit: 0’000 Yuan Currency: RMB | |
| | | | | | | | | | |
| | | Principal businesses by sector | | | |
| By sector | | Operating
income | | Operating
cost | | Gross
profit
margin | | Change in
operating
income over
last year | | Change in
operating
cost over
last year | | Change in
gross profit
margin over
last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Retail industry | | 8,495,782.83 | | 7,358,928.29 | | 13.38 | | -2.11 | | 1.34 | | Decreased by 2.94 percentage points | |
| Service industry | | 610,406.60 | | 43,792.93 | | 92.83 | | -4.84 | | -33.97 | | Increased by 3.17 percentage points | |
| | | Principal businesses by product | | | |
| By product | | Operating
income | | Operating
cost | | Gross
profit
margin | | Change in
operating
income over
last year | | Change in
operating
cost over
last year | | Change in
gross profit
margin over
last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Fresh products and processing | | 4,082,575.24 | | 3,618,652.17 | | 11.36 | | -1.58 | | 1.25 | | Decreased by 2.48 percentage points | |
| Food supplies (including clothing) | | 4,413,207.58 | | 3,740,276.12 | | 15.25 | | -2.59 | | 1.42 | | Decreased by 3.35 percentage points | |
| | | Principal businesses by geographical region | | | |
| By region | | Operating
income | | Operating
cost | | Gross
profit
margin | | Change in
operating
income over
last year | | Change in
operating
cost over
last year | | Change in
gross profit
margin over
last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Southeast China | | 1,465,878.39 | | 1,310,813.46 | | 10.58 | | 0.66 | | 7.28 | | Decreased by 5.52 percentage points | |
| North China | | 900,086.55 | | 776,486.15 | | 13.73 | | -2.76 | | 1.00 | | Decreased by 3.21 percentage points | |
| East China | | 1,926,038.31 | | 1,654,854.75 | | 14.08 | | -0.05 | | 2.42 | | Decreased by 2.07 percentage points | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | Principal businesses by geographical region | | | |
| By region | | Operating
income | | Operating
cost | | Gross
profit
margin | | Change in
operating
income over
last year | | Change in
operating
cost over
last year | | Change in
gross profit
margin over
last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| West China | | 1,774,393.36 | | 1,532,014.86 | | 13.66 | | -6.96 | | -4.01 | | Decreased by 2.65 percentage points | |
| Southwest China | | 1,296,292.45 | | 1,101,471.10 | | 15.03 | | 0.40 | | 2.59 | | Decreased by 1.81 percentage points | |
| South China | | 424,998.02 | | 363,284.72 | | 14.52 | | -11.13 | | -8.10 | | Decreased by 2.82 percentage points | |
| Central China | | 708,095.75 | | 620,003.25 | | 12.44 | | 2.17 | | 5.04 | | Decreased by 2.39 percentage points | |
| | | Principal businesses by sales model | | | |
| Sales model | | Operating
income | | Operating
cost | | Gross
profit
margin | | Change in
operating
income over
last year | | Change in
operating
cost over
last year | | Change in
gross profit
margin over
last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Retail | | 8,495,782.83 | | 7,358,928.29 | | 13.38 | | -2.11 | | 1.34 | | Decreased by 2.94 percentage points | |
| Others | | 610,406.60 | | 43,792.93 | | 92.83 | | -4.84 | | -33.97 | | Increased by 3.17 percentage points | |
The geographical distribution is as follows:
Southeast China: Fujian, Jiangxi, Hong Kong
North China: Beijing, Tianjin, Hebei, Liaoning, Jilin, Heilongjiang, Inner Mongolia
East China: Jiangsu, Zhejiang, Shanghai, Anhui
West China: Chongqing, Guizhou, Yunnan, Hubei, Hunan
Southwest China: Sichuan, Xizang, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang
South China: Guangdong, Guangxi, Hainan
Central China: Shanxi, Hebei, Shandong, Henan
| (2). | Analysis statement of production and sales |
| | ☐ | Applicable | √ | Not applicable |
| (3). | Performance of material procurement contracts and material sales contracts |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (4). | Statement of Cost Analysis |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Unit: 0’000 Yuan | |
| | | | | | | | | | | | | | |
| | | By sector | | | |
| By sector | | Cost
components | | Amount for
the current
period | |
Percentage
of total cost
for the
current
period | | Amount
for the
corresponding
period of
last year | | Percentage
of total cost
for the
corresponding
period of
last year | | Change in
amount for the
current period
as compared
with the
corresponding
period of
last year | | Explanations | |
| | | | | | | (%) | | | | (%) | | (%) | | | |
| Retail industry | | | | 7,358,928.29 | | 99.41 | | 7,261,727.70 | | 99.09 | | 1.34 | | | |
| Service industry | | | | 43,792.93 | | 0.59 | | 66,323.64 | | 0.91 | | -33.97 | | | |
| | | By product | | | |
| By product | | Cost
components | | Amount for
the current
period | |
Percentage
of total cost
for the
current
period | | Amount
for the
corresponding
period of
last year | | Percentage
of total cost
for the
corresponding
period of
last year | | Change in
amount for the
current period
as compared
with the
corresponding
period of
last year | | Explanations | |
| | | | | | | (%) | | | | (%) | | (%) | | | |
| Fresh products and processing | | | | 3,618,652.17 | | 48.88 | | 3,573,923.36 | | 48.77 | | 1.25 | | | |
| Food supplies and clothing | | | | 3,740,276.12 | | 50.53 | | 3,687,804.34 | | 50.32 | | 1.42 | | | |
| (5). | Changes in the scope of consolidation as a result of changes in equity interests in major subsidiaries during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| (6). | Significant change in or adjustment of the businesses, products or services of the Company during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| (7). | Major Customers and Suppliers |
| A. | Major customers of the Company |
The sales of the top five customers amounted to RMB832.7577 million, accounting for 0.93% of the total annual sales; among the sales of the top five customers, the sales of related parties amounted to RMB813.3074 million, accounting for 0.91% of the total annual sales.
The proportion of sales to a single customer over 50% of the total amount, new customers among the top five customers or heavy dependence on a few customers during the Reporting Period
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| B. | Major suppliers of the Company |
The purchases from the top five suppliers amounted to RMB6,474.9930 million, accounting for 8.42% of the total annual purchases; among the purchases from the top five suppliers, the purchases from related parties amounted to RMB4,044.1511 million, accounting for 5.20% of the total annual purchases.
The proportion of purchases from a single supplier over 50% of the total amount, new suppliers among the top five suppliers or heavy dependence on a few suppliers during the Reporting Period
| | ☐ | Applicable | √ | Not applicable |
Other explanations
None
| | √ | Applicable | ☐ | Not applicable |
Please refer to VII. Notes to the Consolidated Financial Statements under Section X Financial Report of this report.
| 4. | Research and Development (R&D) Investment |
| (1). | Statement of R&D investment |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan | |
| | | | |
| Expensed R&D investment for the current period | | | 428,107,468.21 | |
| Capitalized R&D investment for the current period | | | 110,054,605.49 | |
| Total R&D investment | | | 538,162,073.70 | |
| Total R&D investment as a percentage of operating income (%) | | | 0.59 | % |
| Capitalized R&D investment as a percentage of total R&D investment (%) | | | 20.45 | % |
| (2). | Statement of R&D employees |
| | √ | Applicable | ☐ | Not applicable |
| Number of R&D employees of the Company | | | 953 | |
| R&D employees as a percentage of total employees of the Company (%) | | | 0.83 | % |
| | | | | |
| Educational background structure of R&D employees | |
| Educational level | | Number | |
| Doctoral degree | | 4 | |
| Master’s degree | | 118 | |
| Bachelor’s degree | | 697 | |
| Associate degree | | 130 | |
| High school and below | | 4 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Age structure of R&D employees | |
| Age group | | Number | |
| Under 30 years old (30 years old exclusive) | 387 | |
| 30-40 years old (30 years old inclusive, 40 years old exclusive) | | 532 | |
| 40-50 years old (40 years old inclusive, 50 years old exclusive) | | 33 | |
| 50-60 years old (50 years old inclusive, 60 years old exclusive) | | 1 | |
| 60 years old and above | | 0 | |
| | ☐ | Applicable | √ | Not applicable |
| (4). | Reasons of major changes in the composition of R&D employees and its impact on the Company’s future development |
| | ☐ | Applicable | √ | Not applicable |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | Currency: RMB Unit: Yuan | |
| | | | | | | | |
| Item | | Amount for the
current period | | Amount for the
corresponding
period of
last year | | Change | | Explanations | |
| | | | | | | (%) | | | |
| Cash received from other operating activities | | 3,020,586,574.65 | | 880,432,402.09 | | 243.08 | | Increase in recovery of loans granted by microfinance and factoring companies in Chongqing in the current year | |
| Taxes paid | | 1,037,017,460.13 | | 1,615,975,562.07 | | -35.83 | | Decrease in value-added tax and enterprise income tax in the current year | |
| Cash received from disposal of investments | | 681,186,560.54 | | 121,828,381.49 | | 459.14 | | Increase in cash received from disposal of the equity interests of Guo Lian and Sunrise in the current year | |
| Cash received from investment income | | 57,672,406.30 | | 92,953,747.32 | | -37.96 | | Decrease in dividends from Beijing Friendship and Hongqi Chain in the current year | |
| Cash received from other investment activities | | 2,475,657,999.00 | | 5,826,511,631.94 | | -57.51 | | Decrease in wealth management products recovered in the current year | |
| Cash paid for investments | | 159,799,999.46 | | 745,006,998.05 | | -78.55 | | Additional investment in Yunchuang and Fresh Food in the previous year, as well as investment in Yuanxin and Sunrise in the current year | |
| Cash paid for other investment activities | | 1,966,236,083.15 | | 5,387,235,544.57 | | -63.50 | | Decrease in wealth management products purchased in the current year | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Amount for the
current period | | Amount for the
corresponding
period of
last year | | Change | | Explanations | |
| | | | | | | (%) | | | |
| Cash received from capital contributions | | 50,450,000.00 | | 354,057,473.88 | | -85.75 | | Investment amounts received from minority shareholders of Baijia in the previous year, as well as investment amounts received from minority shareholders of Yunchuang in the current year | |
| Cash received from other financing activities | | 39,947,401.43 | | | | – | | Finance lease rentals received was adjusted from operating cash flows to this item due to the application of the new lease standard in the current year | |
| Cash paid for repayment of debts | | 17,430,840,273.76 | | 12,546,526,073.72 | | 38.93 | | Increase in short-term borrowings repaid in the current year | |
| Cash paid for distribution of dividends, profits or settlement of interest | | 555,415,007.07 | | 1,562,195,662.61 | | -64.45 | | Decrease in dividends distributed in the current year | |
| Cash paid for other financing activities | | 4,480,050,083.91 | | 1,769,956,756.86 | | 153.12 | | Fixed rentals paid for non-exempt lease contracts were adjusted from operating cash flows to this item due to the application of the new lease standard in the current year | |
| Effect of exchange rate changes on cash and cash equivalents | | -242,700.09 | | -1,095,099.15 | | N/A | | Changes in exchange rates in the current year | |
| (II) | Explanation on significant changes to the profit resulting from non-principal business |
| | √ | Applicable | ☐ | Not applicable |
Matters that the Company’s non-principal business has a greater impact on the profits:
| (1) | The fair value of financial assets held by the Company at the end of the Reporting Period decreased by RMB283 million as compared to the beginning of the year; |
| (2) | The impairment loss of RMB326 million was made for long-term equity investments; |
| (3) | The provision for impairment of RMB309 million was made for the stores of the Group to be closed due to long-term losses; |
| (4) | The impairment loss of goodwill and intangible assets in the asset group of Guangdong Baijia Yonghui Supermarket Co., Ltd. amounted to RMB143 million. |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (III) | Analysis of assets and liabilities |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | Unit: Yuan | |
| | | | | | | | | | | | | | |
| Item | | Amount
at the end of
the current
period | | Amount
at the end of
the current
period as a
percentage
of total asset | | Amount
at the end of the
previous period | | Amount
at the end of
the previous
period as a
percentage
of total
assets | | Amount
at the end of
the current
period as a
percentage of
amount at the
end of the
previous period | | Explanations | |
| | | | | (%) | | | | (%) | | (%) | | | |
| Loans and advances (current) | | 568,806,255.36 | | 0.80 | | 1,393,758,718.35 | | 2.48 | | -59.19 | | Recovery of short-term loans in the current year | |
| Financial assets held for trading | | 1,560,917,920.71 | | 2.19 | | 241,410,438.34 | | 0.43 | | 546.58 | | KT and Arawana under other non-current financial assets were transferred to this item due to the release of trading restrictions in this current year | |
| Factoring receivable | | 1,411,455,365.03 | | 1.98 | | 2,710,166,360.05 | | 4.83 | | -47.92 | | Recovery of the factoring receivable in the current year | |
| Non-current assets due within one year | | 41,563,339.26 | | 0.06 | | | | | | N/A | | Finance lease receivables due within one year were reclassified to this item due to the application of the new lease standard in the current year | |
| Long-term receivables | | 73,044,056.84 | | 0.10 | | | | | | N/A | | The sublease that meets the finance lease conditions was remeasured due to the application of the new lease standard in the current year | |
| Construction in progress | | 410,335,149.87 | | 0.58 | | 194,264,567.11 | | 0.35 | | 111.22 | | Increase in investment in the construction of Guizhou Logistics Park, Northeast Warehousing Center and Fujian Yonghui Logistics Center in the current year | |
| Productive biological assets | | 11,627,554.75 | | 0.02 | | | | | | N/A | | Fuping Modern Agriculture added productive biological assets such as fruit trees in the current year | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | | | | | | | | | | | | |
| Item | | Amount
at the end of
the current
period | | Amount
at the end of
the current
period as a
percentage
of total asset | | Amount
at the end of the
previous period | | Amount
at the end of
the previous
period as a
percentage
of total
assets | | Amount
at the end of
the current
period as a
percentage of
amount at the
end of the
previous period | | Explanations | |
| | | | | (%) | | | | (%) | | (%) | | | |
| Right-of-use assets | | 21,967,161,359.54 | | 30.80 | | | | | | N/A | | The right-of-use asset was recognized for non-exempt lease contracts due to the application of the new lease standard in the current year | |
| Goodwill | | 3,661,378.25 | | 0.01 | | 121,331,244.79 | | 0.22 | | -96.98 | | Decrease in goodwill in the current year as compared to the corresponding period of the previous year, resulting from the provision made for impairment of Baijia’s goodwill | |
| Deferred tax assets | | 1,036,025,168.71 | | 1.45 | | 472,606,455.22 | | 0.84 | | 119.37 | | Recognition of deferred tax assets for lease liabilities due to the application of the new lease standard in the current year | |
| Bills payable | | 33,000,000.00 | | 0.05 | | | | | | N/A | | The issuance of commercial acceptance bills in the current year | |
| Non-current liabilities due within one year | | 2,069,851,210.42 | | 2.90 | | | | | | N/A | | The reclassification of rentals due within one year to this item due to the application of the new lease standard in the current year | |
| Long-term borrowings | | 1,021,069,722.22 | | 1.43 | | | | | | N/A | | New bank loans for more than one year in the current year | |
| Lease liabilities | | 24,826,561,091.82 | | 34.81 | | | | | | N/A | | The rentals of non-exempt lease contracts were remeasured due to the application of the new lease standard in the current year | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Amount
at the end of
the current
period | | Amount
at the end of
the current
period as a
percentage
of total asset | | Amount
at the end of the
previous period | | Amount
at the end of
the previous
period as a
percentage
of total
assets | | Amount
at the end of
the current
period as a
percentage of
amount at the
end of the
previous period | | Explanations | |
| | | | | (%) | | | | (%) | | (%) | | | |
| Estimated liabilities | | 3,628,259.35 | | 0.01 | | 123,670,630.29 | | 0.22 | | -97.07 | | The estimated liabilities for loss-making contracts were transferred to the provision for impairment of right-of-use assets due to the application of the new lease standard in the current year | |
| Deferred tax liabilities | | 172,894,859.29 | | 0.24 | | 616,873,988.17 | | 1.10 | | -71.97 | | Decrease in deferred tax assets and deferred tax liabilities that were presented on a net basis due to the application of the new lease standard in the current year | |
| Capital reserve | | 4,276,144,811.80 | | 6.00 | | 6,926,920,343.78 | | 12.33 | | -38.27 | | Decrease in capital reserve due to cancellation of treasury shares, capital increase of Fresh Food and share-based payment in the current year | |
| Treasury shares | | | | | | 2,009,067,652.38 | | 3.58 | | N/A | | Cancellation of treasury shares in the current year | |
| Other comprehensive income | | 1,494,334.19 | | 0.00 | | -584,134.06 | | -0.00 | | -355.82 | | The effect of change in other comprehensive income of Huatong Bank in the current year | |
| Retained earnings | | -3,797,684,715.49 | | -5.33 | | 3,886,681,562.18 | | 6.92 | | -197.71 | | Reduction of retained earnings at the beginning of the year and loss for the year due to the application of the new lease standard in the current year | |
| Minority interests | | 418,606,199.35 | | 0.59 | | 1,042,097,792.60 | | 1.86 | | -59.83 | | Reduction of minority interests at the beginning of the year and loss for the year due to the application of the new lease standard in the current year | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | √ | Applicable | ☐ | Not applicable |
Including: overseas assets of RMB800 million, accounting for 1.12% of total assets.
| (2) | Description of relatively high proportion of overseas assets |
| | ☐ | Applicable | √ | Not applicable |
| 3. | Restriction on material assets as of the end of the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
Please refer to VII. 83 in Section X Financial Report of this report
| | ☐ | Applicable | √ | Not applicable |
| (IV) | Analysis of the industry operation information |
| | √ | Applicable | ☐ | Not applicable |
As follows:
Analysis of operational information of retail industry
| 1. | Distribution of stores opened at the end of the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
In 2021, the Company had 75 newly opened stores (including Baijia Yonghui, excluding Yonghui Life and Super Species), with an area of 533,300 square meters; and had a total of 1,057 stores, covering 29 provinces and municipalities directly under the central government; and 159 stores have been contracted but were not opened, with a reserve area of 1,119,600 square meters.
