OFFCN EDUCATION TECHNOLOGY CO., LTD.
2022 Annual Report
Stock Code: 002607
Stock Abbr.: OFFCN EDU
April, 2023
Chapter 1 Important Information, Table of Contents and Definitions
The Company’s Board of Directors, Supervisory Committee, directors, supervisors, and senior management hereby
guarantee that the contents of the annual report are true, accurate, and complete, and that there are no
misrepresentations, misleading statements, or material omissions, and shall assume individual and joint legal
liabilities.
Wang Zhendong, the Company’s legal representative, Shi Lei, head in charge of accounting and Luo Xue, head of
the accounting department (Accounting supervisor), declare that they warrant the truthfulness, accuracy and
completeness of the financial report in the annual report.
All directors attended the board meeting for reviewing this report.
The forward-looking statements on future plans and development strategies involved in this report do not constitute
a substantial commitment to investors. Investors are advised to invest rationally and pay attention to the potential
investment risks.
The possible risks and countermeasures have been detailed in Section XI Forecast of the Company’s future
development of Chapter 3 Management Discussion and Analysis of this report. Investors are advised to pay attention
to the relevant contents.
On December 25, 2021, the Company was filed and investigated by China Securities Regulatory Commission (CSRC)
on suspicion of failing to disclose related party transaction information and violating the laws and regulations of
information disclosure. On April 27, 2022, the Company and the relevant parties received the official Decision of
Administrative Penalty. The Anhui Securities Regulatory Bureau of the CSRC decided to give a warning to and
impose a fine on the Company and the relevant parties, and order the Company and the relevant parties to rectify the
situation. Specific information is stated in the announcement (No. 2022-032) disclosed on CNINFO
(www.cninfo.com.cn) and other designated media.
The Company plans not to distribute cash dividends, bonus shares, nor to increase share capital by converting capital
reserve.
The English version of this report is provided together with the Chinese version. Should there be any inconsistency
between the Chinese version and the English version, the Chinese version shall prevail.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Contents
Chapter 1 Important Information, Table of Contents and Definitions ............................................... 1
Chapter 2 Corporate Profile & Key Financial Indicators .................................................................. 5
Chapter 3 Management Discussion and Analysis ............................................................................ 10
Chapter 4 Corporate Governance .................................................................................................... 35
Chapter 5 Environmental and Social Responsibilities..................................................................... 60
Chapter 6 Significant Events ........................................................................................................... 61
Chapter 7 Share Changes and Shareholders .................................................................................... 87
Chapter 8 Preferred Shares .............................................................................................................. 96
Chapter 9 Corporate Bonds ............................................................................................................. 97
Chapter 10 Financial Statements ..................................................................................................... 98
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Documents Available for Reference
I. The financial statement signed and sealed by the legal representative of the Company, the person in charge of
accounting work and the person in charge of accounting department (accounting supervisor).
II. The original copy of the audit report signed and sealed by the auditors and sealed by the accounting firm.
III. The full text of 2022 Annual Report signed by Wang Zhendong, the Company’s legal representative.
IV. The original copies of all the documents of the Company which have been disclosed in newspapers designated
by the China Securities Regulatory Commission during the reporting period.
V. The place where the above-mentioned documents are maintained: the office of the Company’s Secretary of the
Board of Directors.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Definitions
Term(s) Definition
The listed Company, The Company,
Offcn Education Technology Co., Ltd.
Offcn Edu
CSRC China Securities Regulatory Commission
Company Law Company Law of the People’s Republic of China
Securities Law Securities Law of the People’s Republic of China
Articles of Corporation Articles of Corporation of Offcn Education Technology Co., Ltd.
Yuan, 10 thousand yuan, 100 million
RMB yuan, RMB 10 thousand yuan, RMB 100 million yuan
yuan
Base on the assessment, Yaxia Auto takes all assets and liabilities other than retained assets as
the exchange-out assets to swap the equivalent portion of 100% equity of Offcn which held by
Li Yongxin and other 10 counterparties, and the swapping deficiency is settled by issuance of
This major assets restructuring, Yaxia Auto shares according to the proportion of shareholding. At the same time, Yaxia
This transaction, Industrial transfers 80,000,000 and 72,696,561 Yaxia Auto shares to Offcn Partnership and Li
This restructuring Yongxin respectively. All shareholders of Offcn entrust Yaxia Auto to directly deliver the
exchange-out assets to Yaxia Industrial or its designated third party as the consideration for the
transfer of 80,000,000 shares to Offcn Partnership, and Li Yongxin offers RMB1 billion in cash
as the consideration for the transfer of 72,696,561 shares.
Aerospace Industry Beijing Aerospace Industry Investment Fund (Limited Partnership)
Kerui Technology Innovation Beijing Kerui Technology Innovation Investment Center (Limited Partnership)
Beijing Offcn Future Information Consulting Center (Limited Partnership), established by all
Offcn Partnership shareholders of Offcn Ltd. in accordance with the shareholdings ratio, which is used to
undertake 80,000,000 shares of the listed Company transferred by Yaxia Industrial.
Yaxia Industrial Anhui Yaxia Industrial Co., Ltd.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Chapter 2 Corporate Profile & Key Financial Indicators
Section I. Corporate profile
Stock Abbreviation OFFCN EDU Stock Code 002607
Changed Stock Abbreviation (if any) /
Listed Stock Exchange Shenzhen Stock Exchange
Chinese Name of the Company 中公教育科技股份有限公司
Chinese Name Abbreviation of the Company 中公教育
English Name of the Company (if any) Offcn Education Technology Co., Ltd.
English Name Abbreviation of the Company (if
OFFCN EDU
any)
Legal Representative of the Company Wang Zhendong
Yaxia Automobile City, Yijiang North Road, Jiujiang District, Wuhu City, Anhui
Registered Address
Province
Zip Code of Registered Address 241000
Changed Registered Address of the Company (if
/
any)
Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District,
Office Address
Beijing
Zip Code of Office Address 100089
Company Website http://www.offcn.com
E-mail ir@offcn.com
Section II. Contact information
Board Secretary Securities Affairs Representative
Name Gui Hongzhi Gu Pan
Block B, Hanhua Century Mansion, No.23 Xueqing Road, Block B, Hanhua Century Mansion, No.23 Xueqing
Address
Haidian District, Beijing Road, Haidian District, Beijing
Tel. 010-83433677 010-83433688
Fax 010-83433666 010-83433666
E-mail ir@offcn.com ir@offcn.com
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Section III. Information disclosure and location of Annual Report
Securities Times, Shanghai Securities News and China Securities
Company’s Designated Information Disclosure Media
Journal
Website Designated by the China Securities Regulatory
http://www.cninfo.com.cn
Commission for Publishing the Annual Report
Place Where the Annual Report is Available for Inspection Office of Secretary of the Board
Section IV. Registration Changes
Organization Code 91340200711040703A
Changes in Main Business Since the Company’s Listing (if any) None
Change of Previous Controlling Shareholders (if any) None
Section V. Other relevant information
Accounting firm hired by the Company
Accounting Firm Name Baker Tilly China Certified Public Accountants (LLP)
No.12 Building, Foreign Cultural and Creative Garden, No.19 Chegongzhuang West Road,
Office Address of the Accounting Firm
Haidian District, Beijing, China
Signing Accountants’ Names Zhou Baiming, Li Qiang
Sponsor institution engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable √ Not applicable
Section VI. Key Accounting Information and Financial Indicators
Does the Company need to adjust its financial data retrospectively or restate its accounting data of previous year?