| | | | | Self-owned stores | | Leased stores | |
| | | | | Number | | | | Number | | | |
| Region | | Operation mode | | of stores | | GFA | | of stores | | GFA | |
| | | | | | | (0’000 m2) | | | | (0’000 m2) | |
| Anhui | | Supermarket | | | | | | 74 | | 67.55 | |
| Beijing | | Supermarket | | | | | | 45 | | 41.27 | |
| Fujian | | Supermarket | | 4 | | 4.15 | | 140 | | 107.27 | |
| Gansu | | Supermarket | | | | | | 3 | | 1.89 | |
| Guangdong | | Supermarket | | | | | | 71 | | 38.57 | |
| Guangxi | | Supermarket | | | | | | 8 | | 5.10 | |
| Guizhou | | Supermarket | | | | | | 41 | | 36.54 | |
| Hebei | | Supermarket | | 1 | | 2.65 | | 46 | | 37.02 | |
| Henan | | Supermarket | | | | | | 44 | | 37.12 | |
| Heilongjiang | | Supermarket | | | | | | 9 | | 8.95 | |
| Hubei | | Supermarket | | | | | | 16 | | 11.74 | |
| Hunan | | Supermarket | | | | | | 8 | | 5.01 | |
| Jilin | | Supermarket | | | | | | 6 | | 5.83 | |
| Jiangsu | | Supermarket | | | | | | 71 | | 60.62 | |
| Jiangxi | | Supermarket | | | | | | 15 | | 9.99 | |
| Liaoning | | Supermarket | | | | | | 7 | | 6.38 | |
| Inner Mongolia | | Supermarket | | | | | | 3 | | 2.50 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | | | Self-owned stores | | Leased stores | |
| | | | | Number | | | | Number | | | |
| Region | | Operation mode | | of stores | | GFA | | of stores | | GFA | |
| | | | | | | (0’000 m2) | | | | (0’000 m2) | |
| Ningxia | | Supermarket | | | | | | 4 | | 2.71 | |
| Qinghai | | Supermarket | | | | | | 1 | | 0.61 | |
| Shandong | | Supermarket | | | | | | 4 | | 2.38 | |
| Shanxi | | Supermarket | | | | | | 16 | | 12.94 | |
| Shaanxi | | Supermarket | | | | | | 33 | | 23.95 | |
| Shanghai | | Supermarket | | | | | | 38 | | 25.43 | |
| Sichuan | | Supermarket | | 1 | | 0.42 | | 110 | | 92.61 | |
| Tianjin | | Supermarket | | | | | | 8 | | 7.74 | |
| Xizang | | Supermarket | | | | | | 2 | | 1.64 | |
| Yunnan | | Supermarket | | | | | | 8 | | 5.20 | |
| Zhejiang | | Supermarket | | | | | | 72 | | 54.52 | |
| Chongqing | | Supermarket | | 4 | | 3.83 | | 144 | | 103.47 | |
| Total | | | | 10 | | 11.04 | | 1,047 | | 816.51 | |
Table of newly opened stores and reserved stores during the Reporting Period
| | | | | (Unit of area: m2) | |
| | | | | | |
| | | | | Net increase in | | | |
| | | | | stores opened in | | Contracted but | |
| | | Subtotal of | | the current | | not opened | |
| Item | | opened stores | | period | | stores | |
| Number of stores in Anhui | | 74 | | 5 | | 11 | |
| Area of stores in Anhui | | 675,535.13 | | 34,253.43 | | 75,634.31 | |
| Number of stores in Beijing | | 45 | | 1 | | 3 | |
| Area of stores in Beijing | | 412,729.92 | | 2,657.41 | | 13,934.00 | |
| Number of stores in Fujian | | 144 | | 4 | | 14 | |
| Area of stores in Fujian | | 1,114,179.60 | | 40,247.40 | | 109,213.72 | |
| Number of stores in Gansu | | 3 | | 1 | | 1 | |
| Area of stores in Gansu | | 18,871.90 | | 7,101.76 | | 8,086.00 | |
| Number of stores in Guangdong | | 71 | | 6 | | 4 | |
| Area of stores in Guangdong | | 385,727.04 | | 33,732.88 | | 13,340.77 | |
| Number of stores in Guangxi | | 8 | | 0 | | 2 | |
| Area of stores in Guangxi | | 51,043.17 | | 0 | | 11,505.43 | |
| Number of stores in Guizhou | | 41 | | 5 | | 12 | |
| Area of stores in Guizhou | | 365,377.07 | | 48,450.00 | | 97,395.47 | |
| Number of stores in Hebei | | 47 | | 3 | | 9 | |
| Area of stores in Hebei | | 396,713.32 | | 19,656.04 | | 75,761.19 | |
| Number of stores in Henan | | 44 | | 5 | | 11 | |
| Area of stores in Henan | | 371,185.14 | | 36,750.04 | | 85,043.00 | |
| Number of stores in Heilongjiang | | 9 | | 0 | | 0 | |
| Area of stores in Heilongjiang | | 89,423.31 | | 0 | | 0 | |
| Number of stores in Hubei | | 16 | | 5 | | 6 | |
| Area of stores in Hubei | | 117,361.51 | | 36,048.82 | | 28,142.11 | |
| Number of stores in Hunan | | 8 | | 1 | | 1 | |
| Area of stores in Hunan | | 50,067.07 | | 6,198.00 | | 6,172.00 | |
| Number of stores in Jilin | | 6 | | 0 | | 0 | |
| Area of stores in Jilin | | 58,323.42 | | 0 | | 0 | |
| Number of stores in Jiangsu | | 71 | | 3 | | 2 | |
| Area of stores in Jiangsu | | 606,205.47 | | 18,869.78 | | 12,352.70 | |
| Number of stores in Jiangxi | | 15 | | 2 | | 2 | |
| Area of stores in Jiangxi | | 99,851.78 | | 10,493.03 | | 12,318.86 | |
| Number of stores in Liaoning | | 7 | | 1 | | 2 | |
| Area of stores in Liaoning | | 63,735.06 | | 7,479.90 | | 10,499.91 | |
| Number of stores in Inner Mongolia | | 3 | | 1 | | 0 | |
| Area of stores in Inner Mongolia | | 24,913.57 | | 9,659.00 | | 0 | |
| Number of stores in Ningxia | | 4 | | 0 | | 0 | |
| Area of stores in Ningxia | | 27,090.78 | | 0 | | 0 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | | | Net increase in | | | |
| | | | | stores opened in | | Contracted but | |
| | | Subtotal of | | the current | | not opened | |
| Item | | opened stores | | period | | stores | |
| Number of stores in Qinghai | | 1 | | 0 | | 1 | |
| Area of stores in Qinghai | | 6,018.58 | | 0 | | 6,820.00 | |
| Number of stores in Shandong | | 4 | | 2 | | 3 | |
| Area of stores in Shandong | | 23,773.71 | | 12,613.15 | | 17,147.33 | |
| Number of stores in Shanxi | | 16 | | 1 | | 3 | |
| Area of stores in Shanxi | | 129,390.06 | | 6,193.00 | | 18,552.00 | |
| Number of stores in Shaanxi | | 33 | | 1 | | 9 | |
| Area of stores in Shaanxi | | 239,455.56 | | 5,059.80 | | 71,167.20 | |
| Number of stores in Shanghai | | 38 | | 4 | | 4 | |
| Area of stores in Shanghai | | 254,251.10 | | 14,023.56 | | 24,924.50 | |
| Number of stores in Sichuan | | 111 | | 14 | | 29 | |
| Area of stores in Sichuan | | 930,284.30 | | 127,919.45 | | 222,555.18 | |
| Number of stores in Tianjin | | 8 | | 0 | | 1 | |
| Area of stores in Tianjin | | 77,396.25 | | 0 | | 5,812.60 | |
| Number of stores in Xizang | | 2 | | 1 | | 1 | |
| Area of stores in Xizang | | 16,367.68 | | 5,114.73 | | 4,281.00 | |
| Number of stores in Yunnan | | 8 | | 1 | | 6 | |
| Area of stores in Yunnan | | 52,046.87 | | 6,035.00 | | 42,006.50 | |
| Number of stores in Zhejiang | | 72 | | 3 | | 7 | |
| Area of stores in Zhejiang | | 545,205.17 | | 17,840.10 | | 46,537.89 | |
| Number of stores in Chongqing | | 148 | | 5 | | 15 | |
| Area of stores in Chongqing | | 1,072,997.28 | | 26,974.13 | | 100,462.78 | |
| Total number of stores | | 1,057 | | 75 | | 159 | |
| Total area of stores | | 8,275,520.82 | | 533,370.41 | | 1,119,666.45 | |
Newly opened stores of the Company in the fourth quarter of 2021
The Company opened 27 new stores in China in the fourth quarter of 2021, the particulars of which were as follows:
| No. | | Region | | Name of project | | Opening date | | Leased area | | Lease term | | Address | |
| | | | | | | | | (m2) | | (years) | | | |
| 1 | | Shaanxi | | Qindu Shanglin Road Store | | 2021-10-1 | | 5,059.8 | | 20 | | F1, East Area, Guoruncheng, Xincheng Shiji Avenue, Qindu District, Xianyang, Shaanxi | |
| 2 | | Zhejiang | | Dingqiao Longfor Paradise Walk | | 2021-10-15 | | 5,023.2 | | 15 | | Longfor Paradise Walk, No. 515 Dingcheng Road, Dinglan Street, Jianggan District, Hangzhou, Zhejiang | |
| 3 | | Hebei | | Langfang Damuzhi Store | | 2021-10-30 | | 9,970 | | 20 | | Damuzhi Square, No. 139 Changfu Road, Anci District, Langfang, Hebei | |
| 4 | | Shanxi | | Wangfu Square | | 2021-11-10 | | 6,193 | | 20 | | Fudong Street Extension Line (near Dongzhonghuan Road), Xinghualing District, Taiyuan, Shanxi | |
| 5 | | Guizhou | | Kaili 9 Square Paradise Walk Store | | 2021-11-19 | | 7,960 | | 20 | | 9 Square Paradise Walk, No. 25 Beijing West Road, Kaili, Qiandongnan Miao and Dong Autonomous Prefecture, Guizhou | |
| 6 | | Jiangsu | | Xiandai Avenue INCITY Store | | 2021-11-19 | | 7,542 | | 15.4 | | No. 1699 Xiandai Avenue, Wuzhong District Industrial Park, Suzhou, Jiangsu | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| No. | | Region | | Name of project | | Opening date | | Leased area | | Lease term | | Address | |
| | | | | | | | | (m2) | | (years) | | | |
| 7 | | Shanghai | | Songjiang INCITY Store | | 2021-11-20 | | 4,978.62 | | 12 | | No. 1, Lane 1788, Guangfulin Road, Songjiang District, Shanghai | |
| 8 | | Sichuan | | Neijiang Weiyuan Wanda Plaza | | 2021-11-26 | | 11,522.24 | | 20 | | Wanda Plaza, Weiyuan County, Neijiang, Sichuan | |
| 9 | | Hubei | | Xiangyang Minfa Century Square | | 2021-11-27 | | 9,995.6 | | 20 | | Intersection of Jinyuan Road and Haoranhe East Road, Xiangzhou District, Xiangyang, Hubei | |
| 10 | | Guizhou | | Zunyi Baixin Aoyuan Square | | 2021-12-3 | | 7,524 | | 20 | | Aoyuan Square, Tongzi County, Zunyi, Guizhou | |
| 11 | | Yunnan | | Kunming Hello World | | 2021-12-3 | | 6,035 | | 20 | | Yongzhong Road, Liujia Street, Guandu District, Kunming, Yunnan | |
| 12 | | Fujian | | Nanping Wuyishan Wanzhao Square Store | | 2021-12-5 | | 19,809.0 6 | | Owned | | 1/F-3/F, South of Wujiu Avenue (Wanzhao Square), Wuyishan, Fujian | |
| 13 | | Shandong | | Tengzhou True Love Plaza | | 2021-12-17 | | 6,853 | | 15 | | Northwest Corner of the Intersection of Jinghe West Road and Pingxing Middle Road, Tengzhou, Zaozhuang, Shandong | |
| 14 | | Sichuan | | Jiangyou Shengming Plaza | | 2021-12-18 | | 6,110.8 | | 20 | | Middle Section of Taiping Road, Jiangyou, Sichuan | |
| 15 | | Hubei | | Wulidun Vanke Plaza | | 2021-12-18 | | 6,137.59 | | 15.5 | | Intersection of Jiangcheng Avenue and Hanyang Avenue, Hanyang District, Wuhan | |
| 16 | | Fujian | | Guankou Wanda | | 2021-12-18 | | 6,221.96 | | 15 | | Guankou Wanda Plaza, Jimei District, Xiamen, Fujian | |
| 17 | | Guangdong | | Zhaoqing Dinghu Wanda | | 2021-12-23 | | 6,910.75 | | 15 | | Zhaoqing Dinghu Wanda Plaza, No. 16 Taoyuan Road East, Dinghu District, Zhaoqing, Guangdong | |
| 18 | | Chongqing | | Chongqing Jinyuecheng Store | | 2021-12-24 | | 5,027 | | 20 | | Jinyuecheng, No. 2 Wutong Street, Heyangcheng Street, Hechuan District, Chongqing | |
| 19 | | Shanghai | | Pudong Zhuqiao Tianhe Plaza | | 2021-12-24 | | 4,994.03 | | 19 | | Area 40/21, Block 10, Zhuqiao Town, Pudong New Area, Shanghai | |
| 20 | | Guangdong | | Guangdong Sihui Wuyue Square | | 2021-12-24 | | 6,067.47 | | 15 | | Xincheng Wuyue Square, Dongcheng Street, Sihui, Zhaoqing, Guangdong | |
| 21 | | Guangdong | | Heyuan Fun World | | 2021-12-25 | | 6,591.47 | | 15 | | Intersection of Fenghuang Road and Wutong 2nd Road, Yuancheng District, Heyuan, Guangdong | |
| 22 | | Chongqing | | Central Park Xincheng Wuyue | | 2021-12-25 | | 8,786.43 | | 15 | | Intersection of Tongmao Avenue and Gongyuan West Road, Yube District, Chongqing | |
| 23 | | Sichuan | | Longchang Shenghua Plaza (Longchang Jinsha Times Plaza Store) | | 2021-12-29 | | 6,382.52 | | 20 | | Intersection of Longhua Road and Wanlong Road, Longchang, Sichuan | |
| 24 | | Chongqing | | Konggang Zekeli (Guifu Avenue Store) | | 2021-12-31 | | 5,116.1 | | 20 | | Intersection of Guixin Avenue and Fuchang Road in Yubei Konggang Xincheng | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| No. | | Region | | Name of project | | Opening date | | Leased area | | Lease term | | Address | |
| | | | | | | | | (m2) | | (years) | | | |
| 25 | | Anhui | | Qianshan Zhongnuo Hengtai Mall | | 2021-12-31 | | 7,962 | | 20 | | Intersection of Wanqian Avenue and Meihe Road, Qianshan County, Anqing, Anhui | |
| 26 | | Jiangxi | | Jiangxi Ganzhou Yudu Wanda Plaza square | | 2021-12-31 | | 7,046.03 | | 15 | | Wanda Plaza, Yudu, Ganzhou, Jiangxi | |
| 27 | | Guizhou | | Zunyi Only International | | 2021-12-31 | | 17,921 | | 19 | | Only International, Kunming Road, Huichuan District, Zunyi, Guizhou | |
The Company signed contracts with 7 new stores in the fourth quarter of 2021, the particulars of which were as follows:
| No. | | Region | | Name of project | | Date of contract | | Expected delivery date | | Lease term | | Leased area | | Address | |
| | | | | | | | | | | (years) | | (m2) | | | |
| 1 | | Shandong | | Jinan Huashan Uni Mall | | 2021-10-31 | | 2023-10-31 | | 15 | | 4,299.93 | | Jinan, Shandong | |
| 2 | | Chongqing | | Banan Ronghui Plaza | | 2021-11-23 | | 2022-11-1 | | 15 | | 5,400 | | Chongqing | |
| 3 | | Liaoning | | Glory Mall | | 2021-11-11 | | 2021-11-18 | | 16.5 | | 5,565.01 | | Shenyang, Liaoning | |
| 4 | | Guizhou | | Qianxi King Mall | | 2021-12-15 | | 2022-7-1 | | 20 | | 4,474.6 | | Qianxi, Guizhou | |
| 5 | | Sichuan | | Wenjiang New Fashion World | | 2021-9-13 | | 2022-9-30 | | 20 | | 9,373.27 | | Chengdu, Sichuan | |
| 6 | | Xizang | | North City Mall | | 2021-9-15 | | 2022-3-31 | | 15 | | 4,281 | | Xizang | |
| 7 | | Hubei | | Wuhan Sky Garden | | 2021-12-31 | | 2023-12-31 | | 15 | | 6,769.84 | | Wuhan, Hubei | |
| | √ | Applicable | ☐ | Not applicable |
Information on the top 10 stores in terms of revenue
| No. | | Store | | GFA | | Ownership of property | | Address | | Opening date | |
| | | | | (m2) | | | | | | | |
| 1 | | Shijingshan District Lugu Store | | 18,322 | | Leased | | East of Lugu Street, Shijingshan District, Beijing | | 2009/6/26 | |
| 2 | | Fuzhou Liming Store | | 14,472 | | Leased | | No. 436 Xi’erhuan Middle Road, Jin’an District, Fuzhou | | 2001/9/8 | |
| 3 | | Chengdu Wenjiang Guanghua Avenue Store | | 21,728 | | Leased | | Guanghua Avenue, Wenjiang District, Chengdu, Sichuan | | 2012/4/26 | |
| 4 | | Daxing District Jiugong Store | | 25,248 | | Leased | | No. 39 Xiaohongmen Road, Jiugong Town, Daxing District, Beijing | | 2010/2/5 | |
| 5 | | Guiyang Jinyuan Shopping Mall Store | | 16,216 | | Leased | | No. 6 Jinyang South Road, Jinyang New District, Guiyang, Guizhou | | 2010/10/23 | |
| 6 | | Tongzhou District Tongzhou Wanda Store | | 12,015 | | Leased | | Wanda Plaza, Beiyuan Business District, Yongshun Town, Tongzhou District, Beijing | | 2014/11/29 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| No. | | Store | | GFA | | Ownership of property | | Address | | Opening date | |
| | | | | (m2) | | | | | | | |
| 7 | | Hefei Golden Resources Binhu Store | | 18,900 | | Leased | | Intersection of Huizhou Avenue and Ziyun Road, Binhu New District, Hefei, Anhui | | 2010/4/25 | |
| 8 | | Shapingba District CapitaRetail Store | | 8,145 | | Leased | | No. 1 Huayu Plaza, No. 029 Xiaolongkan New Street, Shapingba District, Chongqing | | 2009/9/18 | |
| 9 | | Chaoyang District Longfor Changying Paradise Walk Store | | 12,552 | | Leased | | Opposite to Phase IV of Wanxiang Xintian, Chaoyang North Road (Intersection of Guanzhuang Road), Chaoyang District, Beijing | | 2014/12/20 | |
| 10 | | Neijiang Wanda Store | | 9,611 | | Leased | | Wanda Plaza, North of Han’an Avenue, Dongxing District, Neijiang, Sichuan | | 2015/6/25 | |
| (V) | Analysis of investments |
Overall analysis of external equity investments
| √ | Applicable | ☐ | Not applicable |
During the Reporting Period, the Company focused on its principal businesses and reduced the external investments.
| 1. | Significant equity investments |
| | ☐ | Applicable | √ | Not applicable |
| 2. | Significant non-equity investments |
| | ☐ | Applicable | √ | Not applicable |
| 3. | Financial assets measured at fair value |
| | √ | Applicable | ☐ | Not applicable |
According to the relevant authorization at the 22nd meeting of the third session of the board of directors, Ningbo Yonghui Superstores Co., Ltd. ( 寧波永輝超市有限公司), a subsidiary of the Company, entered into relevant partnership agreement and entrusted management agreement with Xiangxin Investment Fund Management Co., Ltd. (向新投資基金管理有限公司, “Xiangxin Fund”) and its subsidiaries, pursuant to which, Ningbo Yonghui Superstores Co., Ltd. undertook to subscribe for the products of Ningbo Yicun Yipin Investment Partnership (Limited Partnership) ( 寧波市伊村伊品投資合夥企業(有限合夥)) issued by Xiangxin Fund by installments as required by the fund manager according to the needs of the investment project within the authorized limit.
During the Reporting Period, Ningbo Yicun Yipin Investment Partnership (Limited Partnership) participated in the non-public offering of Sunrise Group Company Limited (昇興集團股份有限公司) in 2021, with an investment amount of approximately RMB150 million.
| 4. | Specific progress of significant asset restructuring and integration during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (VI) | Significant asset and equity sale |
| | √ | Applicable | ☐ | Not applicable |
From January to October 2021, the Company sold 75,256,548 shares of Zhanjiang Guolian Aquatic Products Co., Ltd. (湛江國聯水產開發股份有限公司) through the trading platform of the Shenzhen Stock Exchange, which increased the investment income of RMB42.75 million for the year, leading to an accumulated investment income of RMB-174.097 million.
In June 2021, the Company withdrew the equity investment in Powerlong Commercial (寶龍商業) through Caitong Fund (財通基金), with the initial investment cost of RMB72.7175 million and the accumulated investment income of RMB110 million.
In November 2021, the Company sold all the shares held in Sunrise Group Company Limited through the trading platform of the Shenzhen Stock Exchange, with an investment income of RMB14.48 million.
| (VII) | Analysis of major subsidiaries |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | Unit: 0’000 Yuan Currency: RMB | |
| | | | | | | | | | | | |
| Company abbreviation | | Industry | | Registered capital | | Total assets | | Net assets | | Net profit | | Revenue | | Profit | |
Yonghui Logistics (永輝物流) | | Logistics distribution industry | | 10,000.00 | | 754,736.93 | | 31,345.42 | | 16,693.14 | | 949,993.48 | | 15,421.83 | |
Chengdu Commercial (成都商業) | | Logistics distribution industry | | 13,000.00 | | 489,520.66 | | 24,615.84 | | 4,483.12 | | 732,596.27 | | 4,499.52 | |
Minhou Commercial (閩侯商業) | | Logistics distribution industry | | 5,000.00 | | 1,215,364.16 | | 13,106.35 | | 962.33 | | 431,524.16 | | 22.82 | |
Fujian Yuntong (福建雲通) | | Logistics distribution industry | | 10,000.00 | | 577,021.31 | | 12,997.26 | | 2,997.26 | | 731,151.71 | | 3,470.58 | |
Beijing Commercial (北京商業) | | Logistics distribution industry | | 11,241.86 | | 262,142.97 | | 17,549.09 | | 2,206.81 | | 192,367.57 | | 2,615.63 | |
| (VIII) | Information about the structured entities controlled by the Company |
| | ☐ | Applicable | √ | Not applicable |
| VI. | Discussion and Analysis of the Company’s Future Development |
| (I) | Industry landscape and trends |
| | √ | Applicable | ☐ | Not applicable |
In 2021, with the normalization of pandemic prevention and control, the growth of online business accelerated, attracting many retail giants to engage in, and the emergence of community group buying intensified the online business competition, which resulted in the loss of offline customer flow and greatly affected the traditional supermarket industry. As a leading player in the industry, Yonghui Superstores has introduced digital operation talents in all aspects under a highly competitive market environment, deeply developed middle-office capabilities to replicate its business, and strengthened the core capability improvement in users, commodities and warehouse distribution operations. Through the digital transformation, it has unswervingly advanced the omni-channel business strategy, promoted the pilot of warehouse stores and the online-offline integration, and gained certain valuable experience.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (II) | Development strategy of the Company |
| | √ | Applicable | ☐ | Not applicable |
In 2022, the Company will make the best effort to build a fresh-based, customer-oriented, omni-channel, digital retail platform, comprehensively improve the quality of operations, promote high-quality growth, and strive to achieve full-year breakeven. Starting from four major aspects, namely sales improvement, retail channel quality improvement, user experience management, organizational efficiency and cost optimization, through transformative thinking and scientific project management methods, the Company will help the management develop experience into the Company’s system process, system logic and system capability, to gradually develop a systematic management and control mechanism and ensure that the work has purposes and measures, and is progressing and productive.
| | √ | Applicable | ☐ | Not applicable |
| 1. | The Company will strengthen fresh food business, form a positive cycle for store development, focus on the sales improvement of middle and low ranking stores, strengthen logistics support for operations in an efficient and flexible manner, and implement various measures such as digital logistics improvement, dismounting and distribution, online and offline inventory sharing, and diversified distribution models. It will focus on medium categories and key single products, select high-quality/potential partners for cooperation/investment, integrate supply chain resources, and continuously improve the cost advantage in the supply chain and the differentiated goods operation. |
| 2. | The Company will open new high-quality stores, close stores in a reasonable and prudent manner, and optimize Bravo stores to achieve high-quality growth in online business. |
| 3. | The Company will facilitate the closed loop of organization and business processes by focusing on customer experience, based on an omni-channel, whole-chain, and high-availability digital platform, to boost high-quality business growth. |
| | √ | Applicable | ☐ | Not applicable |
The recurrence of the pandemic has brought uncertainties to the normal operation of stores, the stability of employees, the smooth flow of logistics, the higher cost of procurement, and the consuming willingness of customers.
| | ☐ | Applicable | √ | Not applicable |
| VII. | The Company’s Failure to Disclose as Required by the Standards Due to Non-Application of the Provisions of the Standards or for Special Reasons Such as State Secrets and Trade Secrets and the Description of Reason Therefor |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| 2. | For the year ended December 31, 2022 |
SECTION 3 MANAGEMENT DISCUSSION AND ANALYSIS
| I. | Discussion and Analysis of Operations |
| 1. | Stores in various provinces and municipalities: |
During the Reporting Period, the Company opened 36 new Bravo stores, closed 60 stores, and newly contracted 10 stores. By the end of 2022, the Company operated a total of 1,033 supermarkets in 29 provinces and municipalities in China.
In 2022, the business environment of the retail industry became even more challenging. The Company was one of a few retailers in China that were able to maintain their store expansion momentum. By carefully selecting prime store properties and closing underperforming stores, the Company initiated a new era of store iteration.
During the Reporting Period, the Company focused on improving sales per square meter, sales per employee, and sales per SKU through the promotion and application of tools such as intelligent ordering and intelligent scheduling, as well as the full launch of the YHDOS system, and maintained a relatively high rate of new product introduction and product phasing out. In some benchmark stores, sales per employee increased by 30% to 50%.
| 2. | Strategic transformation of omni-channel business |
During the Reporting Period, the Company’s online business recorded operating income of RMB15.936 billion in 2022, accounting for 17.69% of the total operating income, with a year-on-year increase of 21.37%, and the average daily order volume reached 518,000 orders.
The self-operated home delivery business under “Yonghui Life (永輝生活)” has covered 984 stores, achieving sales of RMB8.8 billion, representing a year-on-year increase of 24%, and the average daily order volume reached 316,000 orders and the monthly repeat purchase rate reached 51.5%. The home delivery business operated on the third-party platforms has covered 958 stores, achieving sales of RMB7.12 billion, with an average daily order volume of 202,000 orders.
In particular, “Yonghui Life”, the self- operated platform, accumulated 101 million registered members, with a year- on-year growth of 18.73% and average monthly online active users of 12.607 million. While meeting consumer demands, the online business has been working to address weaknesses based on user experience feedback, continuously enhancing product diversity, improving service quality, and optimizing the shopping experience on its APP. At the same time, driven by user needs and benchmarking against industry leaders and market trends, the Company has been proactively identifying issues, seeking gaps, and honing online operational capabilities. As a result, the Company’s business has gradually shifted from marketing-driven growth to development driven by “best-selling products” and “enjoyable service experience”.
The third decade of Yonghui is a decade of technological transformation. Through investment in digital technology, the Company promoted organizational rejuvenation, formed new organizational performance, and transformed from the traditional Yonghui Supermarket to an “Internet Tech” Yonghui, restarting comprehensive growth.
| 1) | Development of digitalized stores: Leveraging the YHDOS system, the Company has fully realized online business operation. By December 31, 2022, all the stores of the Company have completed digital transformation, forming comprehensive online and digital business governance. The Company aims to include all store back-end operations, home delivery warehouses, product inventory, shelf displays, purchase orders, employee tasks, and organizational performance into YHDOS digital management by March 31, 2023. |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| 2) | Creating a digital supply chain driven by category-based governance: Since August 2021, the Company has gradually achieved online whole lifecycle digital governance of products, enhancing the efficiency of product inflow and outflow, and will further promote digitalization of supplier management and improve performance through grading strategies in the future. |
The Company aims to achieve digital product selection based on store and user profiles, driving product development through category planning and building truly digital supply chain capabilities by June 30, 2023.
| 3) | Enhancing the competitiveness of fresh produce-based core products: The Company promoted content-driven product strategy, content branding and development of private brands, enhancing brand value and maintaining sustainable growth. The Company aims to digitalize fresh produce operations and implement such digitalization in all stores by March 31, 2023. |
| 4) | Promoting organizational rejuvenation and employee renewal: The Company promoted organizational rejuvenation, deeply connecting the Company’s middle office and back office, provincial areas, stores, and small shops, activating the organization to make user-facing units more effective and create value for users. Through deliberate practicing, the Company taught employees the secrets of doing business and activated employee initiative to help employees become better versions of themselves, devote greater efforts and improve efficiency, thus achieving profit growth. |
| 5) | Advancing user and customer digitalization: Through digital operations, the Company enhanced user and customer experience, improved user satisfaction, and achieved revenue growth. |
| 6) | Innovating business digital transformation: Through investment in data technology, Yonghui has innovated new digital business models such as the “Yonghui Life Home Delivery” business, achieving digital operations covering online and offline channels, making users more satisfied, entrepreneurship easier, and local life better. |
| 4. | Supply chain development |
The Company optimized the procurement model based on long and short-radius mechanisms, and promoted the development of standard products and pre-made food to ensure product strength and drive business growth. By leveraging technology tools, fine-tuning supply chain processes and mechanisms, and strengthening the talent pipeline development for the fresh produce segment, the Company has continuously improved its long-term supply chain capabilities.
During the Reporting Period, the private brand sales of the Company reached RMB3.27 billion, representing a year-on-year increase of 23.40%. The Company deepened the development of the supply chain upstream, and the fresh produce segment continued to implement order-based planting for products such as “Tianqu Rice” (田趣大米) and “Yonghui Farm Kabocha Squash” (永輝農場板栗南瓜), while accelerating the development of pre-made food and differentiated quality products like Dandong strawberries. The Company and suppliers have strengthened joint R&D efforts on food and supplies, launching popular products such as Super Foodie Lime (饞大獅⼩⻘檸), Super Foodie Cheese Cake (饞大獅芝士蛋糕), Super Foodie Yogurt Hawthorn Dices (饞大獅酸奶山楂丁), U-song Antibacterial and Mite-Removing Scented Laundry Detergent Beads (優頌抑菌除蟎香氛洗衣凝珠) and air fryers.
Taking a differentiated approach, the Company has optimized its supply chain. In 2022, the Company removed 54 suppliers from its list and introduced more competitive and innovative suppliers. The Company focused on the development of 122 key products accounting for 50% of the sales. Through promotion and marketing via various channels, the Company has attracted young consumers and penetrated the Gen Z consumer market. Leveraging platforms such as Douyin, Xiaohongshu and Weibo, the Company achieved a total exposure of over 100 million, thus accelerating brand rejuvenation, expanding consumer base and diversifying consumer age groups.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| 5. | Human resources and organization development |
During the Reporting Period, in accordance with its strategies, the Company has continuously optimized and adjusted the organizational structure, refined duty allocation, streamlined staffing, reduced costs and improved efficiency. These systematic efforts have contributed significantly to achieving the Company’s organizational objectives. The Company conducted a comprehensive review of the responsibilities of platform departments and updated job descriptions. By integrating and enhancing platform efficiency, the Company consolidated procurement, operation, and marketing functions into the CMO system, fostering collaboration and shared accountability for results of operations. The Company implemented scientific processes and robust mechanisms to align business processes and break business barriers. Through technological empowerment, the Company optimized and improved business tools, enabling cross-department collaboration and ensuring the use of scientific tools. The human resources department reorganized its structure into a three-pillar model. The adjustment, streamlining and decentralization of functions in relevant departments, along with the integration and adjustment among provincial segments, further facilitated business operations.
In 2022, the total value of the Company’s logistics operations amounted to RMB55.73 billion. The distribution scope of the logistics centers covers 29 provinces and municipalities in China, with a total logistics operation area of 850,000 square meters and over 5,100 employees (including approximately 2,521 in-house employees). The logistics centers are classified according to the temperature zone, including a total of 21 normal temperature distribution centers, 11 constant temperature distribution centers (mainly for fruits and vegetables, frozen and refrigerated goods and dry food), and 1 production warehouse; serving customer stores, home delivery warehouses, online stores, processing of standard products, etc. With the construction concept of integrating processing logistics, trunk logistics and urban distribution logistics, the Company provided end- to-end supply chain services such as source direct sourcing, direct delivery from the factory and customized packaging, to improve the overall efficiency of the supply chain, empower science and technology, and speed up the construction of digital and automated logistics.
| 7. | Social responsibilities |
The Company actively fulfilled its corporate social responsibilities by strictly adhering to the “four most stringent” requirements for food safety and continuously iterating end-to-end food safety quality control system through its in- house developed “Food Safety Cloud Network” system, to provide consumers with safe, healthy and cost-effective food. The Company perfected its food safety system and management standards and revised 22 food safety regulations to further improve the food safety management mechanism.
The Company strengthened food safety responsibilities and duties at all levels and positions, and organized key officers and major management personnel to sign the Food Safety Responsibility Statement online. The Company launched specialized food safety training courses, with over 1.6 million online participants and over 388,000 offline participants, enhancing professional knowledge and capabilities in preventing food safety risks. By implementing a multi-level risk assessment mechanism combining “self-inspection and self-checking” with “unannounced inspection”, the Company conducted 4,259 store inspections throughout the year, proactively eliminating food safety hazards. The Company also promoted initiatives such as the “Holiday Food Safety Special Campaign”, “3.15 Food Safety Special Campaign”, “Summer and Autumn Food Safety Special Campaign”, and “Ready-to-Eat Fresh Fruits and Vegetables Special Campaign” to continuously update food safety operating procedures and improve product quality and safety.
As part of its corporate social responsibilities, the Company created food safety demonstration brands. Stores in Fuzhou, Chengdu, Chongqing, Changsha, and Xi’an cooperated with regulatory authorities to actively participate in the creation of “Food Safety Demonstration Cities”. Additionally, 57 stores in 10 provinces and municipalities, including Chongqing, Shaanxi, and Hebei, were recognized as “Safe Meat and Vegetable Demonstration Supermarket”. The Company partnered with regulatory authorities to build traceability platforms and its “Food Safety Could Network” achieved data sharing with 12 government traceability platforms, including the “Fujian Province One Product, One Code Traceability Platform”.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
In 2022, as a leading domestic retail enterprise, the Company activated its emergency supply and price stabilization plan in response to exceptional circumstances, contributing to ensuring stable supply and prices.
Over the past three years, the Company’s supply chain has fully leveraged the advantages of long-radius and short-radius collaborative procurement to ensure the supply of daily necessities for the public. At the same time, the Company has also intensified routine disinfection efforts to ensure the safety and health of its employees and customers. In April 2022, nearly a thousand core employees of the Company were dispatched from across the country to support Shanghai. In its warehouse in Yuepu, Baoshan, the Company established a central factory for providing essential supplies, producing meal packages and arranging vehicles to assist the government to ensure the supply of daily necessities to the public.
As of the end of the Reporting Period, the total assets of the Company’s Yunjin business amounted to RMB1.836 billion, and the number of registered customers reached 5.50 million. The revenue amounted to RMB149 million, representing a year-on-year decrease of 63.5%, and the net profit reached RMB18 million. Considering the impact of the economic environment and long-term growth, the Company took the initiative to reduce the scale of its financial segment to ensure its orderly development.
| II. | The Situation of the Industry in which the Company Operated during the Reporting Period |
According to the National Bureau of Statistics of China, in 2022, the total retail sales of consumer goods was 43,973.3 billion, representing a decrease of 0.2% over the previous year. Among them, the retail sales of consumer goods excluding automobiles amounted to RMB39,396.1 billion, representing a decrease of 0.4%. The retail sales of supermarkets, convenience stores, specialty stores and exclusive shops above the limit increased by 3.0%, 3.7%, 3.5% and 0.2% respectively over the previous year, while that of department stores decreased by 9.3%.
In 2022, the national online retail sales amounted to RMB13,785.3 billion, representing an increase of 4.0% over the previous year. Among them, the online retail sales of physical goods amounted to RMB11,964.2 billion, representing an increase of 6.2%, accounting for 27.2% of the total retail sales of consumer goods. Among the online retail sales of physical goods, the sales of food, clothing and household goods increased by 16.1%, 3.5% and 5.7%, respectively.
| III. | Business Engaged in by the Company during the Reporting Period |
Yonghui Superstores is one of the top 500 enterprises in China and a leading enterprise of “circulation” and “agricultural industrialization” at the national level. Yonghui Superstores is one of the first circulation enterprises to introduce fresh agricultural products into modern supermarkets in mainland China, and has been praised by seven ministries and commissions as a model for the promotion of “Wet Market Transforming into Food Supermarket” in China. Through connecting agricultural produce with supermarkets, it has been recognized by the people for its fresh and affordable commodities, and is known as “A Supermarket for People’s Livelihood”. Since its inception, Yonghui Superstores has been developing with high quality. At present, Yonghui Superstores has developed more than 1,000 supermarket chains nationwide, covering 585 cities in 29 provinces, with an operating area of more than 8 million square meters, ranking second among the top 100 supermarkets in China in 2021.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| IV. | Analysis of Core Competitiveness during the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
The Company has taken the initiative to implement digital strategic transformation, insisting on building a digital supply chain driven by middle-classification governance, serving the whole chain commodity system based on fresh food, building a food supply chain platform with the YHDOS smart mid-end platform, and adhering to the concept of “Becoming Perfect through Integration and Sharing” (融合共享, 成於至善) to build a service-oriented enterprise for the people’s livelihood.
| V. | Main Operations during the Reporting Period |
As of the end of the Reporting Period, the Company achieved an operating income of RMB90.091 billion, representing a year-on-year decrease of 1.07%, and the consolidated net profit attributable to shareholders of the listed company was RMB-2.763 billion.
| (I) | Analysis of principal businesses |
| 1. | Analysis of changes in relevant items in the income statement and cash flow statement |
| | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | |
| Item | | Amount for the
current period | | | Amount for the
same period of
last year | | | Change | |
| | | | | | | | | (%) | |
| Operating income | | | 90,090,819,396.14 | | | | 91,061,894,312.13 | | | | -1.07 | |
| Operating cost | | | 72,360,590,128.08 | | | | 74,027,212,258.30 | | | | -2.25 | |
| Selling expenses | | | 15,849,737,690.89 | | | | 16,629,508,068.60 | | | | -4.69 | |
| Administrative expenses | | | 2,046,416,100.93 | | | | 2,155,455,991.88 | | | | -5.06 | |
| Finance cost | | | 1,538,197,292.52 | | | | 1,551,693,676.48 | | | | -0.87 | |
| Research and development expenses | | | 481,898,435.04 | | | | 428,107,468.21 | | | | 12.56 | |
| Net cash flows from operating activities | | | 5,864,080,337.22 | | | | 5,826,920,929.25 | | | | 0.64 | |
| Net cash flows from investment activities | | | -87,409,382.17 | | | | -915,087,930.10 | | | | N/A | |
| Net cash flows from financing activities | | | -6,982,014,871.77 | | | | -6,855,907,963.31 | | | | N/A | |
Reasons for the change in net cash flows from investment activities: the decrease in cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets during the period.
Particulars of material changes in the Company’s business type, profit composition or profit sources during the period
| | ☐ | Applicable | √ | Not applicable |
| 2. | Income and cost analysis |
| | √ | Applicable | ☐ | Not applicable |
Due to changes in the domestic and international socio-economic environment, shifts in residents’ consumption habits and constrained spending power, the Company’s revenue declined by 1.07% year-on-year in 2022. Although the gross profit margin increased by 0.97% compared to the previous year, it has not yet returned to its normal level.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (1). | Principal businesses by sector, product, region and sales model |
| | | Unit: 0’000 Yuan Currency: RMB |
| | | |
| | | Principal businesses by sector | | | |
| By sector | | Operating
income | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Retail industry | | 8,412,812.71 | | | 7,206,572.07 | | | | 14.34 | | | | -0.98 | | | | -2.07 | | | Increased by 0.96 percentage points |
| Service industry | | 596,269.23 | | | 29,486.94 | | | | 95.05 | | | | -2.32 | | | | -32.67 | | | Increased by 2.22 percentage points |
| | | Principal businesses by product | | | |
| By product | | Operating
income | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Fresh and processed products | | 3,990,046.38 | | | 3,493,132.54 | | | | 12.45 | | | | -2.27 | | | | -3.47 | | | Increased by 1.09 percentage points |
| Food supplies (including clothing) | | 4,422,766.33 | | | 3,713,439.53 | | | | 16.04 | | | | 0.22 | | | | -0.72 | | | Increased by 0.79 percentage points |
| | | Principal businesses by geographical region | | | |
| By region | | Operating
income | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Southeast China | | 1,404,936.12 | | | 1,239,374.63 | | | | 11.78 | | | | -4.16 | | | | -5.45 | | | Increased by 1.20 percentage points |
| North China | | 922,258.58 | | | 776,127.79 | | | | 15.84 | | | | 2.46 | | | | -0.05 | | | Increased by 2.11 percentage points |
| East China | | 1,936,998.17 | | | 1,633,187.44 | | | | 15.68 | | | | 0.57 | | | | -1.31 | | | Increased by 1.60 percentage points |
| West China | | 1,760,697.99 | | | 1,521,104.80 | | | | 13.61 | | | | -0.77 | | | | -0.71 | | | Decreased by 0.05 percentage points |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | Principal businesses by geographical region | | | |
| By region | | Operating
income | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Southwest China | | 1,308,842.03 | | | 1,110,614.29 | | | | 15.15 | | | | 0.97 | | | | 0.83 | | | Increased by 0.12 percentage points |
| South China | | 396,902.97 | | | 334,556.63 | | | | 15.71 | | | | -6.61 | | | | -7.91 | | | Increased by 1.19 percentage points |
| Central China | | 682,176.85 | | | 591,606.49 | | | | 13.28 | | | | -3.66 | | | | -4.58 | | | Increased by 0.84 percentage points |
| | | Principal businesses by sales model | | | |
| Sales model | | Operating
income | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Retail | | 8,412,812.71 | | | 7,206,572.07 | | | | 14.34 | | | | -0.98 | | | | -2.07 | | | Increased by 0.96 percentage points |
| Others | | 596,269.23 | | | 29,486.94 | | | | 95.05 | | | | -2.32 | | | | -32.67 | | | Increased by 2.22 percentage points |
Description of the main business by industry, product, geographical region and sales model
The geographical regional distribution is as follows:
Southeast China: Fujian, Jiangxi
North China: Beijing, Tianjin, Hebei (upper half), Liaoning, Jilin, Heilongjiang, Inner Mongolia
East China: Jiangsu, Zhejiang, Shanghai, Anhui
West China: Chongqing, Guizhou, Yunnan, Hubei, Hunan
Southwest China: Sichuan, Xizang, Shaanxi, Gansu, Qinghai, Ningxia
South China: Guangdong, Guangxi
Central China: Shanxi, Hebei (lower half), Shandong, Henan
| (2). | Analysis statement of production and sales |
| | ☐ | Applicable | √ | Not applicable |
| (3). | Performance of material procurement contracts and material sales contracts |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (4). | Cost analysis statement |
| | | | | | | | | | | | | | Unit: 0’000 Yuan | |
| | | | | | | | | | | | | | | |
| | | By sector | | | | |
| By sector | | Cost
components | | Amount for
the current
period | | | Percentage
of the total
cost for the
current
period | | | Amount
for the
corresponding
period of
last year | | | Percentage
of total cost
for the
corresponding
period of
last year | | | Change in
amount for the
current period
as compared
with the
corresponding
period of
last year | | | Explanations | |
| | | | | | | | | (%) | | | | | | | (%) | | | (%) | | | | | |
| Retail industry | | | | | 7,206,572.07 | | | | 99.59 | | | | 7,358,928.29 | | | | 99.41 | | | | -2.07 | % | | | | |
| Service industry | | | | | 29,486.94 | | | | 0.41 | | | | 43,792.93 | | | | 0.59 | | | | -32.67 | % | | | | |
| | | By product | | | | |
| By product | | Cost
components | | Amount for
the current
period | | | Percentage
of the total
cost for
the current
period | | | Amount
for the
corresponding
period of
last year | | | Percentage
of total cost
for the
corresponding
period of
last year | | | Change in
amount for the
current period
as compared
with the
corresponding
period of
last year | | | Explanations | |
| | | | | | | | | (%) | | | | | | | (%) | | | | (%) | | | | | |
| Fresh and processed products | | | | | 3,493,132.55 | | | | 48.27 | | | | 3,618,652.17 | | | | 48.88 | | | | -3.47 | % | | | | |
| Food supplies and clothing | | | | | 3,713,439.52 | | | | 51.32 | | | | 3,740,276.12 | | | | 50.53 | | | | -0.72 | % | | | | |
| (5). | Changes in the scope of consolidation as a result of changes in equity interests in major subsidiaries during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| (6). | Significant change in or adjustment of the businesses, products or services of the Company during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| (7). | Major customers and suppliers |
| A. | Major customers of the Company |
| | √ | Applicable | ☐ | Not applicable |
The sales of the top five customers amounted to RMB634.1299 million, accounting for 0.70% of the total annual sales; among the sales of the top five customers, the sales of related parties amounted to RMB205.2762 million, accounting for 0.23% of the total annual sales.
The proportion of sales to an individual customer exceeded 50% of the total amount, new customers among the top five customers or heavy dependence on a few customers during the Reporting Period
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| B. | Major suppliers of the Company |
| | √ | Applicable | ☐ | Not applicable |
The purchase from the top five suppliers amounted to RMB7,279.7657 million, accounting for 10.15% of the total annual purchase; among the purchase amount of the top five suppliers, the purchase amount from related parties amounted to RMB3,132.9691 million, accounting for 4.37% of the total annual purchase.
The proportion of purchases from an individual supplier exceeded 50% of the total amount, new suppliers among the top five suppliers or heavy dependence on a few suppliers during the Reporting Period
| | ☐ | Applicable | √ | Not applicable |
| | √ | Applicable | ☐ | Not applicable |
Please refer to VII. Notes to the Consolidated Financial Statements under Section X Financial Report of this report.
| 4. | Research and Development (R&D) Investment |
| (1). | Statement of R&D investment |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan | |
| | | | |
| Expensed R&D investment for the current period | | | 481,898,435.04 | |
| Capitalized R&D investment in the current period | | | 17,353,556.52 | |
| Total R&D investment | | | 499,251,991.56 | |
| Total R&D investment as a percentage of operating income (%) | | | 0.55 | |
| Capitalized R&D investment as a percentage of total R&D investment (%) | | | 3.48 | |
| (2). | Statement of R&D employees |
| | √ | Applicable | ☐ | Not applicable |
| Number of R&D employees in the Company | | | 863 | |
| R&D employees as a percentage of total employees of the Company (%) | | | 0.794 | |
| | | | | |
| Educational background structure of R&D employees | | | | |
| Education level | | Number | |
| Doctoral degree | | | 3 | |
| Master’s degree | | | 109 | |
| Bachelor’s degree | | | 630 | |
| Associate degree | | | 114 | |
| High school and below | | | 7 | |
| | | | | |
| Age structure of R&D employees | | | | |
| Age group | | Number | |
| Under 30 years old (30 years old exclusive) | | | 300 | |
| 30-40 years old (30 years old inclusive, 40 years old exclusive) | | | 522 | |
| 40-50 years old (40 years old inclusive, 50 years old exclusive) | | | 40 | |
| 50-60 years old (50 years old inclusive, 60 years old exclusive) | | | 1 | |
| 60 years old and above | | | 0 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | ☐ | Applicable | √ | Not applicable |
| (4). | Reasons of major changes in the composition of R&D employees and its impact on the Company’s future development |
| | ☐ | Applicable | √ | Not applicable |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | Currency: RMB Unit: Yuan |
| | | | | | | | | |
| Item | | Amount for the
current period | | | Amount for the
corresponding
period of
last year | | | Change | | | Explanations |
| | | | | | | | | (%) | | | |
| Tax refunds received | | | 264,494,708.10 | | | | | | | | N/A | | | Value-added tax credits received during the year |
| Other cash received from operating activities | | | 1,386,207,956.81 | | | | 3,020,586,574.65 | | | | -54.11 | | | The change is due to the Company taking the initiative to reduce the its loan scale |
| Cash received from the disposal of investments | | | 1,218,210,833.38 | | | | 681,186,560.54 | | | | 78.84 | | | Mainly due to the increase in cash received from the disposal of equity interests in Arawana and Zhongbai during the year |
| Cash received from investment income | | | 29,998,400.00 | | | | 57,672,406.30 | | | | -47.98 | | | Decrease in cash dividends received from associates during the year |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | | | 9,776,709.58 | | | | 6,648,320.55 | | | | 47.06 | | | Increase in the disposal of idle assets during the year |
| Net cash received from the disposal of subsidiaries and other operating units | | | 221,073.29 | | | | | | | | N/A | | | Disposal of Xiamen Yunchuang, a subsidiary, during the year |
| Cash paid for the acquisition of fixed assets, intangible assets and other long-term assets | | | 1,203,678,434.13 | | | | 2,010,217,133.88 | | | | -40.12 | | | Decrease in cash paid for long-term assets during the year |
| Cash paid for investments | | | | | | | 159,799,999.46 | | | | -100.00 | | | Mainly due to investments in Yuanxin and Shengxing last year, while no foreign investment during the year |
| Cash received from the absorption of investments | | | | | | | 50,450,000.00 | | | | -100.00 | | | Mainly due to investments received from minority shareholders of Yunchuang last year, while no such matter during the year |
| Other cash received related to fund-raising activities | | | 54,280,019.15 | | | | 39,947,401.43 | | | | 35.88 | | | Increase in finance lease rentals received |
| Effect of exchange rate changes on cash and cash equivalents | | | 4,690,719.29 | | | | -242,700.09 | | | | N/A | | | Changes in exchange rates during the year |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (II) | Significant changes to the profit resulting from non-principal business |
| | √ | Applicable | ☐ | Not applicable |
Matters that the Company’s non-principal business has a greater impact on the profits:
The value of financial assets held by the Company at the end of the Reporting Period decreased by RMB509 million as compared with the beginning of the year, and investment losses arising from the disposal of financial assets during the Reporting Period amounted to RMB115 million;
The provision for impairment losses of RMB197 million was made for long-term equity investments;
| (III) | Analysis of assets and liabilities |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | Unit: Yuan |
| | | | | | | | | | | | | |
| Item | | Amount at the
end of the
current period | | Amount at
the end of
the current
period as a
percentage
of total asset | | Amount at the
end of the
previous period | | Amount at
the end of
the previous
period as a
percentage
of total
assets | | Amount at the
end of the
current period
as a percentage
of amount at
the end of the
previous period | | Explanations |
| | | | | (%) | | | | (%) | | (%) | | |
| Loans and advances (short-term) | | 818,071,041.50 | | 1.32 | | 568,806,255.36 | | 0.80 | | 43.82 | | Increase in short-term loans issued during the year |
| Financial assets held for trading | | 890,826,719.10 | | 1.43 | | 1,560,917,920.71 | | 2.19 | | -42.93 | | Decrease in fair value of financial assets held for trading during the year and sales of certain financial assets held for trading |
| Factoring receivable | | 639,126,680.56 | | 1.03 | | 1,411,455,365.03 | | 1.98 | | -54.72 | | Recovery of factoring receivables during the year |
| Loans and advances | | 76,991,144.35 | | 0.12 | | 245,810,924.79 | | 0.34 | | -68.68 | | Decrease in long-term loans issued during the year |
| Long-term receivables | | 264,650,510.99 | | 0.43 | | 73,044,056.84 | | 0.10 | | 262.32 | | Due to new finance lease receivables during the year |
| Short-term borrowings | | 6,528,480,368.69 | | 10.51 | | 10,947,557,472.21 | | 15.35 | | -40.37 | | Repayment of short-term borrowings during the year |
| Bills payable | | | | | | 33,000,000.00 | | 0.05 | | N/A | | Notes payable at the beginning of the year due for acceptance |
| Other payables | | 1,899,603,590.71 | | 3.06 | | 2,761,266,270.83 | | 3.87 | | -31.21 | | Decrease in payables for equipment work and investments during the year |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Amount at the
end of the
current period | | Amount at
the end of
the current
period as a
percentage
of total asset | | Amount at the
end of the
previous period | | Amount at
the end of
the previous
period as a
percentage
of total
assets | | Amount at the
end of the
current period
as a percentage
of amount at
the end of the
previous period | | Explanations |
| | | | | (%) | | | | (%) | | | | (%) |
| Dividends payable | | | | | | 12,000,000.00 | | 0.02 | | N/A | | Dividends payable to minority shareholders at the end of the last year, no such matter at the end of the current year |
| Long-term borrowings | | 2,070,085,001.67 | | 3.33 | | 1,021,069,722.22 | | 1.43 | | 102.74 | | The Company converted part of its short-term borrowings to long- term borrowings during the year |
| Estimated liabilities | | 7,383,565.56 | | 0.01 | | 3,628,259.35 | | 0.01 | | 103.5 | | Increase in estimated liabilities arising from litigation or arbitration pending during the year |
| Treasury shares | | 263,483,654.25 | | 0.42 | | | | | | | | Shares repurchased during the year |
| Other comprehensive income | | 440,260.72 | | 0.00 | | 1,494,334.19 | | 0.00 | | -70.54 | | Effect of changes in other comprehensive income of One Bank during the year |
| Retained earnings | | -6,751,820,069.61 | | -10.86 | | -3,797,684,715.49 | | -5.33 | | N/A | | Operating loss for the year |
| Minority interests | | 191,328,573.37 | | 0.31 | | 418,606,199.35 | | 0.59 | | -54.29 | | Operating loss for the year |
| | √ | Applicable | ☐ | Not applicable |
Including: overseas assets of RMB287 million, accounting for 0.46% of total assets.