□ Yes √ No
Increase/Decrease
Year 2022 Year 2021 over the previous Year 2020
year
Operating income (RMB yuan) 4,824,814,105.43 6,911,723,331.79 -30.19% 11,202,494,295.04
Net profit attributable to shareholders
-1,102,059,818.43 -2,369,509,039.00 53.49% 2,304,357,742.74
of the listed Company (RMB yuan)
Net profit after deducting non-
recurring profits and losses
-1,113,077,251.50 -2,485,630,452.04 55.22% 1,867,289,479.85
attributable to shareholders of the
listed Company (RMB yuan)
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Net cash flow from operating
787,191,958.28 -4,097,961,548.90 119.21% 4,882,469,101.91
activities (RMB yuan)
Basic earnings per share (RMB
-0.18 -0.38 52.63% 0.37
yuan/share)
Diluted earnings per share (RMB
-0.18 -0.38 52.63% 0.37
yuan/share)
Weighted average return on net assets -82.59% -76.88% -5.71% 66.15%
Increase/Decrease
Year End 2022 Year End 2021 Over Previous Year Year End 2020
End
Total assets (RMB yuan) 8,027,414,353.26 10,305,183,525.70 -22.10% 14,418,850,027.27
Net assets attributable to shareholders
779,933,935.77 1,888,818,754.20 -58.71% 4,275,127,793.20
of the listed Company (RMB yuan)
The lower of the net profit of the Company before and after deduction of non-recurring profits and losses for the most
recent three financial years is negative, and the audit report of the most recent year shows that there are uncertainties
on the Company’s ability to continue operations
□ Yes √ No
The lower of the net profit before and after deduction of non-recurring profits and losses is negative
√ Yes □ No
Item Year 2022 Year 2021 Note
Operating income
4,824,814,105.43 6,911,723,331.79 None
(RMB yuan)
In this reporting period, the deductions of operating income include:
Deduction of hotel income RMB 17,852,200.26;
Deduction from
Deduction of house leasing income RMB 1,602,191.15;
operating income 22,965,218.28 51,440,960.49
Deduction of exhibition income RMB 2,647,169.74;
(RMB yuan)
Deduction of custody income RMB 28,301.89;
Deduction of other income RMB 835,355.24.
In this reporting period, the deduction of operating income includes:
Deduction of hotel income RMB 17,852,200.26;
Operating income
Deduction of house leasing income RMB 1,602,191.15;
after deduction 4,801,848,887.15 6,860,282,371.30
Deduction of exhibition income RMB 2,647,169.74;
(RMB yuan)
Deduction of custody income RMB 28,301.89;
Deduction of other income RMB 835,355.24.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Section VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences between net profits and net assets disclosed in the financial reports in accordance with Chinese
accounting standards and international accounting standards
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in accordance with Chinese accounting
standards and those disclosed in accordance with international accounting standards in the reporting period.
2. Differences between net profits and net assets disclosed in the financial reports in accordance with Chinese
accounting standards and overseas accounting standards
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in accordance with Chinese accounting standards and those
disclosed in accordance with overseas accounting standards in the reporting period.
Section VIII. Quarterly Key Financial Indicators
Unit: RMB
The First Quarter The Second Quarter The Third Quarter The Fourth Quarter
Operating income 1,212,740,311.93 1,013,964,650.18 1,667,177,321.53 930,931,821.79
Net profit attributable to
shareholders of the listed -463,824,594.93 -427,107,115.40 68,240,054.31 -279,368,162.41
Company
Net profit after deducting non-
recurring profits and losses
-469,727,159.08 -433,912,145.18 62,707,787.41 -272,145,734.65
attributable to shareholders of the
listed Company
Net cash flow from operating
598,889,061.73 434,093,349.59 556,656,455.57 -802,446,908.61
activities
Do the above financial indicators or their total differ significantly from those stated in the Company’s disclosed
quarterly and semi-annual reports?
□ Yes √ No
Section IX. Non-Recurring Profits and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Year 2022 Year 2021 Year 2020 Note
Profits or losses on disposal of non-current assets
-9,500,665.47 -136,455.49 162,043.59
(including offsetting amount for the provision of
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Offcn Education Technology Co., Ltd. 2022 Annual Report
impairment of assets)
Government grants included in current profit or loss
(except those closely related to the Company's normal
business operations, which are in accordance with 27,446,041.19 27,496,339.83 20,128,697.09
national policies and continuously enjoyed in accordance
with certain standards or quotas)
Capital occupation fees charged to non-financial
13,192,187.13
enterprises included in current profit and loss
Profit or loss from entrusting others to invest or manage
8,152,962.12 56,955,660.58 180,223,310.57
assets
Except the effective hedging business related to the
Company’s normal business operations, profits or losses
on changes in fair value arising from the possession of
transactional financial assets and transactional financial -6,026,850.74 -21,490,322.52 20,984,385.76
liabilities; and the investment income from the disposal
of transactional financial assets, transactional financial
liabilities and financial assets available for sale
Custody income from entrusted operations 28,301.89 226,415.10 226,415.09
Other non-operating income and expenses except for the
-4,778,597.36 16,837,313.42 -629,138.85
items above
Other profit or loss items that meet the definition of non-
60,675,060.38 280,283,117.41
recurring profits and losses
Less: Impact on income tax 4,303,758.56 24,442,598.26 76,183,536.19
Impact on minority shareholders’ equity (after tax) 1,319,218.71
Total 11,017,433.07 116,121,413.04 437,068,262.89 --
Details of other profit and loss items that meet the definition of non-recurring profits or losses.
□Applicable √ Not applicable
There is no other profit and loss items that meet the definition of non-recurring profits or losses
Provide explanations for classifying items of non-recurring profits or losses defined or listed in the Explanatory
Announcement No. 1 for Information Disclosures of the Company Issuing Securities Publicly — Non-recurring
Profits and Losses as items of recurring profits or losses.
□ Applicable √ Not applicable
The Company has not classified non-recurring profit or loss items defined or listed in the Explanatory Announcement
No. 1 for Information Disclosures of the Company Issuing Securities Publicly — Non-recurring Profits and Losses
as recurring profit or loss items in the reporting period.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Chapter 3 Management Discussion and Analysis
Section I. The industry situation of the Company during the reporting period
1. The industry is under short-term pressure, but the demand expansion remains unchanged..
In 2022, due to the complex and ever-changing domestic and international situations and multiple unexpected
factors, the demand and supply of the recruitment and training industry have also been greatly affected. However,
with the gradual recovery of the market economy at the end of the fourth quarter, industry demand has been boosted.
Urbanization, equalization of public services, large-scale renewal of working personnel and other elements are major
trends in economic and social development, which lead to a long-term growth in the number of civil servants
recruitment and examinees. In the “14th Five-Year Plan” for Public Services, jointly issued by the National
Development and Reform Commission and other related departments, the goal of continuously promoting the
equalization of basic public services is clarified, and social forces are encouraged to focus on strengthening the supply
of inclusive and standardized services in fields such as elderly care, childcare, education, and medical care. As a
result, the market demand from a wide range of cities, counties, and even towns is further released, and the long-tail
trend of the market will continue to strengthen.
2. The “14th Five-Year Plan” requires that the quality and capacity of education, medical care, elderly
care and other services be greatly improved..
In terms of education, the “14th Five-Year Plan” requires to greatly improve education equality and quality;
promote the popularization of higher education, create more than 60 million new jobs in cities and towns; build,
renovate or expand 20,000 kindergartens to increase enrollments by over 4 million for ordinary families; and build,
renovate or expand more than 4,000 primary and secondary schools. In terms of medical and health care, it requires
to expand disease prevention and control bases, build national and regional medical centers, and strive to upgrade
500 county-level hospitals to meet the facilities and service capabilities of top-tier hospitals. In terms of elderly care
service, 500 districts and counties will be supported in building a model community home elderly care service
network, about 300 training and convalescent institutions will be supported in transformation into inclusive elderly
care institutions, and more nursing beds will be provided for about 1,000 public elderly care institutions. In terms of
childcare service, 150 cities will be supported to develop childcare service with social resource, and more than
500,000 exemplary inclusive childcare enrollments will be added. All of these investments mentioned above will
strongly promote the sustainable growth of the recruitment sectors, especially the recruitment sectors of teachers,
medical staff and community workers.
3. Policy support for vocational education is enhanced.
The year of 2022 is a crucial year for improving the quality and excellence of vocational education, as well as
for tackling the challenges of reform. It is also a milestone year in the development of vocational education. This
year, a series of favorable policies were introduced at the national level to promote the development of vocational
education:
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Offcn Education Technology Co., Ltd. 2022 Annual Report
In May 2022, the newly revised Vocational Education Law of the People’s Republic of China was officially
implemented, marking the first major overhaul of the law since its promulgation and implementation in 1996. This
law specifies the need to coordinate the development of vocational education and general education.
In September 2022, the Ministry of Education and Ministry of Human Resources and Social Security of the
People’s Republic of China officially released the new version of the Introduction to the Majors of Vocational
Education and Occupational Classification System of the People’s Republic of China (2022). The new version of
Introduction to the Majors of Vocational Education unifies the framework of introduction to majors in secondary
vocational schools, vocational colleges, and vocational undergraduate education, covering all 19 major categories of
the new version of the professional catalog, including 1,349 majors in 97 major sub-categories.
In October 2022, the report of the 20th National Congress of the Communist Party of China proposed a new
discourse on vocational education. The report emphasized the need to promote collaborative innovation in vocational
education, higher education and continuing education, to promote integration between vocational education and
general education, between industry and education, and between science and education, and to better position various
types of vocational education. For the first time, the report explicitly included “master craftsmen” and “high-skilled
workers” in the national strategic talent list.
In December 2022, the General Office of the Central Committee of the Communist Party of China and the
General Office of the State Council issued Opinions on Deepening the Reform of Modern Vocational Education
System Construction, proposing strategic tasks including exploring new models of provincial system construction,
creating municipal industry-education consortium and industry-education integration communities, and striving to
complete key work in five areas and complete condition-guarantee work in four areas, including improving key
abilities of running schools, building a team of “Academic-Practical Teachers”, and constructing practice center for
integrating regional industry and education.
4. Main industry characteristics and cyclical characteristics
The institutions of vocational education distribute vastly all over the country. Such situation lifts the
barriers to competition in this field. The demand of vocational education distributes vastly in every province and
every city, especially in the prefecture-level cities and the counties. Almost every county has a vocational high school,
and every prefecture-level city has vocational colleges. The recruitment demand for civil servants also comes in large
numbers from prefecture-level cities and counties. This has given rise to a large number of local small and medium-
sized training institutions, and provided large institutions with a wide space to expand their channel networks, while
making management difficulties and barriers to competition suddenly higher.
The training for civil servant recruitment tests is seasonal. For trainees, the 1-2 years before or after their
graduation are the key period to take training classes for the recruitment tests. The national civil servant test takes
place once a year, and the provincial civil servant examinations basically take place once a year, while a few provinces
will have another joint examination in the second half year. And the recruitment of public institution employees and
teachers are carried out according to the needs of the provinces and cities, which are distributed in each month
throughout the year uncertainly. The documents of recruitment plan are of a great amount.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
This seasonal fluctuation of recruitment has caused major growth bottlenecks for small and medium-sized
training institutions and has also provided large institutions with continuous motivation to constantly challenge the
scale boundary. With the rapid increase in examination categories and business sectors, large institutions will
increasingly enjoy the benefits of scale effects and obtain a more sound resource allocation structure. In recent years,
the momentum of recruitment examinations has switched to new areas such as public institutions, teachers and
comprehensive recruitment, bringing rapid concentration of market share to leading enterprises.
Section II. The Company’s main business during the reporting period
Offcn Edu is a large-scale multi-category vocational education institution, and it is also the pioneer and leader
in the field of public service recruitment examination training in the country. The Company bravely undertakes the
mission of the times, continues to create new markets, and serves the society with kindness and altruism.
Offcn Edu mainly serves knowledge-based employment population including college students, university
graduates, and various professionals, aged 18 to 45. This huge group of hundreds of millions of people is spread
throughout the country, cities and towns at all levels and in all walks of life. Employment and vocational ability
improvement are their two core demands.
For hundreds of millions of knowledge-based people and based on the two core demands, the Company’s main
business covers three major sectors including training for public service recruitment examinations, college and high
institution enrollment examinations and vocational ability enhancement, and it provides more than 100 categories of
comprehensive vocational training service. The Company has more than 1,000 outlets across the country, covering
more than 300 prefecture-level cities.
After a long-term exploration and accumulation, Offcn Edu has owned a large-scale full-time R&D team of
more than 1,600 people, a large-scale teaching team of more than 9,000 teachers, and a staff of more than 20,000
people. Relying on its outstanding team execution and nationwide vertical integrated fast response capability, the
Company has developed into an innovation-driven enterprise platform.
Section III. Analysis of the Company’s core competitiveness
The Company's core competitiveness lies in the formation of an enterprise platform driven by the capability of
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Offcn Education Technology Co., Ltd. 2022 Annual Report
vertical integrated fast response. The key driving factors are as follows:
1. Clustered professional R&D continuously outputs momentum for innovation.
At the beginning of the career, the Company took the lead in carrying out full-time and professional R&D, based
on which it created a brand-new market. Over the past decade, the Company has fostered an expert team with rich
practical experience in R&D and R&D management through front-line teaching practice and adaption to market
upgrading. Under the joint lead of the founding team and the expert team, a full-time R&D team of more than 1,600
people has formed. With the expansion of categories and the involvement of different sectors, the Company's
professional R&D not only achieves the continuous division of labor under the scale effect, but also constantly creates
R&D cluster effect of collaboration between categories, which greatly improves the efficiency of R&D, especially
the grafting efficiency of using stock R&D resources in new categories and new businesses.
2. Vertical integrated fast response capability supports the Company’s sustainable operation structurally and
efficiently.
The high operation efficiency far beyond the general industries is a necessity to realize scale economy and
establish competitive barrier in the decentralized market. Therefore, vertical integrated fast response system and
capability can best adapt to this kind of market environment. In each exam, “Business outlets — Headquarters
command center — Teaching sites” are giving responses and feedback with high frequency every day. Thus,
management and learning effect far above the average can be realized.
Vertical integrated corporate structure can not only realize the high efficiency of operation, but also be
effectively compatible with the management impact brought by rapid business category expansion. So investment in
and innovation on this corporate structure has always been a central part of the management reform. At present, Offcn
Edu has established more than 1,000 business outlets covering 300 prefecture-level cities. Simultaneously, the
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Offcn Education Technology Co., Ltd. 2022 Annual Report
headquarters command center continues to seek the scale effect of management with the help of management reform
and digital operation. In recent years, Offcn Edu has also continuously invested in the construction of large-scale
one-stop bases for food, housing and learning to promote the realization of large-scale factory operation on the
teaching sites.
3. Digital operation forms the enterprise platform with “real-time situational awareness”.
The team’s exploration for digital operation has lasted for more than 15 years, and in recent years, the investment
scale for digital operation infrastructure has increased significantly. One reason is to meet the management needs for
rapid expansion of categories. The other reason lies in the great adaptability of vertical integrated fast response system
to digitization. After the system was integrated with digitization in depth, it generated higher operating efficiency and
significantly improved the foreground and background response frequency from units of days to a level close to “real-
time situational awareness”, which enhanced the Company’s core competitiveness based on speed economy
4. The values of kindness and altruism are ubiquitous and flourishing.
As a knowledgeable staff-intensive vocational education institution, the Company has established a concise and
effective corporate culture in the long journey of arduous entrepreneurship, with the core value of “Be Kind & Do
Right” and advocating altruism. Not only has it become a company system, but also the founding team has taken the
lead to set an example, influenced the staff level by level, and unswervingly implemented it in the operation, making
the values of Offcn Edu ubiquitous and flourishing in the enterprise. This distinctive and tangible corporate culture
allows the Company to maintain strong organizational cohesion.
5. Offcn Edu strives to strengthen the Party's construction to promote the healthy and vigorous development
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Offcn Education Technology Co., Ltd. 2022 Annual Report
of the Company.
From the establishment of the Party committee in 2018 to the founding of the first Party school of non-public-
owned enterprise in 2019, the Party committee of Offcn Edu has fully utilized the Company’s advantages of
knowledge, theory, and technology and actively promoted employees and students to implement the Party’s political
routes, principles, and policies. Meanwhile, Offcn Edu focuses on the integration of the Party building of non-public
enterprises and corporate culture cultivation to promote the healthy and vigorous development of the enterprise.