| (2) | Description of the relatively high proportion of overseas assets |
| | ☐ | Applicable | √ | Not applicable |
| 3. | Restriction on material assets as of the end of the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
Please refer to VII. 83 in Section X Financial Report of this report
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (IV) | Analysis of the industry operational information |
| | √ | Applicable | ☐ | Not applicable |
As follows:
Analysis of operational information of retail industry
Distribution of stores opened at the end of the Reporting Period
| | √ | Applicable | ☐ | Not applicable |
| Region | | Operation mode | | Self-owned stores | | | Leased stores | |
| | | | | Number
of stores | | | GFA | | | Number
of stores | | | GFA | |
| | | | | | | | (0’000 m2) | | | | | | (0’000 m2) | |
| Anhui | | Supermarket | | | | | | | | | | | 69 | | | | 63.38 | |
| Beijing | | Supermarket | | | | | | | | | | | 47 | | | | 41.93 | |
| Fujian | | Supermarket | | | 4 | | | | 4.15 | | | | 135 | | | | 104.49 | |
| Gansu | | Supermarket | | | | | | | | | | | 3 | | | | 1.89 | |
| Guangdong | | Supermarket | | | | | | | | | | | 62 | | | | 32.32 | |
| Guangxi | | Supermarket | | | | | | | | | | | 8 | | | | 4.74 | |
| Guizhou | | Supermarket | | | | | | | | | | | 41 | | | | 35.45 | |
| Hebei | | Supermarket | | | 1 | | | | 2.65 | | | | 43 | | | | 34.84 | |
| Henan | | Supermarket | | | | | | | | | | | 46 | | | | 38.97 | |
| Heilongjiang | | Supermarket | | | | | | | | | | | 8 | | | | 7.87 | |
| Hubei | | Supermarket | | | | | | | | | | | 16 | | | | 11.74 | |
| Hunan | | Supermarket | | | | | | | | | | | 7 | | | | 4.28 | |
| Jilin | | Supermarket | | | | | | | | | | | 6 | | | | 5.83 | |
| Jiangsu | | Supermarket | | | | | | | | | | | 64 | | | | 54.71 | |
| Jiangxi | | Supermarket | | | | | | | | | | | 13 | | | | 8.72 | |
| Liaoning | | Supermarket | | | | | | | | | | | 8 | | | | 6.47 | |
| Inner Mongolia | | Supermarket | | | | | | | | | | | 3 | | | | 2.49 | |
| Ningxia | | Supermarket | | | | | | | | | | | 2 | | | | 1.13 | |
| Qinghai | | Supermarket | | | | | | | | | | | 1 | | | | 0.60 | |
| Shandong | | Supermarket | | | | | | | | | | | 4 | | | | 2.12 | |
| Shanxi | | Supermarket | | | | | | | | | | | 16 | | | | 12.94 | |
| Shaanxi | | Supermarket | | | | | | | | | | | 35 | | | | 25.09 | |
| Shanghai | | Supermarket | | | | | | | | | | | 40 | | | | 26.31 | |
| Sichuan | | Supermarket | | | 1 | | | | 0.42 | | | | 113 | | | | 94.78 | |
| Tianjin | | Supermarket | | | | | | | | | | | 8 | | | | 7.74 | |
| Xizang | | Supermarket | | | | | | | | | | | 3 | | | | 2.06 | |
| Yunnan | | Supermarket | | | | | | | | | | | 5 | | | | 3.35 | |
| Zhejiang | | Supermarket | | | | | | | | | | | 72 | | | | 54.52 | |
| Chongqing | | Supermarket | | | 4 | | | | 3.83 | | | | 145 | | | | 103.84 | |
| Total | | | | | 10 | | | | 11.04 | | | | 1,023 | | | | 794.59 | |
Table of newly opened stores and reserved stores during the Reporting Period
| | | (Unit of area: m2) | |
| | | | |
| Item | | Subtotal of
opened stores | | | Net increase in
stores opened in
the current
period | | | Stores
contracted but
not opened
stores | |
| Number of stores in Anhui | | | 69 | | | | 0 | | | | 9 | |
| Area of stores in Anhui | | | 633,755.60 | | | | 0 | | | | 66,494.31 | |
| Number of stores in Beijing | | | 47 | | | | 2 | | | | 3 | |
| Area of stores in Beijing | | | 419,302.88 | | | | 6,572.96 | | | | 14,648.4 | |
| Number of stores in Fujian | | | 139 | | | | 5 | | | | 8 | |
| Area of stores in Fujian | | | 1,086,360.27 | | | | 32,226.72 | | | | 79,816.3 | |
| Number of stores in Gansu | | | 3 | | | | 0 | | | | 1 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Subtotal of
opened stores | | | Net increase in
stores opened in
the current
period | | | Stores
contracted but
not opened
stores | |
| Area of stores in Gansu | | | 18,871.90 | | | | 0 | | | | 8,086 | |
| Number of stores in Guangdong | | | 62 | | | | 2 | | | | 2 | |
| Area of stores in Guangdong | | | 323,229.04 | | | | 9,104.4 | | | | 9,363.37 | |
| Number of stores in Guangxi | | | 8 | | | | 2 | | | | 0 | |
| Area of stores in Guangxi | | | 47,366.34 | | | | 11,505.43 | | | | 0 | |
| Number of stores in Guizhou | | | 41 | | | | 1 | | | | 11 | |
| Area of stores in Guizhou | | | 354,508.87 | | | | 7,052.80 | | | | 90,342.67 | |
| Number of stores in Hebei | | | 44 | | | | 1 | | | | 7 | |
| Area of stores in Hebei | | | 374,832.76 | | | | 8,414.19 | | | | 68,358.94 | |
| Number of stores in Henan | | | 46 | | | | 4 | | | | 7 | |
| Area of stores in Henan | | | 389,690.99 | | | | 27,424.75 | | | | 59,480.73 | |
| Number of stores in Heilongjiang | | | 8 | | | | 0 | | | | 0 | |
| Area of stores in Heilongjiang | | | 78,721.61 | | | | 0 | | | | 0 | |
| Number of stores in Hubei | | | 16 | | | | 0 | | | | 5 | |
| Area of stores in Hubei | | | 117,361.51 | | | | 0 | | | | 23,984.24 | |
| Number of stores in Hunan | | | 7 | | | | 0 | | | | 0 | |
| Area of stores in Hunan | | | 42,771.07 | | | | 0 | | | | 0 | |
| Number of stores in Jilin | | | 6 | | | | 0 | | | | 0 | |
| Area of stores in Jilin | | | 58,323.42 | | | | 0 | | | | 0 | |
| Number of stores in Jiangsu | | | 64 | | | | 0 | | | | 2 | |
| Area of stores in Jiangsu | | | 547,084.11 | | | | 0 | | | | 12,352.70 | |
| Number of stores in Jiangxi | | | 13 | | | | 1 | | | | 1 | |
| Area of stores in Jiangxi | | | 87,209.61 | | | | 4,818.86 | | | | 7,500.00 | |
| Number of stores in Liaoning | | | 8 | | | | 2 | | | | 0 | |
| Area of stores in Liaoning | | | 64,740.76 | | | | 10,499.91 | | | | 0 | |
| Number of stores in Inner Mongolia | | | 3 | | | | 0 | | | | 0 | |
| Area of stores in Inner Mongolia | | | 24,913.57 | | | | 0 | | | | 0 | |
| Number of stores in Ningxia | | | 2 | | | | 0 | | | | 0 | |
| Area of stores in Ningxia | | | 11,345.95 | | | | 0 | | | | 0 | |
| Number of stores in Qinghai | | | 1 | | | | 0 | | | | 0 | |
| Area of stores in Qinghai | | | 6,018.58 | | | | 0 | | | | 0 | |
| Number of stores in Shandong | | | 4 | | | | 1 | | | | 1 | |
| Area of stores in Shandong | | | 21,220.64 | | | | 4,299.93 | | | | 5,591.55 | |
| Number of stores in Shanxi | | | 16 | | | | 0 | | | | 3 | |
| Area of stores in Shanxi | | | 129,390.06 | | | | 0 | | | | 18,552.00 | |
| Number of stores in Shaanxi | | | 35 | | | | 2 | | | | 5 | |
| Area of stores in Shaanxi | | | 250,883.74 | | | | 11,428.18 | | | | 43,588.02 | |
| Number of stores in Shanghai | | | 40 | | | | 2 | | | | 1 | |
| Area of stores in Shanghai | | | 263,077.18 | | | | 8,826.08 | | | | 11,582.82 | |
| Number of stores in Sichuan | | | 114 | | | | 6 | | | | 24 | |
| Area of stores in Sichuan | | | 952,015.57 | | | | 46,294.27 | | | | 184,602.91 | |
| Number of stores in Tianjin | | | 8 | | | | 0 | | | | 1 | |
| Area of stores in Tianjin | | | 77,396.25 | | | | 0 | | | | 5,812.60 | |
| Number of stores in Xizang | | | 3 | | | | 1 | | | | 0 | |
| Area of stores in Xizang | | | 20,648.68 | | | | 4,281 | | | | 0 | |
| Number of stores in Yunnan | | | 5 | | | | 0 | | | | 6 | |
| Area of stores in Yunnan | | | 33,466.82 | | | | 0 | | | | 42,006.50 | |
| Number of stores in Zhejiang | | | 72 | | | | 0 | | | | 3 | |
| Area of stores in Zhejiang | | | 545,205.17 | | | | 0 | | | | 22,404.09 | |
| Number of stores in Chongqing | | | 149 | | | | 4 | | | | 11 | |
| Area of stores in Chongqing | | | 1,076,652.66 | | | | 21,850.04 | | | | 77,413.65 | |
| Total number of stores | | | 1,033 | | | | 36 | | | | 111 | |
| Total area of stores | | | 8,056,365.61 | | | | 214,599.52 | | | | 851,981.8 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Newly opened stores of the Company in the fourth quarter of 2022
The Company opened four new stores in China in the fourth quarter of 2022, the particulars of which were as follows:
| No. | | Region | | Name of project | | Opening
date | | Lease term | | Leased area | | Address |
| | | | | | | | | (years) | | (m2) | | |
| 1 | | Beijing | | China Overseas Beijing Yinghai UniFun | | 2022-10-2 | | 15 | | 3,253.36 | | B124, B1/F, Building 1, Courtyard 2, Yingxu Alley, Yinghai Town, Beijing Economic- Technological Development Area (Daxing), Beijing |
| 2 | | Chongqing | | Liangping Times Square | | 2022-12-22 | | 20 | | 4,310 | | B1/F, Building 4, No. 8 Yingui Road, Shuanggui Subdistrict, Liangping District, Chongqing |
| 3 | | Sichuan | | Yibin Lingang Xintiandi | | 2022-12-22 | | 20 | | 8,342 | | No. 199 Longtoushan Road, Lingang Economic and Technological Development Zone, Yibin |
| 4 | | Shanghai | | Nanqiao Longfor Paradise Walk | | 2022-12-23 | | 15 | | 4,244.38 | | Longfor Fengxian Paradise Walk, No. 3800 Jinhai Highway, Minhang District, Shanghai |
The Company signed a contract with one new store in the fourth quarter of 2022, the particulars of which were as follows:
| No. | | Region | | Date of contract | | Expected
delivery
date | | Lease term | | Leased area | | Address |
| | | | | | | | | (years) | | (m2) | | |
| 1 | | Hebei | | 2022-12-1 | | 2023-10-1 | | 15 | | 9,452.94 | | Zhangjiakou, Hebei |
Other Explanations
| √ | Applicable | ☐ | Not applicable |
Information on the top 10 stores in terms of revenue
| No. | | Name of store | | Area | | Title of
property | | Address | | Opening
date |
| | | | | (m2) | | | | | | |
| 1 | | Shijingshan Lugu Store (石景山區魯穀店) | | 18,322.00 | | Leased property | | East of Lugu Subdistrict, Shijingshan District, Beijing | | 2009.06.26 |
| 2 | | Yubei Shuanglong Store (渝北區雙龍店) | | 6,308.00 | | Leased property | | No. 218 Shuanglong Avenue, Yubei District, Chongqing | | 2008.01.03 |
| 3 | | Chengdu Wenjiang Guanghua Avenue Store (成都市 江光華 大道店) | | 22,078.06 | | Leased property | | Intersection of Section 3 of Guanghua Avenue and Yongxing Road, Wenjiang District, Chengdu, Sichuan | | 2012.04.26 |
| 4 | | Tongzhou Wanda Plaza Store (通州區通州萬達 店) | | 12,639.82 | | Leased property | | Wanda Plaza, Beiyuan Business District, Yongshun Town, Tongzhou District, Beijing | | 2014.11.29 |
| 5 | | Daxing Jiugong Store (大興區舊宮店) | | 25,303.73 | | Leased property | | No. 39 Xiaohongmen Road, Jiugong Town, Daxing District, Beijing | | 2010.02.05 |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| No. | | Name of store | | Area | | Title of
property | | Address | | Opening
date |
| | | | | (m2) | | | | | | |
| 6 | | Fuzhou Olympic Sports Center Plaza Store (福 州市奧體中心廣場店) | | 13,520.00 | | Leased property | | Fuzhou Straits Olympic Sports Center Commercial Plaza, Fuwan Doumen, Cangshan District, Fuzhou, Fujian | | 2015.09.26 |
| 7 | | Chaoyang Longfor Changying Paradise Walk Store (朝陽區龍 湖 楹天街店) | | 12,816.80 | | Leased property | | Opposite to Phase IV of Wanxiang Xintian, Chaoyang North Road (Intersection of Guanzhuang Road), Chaoyang District, Beijing | | 2014.12.20 |
| 8 | | Guiyang Jinyuan Shopping Center Store (貴陽市金源購物中心 店) | | 16,216.00 | | Leased property | | No. 6 Jinyang South Road, Jinyang New District, Guiyang, Guizhou | | 2010.10.23 |
| 9 | | Guizhou Longli Mingmen Times Square Store (貴州龍 裡名門時代廣場店) | | 5,390.00 | | Leased property | | Intersection of Zheng Main Street and Shengli Street, Longli County, Qiannan Prefecture, Guizhou | | 2018.01.29 |
| 10 | | Tongzhou Banbidian Store (通州區半壁店) | | 11,529.00 | | Leased property | | Eastern Section of Yile South Street, Banbidian, Liyuan Town, Tongzhou District, Beijing | | 2013.05.31 |
| (V) | Analysis of investments |
General analysis of external equity investment
| √ | Applicable | ☐ | Not applicable |
During the Reporting Period, the Company focused on its principal businesses and reduced the external investments.
| 1. | Major equity investment |
| | ☐ | Applicable | √ | Not applicable |
| 2. | Major non-equity investment |
| | ☐ | Applicable | √ | Not applicable |
Financial assets measured at fair value
| √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | | | | | | | | |
Categories of
assets | | Opening
balance | | | Gains or losses
from changes in
fair value for
the period | | | Accumulated
changes in fair
value included
in equity | | | Impairment
provision
made for
the period | | | Amount
purchased for
the period | | | Amount
disposed of/
redeemed for
the period | | | Other changes | | | Closing balance | |
| Stocks | | | 487,156,170.27 | | | | -69,593,738.61 | | | | 218,612,589.36 | | | | | | | | | | | | 372,382,644.93 | | | | -45,179,786.73 | | | | | |
| Others | | | 5,173,761,750.44 | | | | -525,086,428.83 | | | | 136,205,943.73 | | | | | | | | 2,450,000,000.00 | | | | 1,942,083,905.78 | | | | -347,764,696.73 | | | | 4,808,826,719.10 | |
| Total | | | 5,660,917,920.71 | | | | -594,680,167.44 | | | | 354,818,533.09 | | | | | | | | 2,450,000,000.00 | | | | 2,314,466,550.71 | | | | -392,944,483.46 | | | | 4,808,826,719.10 | |
| Note: | Other changes primarily represent investment gains generated upon the disposal of assets |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Investment in securities
| | √ | Applicable | ☐ | Not applicable |
| Unit: Yuan Currency: RMB |
| |
Type of
securities | | Securities
code | | Abbreviation
of securities | | Initial
investment
cost | | Source of
funds | | Opening
carrying
amount | | Gains or
losses from
changes in
fair value for
the period | | Accumulated
changes in
fair value
included
in equity | | Amount
purchased
for the
period | | Amount
disposed of
for the
period | | Gains or
losses from
investment
for the
period | | Closing
carrying
amount | | Accounting items |
| Stock | | SZ000999 | | Arawana | | 198,949,842.30 | | Self-owned funds | | 487,156,170.27 | | -69,593,738.61 | | 218,612,589.36 | | | | 372,382,644.93 | | -45,179,786.73 | | | | Held-for-trading financial assets |
| Total | | / | | / | | 198,949,842.30 | | / | | 487,156,170.27 | | -69,593,738.61 | | 218,612,589.36 | | | | 372,382,644.93 | | -45,179,786.73 | | | | / |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Investment in private equity funds
| | ☐ | Applicable | √ | Not applicable |
Investment in derivatives
| | ☐ | Applicable | √ | Not applicable |
| 4. | The specific progress of material asset restructuring during the reporting period |
| | ☐ | Applicable | √ | Not applicable |
| (VI) | Material asset and equity disposal |
| | √ | Applicable | ☐ | Not applicable |
During the reporting period, the Company disposed of 135,693,739 shares of Zhongbai Holding Group Co., Ltd. via the trading platform of Shenzhen Stock Exchange, and recorded a decrease in investment gains of RMB25,077,100 for the year in the transaction, with a total investment loss of RMB387 million.
| (VII) | Analysis of major subsidiaries and investee companies |
| | √ | Applicable | ☐ | Not applicable |
Unit: 0’000 Yuan Currency: RMB
| Company abbreviation | | Industry | | Registered capital | | | Total assets | | | Net assets | | | Net profit | | | Operating income | | | Operating profit | |
| Fujian Yuntong | | Logistics distribution industry | | | 10,000.00 | | | | 220,829.99 | | | | 29,425.01 | | | | 18,427.74 | | | | 1,160,510.29 | | | | 18,240.47 | |
| Yonghui Logistics | | Logistics distribution industry | | | 10,000.00 | | | | 68,042.19 | | | | 27,144.66 | | | | 10,941.75 | | | | 860,875.08 | | | | 9,860.04 | |
| Chengdu Commercial | | Logistics distribution industry | | | 13,000.00 | | | | 138,020.24 | | | | 27,109.19 | | | | 6,493.35 | | | | 767,105.07 | | | | 6,942.33 | |
| Minhou Commerce | | Logistics distribution industry | | | 5,000.00 | | | | 53,234.48 | | | | 11,504.11 | | | | -602.24 | | | | 381,720.82 | | | | -1,815.01 | |
| Beijing Commercial | | Logistics distribution industry | | | 11,241.86 | | | | 83,350.56 | | | | 15,491.31 | | | | -57.78 | | | | 131,438.25 | | | | -982.60 | |
| (VIII) | Structured entities controlled by the Company |
| | ☐ | Applicable | √ | Not applicable |
| VI. | Discussion and Analysis of the Company’s Future Development |
| (I) | Industry landscape and trends |
| | √ | Applicable | ☐ | Not applicable |
In 2022, the competitive landscape of the retail industry remained tough, with steady growth in online business and a certain impact on foot traffic in offline supermarkets. As a leading chain enterprise, Yonghui Superstores actively sought digital transformation by independently developing YHDOS system, which was fully launched and promoted in December 2022, marking a critical step towards enhanced organizational efficiency and product strength.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (II) | Development strategy of the Company |
| | √ | Applicable | ☐ | Not applicable |
In 2023, the Company will continue to focus on its principal business. It will spare no efforts to solidify a customer-centric, fresh-food-oriented omni-channel digital retail platform, enhance the digitization and transparency of its supply chain and leverage technology to improve the operational quality of each store, with an expectation to turn a profit for the year.
The Company strives to become a “hexagonal warrior”, dedicated to the principles of people’s livelihoods, win-win cooperation with suppliers, ensuring product quality, enhancing service quality, improving organizational efficiency and building an integrated online and offline omni-channel. Undaunted by challenges and embracing changes, the Company aims to comprehensively improve its operational and service quality through years of accumulated experience with forward-thinking mindset and rigorous management practices.
| | √ | Applicable | ☐ | Not applicable |
The Company will promote the digitization of the product supply chain and build a transparent supply chain. It will leverage its technology and data capacities to formulate management rules of product categories, define development goals and positioning of product categories, and optimize product categories by retaining the best and phasing out the underperforming ones, to continuously improve supply chain development.
The Company will open high-quality stores and close and phase out underperforming ones, to achieve store iteration and optimization. It will create benchmark stores that are well-regarded by consumers and have market influence in the new era.
The Company will continuously enhance user experience, drive the in-depth and broad development of its self-operated platform, Yonghui Life, explore potential customers, accelerate the transformation of the “Yonghui Life” in respect of warehouses, and strengthen the development of digital product management capabilities.
| | √ | Applicable | ☐ | Not applicable |
There are uncertainties in economic environment, enterprise procurement, labor costs, customers’ consumption habits, etc.
The Company is firmly committed to the essence of retail, with focus on a retail system to be built around product quality, service, and efficiency, while using digital systems to enhance its omni-channel capabilities.
| | ☐ | Applicable | √ | Not applicable |
| VII. | The Company’s Failure to Disclose as Required by the Standards Due to Non-Application of the Provisions of the Standards or for Special Reasons Such as State Secrets and Trade Secrets and the Description of Reason Therefor |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| 3. | For the year ended December 31, 2023 |
SECTION 3 MANAGEMENT DISCUSSION AND ANALYSIS
| I. | Discussion and Analysis of Operations |
| 1. | Stores in various provinces and municipalities: |
During the Reporting Period, the Company opened 12 new stores, closed 45 stores, and newly contracted 10 stores. As of December 31, 2023, the Company operated a total of 1,000 supermarkets in 29 provinces and municipalities in China.
In 2023, the domestic market gradually recovered, and the retail industry was highly competitive. By closing some underperforming stores, promoting omni-channel digitalization, enhancing operational efficiency of stores, optimizing stores and other measures, the Company continued to transform and upgrade, reduce costs and enhance efficiency to respond to severe market challenges.
| 2. | Strategic transformation of omni-channel business |
During the Reporting Period, the Company’s online business recorded revenue of RMB16.1 billion in 2023, accounting for 20.5% of the total revenue, of which the gross profit margin of commodities increased by 0.9% year-on-year, mainly attributed to the improvement of the commodity structure and the optimization of commodity costs.
The self-operated home delivery business under “Yonghui Life (永輝生活)” has covered 920 stores, achieving sales of RMB8.38 billion, with an average daily order volume of 307,000 orders and an average monthly repurchase rate of 50%. During the Reporting Period, the home delivery business operated on the third-party platforms has covered 910 stores, achieving sales of RMB7.7 billion, with an increase of 8.15% year-on-year and an average daily order volume of 208,000 orders. In particular, the number of registered members of the self-operated platform, “Yonghui Life” APP, has surpassed 115 million, with a year-on-year growth of 13.86%.
In terms of channel operation, the Company persisted in strengthening cooperation with third-party platforms to expand its business scale by focusing on enhancing three core indicators of “traffic, conversion and frequency”. In addition to consolidating the original channels, the Company also actively explored new channels, and in the second half of the year, the number of followers of its “Douyin Group Purchase to Store (抖音團購到店)” increased by 200,000, and attracted approximately 2 million users to shopping in store, continuously ranking TOP 1 in terms of group purchases in the supermarket industry; “Douyin One-hour Delivery (抖音⼩時達)” launched daily broadcasts in November, with viewers at a peak of over 10,000, continuously ranking TOP 1 in November and December in terms of sales in the supermarket industry.
In 2023, Yonghui Technology adhered to the principle of “focusing on customers’ experience”, and comprehensively applied digital and intelligent technology to promote organizational process change and business innovation based on the omni-channel, full-chain, efficient and accessible digital platform. The infrastructure construction such as store digitalization and supply chain digitalization has been basically completed.
Digital supply chain: It promoted the digitalization of supplier management and enhanced the efficiency of collaboration between suppliers and retailers through multiple digital means such as supplier hierarchical management, risk control, and performance improvement. With commodity power as the core, it improved the inbound and outbound efficiency and price competitiveness of commodities by promoting and applying tools of intelligent product selection, intelligent obsolescence and replacement, intelligent clearance, and intelligent pricing, with the efficiency of new product introduction increased by 50% year-on-year. Through the digitization of orders, it handled all the store and warehouse orders, logistics orders and suppliers’ orders online, with the labor efficiency of fresh orders in the provinces where the digitization of orders has been promoted increased by 20% year-on-year.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Digital stores: It realized the task-based, process-based and automatic operation of stores nationwide, promoted the implementation of the piece-rate pay system in the core scenarios, and comprehensively enhanced the efficiency of business operations, with the store-wide inventory accuracy rate overpassing 93%; the store and warehouse display was successfully applied to stores in core cities, with the order picking efficiency increasing by 20% on average. Through the implementation of digital employment, intelligent work scheduling, and flexible personnel allocation, it optimized the labor structure of stores, with the average labor cost of the whole warehouse decreasing by 9.3% year-on-year. It also promoted the environmental action plan to advocate paperless receipts and saving paper.
Digital retail platform: It strengthened user-end capabilities and enhanced the APP experience, promoted the full-chain digitalization of membership operations by virtue of the development of offline, third-party and other channels, deepened the perception of the rights and interests of omni-channel members, continuously improved the penetration rate of digital membership, and updated the APP version to be accessible to the elderly population.
| 4. | Supply chain development |
In 2023, for the supply chain, the Company, with a focus on the medium and long-term development goals, steadily advanced the transformation by restoring direct procurement, transforming the business model, enhancing the centralized procurement capabilities, and matching the three-dimensional output of commodities to the needs of multi-channel and multi-format users. The Company built 3 production warehouses, and promoted the division and fine management of responsibilities during the procurement process; used digital tools to improve operational efficiency, reduce costs and increase efficiency, and facilitated the construction of a transparent and open supply chain.
During the Reporting Period, the sales of products under the Company’s own brands amounted to RMB3.54 billion, accounting for 5% of the operating revenue, representing an increase of 8.26% year-on-year. Focusing on building standard fresh products and Yonghui Farm’s branded products, the sales of fresh products under the Company’s own brands increased by 41.3% year-on-year. The Company has been expanding the supply chain, cooperated with 101 source manufacturers, and established 19 self-owned planting/breeding bases, such as a rice planting base in the Great Northern Wilderness, Gurun small glutinous corn/thumb corn planting base, etc.; set up 27 direct sourcing projects, such as the melon project, beef and mutton roll project, etc. At the same time, the Company coordinated the operation and procurement of the platform to jointly purchase Gannan navel orange and cooperated with the import department to jointly purchase coconut green, etc.
In order to seek differentiated products and meet the needs of customers for a healthy life, the Company successively developed packaged corn products such as thumb corns and colorful corns, setting foot in a new business field. At the same time, it introduced lotus seed juice, Shan Cha Gan Gan Hao ( 山茶柑柑好) and other healthy drinks, and silver wire rolls and other intangible cultural heritage products to meet the needs of different customers.
| 5. | Human resources and organization development |
During the Reporting Period, the Company made concerted efforts on structure optimization, talent development, organizational activation and corporate culture. The organizational performance has been improved through business process optimization and barrier breaking, organizational restructuring and post setting. The Company has improved the talent management mechanism by accumulating more than 120,000 talent resumes, selecting and cultivating young cadres to improve the ability of the cadre team. As such, the Company won the 2023 China Talent Management and Cultural Model Award (2023中國人才管理文化典範獎). The Company activated the organizational vitality of stores, designed incentive programs based on the business objectives of the Company and conducted the piece-rate system and three-point competition to motivate employees, and launched a pilot warehouse in the pilot area (Fuzhou). For furtherance of corporate culture, the Company clarified the behavior standards of “customer first” and eight words of corporate culture, to conduct a national skill competition and establish a display platform, thus promoting the inheritance of corporate culture and serving customers.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
In 2023, the total value of the Company’s logistics operations in China amounted to RMB51.63 billion. The distribution scope of the logistics centers covers 29 provinces and municipalities in China, with a total logistics operation area of 840,000 square meters and approximately 2,366 employees. The Company has 31 logistics centers, including 20 normal temperature distribution centers, 10 constant temperature distribution centers and 1 production warehouse. The Company has established a central warehouse linkage system to improve delivery efficiency, optimize inventory management and enhance logistics service functions. As the delivery scope has been expanded, the digital functions of logistics have been comprehensively improved and the module logistics and delivery mode has been optimized. Inventory management has been optimized as shown by logistics inventory turnover days down by 2.5 days year-on-year and inventory volume down by 83 million. Eight hub warehouses and other regional warehouses have been integrated as a linked grid distribution system, and the warehouse planning, inventory management and route management capabilities are developing with the assistance of big data and AI algorithms. Therefore, the distribution efficiency and logistics service functions have been improved for strengthening supply chain stability and reducing operational costs.
During the Reporting Period, the Company continuously worked on the food safety system, management standards and process operations, and revised 24 items of the food safety management system and processes of the Company.
The Company conducted annual audit of the “Store Food Safety Management System”, with 420 stores under audit at a pass rate of 99.5%.
The Company organized the culture propaganda activities themed by “Food Safety for All”, and 17,000 key management staff in the supply chain and stores have signed the 2024 Food Safety Responsibility Statement with publicity activities covering all employees.
The Company continued to iterate its capability to control the food safety risk management system in the supply chain to eliminate high-risk products at the source through risk monitoring, warning, control and review.
The Company continued to promote the implementation of the governance system for food safety risks and quality improvement at the source of the supply chain through various enhancement measures; in terms of food safety risks, by virtue of the cloud and big data system of food safety, the Company conducted a three-step management of “early warning identification, analysis and judgment, and control tracking” of food safety risks. At the source and factory level, the pre-event tracking of the risk control system has been refined, with the “trigger” mechanism under monitoring, the “control” measures under following-up, and the “improvement” quality under tracking; meanwhile, the Company strengthened food safety responsibilities and duties at all levels and positions, and organized key officers and major management personnel to sign the Food Safety Responsibility Letter online. The Company regularly launched training and publicity programs on food safety to enhance employees’ professional knowledge and capabilities in food safety risks through the “Food Safety Program for All Staff”. A multi-level risk assessment mechanism combining “self-inspection and self-checking” with “unannounced inspection” was implemented by the food safety department at the headquarters level to proactively eliminate food safety hazards. The Company also promoted initiatives such as the “Holiday Food Safety Special Campaign”, “3.15 Food Safety Special Campaign”, “Summer and Autumn Food Safety Special Campaign”, and “Fresh Food Lamps” to continuously update food safety operating procedures and improve product quality and safety.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
In 2023, the Company remained as the major force in supply guarantee and price stability. During the typhoon “Dusurui” (杜蘇芮), all 13,000 employees in Fujian Province participated in fighting against the typhoon to ensure supply and price stability. The Company coordinately dispatched livelihood materials and timely supplied to all stores in Fujian Province to meet the emergency needs of consumers. During the rainstorm brought by the typhoon “Haikui” (海葵) in Fujian Province, the Company immediately conducted a survey on the losses of stores in each region, and made arrangements for various aspects such as the categories of goods provided by the supply chain, logistics distribution, online operations, staff safety and store logistics. In addition, according to the real-time situation of the rainstorm, the Company actively made overall planning for the material allocation of stores and logistics, and reserved milk, instant noodles and other materials in advance to ensure 1.5 times of stock volume of daily necessities than that in ordinary days. The Company also ensured that necessary commodities and materials are available to stores and online storage warehouse in time with stable prices and supply of people’s livelihood.
| II. | The Situation of the Industry in which the Company Operated during the Reporting Period |
According to the data released by the National Bureau of Statistics, in 2023, the total retail sales of consumer goods was RMB47,149.5 billion, representing an increase of 7.2% over the previous year. Among them, the retail sales of consumer goods other than automobiles amounted to RMB42,288.1 billion, representing an increase of 7.3%. The retail sales of department stores, convenience stores, specialty stores and exclusive brand stores in retail units above designated size increased by 8.8%, 7.5%, 4.9% and 4.5%, respectively, over the previous year; the retail sales of superstores in retail units above designated size decreased by 0.4% over the previous year.
In 2023, the national online retail sales amounted to RMB15,426.4 billion, representing an increase of 11.0% over the previous year. Among them, the online retail sales of physical goods amounted to RMB13,017.4 billion, representing an increase of 8.4%, accounting for 27.6% of the total retail sales of consumer goods. Among the online retail sales of physical goods, the sales of food, clothing and household goods increased by 11.2%, 10.8% and 7.1%, respectively.
| III. | Business Engaged in by the Company during the Reporting Period |
At present, Yonghui Superstores has developed more than 1,000 supermarket chains nationwide, covering 29 provinces and municipalities and 530 cities, with an operating area of more than 7.75 million square meters, ranking second among the top 100 supermarkets in China in 2022 and the fourth among the top 100 chains in China in 2022.
| IV. | Analysis of Core Competitiveness during the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
The Company insists on building a platform-based enterprise of food supply chain based on smart middle office, adhering to the concept of “Becoming Perfect through Integration and Sharing” (融合共享, 成於至善), and building an entrepreneurship platform for the youth with Yonghui’s characteristic partnership system; and the Company adopts a store optimization strategy to introduce young and differentiated products, building a multi-level product structure, and meeting the needs of consumers in various regions and age groups.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| V. | Main Operations during the Reporting Period |
As of the end of the Reporting Period, the Company achieved an operating income of RMB78.642 billion in 2023, representing a year-on-year decrease of 12.71%, and the net profit attributable to shareholders of the listed company was RMB-1.33 billion, representing a decrease of RMB1.43 billion in losses as compared to the corresponding period of last year.
| (I) | Analysis of principal businesses |
| 1. | Analysis of changes in relevant items in the income statement and cash flow statement |
Unit: Yuan Currency: RMB
| Item | | Amount for the
current period | | | Amount for
the same period
of last year | | | Change | |
| | | | | | | | | (%) | |
| Operating income | | | 78,642,171,577.01 | | | | 90,090,819,396.14 | | | | -12.71 | |
| Operating cost | | | 61,939,819,460.98 | | | | 72,360,590,128.08 | | | | -14.40 | |
| Selling expenses | | | 14,680,133,439.44 | | | | 15,849,737,690.89 | | | | -7.38 | |
| Administrative expenses | | | 1,887,145,956.28 | | | | 2,046,416,100.93 | | | | -7.78 | |
| Finance cost | | | 1,323,052,505.11 | | | | 1,538,197,292.52 | | | | -13.99 | |
| Research and development expenses | | | 318,267,251.93 | | | | 481,898,435.04 | | | | -33.96 | |
| Net cash flows from operating activities | | | 4,568,880,954.83 | | | | 5,864,080,337.22 | | | | -22.09 | |
| Net cash flows from investment activities | | | 256,485,337.24 | | | | -87,409,382.17 | | | | N/A | |
| Net cash flows from financing activities | | | -6,571,946,948.65 | | | | -6,982,014,871.77 | | | | N/A | |
Reasons for the change in operating income: the decline in income is partly due to the Company’s continuous adjustments to its stores in recent years, actively closing stores that have sustained a loss. On the other hand, as the national economy continues to gradually recover in 2023, the physical retail industry as a whole is facing unprecedented challenges. With the decline in residents’ willingness and ability to consume, the income has also declined.
Reasons for the change in research and development expenses: the decrease in research and development investment of the Company during the year.
Reasons for the change in net cash flows from operating activities: the decrease in operating cash flow resulted from the decrease in income of the Company.
Reasons for the change in net cash flows from investment activities: the cash paid by the Company for the purchase of fixed assets, intangible assets and other long-term assets in the current year.
Reasons for the change in net cash flows from financing activities: the repayment of borrowings in the current year.
Particulars of material changes in the Company’s business type, profit composition or profit sources during the period
| | ☐ | Applicable | √ | Not applicable |
| 2. | Income and cost analysis |
| | √ | Applicable | ☐ | Not applicable |
Due to changes in the domestic and international social and economic environment, shifts in residents’ consumption habits and constrained spending power, the Company’s revenue declined by 12.71% year-on-year in 2023. Although the gross profit margin increased by 1.56% compared to the previous year, it has not yet returned to its normal level.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (1). | Principal businesses by sector, product, geographical region and sales model |
Unit: 0’000 Yuan Currency: RMB
| | | Principal businesses by sector | | | |
| By sector | | Operating
income | | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Retail industry | | | 7,370,998.99 | | | | 6,167,964.50 | | | | 16.32 | | | | -12.38 | | | | -14.41 | | | Increased by 1.98 percentage points |
| Service industry | | | 493,218.17 | | | | 26,017.45 | | | | 94.72 | | | | -17.28 | | | | -11.77 | | | Decreased by 0.33 percentage points |
| | | Principal businesses by product | | | |
| By product | | Operating
income | | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Fresh products and processing | | | 3,306,423.85 | | | | 2,871,253.87 | | | | 13.16 | | | | -17.13 | | | | -17.80 | | | Increased by 0.71 percentage points |
| Food supplies (including clothing) | | | 4,064,575.14 | | | | 3,296,710.63 | | | | 18.89 | | | | -8.10 | | | | -11.22 | | | Increased by 2.85 percentage points |
| | | Principal businesses by geographical region | | | |
| By region | | Operating
income | | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Southeast China | | | 1,267,524.40 | | | | 1,086,892.54 | | | | 14.25 | | | | -9.78 | | | | -12.30 | | | Increased by 2.47 percentage points |
| North China | | | 785,937.49 | | | | 649,946.29 | | | | 17.30 | | | | -14.78 | | | | -16.26 | | | Increased by 1.46 percentage points |
| East China | | | 1,721,393.13 | | | | 1,438,204.51 | | | | 16.45 | | | | -11.13 | | | | -11.94 | | | Increased by 0.77 percentage points |
| West China | | | 1,463,415.40 | | | | 1,202,821.55 | | | | 17.81 | | | | -16.88 | | | | -20.92 | | | Increased by 4.20 percentage points |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | Principal businesses by geographical region | | | |
| By region | | Operating
income | | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Southwest China | | | 1,190,485.81 | | | | 993,344.36 | | | | 16.56 | | | | -9.04 | | | | -10.56 | | | Increased by 1.41 percentage points |
| South China | | | 342,592.15 | | | | 287,912.28 | | | | 15.96 | | | | -13.68 | | | | -13.94 | | | Increased by 0.25 percentage points |
| Central China | | | 599,650.61 | | | | 508,842.97 | | | | 15.14 | | | | -12.10 | | | | -13.99 | | | Increased by 1.86 percentage points |
| | | Principal businesses by sales model | | | |
| Sales model | | Operating
income | | | Operating
cost | | | Gross
profit
margin | | | Change in
operating
income over
last year | | | Change in
operating
cost over
last year | | | Change in
gross profit
margin over
last year |
| | | | | | | | | | | (%) | | | (%) | | | (%) | | | (%) |
| Retail | | | 7,370,998.99 | | | | 6,167,964.50 | | | | 16.32 | | | | -12.38 | | | | -14.41 | | | Increased by 1.98 percentage points |
| Others | | | 493,218.17 | | | | 26,017.45 | | | | 94.72 | | | | -17.28 | | | | -11.77 | | | Decreased by 0.33 percentage points |
Details of principal businesses by sector, product, geographical region and sales model
The geographical distribution is as follows:
Southeast China: Fujian, Jiangxi
North China: Beijing, Tianjin, Hebei, Liaoning, Jilin, Heilongjiang, Inner Mongolia
East China: Jiangsu, Zhejiang, Shanghai, Anhui
West China: Chongqing, Guizhou, Yunnan, Hubei, Hunan
Southwest China: Sichuan, Xizang, Shaanxi, Gansu, Qinghai, Ningxia
South China: Guangdong, Guangxi
Central China: Shanxi, Shandong, Henan
| (2). | Analysis statement of production and sales |
| | ☐ | Applicable | √ | Not applicable |
| (3). | Performance of material procurement contracts and material sales contracts |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (4). | Statement of Cost Analysis |
Unit: 0’000 Yuan
| | | By sector | | | | |
| By sector | | Cost
components | | | Amount for
the current
period | | | Percentage
of total cost
for current
period | | | Amount
for the
corresponding
period of
last year | | | Percentage
of total cost
for the
corresponding
period of
last year | | | Change in
amount for the
current period
as compared
with the
corresponding
period of
last year | | | Explanations | |
| | | |
| | | | | | | (%) | | | | | | | (%) | | | (%) | | | | | |
| Retail industry | | | | | | | 6,167,964.50 | | | | 99.58 | | | | 7,206,572.07 | | | | 99.59 | | | | -14.41 | | | | | |
| Service industry | | | | | | | 26,017.45 | | | | 0.42 | | | | 29,486.94 | | | | 0.41 | | | | -11.77 | | | | | |
| | | By product | | | | |
| By product | | Cost
components | | | Amount for
the current
period | | | Percentage
of total cost
for current
period | | | Amount
for the
corresponding
period of
last year | | | Percentage
of total cost
for the
corresponding
period of
last year | | | Change in
amount for the
current period
as compared
with the
corresponding
period of
last year | | | Explanations | |
| | | |
| | | | | | | (%) | | | | | | | (%) | | | (%) | | | | | |
| Fresh products and processing | | | | | | | 2,871,253.87 | | | | 46.36 | | | | 3,493,132.55 | | | | 48.27 | | | | -17.80 | | | | | |
| Food supplies and clothing | | | | | | | 3,296,710.63 | | | | 53.22 | | | | 3,713,439.52 | | | | 51.32 | | | | -11.22 | | | | | |
| (5). | Changes in the scope of consolidation as a result of changes in equity interests in major subsidiaries during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| (6). | Significant change in or adjustment of the businesses, products or services of the Company during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| (7). | Major Customers and Suppliers |
| A. | Major customers of the Company |
| | √ | Applicable | ☐ | Not applicable |
The sales of the top five customers amounted to RMB530.4 million, accounting for 0.67% of the total annual sales; among the sales of the top five customers, the sales of related parties amounted to RMB155.7862 million, accounting for 0.20% of the total annual sales.
The proportion of sales to a single customer over 50% of the total amount, new customers among the top five customers or heavy dependence on a few customers during the Reporting Period
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| B. | Major suppliers of the Company |
| | √ | Applicable | ☐ | Not applicable |
The purchases from the top five suppliers amounted to RMB6,064.9161 million, accounting for 10.20% of the total annual purchases; among the purchases from the top five suppliers, the purchases from related parties amounted to RMB3,190.4164 million, accounting for 5.36% of the total annual purchases.
The proportion of purchases from a single supplier over 50% of the total amount, new suppliers among the top five suppliers or heavy dependence on a few suppliers during the Reporting Period
| | ☐ | Applicable | √ | Not applicable |
| | √ | Applicable | ☐ | Not applicable |
Please refer to VII. Notes to the Consolidated Financial Statements under Section X Financial Report of this report.
| 4. | Research and Development (R&D) Investment (1). Statement of R&D investment |
| (1). | Statement of R&D investment |
| | √ | Applicable | ☐ | Not applicable |
| | | Unit: Yuan |
| | | |
| Expensed R&D investment for the current period | | | 318,267,251.93 | |
| Capitalized R&D investment for the current period | | | 1,160,689.92 | |
| Total R&D investment | | | 319,427,941.85 | |
| Total R&D investment as a percentage of operating income (%) | | | 0.41 | |
| Capitalized R&D investment as a percentage of total R&D investment (%) | | | 0.36 | |
| (2). | Statement of R&D employees |
| | √ | Applicable | ☐ | Not applicable |
| Number of R&D employees in the Company | | | 672 | |
| R&D employees as a percentage of total employees of the Company (%) | | | 0.68 | |
1. Educational background structure of R&D employees
| Educational level | | Number | |
| Doctoral degree | | | 2 | |
| Master’s degree | | | 79 | |
| Bachelor’s degree | | | 507 | |
| Associate degree | | | 79 | |
| High school and below | | | 5 | |
2. Age structure of R&D employees
| Age group | | Number | |
| Under 30 years old (30 years old exclusive) | | | 165 | |
| 30-40 years old (30 years old inclusive, 40 years old exclusive) | | | 461 | |
| 40-50 years old (40 years old inclusive, 50 years old exclusive) | | | 45 | |
| 50-60 years old (50 years old inclusive, 60 years old exclusive) | | | 1 | |
| 60 years old and above | | | 0 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | ☐ | Applicable | √ | Not applicable |
| (4). | Reasons of major changes in the composition of R&D employees and its impact on the Company’s future development |
| | ☐ | Applicable | √ | Not applicable |
| | √ | Applicable | ☐ | Not applicable |
Currency: RMB Unit: Yuan
| Item | | Amount for the
current period | | | Amount for the
corresponding
period of last
year | | | Change | | | Explanations |
| | | | | | | | | | | (%) | | | |
| Tax refunds received | | | 1,349,881.04 | | | | 264,494,708.10 | | | | -99.49 | | | Decrease in value-added tax retention and refund received in the current year |
| Cash received from the disposal of investments | | | 421,011,225.76 | | | | 1,218,210,833.38 | | | | -65.44 | | | Decrease in investment assets sold in the current year |
| Cash received from investment income | | | 159,535,200.00 | | | | 29,998,400.00 | | | | 431.81 | | | Increase in dividends received from joint ventures in the current year |
| Net cash receipts from the disposals of fixed assets, intangible assets and other long-term assets | | | 15,544,463.48 | | | | 9,776,709.58 | | | | 58.99 | | | Disposal of closed stores and an increase in idle assets in the current year |
| Net cash received from the disposal of subsidiaries and other operating units | | | 16,218,914.55 | | | | 221,073.29 | | | | 7,236.44 | | | Increase in cash received from disposal of subsidiaries in the current year |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | | | 671,445,532.92 | | | | 1,203,678,434.13 | | | | -44.22 | | | Decrease in long-term asset investment in the current year |
| Cash paid for investments | | | 17,386,837.66 | | | | | | | | N/A | | | Newly added investment in joint ventures in the current year |
| Cash received from capital contributions | | | 240,000.00 | | | | | | | | N/A | | | Capital increase from minority shareholders of the subsidiary in the current year |
| Cash received from loans | | | 6,200,000,000.00 | | | | 10,920,000,000.00 | | | | -43.22 | | | Decrease in borrowings in the current year |
| Other cash received from financing activities | | | 79,951,033.98 | | | | 54,280,019.15 | | | | 47.29 | | | Increase in sublease income received that meets the conditions for financial leasing |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Amount for the
current period | | | Amount for the
corresponding
period of last
year | | | Change | | | Explanations |
| | | | | | | | | | | (%) | | | |
| Cash paid for repayment of debts | | | 9,429,100,000.00 | | | | 14,161,100,000.00 | | | | -33.42 | | | Decrease in loan repayment amount for the current year |
| Cash paid for distribution of dividends, profits or settlement of interest | | | 241,422,898.08 | | | | 482,219,907.57 | | | | -49.94 | | | The Company failed to distribute dividends of ordinary shares in the current year |
| Effect of foreign exchange rate changes on cash and cash equivalents | | | 208,556.62 | | | | 4,690,719.29 | | | | -95.55 | | | The decrease in the impact of exchange rate fluctuations this year as compared to the previous year |
| (II) | Significant changes to the profit resulting from non-principal business |
| | ☐ | Applicable | √ | Not applicable |
| (III) | Analysis of assets and liabilities |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan
| Item | | Amount at the
end of the
period | | | Amount at
the end of
the period as
a percentage
of total asset | | | Amount at the
end of the
previous period | | | Amount at
the end of
the previous
period as a
percentage
of total
assets | | | Amount at the
end of the
current period
as a percentage
of amount at
the end of the
previous period | | | Explanations |
| | | | | | | | (%) | | | | | | | | (%) | | | | (%) | | | |
| Loans and advances (short-term) | | | 537,340,391.79 | | | | 1.03 | | | | 818,071,041.50 | | | | 1.32 | | | | -34.32 | | | Decrease in short-term loans issued for the current year |
| Factoring receivable | | | 68,688,964.38 | | | | 0.13 | | | | 639,126,680.56 | | | | 1.03 | | | | -89.25 | | | Collection of factoring receivables in the current year |
| Loans and advances | | | 20,568,200.17 | | | | 0.04 | | | | 76,991,144.35 | | | | 0.12 | | | | -73.28 | | | Recovery of long-term loans in the current year |
| Construction in progress | | | 240,333,156.71 | | | | 0.46 | | | | 383,281,366.61 | | | | 0.62 | | | | -37.30 | | | Reduction in long-term asset projects newly added by the company |
| Development expenditure | | | | | | | | | | | 10,899,846.17 | | | | 0.02 | | | | -100.00 | | | Conversion of capitalized research and development projects into intangible assets for the current year |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Amount at the
end of the
period | | | Amount at
the end of
the period as
a percentage
of total asset | | | Amount at the
end of the
previous period | | | Amount at
the end of
the previous
period as a
percentage
of total
assets | | | Amount at the
end of the
current period
as a percentage
of amount at
the end of the
previous period | | | Explanations |
| | | | | | (%) | | | | | | (%) | | | (%) | | | |
| Advance receipt | | | 106,067,963.44 | | | | 0.20 | | | | 196,630,132.94 | | | | 0.32 | | | | -46.06 | | | Decrease in prepaid equity transfer payments for the current year |
| Long-term borrowings | | | 349,889,789.58 | | | | 0.67 | | | | 2,070,085,001.67 | | | | 3.33 | | | | -83.10 | | | Repayment of long-term loans in advance in the current year |
| Estimated liabilities | | | 37,797,080.80 | | | | 0.07 | | | | 7,383,565.56 | | | | 0.01 | | | | 411.91 | | | Expected increase in liabilities due to litigation cases at the end of the current year |
| Deferred tax liabilities | | | 74,683,702.79 | | | | 0.14 | | | | 126,183,109.37 | | | | 0.20 | | | | -40.81 | | | The decrease in deferred income tax liabilities arising from the use of right assets in the current year |
| Other non-current liabilities | | | 46,931,643.83 | | | | 0.09 | | | | | | | | | | | | | | | Renewal of the Baijia loan in the current year |
| Less: treasury shares | | | 488,768,297.30 | | | | 0.94 | | | | 263,483,654.25 | | | | 0.42 | | | | 85.50 | | | Repurchase of treasury shares in the current year |
| Other comprehensive income | | | 5,073,713.42 | | | | 0.01 | | | | 440,260.72 | | | | | | | | 1,052.43 | | | Increase in other comprehensive income recognized by joint ventures during the current period |
| Minority interests | | | -4,333,522.99 | | | | -0.01 | | | | 191,328,573.37 | | | | 0.31 | | | | -102.26 | | | The conversion of a subsidiary to a joint venture this year, which was due to losses incurred by minority shareholders and the sale of equity in the subsidiary |
| | √ | Applicable | ☐ | Not applicable |
Including: overseas assets of RMB0.433 billion, accounting for 0.83% of total assets.