As of December 31, 2022, the Company had about 5,000 Party members, accounting for more than one-fifth of
the total number of employees.
Section IV. Core business analysis
1. Overview
(1)The Company’s losses have significantly narrowed.
In 2022, the situation in the education and training industry is even more severe than that in 2021. Due to the
complex and ever-changing domestic and international situations and multiple unexpected factors, the development
environment of the education and training industry continues to be under pressure, and the industry remains sluggish.
At the Company level, due to multiple unexpected factors, the Company’s directly operated branches and learning
centers in various regions were closed temporarily, causing significant interference in enrollment and teaching.
On a quarterly basis, the civil servant provincial joint examination in various provinces, originally scheduled
for late March, has been postponed to early July, and there have also been delays in the interview of national civil
servant examinations, teacher recruitment examinations and recruitment examination for public institutions. Those
uncertainties in business environment have had a significant adverse impact on the Company’s business receipts and
recognition of revenue in the first half of the year. But in the third quarter, the Company took various effective
operational measures and optimized management to turn losses into profits. However, in the fourth quarter, due to
travel restrictions, the Company’s face-to-face teaching business was almost completely suspended. Due to rigid
operating expenses such as labor and venue costs, the fourth quarter suffered losses.
However, during the reporting period, although greatly impacted by the harsh market environment, the Company
carried out a series of annual business boost plans such as internal optimization to reduce costs and increase efficiency,
and structural adjustments of products, resulting in a significant reduction in losses of annual performance compared
with that of previous years. In the next stage, the liberalization of policies and the gradual recovery of the economy
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Offcn Education Technology Co., Ltd. 2022 Annual Report
will user in new opportunities for the reconstruction of the global economic order, and will also bring us confidence.
In order to further improve the overall business performance, the Company has launched the “Recovery and
Consolidation Action”, addressing the problems in business management from aspects such as organizational
structure, employee motivation, product innovation, and marketing methods, so as to gradually restore and stabilize
the Company’s performance.
During the current reporting period, the Company achieved a total operating income of RMB 4,824,814,105.43
yuan, a 30.19% year-on-year decrease. Net profit attributable to shareholders of the listed Company was RMB -
1,102,059,818.43 yuan, a decreased loss of 53.49% from the previous year. After deducting non-recurring profits and
losses, net profits attributable to shareholders of the parent company was RMB -1,113,077,251.50 yuan, a decreased
loss of 55.22% from the previous year.
The key operating resources and performance indicators during the reporting period are stated in the table below:
The increase or
decrease at the end
At the end of the of the reporting
Item Indicators At the end of last year
reporting period period from the
end of the previous
year
Directly-operated branches 1,113 1,508 -26.19%
Operating Employees 22,652 36,143 -37.33%
resources R&D personnel 1,694 2,452 -30.91%
Teachers 9,024 14,590 -38.15%
The increase or
decrease in the
The current reporting The same period of last reporting period
Item Indicators
period year from the same
period of the
previous year
Revenue of face-to-face training (RMB
2,880,513,016.89 4,380,182,147.02 -34.24%
yuan)
Revenue of online training (RMB yuan)
1,921,335,870.26 2,480,100,224.28 -22.53%
Business and Number of training participants
3,087,140.00 3,849,035 -19.79%
profits
Operating income (RMB yuan)
4,824,814,105.43 6,911,723,331.79 -30.19%
Net profits attributable to shareholders of
-1,102,059,818.43 -2,369,509,039.00 53.49%
the listed Company (RMB yuan)
(2) Multiple measures were taken to reduce costs and increase efficiency.
16
Offcn Education Technology Co., Ltd. 2022 Annual Report
During the reporting period, in the face of an unfavorable business environment, the Company reasonably
optimized its organizational structure and closed ineffective branches. At the end of the reporting period, the total
number of directly operated branches of the Company was 1,113, a decrease of 395 from 1,508 in 2021 and a year-
on-year decrease of 26.19%. The closure of the branches was also accompanied by the optimization of staff. At the
end of the reporting period, the total number of employees in the Company was 22,652, a decrease of 37.33% on an
annual basis.
In addition, the Company has made efforts to reduce costs and expenses. During the reporting period, the
Company’s total operating costs decreased by 37.63% year-on-year, sales expenses decreased by 35.44% year-on-
year, and management expenses decreased by 28.87% year-on-year. Significant results have been achieved on
controlling expenses.
(3) Vocational education business has achieved phased practical results.
In 2022, the Company integrated internal resources and continued to explore new vocational education
businesses, achieving some practical results in school-enterprise cooperation and deepening the integration between
industry and education. During the reporting period, the Company jointly established majors with colleges in Henan,
Shaanxi, Sichuan, Hunan, and other regions, and the number of trainees has reached nearly 4000. Among them, the
major of AI technology application jointly built with Puyang Petrochemical Vocational and Technical College, the
major of software testing jointly built with Kaifeng Information Engineering School, the major of UI/UE interaction
design jointly built with Shanxi Dachang Vocational High School, the major of animation jointly built with Changsha
Nanfang Professional College, and the major of e-commerce jointly built with Sichuan University Jinjiang College
have all respectively developed into distinctive major of their colleges.
At present, the integration between industry and education, as well as the collaborative education between
schools and enterprises, has not yet formed a stable and mutually beneficial long-term mechanism, and resources
from the demand side of enterprises and from supply side of education are relatively scarce. Therefore, during the
reporting period, the Company sought cooperation with Alibaba.com, New Higher Education Group, German IB
Education, PowerLeader, Huaxia Class and other enterprises in the field of enhancing employment and skill
development to create cost-effective and high-quality supply and drive demand expansion through innovation of
supply side.
2. Revenue and cost
(1) Composition of revenue
Unit: RMB yuan
2022 2021 Increase/ Decrease
Proportion of Proportion of over the previous
Amount Amount
Revenue Revenue year
Revenue 4,824,814,105.43 100% 6,911,723,331.79 100% -30.19%
17
Offcn Education Technology Co., Ltd. 2022 Annual Report
Sectors
Educational 4,801,848,887.15 99.52% 6,860,282,371.30 99.26% -30.01%
training
Others 22,965,218.28 0.48% 51,440,960.49 0.74% -55.36%
Categories of product
Training for Civil
1,923,536,101.12 39.87% 3,368,861,256.89 48.74% -42.90%
Servant Test
Training for Public
879,502,420.01 18.23% 1,019,282,962.72 14.75% -13.71%
Institution Test
Training for
Teachers’ 676,771,588.97 14.03% 802,387,194.18 11.61% -15.66%
Recruitment Test
Training for other
public services test 1,322,038,777.05 27.40% 1,669,750,957.51 24.16% -20.82%
and new businesses
Others 22,965,218.28 0.48% 51,440,960.49 0.74% -55.36%
Regions
Northeast China 495,256,554.30 10.26% 891,663,394.84 12.90% -44.46%
North China 800,112,470.69 16.58% 1,172,797,204.47 16.97% -31.78%
East China 1,301,233,313.99 26.97% 1,687,969,176.80 24.42% -22.91%
Middle China 605,537,171.26 12.55% 850,590,365.27 12.31% -28.81%
South China 449,723,710.15 9.32% 571,708,625.26 8.27% -21.34%
Southwest Region 622,638,791.52 12.90% 907,397,421.66 13.13% -31.38%
Northwest China 527,346,875.24 10.93% 778,156,183.00 11.26% -32.23%
Others 22,965,218.28 0.48% 51,440,960.49 0.74% -55.36%
Sales models
Direct sales 4,824,814,105.43 100.00% 6,911,723,331.79 100.00% -30.19%
(2) Particulars of sectors, products, regions and sales models that account for more than 10% of the operating
revenue or profits
□ Applicable √ Not applicable
(3) Is the Company’s goods sales income greater than that of labor services?
□ Yes √ No
18
Offcn Education Technology Co., Ltd. 2022 Annual Report
(4) Fulfillment of significant sales contracts and purchase contracts signed by the Company as of the reporting
period
□ Applicable √ Not applicable
(5) Composition of operating cost
Categories of industry
Unit: RMB yuan
2022 2021 Year-on-
year
Industries Items Proportion of Proportion of
Amount Amount Increase/
operating costs operating costs
Decrease
Education
Cost of operation 2,958,900,025.02 99.30% 4,945,732,913.85 99.04% 0.26%
training
Others Cost of operation 20,887,285.53 0.70% 47,984,449.73 0.96% -0.26%
Statements
None
(6) Did the scope of consolidation change during the reporting period?
√ Yes □ No
Full name of the subsidiary Proportion of Reason for changes
shareholding (%)
1. Sichuan Offcn Luming Cultural Media Co., Ltd 100.00 New establishment
2. Beijing Offcn Shengjing Education Technology Co., Ltd. 100.00 New establishment
3.Henan Offcn Education Consulting Co., Ltd. 100.00 New establishment
4. Lhasa Offcn Training School Co., Ltd. 100.00 New establishment
5. Tianjin Offcn Technology Co., Ltd. 100.00 New establishment
6. Tianjin Jinnan Offcn Lexue Training School Co., Ltd. 100.00 New establishment
7. Tianjin Baodi Offcn Lexiang Training School Co., Ltd. 100.00 New establishment
8. Tianjin Jizhou Offcn LechengTraining School Co., Ltd. 100.00 New establishment
9. Nantong Sigang Huizhi Technology Co., Ltd. 51.00 New establishment
(7) Major changes or adjustments to the Company’s business, products, or services during the reporting
period
□ Applicable √ Not applicable
(8) Major customers and major suppliers
Information about major customers
Total sales amount of the top five customers (RMB yuan) 536,968.92
19
Offcn Education Technology Co., Ltd. 2022 Annual Report
The ratio of the total sales amount of the top five customers
0.01%
to the total annual sales amount
The ratio of the sales amount of related parties in the sales
amount of the top five customers to the total annual sales 0.00%
amount
Information about the top 5 customers
SN Customer Sales amount (RMB) Ratio to the total annual sales amount
1 Customer 1 120,871.84 0.00%
2 Customer 2 113,592.23 0.00%
3 Customer 3 105,514.56 0.00%
4 Customer 4 104,757.28 0.00%
5 Customer 5 92,233.01 0.00%
Total -- 536,968.92 0.01%
Other information regarding major customers
□ Applicable √ Not applicable
Information regarding major suppliers
Total purchase amount of the top five suppliers (RMB yuan) 117,972,114.27
The ratio of the total purchase amount of the top five suppliers to
8.73%
the total annual purchase amount
The ratio of the purchase amount of related parties in the
purchase amount of the top five suppliers to the total annual 0.00%
purchase amount
Information regarding the top 5 suppliers
SN Supplier Purchase Amount (RMB) Ratio to the total annual purchase amount
1 Supplier 1 59,200,000.00 4.38%
2 Supplier 2 24,888,088.11 1.84%
3 Supplier 3 16,024,439.86 1.19%
4 Supplier 4 11,800,000.00 0.87%
5 Supplier 5 6,059,586.30 0.45%
Total -- 117,972,114.27 8.73%
Other information about major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB yuan
20
Offcn Education Technology Co., Ltd. 2022 Annual Report
Year-on-year
Year 2022 Year 2021 Increase/ Description on major changes
Decrease
Mainly due to the decrease of market
operating expenses and labor expenses
Sales expenses 1,359,096,659.05 2,105,098,912.06 -35.44% with the optimization of sales
personnel, by taking measures to
reduce cost and increase efficiency.
Mainly due to the decrease of
operation and management expenses
and labor expenses with the
Management expenses 935,818,353.08 1,315,643,022.03 -28.87%
optimization of management
personnel, by taking measures to
reduce cost and increase efficiency.
Mainly due to the decrease on bank
Financial expenses 238,521,491.09 491,614,471.98 -51.48% loan interest and financial institution
fees during the current period.
The company's cost reduction and
efficiency increase resulted in a
reduction in expenses, optimization
of R&D personnel, and corresponding
reduction in labor expenses.
R&D expenses 592,208,850.10 901,469,538.57 -34.31%
Mainly due to the decrease of R&D
expenses and labor expenses with the
optimization of R&D personnel, by
taking measures to reduce cost and
increase efficiency.
4. R&D investment
√ Applicable □ Not applicable
Progress of Potential influence on the
Name of Projects Purpose of projects Goals to be achieved
projects Company’s development
Provide different product
Enrich the Company's Enrich the Company's portfolios to enhance
Basic research and Obtained
curriculum system to achieve curriculum system to achieve students’ learning outcome
development of partial
a diversified curriculum a diversified curriculum and to improve the
curriculum system objective
portfolio portfolio Company’s core
competitiveness
Research and By developing platform Obtained By developing platform Promote the deep matching
development of systems and client APPs, partial systems and client APPs, of digital management and
infrastructure for provide technical support for objective provide technical support for vertically integrated fast
21
Offcn Education Technology Co., Ltd. 2022 Annual Report
digital operation the transformation of business the transformation of response system, seek for
digitization business digitization higher level of efficient fast
response with the power of
digital management, and
further enhance the core
competitiveness of the
Company based on speed
economy
R&D staff
Year-on-year Increase/
2022 2021
Decrease
Numbers of R&D staff 1,694 2,452 -30.91%
Proportion of R&D staff 7.48% 6.78% 0.70%
Education background of R&D
—— —— ——
staff
Bachelor degree 1,123 1,665 -32.55%
Master degree 567 778 -27.12%
Others 4 9 -55.56%
Age of R&D staff —— —— ——
Below 30 years old 523 1,052 -50.29%
30-40 years old 1,101 1,344 -18.08%
Above 40 years old 70 56 25.00%
Investments in R&D
Year-on-year Increase/
Year 2022 Year 2021
Decrease
R&D investment amount
592,208,850.10 901,469,538.57 -34.31%
(RMB yuan)
The proportion of R&D
12.27% 13.04% -0.77%
investment in revenue
Amount of capitalized R&D
0.00 0.00 0.00%
investment (RMB yuan)
The proportion of Capitalized
R&D investment in R&D 0.00% 0.00% 0.00%
investment
Reasons and effects of major changes in the composition of the Company's R&D personnel
□ Applicable √ Not applicable
22
Offcn Education Technology Co., Ltd. 2022 Annual Report
Reason for a significant change of the proportion of total R&D investment in revenue from that of the last year
□ Applicable √ Not applicable
Reason and statement for the significant change in capitalization rate of R&D investment
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB yuan
Year-on-year
Item Year 2022 Year 2021
Increase/ Decrease
Sub-total of cash inflows from
5,921,228,306.58 5,344,505,574.24 10.79%
operating activities
Sub-total of cash outflows from
5,134,036,348.30 9,442,467,123.14 -45.63%
operating activities
Net cash flows from operating
787,191,958.28 -4,097,961,548.90 119.21%
activities
Sub-total of cash inflows from
476,398,474.82 9,419,573,425.23 -94.94%
investing activities
Sub-total of cash outflows from
223,604,195.85 7,679,034,155.42 -97.09%
investing activities
Net cash flows from investing
252,794,278.97 1,740,539,269.81 -85.48%
activities
Sub-total of cash inflows from
959,240,000.00 4,569,000,000.00 -79.01%
financing activities
Sub-total of cash outflows from
3,588,146,347.44 6,191,808,200.47 -42.05%
financing activities
Net cash flows from financing
-2,628,906,347.44 -1,622,808,200.47 -62.00%
activities
Net increase in cash and cash
-1,588,920,110.19 -3,980,230,479.56 60.08%
equivalents
Main influencing factors of major year-on-year changes in relevant data
□ Applicable √ Not applicable
Reason for significant differences between the net cash flow from operating activities and the net profit of the Company during the
reporting period
□ Applicable √ Not applicable
23
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section V. Non-core business analysis
√ Applicable □ Not applicable
Unit: RMB yuan
Proportion of
Amount Reason Sustainable or not
Total Profit
Investment income 9,804,270.34 -0.76% Uncertain
Gains and losses
from changes in fair -6,026,850.74 0.47% Uncertain
value
Non-operating
4,778,597.36 -0.37% Uncertain
expenses
Section VI. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: RMB yuan
End of Year 2022 Beginning of Year 2022
Proportion
Proportion Proportion
of increase/ Major Changes
Amount of total Amount of total
decrease
assets assets
Mainly due to the decrease in
Monetary
385,328,555.74 4.80% 1,970,361,272.64 19.12% -14.32% the Company's business
fund
receipts
Accounts No major changes during this
37,323,682.88 0.46% 40,374,842.27 0.39% 0.07%
receivable period
Due to the transfer of leasing
Investment assets of the parent company