| (2) | Description of relatively high proportion of overseas assets |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| 3. | Restriction on material assets as of the end of the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
Please refer to VII. 34 in Section X Financial Report of this report
| | ☐ | Applicable | √ | Not applicable |
| (IV) | Analysis of the industry operation information |
| | √ | Applicable | ☐ | Not applicable |
As follows:
Analysis of operational information of retail industry
| 1. | Distribution of stores opened at the end of the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
| | | | | Self-owned stores | | | Leased stores | |
| Region | | Operation mode | | Number
of stores | | | GFA | | | Number
of stores | | | GFA | |
| | | | | | | | (m2) | | | | | | (m2) | |
| Anhui | | Supermarket | | | 1 | | | | 7,033.00 | | | | 67 | | | | 586,137.56 | |
| Beijing | | Supermarket | | | – | | | | – | | | | 48 | | | | 423,336.88 | |
| Fujian | | Supermarket | | | 4 | | | | 41,453.97 | | | | 134 | | | | 1,038,769.97 | |
| Gansu | | Supermarket | | | – | | | | – | | | | 3 | | | | 18,871.90 | |
| Guangdong | | Supermarket | | | – | | | | – | | | | 60 | | | | 304,886.06 | |
| Guangxi | | Supermarket | | | – | | | | – | | | | 7 | | | | 41,148.34 | |
| Guizhou | | Supermarket | | | – | | | | – | | | | 41 | | | | 356,255.97 | |
| Hebei | | Supermarket | | | 1 | | | | 26,475.96 | | | | 39 | | | | 328,624.19 | |
| Henan | | Supermarket | | | – | | | | – | | | | 44 | | | | 378,594.99 | |
| Heilongjiang | | Supermarket | | | – | | | | – | | | | 8 | | | | 78,721.61 | |
| Hubei | | Supermarket | | | – | | | | – | | | | 16 | | | | 117,361.51 | |
| Hunan | | Supermarket | | | – | | | | – | | | | 7 | | | | 42,771.07 | |
| Jilin | | Supermarket | | | – | | | | – | | | | 6 | | | | 58,323.42 | |
| Jiangsu | | Supermarket | | | – | | | | – | | | | 53 | | | | 448,382.60 | |
| Jiangxi | | Supermarket | | | – | | | | – | | | | 12 | | | | 82,786.61 | |
| Liaoning | | Supermarket | | | – | | | | – | | | | 7 | | | | 50,803.76 | |
| Inner Mongolia | | Supermarket | | | – | | | | – | | | | 4 | | | | 32,325.91 | |
| Ningxia | | Supermarket | | | – | | | | – | | | | 2 | | | | 11,345.95 | |
| Qinghai | | Supermarket | | | – | | | | – | | | | 1 | | | | 6,018.58 | |
| Shandong | | Supermarket | | | – | | | | – | | | | 5 | | | | 26,812.19 | |
| Shanxi | | Supermarket | | | – | | | | – | | | | 15 | | | | 120,813.06 | |
| Shaanxi | | Supermarket | | | – | | | | – | | | | 36 | | | | 253,558.12 | |
| Shanghai | | Supermarket | | | – | | | | – | | | | 35 | | | | 226,204.25 | |
| Sichuan | | Supermarket | | | 1 | | | | 4,200.00 | | | | 113 | | | | 944,308.42 | |
| Tianjin | | Supermarket | | | – | | | | – | | | | 7 | | | | 66,097.25 | |
| Xizang | | Supermarket | | | – | | | | – | | | | 3 | | | | 20,648.68 | |
| Yunnan | | Supermarket | | | – | | | | – | | | | 5 | | | | 33,466.82 | |
| Zhejiang | | Supermarket | | | – | | | | – | | | | 71 | | | | 543,870.20 | |
| Chongqing | | Supermarket | | | 4 | | | | 38,298.74 | | | | 140 | | | | 993,740.54 | |
| Total | | | | | 11 | | | | 117,461.67 | | | | 989 | | | | 7,634,986.41 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Table of newly opened stores and reserved stores during the Reporting Period
(Unit of area: m2)
| | | | | | | | | Stores opened in | | | Stores contracted | |
| Region | | Opened stores | | | the current period | | | but not opened | |
| | | Number | | | | | | Number | | | | | | Number | | | | |
| | | of stores | | | Area | | | of stores | | | Area | | | of stores | | | Area | |
| Anhui | | | 68 | | | | 593,170.56 | | | | 1 | | | | 7,033 | | | | 10 | | | | 65,318.07 | |
| Beijing | | | 48 | | | | 423,336.88 | | | | 1 | | | | 4,034 | | | | 4 | | | | 16,584.56 | |
| Fujian | | | 138 | | | | 1,080,223.94 | | | | – | | | | – | | | | 7 | | | | 63,199.3 | |
| Gansu | | | 3 | | | | 18,871.90 | | | | – | | | | – | | | | 1 | | | | 8,086.00 | |
| Guangdong | | | 60 | | | | 304,886.06 | | | | 1 | | | | 3,670.75 | | | | 3 | | | | 11,835.65 | |
| Guangxi | | | 7 | | | | 41,148.34 | | | | – | | | | – | | | | – | | | | – | |
| Guizhou | | | 41 | | | | 356,255.97 | | | | 1 | | | | 7,137.10 | | | | 7 | | | | 57,272.17 | |
| Hebei | | | 40 | | | | 355,100.15 | | | | 1 | | | | 9,452.94 | | | | 5 | | | | 44,696 | |
| Henan | | | 44 | | | | 378,594.99 | | | | – | | | | – | | | | 6 | | | | 52,586.73 | |
| Heilongjiang | | | 8 | | | | 78,721.61 | | | | – | | | | – | | | | 0 | | | | – | |
| Hubei | | | 16 | | | | 117,361.51 | | | | – | | | | – | | | | 4 | | | | 19,013.88 | |
| Hunan | | | 7 | | | | 42,771.07 | | | | – | | | | – | | | | – | | | | – | |
| Jilin | | | 6 | | | | 58,323.42 | | | | – | | | | – | | | | – | | | | – | |
| Jiangsu | | | 53 | | | | 448,382.60 | | | | – | | | | – | | | | 2 | | | | 12,352.70 | |
| Jiangxi | | | 12 | | | | 82,786.61 | | | | – | | | | – | | | | – | | | | – | |
| Liaoning | | | 7 | | | | 50,803.76 | | | | – | | | | – | | | | – | | | | – | |
| Inner Mongolia | | | 4 | | | | 32,325.91 | | | | 1 | | | | 7,412.34 | | | | – | | | | – | |
| Ningxia | | | 2 | | | | 11,345.95 | | | | – | | | | – | | | | – | | | | – | |
| Qinghai | | | 1 | | | | 6,018.58 | | | | – | | | | – | | | | – | | | | – | |
| Shandong | | | 5 | | | | 26,812.19 | | | | 1 | | | | 5,591.55 | | | | – | | | | – | |
| Shanxi | | | 15 | | | | 120,813.06 | | | | – | | | | – | | | | 3 | | | | 18,552.00 | |
| Shaanxi | | | 36 | | | | 253,558.12 | | | | 1 | | | | 2,674.38 | | | | 4 | | | | 40,509.68 | |
| Shanghai | | | 35 | | | | 226,204.25 | | | | – | | | | – | | | | – | | | | – | |
| Sichuan | | | 114 | | | | 948,508.42 | | | | 1 | | | | 4,580 | | | | 21 | | | | 169,479.31 | |
| Tianjin | | | 7 | | | | 66,097.25 | | | | – | | | | – | | | | 1 | | | | 5,812.60 | |
| Xizang | | | 3 | | | | 20,648.68 | | | | – | | | | – | | | | – | | | | – | |
| Yunnan | | | 5 | | | | 33,466.82 | | | | – | | | | – | | | | 7 | | | | 54,868.50 | |
| Zhejiang | | | 71 | | | | 543,870.20 | | | | 1 | | | | 7,795.58 | | | | 2 | | | | 16,005.90 | |
| Chongqing | | | 144 | | | | 1,032,039.28 | | | | 2 | | | | 11,252.93 | | | | 10 | | | | 70,771.28 | |
| Total | | | 1,000 | | | | 7,752,448.08 | | | | 12 | | | | 70,634.57 | | | | 97 | | | | 726,944.33 | |
Newly opened stores of the Company in the fourth quarter of 2023
The Company opened 7 new stores in China in the fourth quarter of 2023, the particulars of which were as follows:
| | | | | | | Opening | | Lease | | Leased | | |
| No. | | Region | | Name of project | | date | | term | | area | | Address |
| | | | | | | | | (years) | | (m2) | | |
| 1 | | Shandong | | Longfor Beichen Paradise Walk | | 2023-12-1 | | 15 | | 5,591.55 | | Northwest corner of the intersection of Gongye North Road and Fenghuang Road, Licheng District, Jinan, Shandong |
| 2 | | Anhui | | Hefei Feidong Dongfeng Avenue | | 2023-12-16 | | Self-owned | | 7,033 | | Dongfeng Avenue, Hefei, Anhui |
| 3 | | Chongqing | | Shapingba Huanghua Xinjiyuan | | 2023-12-21 | | 15 | | 4,610.56 | | Basement No. 3 Shop, No. 6 Shuangxiangzi Street, Shapingba District, Chongqing |
| 4 | | Inner Mongolia | | Baotou Vanke In City | | 2023-12-22 | | 15 | | 7,412.34 | | Southwest corner of Qingyuan Road and Qingshan Road intersection, Qingshan District, Baotou City, Inner Mongolia Autonomous Region |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| No. | | Region | | Name of project | | Opening
date | | Lease
term | | Leased
area | | Address |
| | | | | | | | | (years) | | (m2) | | |
| 5 | | Sichuan | | Longyue Xicheng | | 2023-12-22 | | 16 | | 4,580 | | Basement 1st Floor, Beijing Chengjian Xiyuehui Center, No. 72 Shuxi Road, Jinniu District, Chengdu, Sichuan |
| 6 | | Guangdong | | Guangzhou Nansha Xinghe COCO PARK | | 2023-12-23 | | 15 | | 3,670.75 | | COCO Park Shopping Center, one of No. 37, Huangge Section, Fanzhong Road, Nansha District, Guangzhou, Guangdong |
| 7 | | Zhejiang | | Hangzhou Xiaoshan Caojiaqiao Kaiyuan Plaza Store | | 2023-12-30 | | 15 | | 7,795.58 | | Room B1027, Shop B1, Kaiyuan Plaza, No. 1216 Shixin South Road, Shushan Street, Xiaoshan District, Hangzhou |
The Company signed contracts with 4 new stores in the fourth quarter of 2023, the particulars of which were as follows:
| No. | | Region | | Name of project | | Date of
contract | | Expected
delivery
date | | Lease
term | | Leased
area | | Address |
| | | | | | | | | | | (years) | | (m2) | | |
| 1 | | Zhejiang | | Xiaoshan Kaiyuan Plaza | | 2023-10-1 | | 2023-10-10 | | 15 | | 7,795.58 | | Hangzhou, Zhejiang |
| 2 | | Yunnan | | Kunming Golden Resources | | 2023-9-28 | | 2023-10-1 | | 16 | | 12,862 | | Kunming, Yunnan |
| 3 | | Anhui | | Hefei Shazhichuancang Store | | 2023-11-14 | | 2023-11-20 | | 5 | | 1,168.86 | | Hefei, Anhui |
| 4 | | Guangdong | | Shenzhen-Luohu Holiday Plaza | | 2023-10-23 | | 2024-3-1 | | 10 | | 2,472.28 | | Shenzhen, Guangdong |
| | √ | Applicable | ☐ | Not applicable |
Information on the top 10 stores in terms of revenue
| No. | | Store | | Area | | Ownership of
Property | | Address | | Opening
date |
| | | | | (m2) | | | | | | |
| 1 | | Shijingshan District Lugu Store | | 18,322.00 | | Leased | | East of Lugu Street, Shijingshan District, Beijing | | 2009.06.26 |
| 2 | | Chengdu Wenjiang Guanghua Avenue Store | | 21,728.06 | | Leased | | Intersection of Section 3 of Guanghua Avenue and Yongxing Road, Wenjiang District, Chengdu, Sichuan | | 2012.04.26 |
| 3 | | Tongzhou District Tongzhou Wanda Store | | 12,014.82 | | Leased | | Wanda Plaza, Beiyuan Business District, Yongshun Town, Tongzhou District, Beijing | | 2014.11.29 |
| 4 | | Guiyang Jinyuan Shopping Mall Store | | 16,216.00 | | Leased | | No. 6 Jinyang South Road, Jinyang New District, Guiyang, Guizhou | | 2010.10.23 |
| 5 | | Daxing District Jiugong Store | | 25,303.73 | | Leased | | No. 39 Xiaohongmen Road, Jiugong Town, Daxing District, Beijing | | 2010.02.05 |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| No. | | Store | | Area | | Ownership of
Property | | Address | | Opening
date |
| | | | | (m2) | | | | | | |
| 6 | | Tongzhou District Banbidian | | 11,249.00 | | Leased | | East Section of Yile South Street, Banbidian, Liyuan Town, Tongzhou District, Beijing | | 2013.05.31 |
| 7 | | Chaoyang District Longfor Changying Paradise Walk Store | | 12,551.80 | | Leased | | Opposite to District 4, Wanxiang Xintian, Chaoyang North Road (Intersection of Guanzhuang Road), Chaoyang District, Beijing | | 2014.12.20 |
| 8 | | Chongqing Shapingba District CapitaRetail Store | | 8,144.64 | | Leased | | No. 1 Huayu Plaza, No. 029 Xiaolongkan New Street, Shapingba District, Chongqing | | 2009.09.18 |
| 9 | | Chongqing Banan District Banan Wanda Store | | 9,558.73 | | Leased | | Banan Wanda Plaza, No. 5 Longzhou Avenue, Banan District, Chongqing | | 2015.10.30 |
| 10 | | Zhejiang Ningbo Hangzhou Bay Golden Resources Store | | 12,512.00 | | Leased | | No. 19 Jinyuan Avenue, Binhai 2nd Road, Hangzhou Bay New Area, Cixi, Ningbo Province, China (Golden Resources) | | 2013.12.15 |
| (V) | Analysis of the investments |
Overall analysis of external equity investments
| | √ | Applicable | ☐ | Not applicable |
During the Reporting Period, the Company focused on its principal businesses and reduced the external investments.
| 1. | Significant equity investments |
| | ☐ | Applicable | √ | Not applicable |
| 2. | Significant non-equity investments |
| | ☐ | Applicable | √ | Not applicable |
| 3. | Financial assets measured at fair value |
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
Asset
category | | Opening
balance | | | Gains or losses
from changes in
fair value for
the period | | | Accumulated
changes in fair
value included
in equity | | | Impairment
provision made
for the period | | | Amount
purchased for
the period | | | Amount
disposed
of/redeemed for
the period | | | Other changes | | | Closing balance | |
| Stocks | | 206,295,359.14 | | | 182,636,868.60 | | | -257,865,017.96 | | | | | | | | | | | | | | | 388,932,227.74 | |
| Others | | 4,602,531,359.96 | | | -258,979,852.98 | | | -160,524,810.80 | | | | | | 2,369,886,770.48 | | | 2,744,533,793.34 | | | 29,615,184.45 | | | 3,998,519,668.57 | |
| Total | | 4,808,826,719.10 | | | -76,342,984.38 | | | -418,389,828.76 | | | | | | 2,369,886,770.48 | | | 2,744,533,793.34 | | | 29,615,184.45 | | | 4,387,451,896.31 | |
Note: Other changes primarily represent investment gains generated upon the disposal of assets
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Investment in securities
| | √ | Applicable | ☐ | Not applicable |
Unit: Yuan Currency: RMB
Type of
securities | | Securities
code | | Abbreviation
of securities | | Initial
investment cost | | | Source of
funds | | Opening
carrying
amount | | | Gains or losses
on changes in
fair value in the
period | | | Accumulated
fair value
changes
included in
equity | | | Purchase
amount
in the
period | | | Selling
amount
in the
period | | | Gains or
losses on
investments
in the
period | | | Closing
carrying
amount | | | Accounting
accounts |
| Stocks | | ADV | | Advantage Solutions | | 646,797,245.70 | | | Self-owned funds | | 206,295,359.14 | | | 182,636,868.60 | | | -257,865,017.96 | | | | | | | | | | | | 388,932,227.74 | | | Trading financial assets |
| Total | | / | | / | | 646,797,245.70 | | | / | | 206,295,359.14 | | | 182,636,868.60 | | | -257,865,017.96 | | | | | | | | | | | | 388,932,227.74 | | | / |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Investment in private equity funds
| | ☐ | Applicable | √ | Not applicable |
Investment in derivatives
| | ☐ | Applicable | √ | Not applicable |
| 4. | The specific progress of material asset restructuring during the Reporting Period |
| | ☐ | Applicable | √ | Not applicable |
| (VI) | Material asset and equity disposal |
| | √ | Applicable | ☐ | Not applicable |
During the Reporting Period, the Company entered into an equity transfer agreement with Dalian Yujin Trading Co., Ltd. (大連禦錦貿易有限公司) (hereinafter referred to as “Dalian Yujin”) for Dalian Wanda Commercial Management Group Co., Ltd. (hereinafter referred to as “Wanda Commercial Management”), pursuant to which, the Company intended to transfer 388,699,998 shares of Wanda Commercial Management held by it to Dalian Yujin, representing 1.43% of the total share capital of Wanda Commercial Management. During the Reporting Period, the first phase of the transfer of equity transaction has been completed, with 26,925,678 shares transferred.
During the Reporting Period, the Company intended to transfer 136,000,000 shares of Chengdu Hongqi Chain Co Ltd. (成都紅旗連鎖股 有限公司) held by it to Sichuan Commercial Investment Group Co., Ltd, representing approximately 10% of the total share capital of Hongqi Chain. As of the date of this report, the relevant transactions are still under approval by the relevant regulatory authorities.
| (VII) | Analysis of major subsidiaries |
| | √ | Applicable | ☐ | Not applicable |
Unit: 0’000 Yuan Currency: RMB
Company
abbreviation | | Industry | | Registered
capital | | | Total
assets | | | Net assets | | | Net profit | | | Revenue | | | Profit | |
| Fujian Yuntong | | Logistics distribution industry | | 10,000.00 | | | 233,040.03 | | | 27,169.09 | | | 14,744.08 | | | 1,188,489.82 | | | 14,657.82 | |
| Yonghui Logistics | | Logistics distribution industry | | 10,000.00 | | | 169,008.89 | | | 30,421.29 | | | 14,276.63 | | | 672,189.61 | | | 14,834.30 | |
| Sichuan Yonghui | | Commercial Retail Industry | | 100,000.00 | | | 406,367.72 | | | 73,589.78 | | | 6,069.64 | | | 929,087.93 | | | 6,206.50 | |
| Fuping Yunshang | | Logistics distribution industry | | 20,000.00 | | | 186,247.02 | | | 14,691.20 | | | 3,638.45 | | | 162,351.10 | | | 3,594.79 | |
| Chengdu Commercial | | Logistics distribution industry | | 13,000.00 | | | 122,978.22 | | | 22,687.73 | | | 2,578.54 | | | 701,157.14 | | | 2,205.17 | |
| (VIII) | Information about the structured entities controlled by the Company |
| | ☐ | Applicable | √ | Not applicable |
| VI. | Discussion and Analysis of the Company’s Future Development |
| (I) | Industry landscape and trends |
| | √ | Applicable | ☐ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
The year of 2023 witnessed dramatic changes occurred in the retail industry with the rapid development of technology and shift in consumer behavior. As a leading enterprise among Chinese Superstores, Yonghui Superstores embraced the developments in technology and consumer behavior by taking the initiative on digital transformation and upgrading of shopping scenario. Through product restructuring at multiple levels by leveraging on its global supply chain advantages, Yonghui Superstores focused on balance of new retail trends, high-quality services and affordable goods. In addition, Yonghui Superstores made great efforts on comprehensive upgrade of service, hardware and store, including scenario design, product innovation and convenient services. The retail industry has embarked on constantly innovative development as evidenced by promoting convenient online delivery, enhancing the atmosphere of hustle and bustle in stores, establishing genuine discount stores and other optimization strategies.
| (II) | Development strategy of the Company |
| | √ | Applicable | ☐ | Not applicable |
In 2024, the Company will continue to focus on its principal business, deepen digital transformation and incorporate innovation into the processing of catering scenes. Standardization of fresh goods will be promoted to optimize product structure, while attaching importance to product innovation for refined operation and customized transformation, thus promoting all-round improvement of stores in terms of “scenario, product and service”. In pursuit of rendering better shopping experience through intelligent services and humanistic care, the Company aims to create a smarter, more convenient and comfortable shopping experience for customers, to bring the offline shopping back to the most plain “human touch”.
| | √ | Applicable | ☐ | Not applicable |
Supply chain optimization and commodity restructure: Yonghui Superstores will promote the optimization of supply chain and continuously strengthen category management, sourcing procurement, and commodity supply and operation capabilities.
High-quality store and consumer scenario expansion: Yonghui Superstores will implement store customized transformation of “one store, one discussion”, extend consumer scenarios, build offline “canteens with hustle and bustle”, upgrade store layout with local characteristics, product selection, procurement and operation with innovation.
Digital application and service upgrade: Yonghui Superstores will explore into business scenarios and the application of digital tools, and empower continuous improvement of operational and management efficiency. The store service quality will be improved through more interaction with consumers, and the shopping experience and scene design quality will be also enhanced.
The Company pays more attention to process standards to establish a standardized rule system for the operation of five color cards of store, with a focus on behavior and process verification, to evaluate the efforts of team members. Unified national operating standards and unified verification will be put into place. Centering on customer experience through five color card verification, the Company safeguards food safety, improves product and service standards, implements digital foundations and build a sound business environment.
| | √ | Applicable | ☐ | Not applicable |
Intense market competition, diversified consumer options, etc; the Company will closely monitor market feedback, flexibly adjust strategies and ensure the smooth implementation of strategies.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | ☐ | Applicable | √ | Not applicable |
| VII. | The Company’s Failure to Disclose as Required by the Standards Due to Non-Application of the Provisions of the Standards or for Special Reasons Such as State Secrets and Trade Secrets and the Description of Reason Therefor |
| | ☐ | Applicable | √ | Not applicable |
| 4. | For the six months ended June 30, 2024 |
Section 3 Management Discussion and Analysis
| I. | Industry where the Company Operated and Principal Business during the Reporting Period |
The Company operates in the retail industry (classification code: F52). It is generally believed that the Company’s businesses are classified into the retail industry in terms of the major products and operating model of the Company.
The Company’s principal business is sales of selected goods through offline stores and online channels, covering consumers of all ages.
According to the National Bureau of Statistics, in the first half of 2024, the total retail sales of consumer goods was RMB23,596.9 billion, representing an increase of 3.7% over the previous year. From January to June, the retail sales of department stores and exclusive brand stores decreased by 3.0% and 1.8%, respectively.
The Company continued to accelerate transformation, proactively learned from excellent industry peers and focused on supply chain reform to pragmatically build itself into a platform enterprise in the food supply chain that follows the current development trend.
| II. | Analysis of Core Competitiveness during the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
The Company proactively learned from excellent industry peers, intended to start with users’ experience in three aspects of goods, scenarios and services, continuously strengthened fresh food supply chain while focusing on the quality of goods and services, and endeavored to provide better goods and experience for consumers through continuous learning.
| III. | Discussion and Analysis of Operations |
During the Reporting Period, the Company achieved the total operating income of RMB37,779 million, and the net profit attributable to shareholders of the listed company was RMB275 million; while the net profit attributable to shareholders of the listed company, net of non-recurring gain or loss, was RMB29,862,500 during the Reporting Period, with a consolidated gross profit margin of 21.58%.
During the Reporting Period, the Company’s online business recorded an operating income of RMB7.84 billion for the first half of 2024, accounting for 20.8% of the operating income. By improving product competitiveness and the performance efficiency of warehouses, the loss in online business significantly decreased as compared with that of last year.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
The self-operated home delivery business under “Yonghui Life (永輝生活)” has covered 883 stores, achieving sales of RMB4.22 billion, representing a year-on-year increase of 4%, with an average daily order volume of 306,000 orders and an average monthly repurchase rate of 47.3%. The number of registered members of “Yonghui Life” APP has surpassed 200.4 million. During the Reporting Period, the home delivery business operated on the third-party platforms has covered 878 stores, achieving sales of RMB3.62 billion, with an average daily order volume of 197,000 orders.
In terms of performance management, the Company focused on improving users’ experience on performance and order performance service, strengthened pre-job training of staff and after-sales accountability mechanism for customer complaints as well as management model of alert system. In the first half of 2024, the on-time performance rate was 93.1%, of which the delivery rate for orders from self-operated platform delivered within 60 minutes reached 93.6%, up 1.2% year on year.
In terms of channel operation, the Company continuously strengthened cooperation with third-party platforms, focused on refined operation and improved the three core indicators of “goods, users and experience”. The Company expanded new channels, such as Douyin and Kuaishou, and ranked the first in those channels for consecutive times, among which, durian sold by Yonghui Local Group Purchase (永輝本地團) has become the first blockbuster fresh food at Douyin platform, with the sales of durian and order confirmation ranking the first in the Douyin Local Group Purchase (抖音本地團); Douyin One-hour Delivery (抖音 時達) continuously remained the first in the industry, by adjusting goods structure, Yonghui prawn became the most popular single fresh food in the one-hour delivery industry.
| 3. | Supply Chain Development |
During the Reporting Period, the Company focused on optimizing the organization, system and process of the supply chain, and improving the operating efficiency in all respects; continuously optimized goods structure, and strengthened source procurement to improve goods power; constantly promoted the application of digital tools to increase the operating efficiency of stores. In the first half, the Company optimized product structure while further improving the efficiency of goods introduction. In the first half, the Company introduced 20,276 new products, and eliminated 22,480 products, with an introduction rate of 22.5% and an elimination rate of 24.9%.
During the Reporting Period, the sales of products under the Company’s own brands was RMB1.28 billion, accounting for 3.4% of the operating income. The Company increased the exposure rate and purchase rate of its self-owned products through online and offline channels. For example, Selected Thai Fragrant Rice (泰甄香米) is sold via many channels, such as Douyin Local Group Purchase, On-time Delivery (及時達), and has become a blockbuster on the Douyin platform with the average sales of RMB10 million per live stream; the sales of healthy products, such as 100% coconut juice imported with original packaging, antibiotic-free and selenium-rich eggs, recorded significant growth, which are directly sold to consumers from the place of origin. In pursuit of quality life, the Company successively developed several quality goods, such as organic coarse cereals, Yunnan mushrooms and Ningxia Tan Sheep. In terms of home living products, the Company adjusted the product design of disposable products and cookware for cooking scenario in China, and comprehensively upgraded more than 20 products. With user insights of closer to consumers, the Company continued to introduce new quality products.
During the Reporting Period, the Company actively promoted store network optimization across the country, with 5 stores newly opened and 62 stores closed. As of the end of the Reporting Period, there are a total of 943 stores opened, covering 29 provinces and municipalities in China. The number of stores contracted but not opened was 86, with a reserved area of 655,300 m2.