450,260.54 0.01% 644,936,541.46 6.26% -6.25%
properties back to fixed assets during this
period
Long-term No major changes during this
equity 46,835,952.63 0.58% 46,850,364.40 0.45% 0.13% period
investment
Due to the transfer of leasing
assets of the parent company
Fixed assets 1,970,536,339.75 24.55% 1,770,372,338.85 17.18% 7.37%
back to fixed assets during this
period
24
Offcn Education Technology Co., Ltd. 2022 Annual Report
Construction No major changes during this
323,273,645.99 4.03% 294,785,678.31 2.86% 1.17%
in progress period
Right-of-use No major changes during this
1,112,202,447.58 13.86% 1,342,280,387.08 13.03% 0.83%
asset period
Mainly due to the repayment of
Short-term
3,152,945,812.59 30.60% -30.60% bank borrowings during this
borrowings
period
Mainly due to the advanced
Contract provincial joint examination of
3,949,799,538.71 49.20% 3,063,721,290.28 29.73% 19.47%
liabilities civil servant recruitment in the
previous year
Lease No major changes during this
508,752,253.77 6.34% 635,691,184.87 6.17% 0.17%
liabilities period
A high percentage of overseas assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB yuan
Provisi
Profits and
Accumulate
on for
losses from the Amount of Amount of
d changes in
impair
Opening changes in fair purchase in sales in the Closing
fair value
Item ment Others
balance value in the current current balance
attributed to in
current period period
equity current
period
period
Financial
assets
1.Transaction
al financial
assets
(excluding 376,986,621.74 -6,026,850.74 116,241,028.16 459,520,799.16 27,680,000.00
derivative
financial
assets)
4. Other
equity 130,400,000.00 -9,100,000.00 121,300,000.00
investment
25
Offcn Education Technology Co., Ltd. 2022 Annual Report
Sub-total of
financial 507,386,621.74 -6,026,850.74 -9,100,000.00 116,241,028.16 459,520,799.16 148,980,000.00
assets
Total 507,386,621.74 -6,026,850.74 -9,100,000.00 116,241,028.16 459,520,799.16 148,980,000.00
Financial
0.00 0.00
liabilities
Other changes
None
Whether the Company’s major assets measurement attributes have significant changes during the reporting period
□ Yes √ No
3. Assets with restricted rights as of the end of the reporting period
Unit: RMB
Item Book value at the end of the period Reasons for restriction
Security deposit, dormant account/without
Monetary funds 4,442,656.37
reconciliation, judicial freeze and so on
Total 4,442,656.37
Section VII. Analysis of Investments
1. General situation
√ Applicable □ Not applicable
Investment amount in the reporting Investment amount in the same period of the
Variation
period (RMB) previous year (RMB)
155,982,291.97 7,079,571,718.12 -97.80%
2. Significant equity investment obtained during the reporting period
□ Applicable √ Not Applicable
3. Significant non-equity investment ongoing during the reporting period
□ Applicable √ Not Applicable
26
Offcn Education Technology Co., Ltd. 2022 Annual Report
4. Financial assets investment
（1）Securities investment
□ Applicable √ Not applicable
There is no securities investment during the reporting period of the company.
（2）Derivatives investment
□ Applicable √ Not Applicable
There is no derivatives investment during the reporting period of the Company.
5. Use of raised funds
□ Applicable √ Not Applicable
There is no use of raised funds during the reporting period of the Company.
Section VIII. Sale of major assets and equity
1. Sale of major assets
□ Applicable √ Not Applicable
The Company did not sell any major assets during the reporting period.
2. Sale of major equity
□ Applicable √ Not Applicable
Section IX. Analysis of major holding and participating companies
√ Applicable □Not Applicable
Major subsidiaries and shareholding companies that affect the Company's net profit by more than 10%
Unit: RMB yuan
Company name Beijing Offcn Education Technology Co., Ltd
Company type Subsidiary
Major business Educational technology consulting, technology development, technical services, technology promotion,
27
Offcn Education Technology Co., Ltd. 2022 Annual Report
technology transfer; educational consulting; cultural consulting; corporate management consulting; corporate
investment consulting;computer technology training (not for national admissions); public relations services;
hosting exhibition activities; organizing cultural and artistic exchange activities (excluding performances);
conference services;design, production, agency, release of advertisements; publication wholesale; publication
retail; operating telecommunications business; human resource services; radio and television program production;
engaging in Internet cultural activities.(Market entities independently choose operating projects and carry out
operating activities in accordance with the law; engage in Internet cultural activities, publication wholesale,
publication retail, telecommunications business, radio and television program production, human resource services,
and projects subject to approval in accordance with the law, and after approval by relevant departments, carry out
operating activities in accordance with the approved content; shall not engage in operating activities that are
prohibited or restricted by the state and this city’s industrial policies.)
Registered capital 90,000,000.00
Total assets 7,077,306,933.56
Net assets 53,157,808.82
Revenue 4,823,330,961.90
Operating profit 1,187,961,691.08
Net profit 1,008,816,015.96
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not Applicable
Major holding and participating companies
The Company's wholly-owned subsidiary, Beijing Offcn Education Technology Co., Ltd., achieved a revenue of RMB 4,823.30
million in 2022, a decrease of 29.95% from 2021. The total operating cost in 2022 was RMB 6,056.08 million , a decrease of 37.77%
from 2021. The operating loss in 2022 was RMB 1,008.82 million, a decrease of 55.26% from the loss in 2021. The loss in 2022
mainly resulted from the postponement of the provincial joint examinations, periodic fluctuations of examinations in the education and
training industry, tightening demand, and weakening willingness to attend training, etc. At the same time, Local outlets and learning
centers have been closed down in stages, and offline training has been stopped, which has affected the company’s business
development and performance achievement to a great extent, further resulting in the reduction of main business revenue. Meanwhile,
the company strove to reduce all costs and expenses, adjusted the salary structure, evaluated the staff performance strictly, and thus
effectively controlled the personnel expenses; the number of class and the marketing activities were reduced, thus reducing the
expenses of hotel site and marketing. Because the reduction in total operating costs was greater than the reduction in operating
revenue, the company’s operating loss in 2022 has decreased compared with the loss in 2021.
Section X. Structured entities controlled by the Company
□ Applicable √ Not Applicable
28
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section XI. Forecast of the Company’s future development
1. Trends of the industry’s future development
(1) The status of vocational education in education system is enhancing..
In recent years, China’s industrial structure is undergoing transformation and upgrading. The government has
clearly proposed that great efforts should be made to promote the development of emerging industries with strategic
importance, and the proportion of modern service industry should be further increased. With rapid changes of the
industrial structure, the requirements from enterprises for the professional competence and comprehensive quality of
technical personnel have gradually increased. New requirements for their practical ability have also been put forward.
Traditional academic education can’t fully meet the new requirements.
Besides, the government continues to enhance the efforts to develop vocational education. From the
promulgation and implementation of the newly revised Vocational Education Law of the People’s Republic of China
in 2022 to the issuance of the Opinions on Deepening the Reform of Modern Vocational Education System
Construction, the report of the 20th National Congress of the Communist Party of China in 2022 emphasized “We
will promote collaborative innovation in vocational education, higher education, and continuing education, promote
integration between vocational education and general education, between industry and education, and between
science and education, and better position various types of vocational education”, and clearly included “master
craftsmen” and “highly-skilled workers” into the ranks of national strategic talents. This will strongly promote the
status of vocational education in the education system from the policy and institutional level.
(2) The continuous increase in the number of college graduates is an important indicator of the employment
situation.
Usually, a faster growing economy will bring a higher level of employment. In recent years, economic growth
has slowed down, but the number of university graduates has continued to grow. It reached 11.58 million this year,
setting a new historical record.
College graduates account for more than half of the annual demand of over 15 million new jobs, and the bonus
period for the export of cheap rural labor has come to an end. The expansion of university enrollment has obviously
and directly accelerated the arrival of the turning point. The labor shortage of farmer laborers coexists with the
difficult employment of college graduates. The demand for training for public service recruitment examination
continues to rise.
In addition, aiming to maintain sustained economic growth, realize transformation and upgrading, and overcome
the “middle-income trap”, it is urgently necessary to carry out industrial upgrading for middle and high-end
vocational education in order to improve the vocational skills and professional literacy of knowledge-based
employees.
(3) The serious shortage of high-quality supply is the main contradiction that restricts the development of the
29
Offcn Education Technology Co., Ltd. 2022 Annual Report
vocational education industry.
At present, the foundation of vocational education is still weak. Due to the extremely low concentration of the
industry and the limited number of large vocational education institutes and enterprises, the supply of high-quality
vocational education is seriously insufficient. With the improvement of industry concentration and the continuous
development of leading vocational education enterprises, core business elements such as R&D, management and
marketing of vocational education will gradually break through the original boundaries of the industry, create high-
quality and cost-effective supplies, drive demand-side volume with supply-side innovation and push the industry into
a new track of rapid development.
(4) The urbanization wave will promote the continuous improvement of public service and the number of
employees of the public service sector will continue to expand.
The process of urbanization is a key and long-term driver to China’s employment market growth. At present,
the urbanization rate has exceeded 60%. Urbanization will expand the public financial expenditure and the number
of employees in the public service sector. China’s urbanization rate remains in a high-speed growth range of 30% to
70%. It is likely to continue to develop for nearly 20 years to achieve an urbanization rate of more than 80% in
developed countries. Meanwhile, continuous urbanization may also lead to seriously inadequate public service supply
in cities, which will also impose higher requirements on the quality of public services.
Compared with public products such as infrastructure, public services are labor-intensive inputs, especially the
basic public services of local governments. A large number of employees can be hired while public service
capabilities are being improved. China’s long-term goal for 2035 includes the equalization of basic public services,
and the main goal of economic and social development during the “14th Five-Year Plan” period requires a significant
increase in the level of equalization of basic public services. According to the research by the National Academy of
Governance, the employed population in the public sector in developed countries accounts for about 10% to 20% of
the workforce, which is even higher than 20% in Canada and Hong Kong. However, the employed population in the
current public sector only accounts for 5% in China.
With the deepening of urbanization, the proportion of employed population in China’s public sector will
gradually increase; and the market of training for public service recruitment examination will also maintain a long-
term steady growth, which has been partially proved by the astonishing demands on the training for teacher
recruitment examination and recruitment examination in medical treatment and public health in recent years.
2. Strategic development direction of the Company
(1) Cement the leadership position in recruitment training market and take steady development as the
first priority
The industry is currently facing significant challenges due to the complex and volatile domestic and
30
Offcn Education Technology Co., Ltd. 2022 Annual Report
international situation and the repeated impact of multiple factors that have exceeded expectations, but this does not
change our long-held view of the long-term trend. Urbanization, equalization of public services, the natural renewal
of the in-service staff in large scale and the stabilization of employment are the main trends of the economic and
social development, which means that the long-tail effect of the recruitment market will continue to strengthen.
Under the new industry context, the Company will innovate and optimize the products proactively, respond to the
demand of new-added employment more quickly and meet the demand more properly, transfer from the pursuit of
high growth to sustainable and sound development, balance business development and profitability and cement the
leadership position in recruitment training market.
(2) Maintain effective R&D investment and strengthen the advantages of the leading vocational
education innovation platform.
R&D shall always be regarded as the fundamental driving force for all undertakings. The Company will
resolutely carry out long-term and heavy investment in R&D and attract outstanding talents to participate in R&D.
With R&D, the Company will drive innovation from the bottom level, make systematic improvement, break
through industry boundaries, and establish competition barriers, so as to perfect its current major businesses,
expand its new businesses, and remain to be a leading vocational education innovation platform.
(3) Further integration of technology and business for digital transformation of operations
Years of accumulation of independent IT development is the Company’s valuable wealth, enabling the
Company to calmly cope with the new opportunities and challenges brought by the development of science and
technology. The Company will constantly increase investment in technology infrastructure and technical teams and
enhance responsiveness of technology through technological middle platform and agile development to expand
development output. On this basis, the Company will continue to accelerate digital transformation of operations and
fully integrate the productivity of technology with operation system to facilitate business innovation, and improve
the level of intelligence in operation and teaching, thus supporting vertical integrated fast response capability with a
wider range and on a larger scale.
(4) Focus on the core market and improve service capabilities
Under the influence of changes in consumer demand and market environment, consumers' consumption
concepts have also undergone certain changes, and consumers will turn to products with more competitive prices
when choosing commodities. In order to meet market demand, in 2023, the Company will continue to focus on core
categories such as postgraduate entrance examinations, IT and vocational education. Through full investment in core
links of operation such as teaching and research, channels and management, the Company will improve service
quality and create cost-effective products to meet market demand..
(5) Continue to optimize channels and strengthen core areas
According to the business development strategy, the Company will continue to rationally optimize the channel
network, close ineffective outlets and channel superior resources into strengthening core area under the premise of
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Offcn Education Technology Co., Ltd. 2022 Annual Report
ensuring the stability of the main body of the business network. At present, the Company’s more than 1,000 directly-
operated outlets and learning centers cover more than 300 cities across the country.
3. Major business plan of the Company in 2023
(1) Optimize the organizational structure and enhance the value of human resources
Organizational change must support the growth of the business. In 2023, the Company will adjust the
organizational structure, grant regional companies more autonomous rights of management and enable each small
organization and unit to have greater autonomy when making operational decisions. In addition, the Company has
launched the “Common Wealth” campaign, where regional companies can carry out “one-to-one” pairing support to
improve the output of HR efficiency by continuously optimizing organizing ability.
(2) Adjust the incentive policy to stimulate the vitality of employees
In 2023, the Company will formulate an incentive policy that is more suitable for its own characteristics, revise
the assessment system for each sequence of personnel and promote the salary incentive model of “more work, more
pay”, so that employees will have more enthusiasm and resources, and possess better capabilities to respond to market
demand. At the same time, the Company will regularly give regional companies and employees of each sequence
special training and management training, so that the team can serve the Company’s business development in a more
agile manner.
(3) Innovate products and services to enhance power of core product
As the difficulty of the exam increases and the competition becomes more intense, students increasingly need
more time to prepare for exams. This places very high demands on the comprehensive strength of training institutions.
In 2023, on the basis of increasing the proportion of cash-paid classes in 2022, the Company will innovate products
of individual categories by taking advantage of large-scale R&D and will also develop new products to meet different
demands from different regions and students based on the front-line teaching and training experience. In addition,
the Company will improve the environment of large-scale one-stop bases for food, lodging and learning in each
region to provide higher-quality teaching services.
(4) Consolidate online and offline integration and strengthen digital marketing model
The Company will continue to increase investment in online and OMO, and further expand the leading edge of
online and offline integrated courses on the basis of digitalizing main course products, so that more students can
obtain the convenience of online learning and the effectiveness of face-to-face learning at the same time. As channels
become increasingly fragmented, the Company will make targeted additions to its channel strategy. In addition to
our nationwide coverage of directly operated branches and learning centres, we will expand into various new social
channels in 2023, according to the frequency of consumer contact.