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Table of Opened Stores:
| | | | | Self-owned stores | | | Leased stores | |
| | | | | Number | | | | | | Number | | | | |
| Region | | Operation mode | | of stores | | | GFA | | | of stores | | | GFA | |
| | | | | | | | (m2) | | | | | | (m2) | |
| Anhui | | Supermarket | | | 1 | | | | 7,033.00 | | | | 65 | | | | 563,084.86 | |
| Beijing | | Supermarket | | | – | | | | – | | | | 48 | | | | 424,559.54 | |
| Fujian | | Supermarket | | | 4 | | | | 41,453.97 | | | | 127 | | | | 980,480.44 | |
| Gansu | | Supermarket | | | – | | | | – | | | | 3 | | | | 18,871.90 | |
| Guangdong | | Supermarket | | | – | | | | – | | | | 56 | | | | 276,007.66 | |
| Guangxi | | Supermarket | | | – | | | | – | | | | 7 | | | | 41,148.34 | |
| Guizhou | | Supermarket | | | – | | | | – | | | | 35 | | | | 295,787.59 | |
| Hebei | | Supermarket | | | 1 | | | | 26,475.96 | | | | 37 | | | | 302,008.19 | |
| Henan | | Supermarket | | | – | | | | – | | | | 40 | | | | 340,669.51 | |
| Heilongjiang | | Supermarket | | | – | | | | – | | | | 8 | | | | 78,721.61 | |
| Hubei | | Supermarket | | | – | | | | – | | | | 16 | | | | 117,361.51 | |
| Hunan | | Supermarket | | | – | | | | – | | | | 7 | | | | 42,771.07 | |
| Jilin | | Supermarket | | | – | | | | – | | | | 6 | | | | 58,323.42 | |
| Jiangsu | | Supermarket | | | – | | | | – | | | | 44 | | | | 367,646.08 | |
| Jiangxi | | Supermarket | | | – | | | | – | | | | 12 | | | | 82,786.61 | |
| Liaoning | | Supermarket | | | – | | | | – | | | | 7 | | | | 50,803.76 | |
| Inner Mongolia | | Supermarket | | | – | | | | – | | | | 4 | | | | 32,325.91 | |
| Ningxia | | Supermarket | | | – | | | | – | | | | 2 | | | | 11,345.95 | |
| Qinghai | | Supermarket | | | – | | | | – | | | | 1 | | | | 6,018.58 | |
| Shandong | | Supermarket | | | – | | | | – | | | | 5 | | | | 26,812.19 | |
| Shanxi | | Supermarket | | | – | | | | – | | | | 15 | | | | 120,813.06 | |
| Shaanxi | | Supermarket | | | – | | | | – | | | | 36 | | | | 253,558.12 | |
| Shanghai | | Supermarket | | | – | | | | – | | | | 27 | | | | 177,041.95 | |
| Sichuan | | Supermarket | | | 1 | | | | 4,200.00 | | | | 108 | | | | 904,853.84 | |
| Tianjin | | Supermarket | | | – | | | | – | | | | 6 | | | | 52,837.25 | |
| Xizang | | Supermarket | | | – | | | | – | | | | 3 | | | | 20,648.68 | |
| Yunnan | | Supermarket | | | – | | | | – | | | | 6 | | | | 46,328.82 | |
| Zhejiang | | Supermarket | | | – | | | | – | | | | 67 | | | | 513,335.92 | |
| Chongqing | | Supermarket | | | 4 | | | | 38,298.74 | | | | 134 | | | | 960,035.15 | |
| Total number of stores | | | | | 11 | | | | 117,461.67 | | | | 932 | | | | 7,166,987.51 | |
Table of newly opened stores and reserved stores during the Reporting Period
Unit of area: m2
| | | | Subtotal of
opened stores | | | Net increase in
stores opened in the
current period | | | Stores contracted
but not opened | |
| Item | | | Number
of stores | | | Area | | | Number
of stores | | | Area | | | Number
of stores | | | Area | |
| Anhui | | | | 66 | | | | 570,117.86 | | | | 2 | | | | 6,474.32 | | | | 9 | | | | 65,759.41 | |
| Beijing | | | | 48 | | | | 424,559.54 | | | | 1 | | | | 5,970.16 | | | | 2 | | | | 6,396.40 | |
| Fujian | | | | 131 | | | | 1,021,934.41 | | | | – | | | | – | | | | 7 | | | | 63,199.30 | |
| Gansu | | | | 3 | | | | 18,871.90 | | | | – | | | | – | | | | – | | | | – | |
| Guangdong | | | | 56 | | | | 276,007.66 | | | | 1 | | | | 5,897.4 | | | | 3 | | | | 9,891.27 | |
| Guangxi | | | | 7 | | | | 41,148.34 | | | | – | | | | – | | | | – | | | | – | |
| Guizhou | | | | 35 | | | | 295,787.59 | | | | – | | | | – | | | | 7 | | | | 57,272.17 | |
| Hebei | | | | 38 | | | | 328,484.15 | | | | – | | | | – | | | | 4 | | | | 36,899.00 | |
| Henan | | | | 40 | | | | 340,669.51 | | | | – | | | | – | | | | 5 | | | | 46,365.63 | |
| Heilongjiang | | | | 8 | | | | 78,721.61 | | | | – | | | | – | | | | – | | | | – | |
| Hubei | | | | 16 | | | | 117,361.51 | | | | – | | | | – | | | | 4 | | | | 19,013.88 | |
| Hunan | | | | 7 | | | | 42,771.07 | | | | – | | | | – | | | | – | | | | – | |
| Jilin | | | | 6 | | | | 58,323.42 | | | | – | | | | – | | | | – | | | | – | |
| Jiangsu | | | | 44 | | | | 367,646.08 | | | | – | | | | – | | | | – | | | | – | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | Subtotal of
opened stores | | | Net increase in
stores opened in the
current period | | | Stores contracted
but not opened | |
| | | Number | | | | | | Number | | | | | | Number | | | | |
| Item | | of stores | | | Area | | | of stores | | | Area | | | of stores | | | Area | |
| Jiangxi | | | 12 | | | | 82,786.61 | | | | – | | | | – | | | | – | | | | – | |
| Liaoning | | | 7 | | | | 50,803.76 | | | | – | | | | – | | | | – | | | | – | |
| Inner Mongolia | | | 4 | | | | 32,325.91 | | | | – | | | | – | | | | – | | | | – | |
| Ningxia | | | 2 | | | | 11,345.95 | | | | – | | | | – | | | | – | | | | – | |
| Qinghai | | | 1 | | | | 6,018.58 | | | | – | | | | – | | | | – | | | | – | |
| Shandong | | | 5 | | | | 26,812.19 | | | | – | | | | – | | | | – | | | | – | |
| Shanxi | | | 15 | | | | 120,813.06 | | | | – | | | | – | | | | 3 | | | | 18,552.00 | |
| Shaanxi | | | 36 | | | | 253,558.12 | | | | – | | | | – | | | | 3 | | | | 34,832.42 | |
| Shanghai | | | 27 | | | | 177,041.95 | | | | – | | | | – | | | | – | | | | – | |
| Sichuan | | | 109 | | | | 909,053.84 | | | | – | | | | – | | | | 21 | | | | 169,479.31 | |
| Tianjin | | | 6 | | | | 52,837.25 | | | | – | | | | – | | | | 1 | | | | 5,812.60 | |
| Xizang | | | 3 | | | | 20,648.68 | | | | – | | | | – | | | | – | | | | – | |
| Yunnan | | | 6 | | | | 46,328.82 | | | | 1 | | | | 12,862 | | | | 5 | | | | 35,033.50 | |
| Zhejiang | | | 67 | | | | 513,335.92 | | | | – | | | | – | | | | 2 | | | | 16,005.90 | |
| Chongqing | | | 138 | | | | 998,333.89 | | | | – | | | | – | | | | 10 | | | | 70,771.28 | |
| Total | | | 943 | | | | 7,284,449.18 | | | | 5 | | | | 31,203.88 | | | | 86 | | | | 655,284.07 | |
Stores opened by the Company in the first half of 2024
In the first half of 2024, the Company opened 5 new stores in China, details of which are as follows:
| No. | | Region | | Name of project | | Opening
date | | Lease
term | | Leased
area | | Address |
| | | | | | | | | (year) | | (m2) | | |
| 1 | | Beijing | | CHEERFU (卧龍悅購) | | 2024-1-12 | | 15 | | 5,970.16 | | Shunyi District, Beijing |
| 2 | | Yunnan | | Kunming GR (昆明世 紀金源) | | 2024-1-15 | | 16 | | 12,862 | | Guandu District, Kunming, Yunnan |
| 3 | | Anhui | | SASSEUR (Hefei) Outlets (合肥市砂之 船奧萊店) | | 2024-1-26 | | 5 | | 1,168.86 | | The crossroad of Changning Avenue and Caihong Road, Hefei |
| 4 | | Anhui | | Huoqiu Wanda Plaza (霍邱萬達) | | 2024-5-25 | | 15 | | 5,305.46 | | Huoqiu Wanda, Luan |
| 5 | | Guangdong | | GH New World Center (惠港新天地) | | 2024-6-28 | | 15 | | 5,897.4 | | Huicheng District, Huizhou, Guangdong |
The Company signed contracts with 3 stores in the first half of 2024
| No. | | Region | | Name of project | | Date of
contract | | Expected
delivery
date | | Lease
term | | Leased
area | | Address |
| | | | | | | | | | | (years) | | (m2) | | |
| 1 | | Anhui | | Huoqiu Wanda Plaza (霍邱萬達) | | 2024-1-15 | | 2024-2-28 | | 15 | | 5,305.46 | | Luan, Anhui |
| 2 | | Anhui | | Shouxian Hengtai Mall (壽縣恒太城) | | 2024-1-16 | | 2024-3-20 | | 20 | | 7,475 | | Huainan, Anhui |
| 3 | | Guangdong | | Shenzhen Futian Yin City Center (深圳 福田印城市廣場) | | 2024-4-12 | | 2024-8-1 | | 12 years and 9 months | | 3,953.02 | | Shenzhen, Guangdong |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| 5. | Human resources and organizational development |
During the Reporting Period, the Company continuously improved organizational and process efficiency, strengthened its platform capacities, and enhanced its competitiveness in the supply chain by promoting organizational reform, creating a flat structure and refining organization allocation. The Company formulated and implemented unified policies and process to ensure that each business division carries out work in a standardized and efficient manner.
The Company strove for talent introduction, paid attention to talent development, strengthened talent cultivation to improve the abilities of cadres and organizational efficiency. To reinforce culture construction, the Company held the National Skills Competition, to improve its staff’s skills in lieu of training. The Company initiated the “Golden Ideas” program, fully opening a channel of “Advice and Recommendations from Staff”. The Company continued to care for the staff and carried out staff caring activities. In the first half, Yonghui offered 8% shopping discount to its staff, where the staff were entitled to a monthly discount amount of RMB1,000 when shopping. Such initiative received positive feedback and significantly improved staff’s well-being and sense of belonging.
As of June 30, the Company introduced a total of 817 undergraduates through 1,933 projects which covered the positions in science, online platforms, supply chain and store operation, to continuously gather new momentum.
In the first half of 2024, the total value of the Company’s logistics operations in China was RMB25.25 billion. The Company has a total of 29 national logistics centers, including 20 normal temperature distribution centers and 9 constant temperature distribution centers. The delivery scope of the logistics centers covered 29 provinces and cities in China, with a total logistics operation area of 800,000 square meters and 2,163 employees. The Company curtailed the operation area and reduced the usage of recyclable consumables through optimizing logistics warehouse network planning, and focused on refined operation and social services to improve profitability. The Company promoted flexible supply chain program to enhance the punctuality of timed delivery; carried out label management for each batch of standardized fresh food, and the labelled goods had 380 SKUs, optimizing the visual delivery process and improving the efficiency of goods delivery.
During the Reporting Period, the Company continuously improved the Company’s rules, management standards and process operation regarding food safety, updated and issued 33 rules, process and operation guidelines on the Company’s food safety management.
The Company carried out the cultural publicity activity of “Food Safety Liability on All Staff”, 17,000 core management cadres from supply chain and stores signed the Food Safety Responsibility Statement.
The Company organized Yonghui Testing Stations to test a total of 631,000 batches of farm products by themselves, the pass rate under quick testing improved by 3% year on year.
The Company conducted reviews on food safety, goods and products, data accuracy, customer services, sanitary equipment, and completed on-site reviews on 940 stores, achieving significant improvement in food safety standards at store level.
The Company constantly enhanced the management system of food safety risk and quality improvement from the source of supply chain through multiple initiatives.
To timely formulate, implement and improve freshness preservation plans for major seasonal goods such as “waxberry”, “Shine Muscat grapes” in the warehouses of origin place to control food safety risks;
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
To continuously optimize supplier structure to increase the proportion of quality suppliers under self-owned brands;
To establish a special support team and ensure our suppliers’ compliant operation, to help companies we cooperate with improve quality management;
To increase communication with peers such as Pangdonglai and learn from them, and draw lessons from their advanced management experience, to enhance food safety management of the overall supply chain.
The Company improved the List of Food Safety Risk Management at store level based on its business operation characteristics, to ensure that daily control, weekly inspection and monthly mobilization are fully implemented at all levels. The Company conducted regular training sessions on food safety, to increase staff’s professional knowledge and improve their abilities to respond to risks, publicized and provided training sessions such as the Guidance on Handling Food Safety Risks from Catering Store and Canteen through online empowerment, and approved the Special Inspection on Food Safety during Spring Festival, the Risk Alert and Operation Guidance Marked at the Origin Place of Farm Products, the Risk Alert and Prevention Guidance on the Mildew of Rice, Noodles and Bakery Food, the Risk Alert and Special Inspection on Fresh -cut Fruits and Vegetables, the “March 15” Special Activities of 2024, the Risk Alert and Operation Guidance on Food Safety Risks in Summer and Autumn, the Risk Alert and Inspection Guidance on Seasonal Food “Zongzi”, the Risk Alert and Operation Guidance on Food Safety Risks from Catering Store and Canteen and other plans, to help stores continuously optimize food safety operation practices and improve goods quality and safety.
In the first half of 2024, Yonghui Technologies went into every business division, applied technologies in various business scenarios, helped business accelerate digital transformation and realize model innovation, to comprehensively improve operating efficiency.
As of June 30, 2024, 487 employees in the technology department worked together with various departments to continuously enhance business efficiency and refine inventory management at stores and online warehouses. The Company promoted the application of digital tools and achieved systematic inbound and outbound operation of goods, diminishing manual operation and accelerating the inventory digestion efficiency of obsolete goods
Material changes in the operation of the Company during the Reporting Period and events that occurred during the Reporting Period that have had a significant impact on the operation of the Company and are expected to have a significant impact in the future
| ☐ | Applicable | √ | Not applicable |
| IV. | Main Operations during the Reporting Period |
| (I) | Analysis of principal businesses |
| 1 | Analysis on changes in relevant items in financial statement |
| | | | | Unit: Yuan Currency: RMB | |
| | | | | | |
| Item | | Amount for the current period | | Amount for the same period of last year | | Change | |
| | | | | | | (%) | |
| Operating income | | 37,779,186,915.06 | | 42,027,399,571.78 | | -10.11 | |
| Operating cost | | 29,628,245,252.09 | | 32,786,165,503.87 | | -9.63 | |
| Selling expenses | | 6,513,523,191.26 | | 7,264,482,947.30 | | -10.34 | |
| Administrative expenses | | 888,283,638.63 | | 945,434,502.57 | | -6.04 | |
| Finance cost | | 629,889,827.01 | | 667,150,474.23 | | -5.59 | |
| Research and development expenses | | 133,685,051.80 | | 207,361,419.05 | | -35.53 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Amount for the current period | | Amount for the same period of last year | | Change | |
| | | | | | | (%) | |
| Other income | | 49,296,614.54 | | 76,204,238.58 | | -35.31 | |
| Investment income | | 275,981,109.67 | | 121,781,506.96 | | 126.62 | |
| Gains on changes in fair value | | -183,828,045.27 | | -21,006,851.52 | | N/A | |
| Credit impairment losses | | 15,003,996.73 | | -18,698,565.71 | | N/A | |
| Income tax expenses | | 112,956,087.98 | | 179,642,343.20 | | -37.12 | |
| Net cash flows from operating activities | | 2,939,805,871.88 | | 2,587,185,124.84 | | 13.63 | |
| Net cash flows from investment activities | | -1,602,807,066.72 | | 339,673,519.25 | | -571.87 | |
| Net cash flows from financing activities | | -2,147,697,794.38 | | -5,539,017,546.14 | | N/A | |
Reasons for the change in operating income: on the one hand, the competition in the retail industry was seriously intense. The consumption habits of some consumers have changed due to the general environmental factors, and consumers have higher requirements for product quality, service and shopping experience, the customer flow and customer orders of the Company decreased to a certain extent; on the other hand, as the Company voluntarily closed the stores with poor performance, the overall revenue of the Company for the Reporting Period decreased as compared with the same period of last year.
Reasons for the change in selling expenses: mainly due to the decrease in the number of stores in operation of the Company, cost reduction and efficiency enhancement.
Reasons for the change in research and development expenses: mainly due to the decrease in R&D investment and staff optimization as the preliminary development of the information system has been basically completed.
Reasons for the change in other income: mainly due to the decrease in government subsidies received.
Reasons for the change in investment income: mainly due to the increase in dividends received from the fund wealth management products.
Reasons for the change in gains on changes in fair value: mainly due to the decrease in fair value of the fund wealth management products after paying dividends.
Reasons for the change in credit impairment losses: mainly due to the increase in the reversal of bad debts of factoring receivables for the year.
Reasons for the change in income tax expense: mainly due to the decline in profit, which led to the decrease in income tax expense.
Reasons for the change in net cash flows from operating activities: mainly due to the decrease in the payment for the purchase of goods as compared with the last year as the accounts payable was not due.
Reasons for the change in net cash flows from investment activities: mainly due to the increase in wealth management products purchased by the Company during the Reporting Period.
Reasons for the change in net cash flows from financing activities: the decrease in the Company’s net loan repayment for the year as compared with the same period of last year.
| 2 | Particulars of material changes in the Company’s business type, profit composition or profit sources during the period |
| | √ | Applicable | ☐ | Not applicable |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (1). | Principal businesses by sector, product, geographical region and sales model |
| | | | | | | | | | | Unit: 0’000 Yuan Currency: RMB | |
| | | | | | | | | | | | |
| | | Principal businesses by sector | | | |
| By sector | | Operating income | | Operating cost | | Gross profit margin | | Change in operating income over last year | | Change in operating
cost over last year | | Change in gross profit margin over last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Retail industry | | 3,536,379.29 | | 2,947,644.74 | | 16.65 | | -9.45 | | -9.59 | | Increased by 0.13 percentage point | |
| Service industry | | 241,539.40 | | 15,179.79 | | 93.72 | | -18.72 | | -16.89 | | Decreased by 0.13 percentage point | |
| | | Principal businesses by product | | | |
| By product | | Operating income | | Operating cost | | Gross profit margin | | Change in operating income over last year | | Change in operating cost over last year | | Change in gross profit margin over last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Fresh products and processing | | 1,359,688.60 | | 1,190,343.29 | | 12.45 | | -20.44 | | -19.74 | | Decreased by 0.77 percentage point | |
| Food supplies (including clothing) | | 2,176,690.69 | | 1,757,301.45 | | 19.27 | | -0.90 | | -1.12 | | Increased by 0.18 percentage point | |
| | | Principal businesses by geographical region | | | |
| By region | | Operating income | | Operating cost | | Gross profit margin | | Change in operating income over last year | | Change in operating cost over last year | | Change in gross profit margin over last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Southeast China | | 591,933.64 | | 475,145.90 | | 19.73 | | -10.89 | | -13.11 | | Increased by 2.05 percentage points | |
| North China | | 381,895.20 | | 317,595.01 | | 16.84 | | -7.15 | | -6.76 | | Decreased by 0.34 percentage point | |
| East China | | 807,966.21 | | 681,059.22 | | 15.71 | | -11.84 | | -11.57 | | Decreased by 0.25 percentage point | |
| West China | | 703,640.73 | | 589,821.34 | | 16.18 | | -8.78 | | -7.85 | | Decreased by 0.85 percentage point | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | | Principal businesses by geographical region | | | |
| By region | | Operating income | | Operating cost | | Gross profit margin | | Change in operating income over last year | | Change in operating cost over last year | | Change in gross profit margin over last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Southwest China | | 602,741.06 | | 507,224.76 | | 15.85 | | -5.34 | | -5.00 | | Decreased by 0.30 percentage point | |
| South China | | 160,315.72 | | 134,442.76 | | 16.14 | | -9.37 | | -10.27 | | Increased by 0.84 percentage point | |
| Central China | | 287,886.73 | | 242,355.75 | | 15.82 | | -12.36 | | -13.10 | | Increased by 0.73 percentage point | |
| | | Principal businesses by sales model | | | |
| Sales model | | Operating income | | Operating cost | | Gross profit margin | | Change in operating income over last year | | Change in operating cost over last year | | Change in gross profit margin over last year | |
| | | | | | | (%) | | (%) | | (%) | | (%) | |
| Retail | | 3,536,379.29 | | 2,947,644.74 | | 16.65 | | -9.45 | | -9.59 | | Increased by 0.13 percentage point | |
| Others | | 241,539.40 | | 15,179.79 | | 93.72 | | -18.72 | | -16.89 | | Decreased by 0.13 percentage point | |
Description on the principal businesses by sector, product, geographical region and sales model
The geographical distribution is as follows:
Southeast China: Fujian, Jiangxi
North China: Beijing, Tianjin, Hebei, Liaoning, Jilin, Heilongjiang, Inner Mongolia
East China: Jiangsu, Zhejiang, Shanghai, Anhui
West China: Chongqing, Guizhou, Yunnan, Hubei, Hunan
Southwest China: Sichuan, Xizang, Shaanxi, Gansu, Qinghai, Ningxia
South China: Guangdong, Guangxi
Central China: Shanxi, Shandong, Henan
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| (2). | Statement of Cost Analysis |
| | | | | | | | | | | | | Unit: 0’000 Yuan | |
| | | | | | | | | | | | | | |
| | | By sector | | | |
| By sector | | Cost components | | Amount for the current period | | Percentage of total cost for the current period | | Amount for the corresponding period of last year | | Percentage of total cost for the corresponding period of last year | | Change in amount for the current period as compared with the corresponding period of last year | | Explanations | |
| | | | | | | (%) | | | | (%) | | (%) | | | |
| Retail industry | | | | 2,947,644.74 | | 99.49 | | 3,260,352.59 | | 99.44 | | -9.59 | | | |
| Service industry | | | | 15,179.79 | | 0.51 | | 18,263.96 | | 0.56 | | -16.89 | | | |
| | | By product | | | |
| By product | | Cost components | | Amount for the current period | | Percentage of total cost for the current period | | Amount for the corresponding period of last year | | Percentage of total cost for the corresponding period of last year | | Change in amount for the current period as compared with the corresponding period of last year | | Explanations | |
| | | | | | | (%) | | | | (%) | | (%) | | | |
| Fresh products and processing | | | | 1,190,343.29 | | 40.38 | | 1,483,152.73 | | 45.49 | | -19.74 | | | |
Food supplies and clothing | | | | 1,757,301.45 | | 59.62 | | 1,777,199.86 | | 54.51 | | -1.12 | | | |
| (II) | Significant changes to the profit resulting from non-principal business |
| | ☐ | Applicable | √ | Not applicable |
| (III) | Analysis of assets and liabilities |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | Unit: Yuan | |
| | | | | | | | | | | | | | |
| Item | | Amount at the end of the current period | | Amount at the end of the current period as a percentage of total asset | | Amount at the end of the corresponding period of last year | | Amount at the end of the previous period as a percentage of total assets | | Change in amount for the current period as compared with the end of the corresponding period of last year | | Explanations | |
| | | | | (%) | | | | (%) | | (%) | | | |
| Loans and advances (short-term) | | | | | | 537,340,391.79 | | 1.03 | | -100.00 | | No relevant business after the transfer of 65% equity interests in Yonghui Yunjin Technology Co., Ltd. during the Reporting Period | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| Item | | Amount at the end of the current period | | Amount at the end of the current period as a percentage of total asset | | Amount at the end of the corresponding period of last year | | Amount at the end of the previous period as a percentage of total assets | | Change in amount for the current period as compared with the end of the corresponding period of last year | | Explanations | |
| | | | | (%) | | | | (%) | | (%) | | | |
| Financial assets held for trading | | 2,709,808,027.29 | | 5.70 | | 735,971,777.07 | | 1.41 | | 268.19 | | Increase in the structured deposit wealth management products purchased by the Company during the current period | |
| Factoring receivable | | | | | | 68,688,964.38 | | 0.13 | | -100.00 | | No relevant business after the transfer of 65% equity interests in Yonghui Yunjin Technology Co., Ltd. during the Reporting Period | |
| Inventories | | 5,700,299,097.82 | | 11.99 | | 8,268,982,538.27 | | 15.89 | | -31.06 | | Restocking for the Spring Festival at the beginning of the year, and decrease in stocking resulting from optimization of the inventories as at the end of the period | |
| Loans and advances | | | | | | 20,568,200.17 | | 0.04 | | -100.00 | | No relevant business after the transfer of 65% equity interests in Yonghui Yunjin Technology Co., Ltd. during the Reporting Period | |
| Advance receipts | | 276,593,321.13 | | 0.58 | | 106,067,963.44 | | 0.20 | | 160.77 | | Receipt of equity transfer price of RMB200 million, for which the closing procedure has not completed during the Reporting Period | |
| Long-term borrowings | | | | | | 349,889,789.58 | | 0.67 | | -100.00 | | Long-term borrowings will be due in March 2025, which was reclassified to non-current liabilities due within one year | |
| Estimated liabilities | | 23,539,437.34 | | 0.05 | | 37,797,080.80 | | 0.07 | | -37.72 | | Decrease in the estimated liability arising from pending litigation or arbitration as at the end of the period | |
| Other comprehensive income | | 11,698,153.58 | | 0.02 | | 5,073,713.42 | | 0.01 | | 130.56 | | Change in other comprehensive income of Fujian One Bank Co., Ltd. during the period | |
| Minority interests | | -1,296,651.15 | | 0.00 | | -4,333,522.99 | | -0.01 | | N/A | | The purchase of minority interests in Hubei Yonghui Zhongbai during the period | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| | √ | Applicable | ☐ | Not applicable |
Including: overseas assets of RMB393 million, accounting for 0.83% of total assets.
| (2) | Description on relatively high proportion of overseas assets |
| | ☐ | Applicable | √ | Not applicable |
| 3. | Restriction on material assets as of the end of the Reporting Period |
| | √ | Applicable | ☐ | Not applicable |
Please refer to VII. 33 in Section X Financial Report of this report
| | √ | Applicable | ☐ | Not applicable |
| (IV) | Analysis of investments |
General analysis of external equity investment
| √ | Applicable | ☐ | Not applicable |
The Company continued to revitalize assets, bring cash inflow, and focus on its principal business during the Reporting Period.
| (1). | Major equity investment |
| | ☐ | Applicable | √ | Not applicable |
| (2). | Major non-equity investment |
| | ☐ | Applicable | √ | Not applicable |
| (3). | Financial assets measured at fair value |
| | √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | | | |
Categories of assets | | Opening balance | | Gains or losses from changes in fair value for the period | | Accumulated changes in fair value included in equity | | Impairment provision made for the period | | Amount purchased for the period | | Amount disposed of/redeemed for the period | | Other changes | | Closing balance | |
| Stocks | | 388,932,227.74 | | -40,821,861.00 | | -298,686,878.96 | | | | | | | | | | 348,110,366.74 | |
| Others | | 3,998,519,668.57 | | -143,006,184.27 | | -151,969,100.69 | | | | 2,880,000,000.00 | | 1,113,653,511.72 | | 42,403,273.82 | | 5,664,263,246.40 | |
| Total | | 4,387,451,896.31 | | -183,828,045.27 | | -450,655,979.65 | | | | 2,880,000,000.00 | | 1,113,653,511.72 | | 42,403,273.82 | | 6,012,373,613.14 | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Investment in securities
| √ | Applicable | ☐ | Not applicable |
| | | | | | | | | | | | | | | | | | | Unit: Yuan Currency: RMB | |
| | | | | | | | | | | | | | | | | | | | |
| Type of securities | | Securities code | | Abbreviation of securities | | Initial investment cost | | Source of funds | | Opening carrying amount | | Gains or losses from changes in fair value for the period | | Accumulated changes in fair value included in equity | | Amount purchased for the period | | Amount disposed of for the period | | Gains or losses from Investment for the period | | Closing carrying amount | | Accounting items | |
| Stock | | ADV | | Advantage Solutions | | 646,797,245.70 | | Self-owned funds | | 388,932,227.74 | | -40,821,861.00 | | -298,686,878.96 | | | | | | | | 348,110,366.74 | | Financial asset held for trading | |
| Total | | / | | / | | 646,797,245.70 | | / | | 388,932,227.74 | | -40,821,861.00 | | -298,686,878.96 | | | | | | | | 348,110,366.74 | | / | |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
Explanations on investment in securities
| | ☐ | Applicable | √ | Not applicable |
Investment in private equity funds
| | ☐ | Applicable | √ | Not applicable |
Investment in derivatives
| | ☐ | Applicable | √ | Not applicable |
| (V) | Material asset and equity disposal |
| | √ | Applicable | ☐ | Not applicable |
| 1. | The Company held the 11th meeting of the fifth session of the board of directors on December 13, 2023, and held the third extraordinary general meeting in 2023 on December 29, 2023, at which the Resolution on the Disposal of Assets was considered and approved. The Company disposed its 388,699,998 shares in Dalian Wanda Commercial Management Group Co., Ltd. to Dalian Yujin Trading Co., Ltd. (大連禦錦貿易有限公司) (“Dalian Yujin”) at the transfer price of RMB4,530,059,250.07. According to the Transfer Agreement entered into between the Company and Dalian Yujin, the aforesaid transaction consideration would be paid by Dalian Yujin in eight installments. |
The Company held the sixteenth meeting of the fifth session of the board of directors and the first extraordinary general meeting of the Company in 2024 on August 12, 2024, at which the Resolution on the Proposal on Adjusting the Asset Disposal Plan was considered and approved. The Company entered into the Supplementary Agreement to the Transfer Agreement with Dalian Yujin, Mr. Wang Jianlin (王健林), Mr. Sun Xishuang ( 孫喜雙) and Dalian Yifang Group Co., Ltd. (大連一方集團有限公司), which adjusted the payment scheme and added Mr. Wang Jianlin, Mr. Sun Xishuang and Dalian Yifang Group Co., Ltd. as the guarantors of the transaction. The remaining shares transfer price amounted to RMB3,839,089,070.93 in total, which would be paid in eight instalments (namely the third to tenth instalments, of which the third instalment has been paid in full by June 30, 2024). As of the disclosure date of this report, the Company has received a total shares transfer price of RMB890,970,179.14. The remaining shares transfer price in this transaction was RMB3,639,089,070.93 in total, and the number of shares transferred corresponding to remaining transfer price was 310,115,364 shares.
| 2. | During the Reporting period, the Company transferred its 136,000,000 shares in Chengdu Hongqi Chain Co., Ltd. (成都紅旗連鎖股份有限公司股份) to Sichuan Commercial Investment Co., Ltd. (四川商投投資有限責任公司) (“Sichuan Commercial Investment”), representing approximately 10% of the total share capital of Hongqi Chain. On June 17, 2024, the Company received the Notification Letter issued by Sichuan Commercial Investment, which stated that Sichuan Commercial Investment received the Reply on Approving the Acquisition of the Control Right of Chengdu Hongqi Chain Co., Ltd. by Sichuan Commercial Investment Group (Chuan Guo Zi Han [2024] No. 77) issued by the State-owned Assets Supervision and Administration Commission of the Sichuan Province and the Reply on the Acquisition of the Control Right of Hongqi Chain by Sichuan Commercial Investment Co., Ltd., a Subsidiary of Sichuan Rural Development Group Co., Ltd. (Si Chuan Shang Tou [2024] No. 63), and obtained the Decision on Non-Prohibition of Anti-Monopoly Review on Business Operators Concentration (Fan Zhi Er Shen Cha Jue Ding [2024] No. 147) issued by the State Administration for Market Regulation. The entry-into-force conditions of the agreement stipulated in the Share Transfer Agreement have been satisfied, the transaction agreement has come into effect. As of the disclosure date of this report, the relevant transaction is still undergoing transfer procedure with the Shenzhen Stock Exchange. |
| APPENDIX V | MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET GROUP |
| 3. | During the Reporting Period, the Company disposed its 65% equity interests in Yonghui Yunjin Technology Co., Ltd. (永輝雲金科技有限公司) (“Yunjin Technology”) to Shanghai Paihui Technology Co., Ltd. (上海派慧科技有限公司) at a total transfer price of RMB377,762,864.53. During the Reporting Period, the Company has received the all transfer price. Upon the completion of this transaction, the Company still held 35% equity interests in Yunjin Technology. |
| (VI) | Analysis of major subsidiaries and investee companies |
| | √ | Applicable | ☐ | Not applicable |
Unit: 0’000 Yuan Currency: RMB
| Company abbreviation | | Industry | | Registered capital | | | Total assets | | | Net assets | | | Net profit | | | Operating income | | | Operating profit | |
| Fujian Yuntong | | Logistics distribution industry | | | 10,000.00 | | | | 186,235.34 | | | | 41,770.79 | | | | 14,601.70 | | | | 647,844.10 | | | | 15,595.05 | |
| Yonghui Logistics | | Logistics distribution industry | | | 10,000.00 | | | | 181,353.55 | | | | 40,408.41 | | | | 9,987.11 | | | | 318,932.67 | | | | 10,771.10 | |
| Chengdu Commercial | | Logistics distribution industry | | | 13,000.00 | | | | 118,581.85 | | | | 29,969.77 | | | | 7,282.04 | | | | 390,027.22 | | | | 8,166.84 | |
| Sichuan Yonghui | | Commercial Retail Industry | | | 100,000.00 | | | | 388,480.44 | | | | 76,858.36 | | | | 3,268.58 | | | | 461,548.49 | | | | 4,476.06 | |
| Chongqing Yonghui | | Commercial Retail Industry | | | 71,440.00 | | | | 429,666.91 | | | | 43,290.33 | | | | 2,145.61 | | | | 543,109.37 | | | | 3,984.35 | |
| (VII) | Information about the structured entities controlled by the Company |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| | ☐ | Applicable | √ | Not applicable |
| APPENDIX VI | GENERAL INFORMATION |
| I. | RESPONSIBILITY STATEMENT |
This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable inquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.
| II. | DISCLOSURE OF INTERESTS |
| (a) | Directors’ and Chief Executive’s Interests and Short Positions in Shares and Underlying Shares and Debentures of the Company or Any of Its Associated Corporations |
To the best of the knowledge of the Directors, as at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or its associated corporations within the meaning of Part XV of the SFO, which were required (a) to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) to be recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO; or (c) as otherwise notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) set out in Appendix C3 to the Listing Rules were as follows:
| Name of Director | | Nature of interest | | Number of
ordinary shares | | | Number of Shares
underlying
outstanding
options/restricted
shares/restricted
share units granted | | | Approximate %
of shareholding in our Company(1) | |
| Mr. Ye | | Interest in controlled | | | 789,541,061 | (2)(L) | | | – | | | | 62.8 | % |
| | | corporations/founder | | | 14,000,000 | (2)(S) | | | | | | | 1.1 | % |
| | | of a discretionary | | | | | | | | | | | | |
| | | trust/beneficiary of a | | | | | | | | | | | | |
| | | trust/interest of | | | | | | | | | | | | |
| | | spouse | | | | | | | | | | | | |
| Ms. XU Lili | | Beneficial interest | | | – | | | | 20,000 | (3)(L) | | | 0.002 | % |
| Mr. ZHU Yonghua | | Beneficial interest | | | – | | | | 50,528 | (4)(L) | | | 0.004 | % |
Notes:
| (1) | The calculation is based on the total number of 1,256,280,037 Shares in issue as at the Latest Practicable Date. The letter “L” stands for long position and the letter “S” stands for short position. |
| (2) | Represents (i) 328,290,482 Shares held by Mini Investment Limited; (ii) 203,401,382 Shares held by YGF MC Limited; and (iii) 257,849,197 Shares held by YYY MC Limited. The short position represents Mr. Ye, through an entity controlled under YGF Trust, has delivered a total of 14,000,000 shares under credit support arrangement with a return obligation. For further details of Mr. Ye’s interest in our Company, please see the section headed “Substantial Shareholders’ Interests and Short Positions in Shares and Underlying Shares”. |
| (3) | Represents Ms. Xu’s entitlement to receive up to 20,000 Shares pursuant to the exercise of options granted to her under the 2020 Share Incentive Plan. |
| (4) | Represents Mr. Zhu’s entitlement to receive up to 29,476 Shares pursuant to the vesting of RSUs granted to him under the 2020 Share Incentive Plan and his beneficial interest in 21,052 Shares. |
Save as disclosed above, as at the Latest Practicable Date, so far as is known to any Director or the chief executive of the Company, none of the Directors nor the chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code, to be notified to the Company and the Hong Kong Stock Exchange.
| APPENDIX VI | GENERAL INFORMATION |
| (b) | Substantial Shareholders’ Interests and Short Positions in Shares and Underlying Shares |
As at the Latest Practicable Date, the following persons (other than the Directors and chief executive of the Company whose interests have been disclosed in this circular), had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company and the Hong Kong Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO or as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO:
Name of
Shareholder | | Nature of interest | | Number of
ordinary shares | | | Approximate %
of shareholding in
our Company(1) | |
| YYY MC Limited(2) | | Beneficial interest | | | 257,849,197 | (L) | | | 20.5 | % |
| YYY Development Limited(2) | | Interest in controlled corporation | | | 257,849,197 | (L) | | | 20.5 | % |
| YGF MC Limited(3) | | Beneficial interest | | | 203,401,382 | (L) | | | 16.2 | % |
| Mini Investment Limited(4) | | Beneficial interest | | | 328,290,482 | (L) | | | 26.1 | % |
| | | | | | 14,000,000 | (S) | | | 1.1 | % |
| YGF Development Limited(4) | | Interest in controlled corporation | | | 328,290,482 | (L) | | | 26.1 | % |
| | | | | | 14,000,000 | (S) | | | 1.1 | % |
| Mr. Ye(2)(3)(4)(5) | | Interest in controlled corporations/founder | | | 789,541,061 | (L) | | | 62.8 | % |
| | | of a discretionary trust/beneficiary | | | 14,000,000 | (S) | | | 1.1 | % |
| | | of a trust/interest of spouse | | | | | | | | |
| Ms. Yang(2)(3)(4)(5) | | Interest in controlled corporations/founder | | | 789,541,061 | (L) | | | 62.8 | % |
| | | of a discretionary trust/beneficiary of a trust/interest of spouse | | | 14,000,000 | (S) | | | 1.1 | % |
Notes:
| (1) | The calculation is based on the total number of 1,256,280,037 Shares in issue as at the Latest Practicable Date. The letter “L” stands for long position and the letter “S” stands for short position. |
| (2) | YYY MC Limited is wholly-owned by YYY Development Limited, a limited liability company incorporated under the laws of BVI. All shares of YYY Development Limited are held by TMF (Cayman) Ltd. on behalf of YYY Trust, with TMF (Cayman) Ltd. as the trustee, and Ms. Yang and her family members as beneficiaries. Ms. Yang is both the settlor and protector of YYY Trust and is deemed to be the controlling person of the YYY Trust. Under the SFO, Ms. Yang is deemed to be interested in all the interests in our Company held by YYY MC Limited. |
| (3) | YGF MC Limited is wholly-owned by Mr. Ye and Mr. Ye is a director of YGF MC Limited. |
| (4) | Mini Investment Limited is wholly-owned by YGF Development Limited, a limited liability company incorporated under the laws of BVI. All shares of YGF Development Limited are held by TMF (Cayman) Ltd. on behalf of YGF Trust, with TMF (Cayman) Ltd. as the trustee, and Mr. Ye and his family members as beneficiaries. Mr. Ye is both the settlor and the protector of YGF Trust and is deemed to be the controlling person of the YGF Trust. Under the SFO, Mr. Ye is deemed to be interested in all the interests in our Company held by Mini Investment Limited and Mr. Ye is also a director of Mini Investment Limited. |
| (5) | Mr. Ye and Ms. Yang are spouses, and are therefore deemed to be interested in the equity interests held by each other. |
| APPENDIX VI | GENERAL INFORMATION |
Save as disclosed above, as at the Latest Practicable Date, no person, other than the Directors whose interests are set out in the section headed “Directors’ and Chief Executive’s Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any of its Associated Corporations” had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company and the Hong Kong Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO, or which were required to be recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO.
| (a) | Interest in service contracts |
As at the Latest Practicable Date, none of the Directors had entered, or was proposing to enter, into any service contract with any member of the Group (excluding contracts expiring or determinable by such member of the Group within one year without payment of compensation (other than statutory compensation)).
| (b) | Interest in competing business |
As at the Latest Practicable Date, none of the Directors or their respective close associate is or was interested in any business apart from the Group’s business, that competes or is likely to compete, either directly or indirectly, with the Group’s business.
Reference is made to the announcement of the Company dated August 30, 2024 in relation to, amongst others, the connected transaction of the Company for the lease agreement entered into with Miniso (Zhaoqing) Industrial Investment Co., Ltd. as the landlord and a connected person of the Company which is indirectly wholly-owned by a director of our Company, pursuant to which a right-of-use asset of approximately RMB63.6 million has been recognized by the Group as the lessee in accordance with IFRS 16.
Save as disclosed therein, as at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which had been, since December 31, 2023, being the date of which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.
| (d) | Interests in contract or arrangement |
As at the Latest Practicable Date, there is no contract or arrangement subsisting in which any of the Directors is materially interested and which is significant in relation to the business of the Group.
In August 2022, a putative federal securities class action was filed against the Company and certain of its officers and Directors (“Defendants”), alleging that Defendants made misleading misstatements or omissions regarding the Company’s business operations and financials in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934. The action is captioned In re MINISO Group Holding Limited Securities Litigation, 1:22-cv-09864 (S.D.N.Y.). The lead plaintiff selection process was completed in November 2022 and an amended complaint was filed shortly thereafter. The court granted Defendants’ motion to dismiss in February 2024 with leave to amend. Plaintiffs filed a motion for reconsideration of the court’s decision in late March 2024, to which Defendants have timely responded. Decision on plaintiffs’ motion for reconsideration is pending. Because the case remains in its preliminary stage, Defendants are unable to predict the outcome of the action or estimate the potential losses, if any.
| APPENDIX VI | GENERAL INFORMATION |
Save as disclosed above, as at the Latest Practicable Date, no member of the Group was or is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was or is known to the Directors to be pending or threatened by or against any members of the Group.
| V. | MATERIAL ADVERSE CHANGE |
As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial position or trading position of the Group since December 31, 2023, being the date to which the latest published audited financial statements of the Company were made up.
The following contracts (not being contracts in the ordinary course of business) have been entered into by members of the Group within the two years immediately preceding the date of this circular and are or may be material:
| (a) | Dairy Farm Share Purchase Agreement; and |
| (b) | Jingdong Share Purchase Agreement. |
The following is the qualification of the expert or professional adviser who has given opinion or advice contained in this circular:
| KPMG | | Certified Public Accountants |
| | | |
| | | Public Interest Entity Auditor registered in accordance with the Accounting and Financial Reporting Council Ordinance |
The above expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or report and references to its name in the form and context in which they respectively appear.
As at the Latest Practicable Date, the above expert (a) did not have any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and (b) was not interested, directly or indirectly, in any assets which have been or are proposed to be acquired or disposed of by or leased to any member of the Group since December 31, 2023, being the date to which the latest published audited financial statements of the Company were made up.
| VIII. | DOCUMENTS ON DISPLAY |
Copies of the below documents will be on display from the date of this circular up to and including the date of the EGM (being not less than 14 days) on the websites of the Hong Kong Stock Exchange (http://www.hkexnews.hk) and the Company (https://ir.miniso.com):
| (a) | the material contracts referred to in the section headed “Material Contracts” in this appendix; |
| (b) | the report on the unaudited pro forma financial information of the Group issued by KPMG as set out in Appendix III to this circular; and |
| (c) | the letter of consent referred to in the section headed “Expert and Consent” in this appendix. |
| APPENDIX VI | GENERAL INFORMATION |
| (a) | The address of the registered office of the Company is the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands. |
| (b) | The head office and principal place of business in the PRC of the Company is 8/F, M Plaza, No. 109, Pazhou Avenue, Haizhu District, Guangzhou 510000, Guangdong Province, China. |
| (c) | The address of the principal place of business in Hong Kong of the Company is Flats B-D, 35/F, Plaza 88, 88 Yeung Uk Road, Tsuen Wan, the New Territories, Hong Kong. |
| (d) | The Company’s Hong Kong branch share registrar is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong. |
| (e) | The Company’s principal share registrar and transfer office is Maples Fund Services (Cayman) Limited at PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman, KY1-1102, Cayman Islands. |
| (f) | The joint company secretaries of the Company are Mr. Zhang Jingjing and Ms. Wong Hoi Ting. Mr. Zhang Jingjing is the chief financial officer and vice president of the Company. Ms. Wong Hoi Ting is an associate of both The Hong Kong Chartered Governance Institute and The Chartered Governance Institute in the United Kingdom. |
| NOTICE OF EXTRAORDINARY GENERAL MEETING |
MINISO Group Holding Limited
名創優品集團控股有限公司
(A company incorporated in the Cayman Islands with limited liability)
(NYSE: MNSO; HKEX: 9896)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “EGM”) of MINISO Group Holding Limited (the “Company”) will be held at Flats B-D, 35/F, Plaza 88, 88 Yeung Uk Road, Tsuen Wan, the New Territories, Hong Kong on January 17, 2025 at 11:00 a.m. for the following purposes:
ORDINARY RESOLUTIONS
“THAT
| 1. | the Dairy Farm Share Purchase Agreement (as defined in the circular dated November 22, 2024 despatched to the shareholders of the Company (the “Circular”), a copy of which has been produced to the EGM marked “A” and signed by the chairman of the EGM for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; |
| 2. | the Jingdong Share Purchase Agreement (as defined in the Circular, a copy of which has been produced to the EGM marked “B” and signed by the chairman of the EGM for the purpose of identification, together with the Dairy Farm Share Purchase Agreement, the “Share Purchase Agreements”), and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and |
| 3. | any one of the directors of the Company be and is hereby authorized to do all such acts and things incidental to the Share Purchase Agreements as he/she considers necessary, desirable, or expedient in connection with the implementation of or giving effect to the Share Purchase Agreements and the transactions contemplated thereunder.” |
SHARE RECORD DATE AND ADS RECORD DATE
The board of directors has fixed the close of business on December 6, 2024 (Hong Kong Time) as the record date (the “Share Record Date”) of the Company’s shares. Holders of record of the Company’s shares (as of the Share Record Date) are entitled to attend and vote at the EGM and any adjourned meeting thereof. Holders of American depositary shares (the “ADSs”) as of the close of business on December 6, 2024 (New York Time) (the “ADS Record Date”), who wish to exercise their voting rights for the underlying shares must give voting instructions either directly to The Bank of New York Mellon, the depositary of the ADSs, if ADSs are held directly on the books and records of The Bank of New York Mellon, or indirectly through a bank, brokerage or other securities intermediary if ADSs are held by any of them on behalf of holders, as the case may be.
| NOTICE OF EXTRAORDINARY GENERAL MEETING |
ATTENDING THE EGM
Only holders of record of the Company’s shares as of the Share Record Date are entitled to attend and vote at the EGM. All officers and agents of the Company reserve the right to refuse any person entry to the EGM venue, or to instruct any person to leave the EGM venue, where such officer or agent reasonably considers that such refusal or instruction is or may be required for the Company or any other person to be able to comply with applicable laws and regulations. The exercise of such right to refuse entry or instruct to leave shall not invalidate the proceedings at the EGM.
PROXY FORMS AND ADS VOTING CARDS
A holder of the Company’s shares as of the Share Record Date may appoint a proxy to exercise his or her rights at the EGM. A holder of ADSs as of the ADS Record Date will need to directly instruct The Bank of New York Mellon, the depositary of the ADSs, if ADSs are held directly by holders on the books and records of The Bank of New York Mellon, or instruct a holder’s a bank, brokerage or other securities intermediary if the ADSs are held by any of them on behalf of holders, as the case may be, as to how to vote the shares represented by the ADSs. Please refer to the proxy form (for holders of the shares) which is available on our website at https://ir.miniso.com.
Holders of record of the Company’s shares on the Company’s register of members as of the Share Record Date are cordially invited to attend the EGM in person. Your vote is important. You are urged to complete, sign, date, and return the accompanying proxy form to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited (for holders of the shares) or your voting instructions to The Bank of New York Mellon, if your ADSs are held directly on the books and records of The Bank of New York Mellon, or to your bank, brokerage or other securities intermediary, if your ADSs are held by any of them on your behalf, as the case may be (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise your voting rights. This proxy form must be completed, signed and deposited at Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time for holding the meeting (i.e. before 11:00 a.m. on January 15, 2025) to ensure your representation at the EGM; and The Bank of New York Mellon must receive your voting instructions by the time and date specified in the ADS voting instruction card to enable the votes attaching to the shares represented by your ADSs to be cast at the EGM. For the avoidance of doubt, holders of treasury shares of the Company (if any) are not entitled to vote at the EGM.
| By Order of the Board |
| | MINISO Group Holding Limited Mr. YE Guofu |
| | Executive Director and Chairman |
Hong Kong, November 22, 2024
| Registered Office: | Headquarters and principal place of business in China: |
| Maples Corporate Service Limited | 8F, M Plaza |
| PO Box 309, Ugland House | No. 109, Pazhou Avenue |
| Grand Cayman, KY1-1104 | Haizhu District, Guangzhou 510000 |
| Cayman Islands | Guangdong Province |
| | China |
As of the date of this notice, the board of directors of the Company comprises Mr. YE Guofu as executive Director, Ms. XU Lili, Mr. ZHU Yonghua and Mr. WANG Yongping as independent non-executive Directors.