(5) Cement the foundation and continue to explore new business of vocational education
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Offcn Education Technology Co., Ltd. 2022 Annual Report
With the Company’s gradual exploration of new vocational education business last year, the integration of
platform resources and business has reached a new level and the output capacity of the vocational education team
has been greatly improved. However, the market is still in the stage of lacking high-quality supply, therefore, on the
basis of the great progress made in 2022, this year the Company will continue to explore new market opportunities
arising from China’s industrial upgrading, make greater investment in product innovation and resource allocation,
improve the level of intelligent operation and teaching, and drive vocational education business to make
breakthrough.
4. Possible Risks
(1)Industry Policy Risks
The boom of the vocational education industry has a high correlation with the policy environment, and is easily
influenced by the vocational education policy. In recent years, in order to support the development of the vocational
education industry, the state has successively issued a number of industry support and encouragement policies.
However, it will take time for the corresponding supporting laws, regulations and rules to be fully implemented, and
there is still a certain degree of uncertainty in the future. If there are major changes and adjustments to relevant laws,
regulations or industrial policies in the future, it may have an impact on the development trend of the vocational
education industry, which may affect the Company’s future business development and performance. In addition, the
Company has many branches and wide distribution of training venues. It is not ruled out that in the future, relevant
regulatory authorities of provinces, autonomous regions and municipalities will issue more stringent regulations for
the local education and training industry, which may affect the Company’s operations in the region.
Risk response: Each branch of the Company has established a tracking research policy team to conduct in-
depth analysis of various policies that have been issued. At the same time, the Company’s deep IT independent
development and accumulated strength and effective digital transformation of operations simultaneously ensure the
efficiency of information feedback. Through the upgrading and transforming of basic systems such as ERP, CRM,
and teaching platforms, it is possible to obtain, perceive and predict the direction and trend of relevant policy changes
in various places in a timely manner, make arrangements and adjustments in advance, avoid relevant policy risks,
and take advantage of industry policies to help the Company’s business development.
(2) Market Risks
The vocational education industry is encouraged by national policies, which will inevitably lead to an increasing
influx of capital into the vocational education and training industry, resulting in increasingly fierce competition in
the market, and the Company’s business may face the impact of new competitors. At the same time, due to the
macroeconomic environment, the training industry is experiencing cyclical fluctuations, shrinking demand and
weakening willingness of trainees to participate in training, and the industry is showing signs of overall contraction,
which poses a test to the Company’s business. Therefore, in the long run, the resilience of market demand is strong,
33
Offcn Education Technology Co., Ltd. 2022 Annual Report
but it cannot be ruled out that the short-term decline due to various factors will affect the candidates’ enthusiasm for
the exam, resulting in the decline of market demand.
Risk response: In response to the above risks, the Company will continue to maintain effective investment in
research and development, and also in technology infrastructure and technical teams to integrate the productivity of
technology into the business system and promote business innovation and the quality of products and services. The
Company will optimize the product structure timely, refine the product quality and innovate the service model
according to the demand of market and trainees, to improve the operating profitability. At the same time, based on
the operating conditions, the Company will seek the optimum balance between products, staff and channels and
strengthen the control over cost to enhance the Company’s capability of fighting against market risks.
(3)Management Risks
With the continuous expansion of the Company’s business categories and branches, the Company must face the
risk of mismatch between expansion and management capabilities. With the continuous increase of costs such as
venue leasing and labor, the pursuit of rapid development will lead to a decline in the current profit level and profit
margin.
Risk response: The Company will continuously optimize the vertically integrated and rapid response
management system to enable the system to have rapid resource allocation capabilities and information feedback
mechanism, which can bring a larger management radius, higher delivery efficiency, enhance the work collaboration
of large-scale employees, and improve management and operation efficiency. At the same time, the Company’s R&D
capabilities and channel advantages accumulated over years provide strong support for the Company to expand new
categories and form a diversified product matrix.
Section XII. Reception of research, communication, interview and other activities
√ Applicable □ Not Applicable
Type of
Ways of Reception Discussion content and
Date Place reception Index of the survey
reception object the materials provided
object
Interpretation of the The "Investor
Company's annual Relations Activity
performance in 2021, Record Form (2022-
May 11, 2022 rs.p5w.net Other Other All investors business development, 001)" disclosed by
introduction of the the Company on
Company's strategic plan, www.cninfo.com.cn
and etc. on May 11, 2022
34
Offcn Education Technology Co., Ltd. 2022 Annual Report
Chapter 4 Corporate Governance
Section I. Basic Information of Corporate Governance
During the reporting period, in strict accordance with relevant laws and regulations, and rules and regulatory
documents from supervision authorities, i.e. Company Law, Securities Law, Code of Corporate Governance for
Listed Companies in China, Stock Listing Rules of Shenzhen Stock Exchange, and Listed Companies Self-Regulatory
Guidelines No.1 — Standardized Operation of the Listed Companies on Main Board, the Company, based on its
actual situation, consistently improved its corporate governance structure and internal control system, and enhanced
the level of corporate governance. The Company’s overall operation, corporate governance system and information
disclosure were sound and standardized. The actual conditions of corporate governance met the requirements of the
regulatory documents with respect to the corporate governance of listed companies issued by CSRC.
1. Shareholders and the Shareholders’ General Meeting
In strict accordance with Articles of Corporation and Rules of Procedure for Shareholders’ General Meeting as
well as other applicable regulations and requirements, the Company standardized the gathering, convening,
deliberations and voting procedures of its shareholders’ general meetings and hired legal advisers to issue legal
opinions for the shareholders’ general meetings. The Company treats all shareholders equally and especially ensures
that the minority shareholders enjoy equal status. During the reporting period, the Company convened two
shareholders’ general meetings in total, and all resolutions of the shareholders’ general meetings were faithfully
implemented by the board of directors.
2. The relationship between the Company and the controlling shareholders
The controlling shareholders of the Company exercised the rights and obligations of the investors in strict
accordance with Company Law. During the reporting period, there was neither any direct or indirect interference with
the Company’s decision-making and operations beyond the Shareholders’ General Meeting by the controlling
shareholders nor a situation where the controlling shareholders damaged the legitimate rights and interests of other
shareholders of the Company. There wasn’t any guarantee provided by the listed Company for the controlling
shareholders or their subsidiaries.
3. Directors and the Board of Directors
The Company elected candidates for the Board of Directors in strict accordance with relevant laws and
regulations i.e. Company Law and Articles of Corporation. The number of directors and composition of the Board of
Directors met the requirements of laws and regulations. The Board of Directors of the Company convened Board
sessions in strict accordance with the relevant provisions of Articles of Corporation, Regulations of Appointment and
Proceedings for Independent Directors and Rules of Procedure for the Board of Directors. All directors of the
Company attended the Board sessions on time, fulfilled their duties diligently, scrupulously reviewed various
proposals and made scientific and reasonable decisions on major matters of the Company to effectively safeguard
the interests of the Company and the legitimate rights and interests of all shareholders. Under the Board of Directors
of the Company are four professional committees: Strategy and Investment Committee, Nomination Committee,
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Audit Committee and Remuneration and Appraisal Committee. With clearly defined powers and responsibilities and
effective operations, each committee gave full play to its professional functions and provided scientific and
professional opinions for the decision-making of the Board of Directors.
4. Supervisors and the Supervisory Committee
The Company elected candidates for the Supervisory Committee in strict accordance with relevant laws and
regulations i.e. Company Law and Articles of Corporation. The number of supervisors and composition of the
Supervisory Committee met the requirements of laws and regulations. The Supervisory Committee of the Company
convened its sessions in strict accordance with the relevant provisions of Articles of Corporation, Rules of Procedure
for the Supervisory Committee, and other related regulations. All supervisors of the Company attended the
supervisory sessions on time, fulfilled their duties faithfully, provided supervision and opinions for major issues,
financial status, etc., and safeguarded the legitimate rights and interests of the Company and shareholders.
5. Relevant stakeholders
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders,
constantly strengthens the awareness of social responsibility and enhances communication with all parties to
coordinate and balance the interests of the society, government, shareholders, the Company itself, and its employees.
The Company adheres to the principle of mutual benefits and win-win results with relevant stakeholders and jointly
promotes the Company’s harmonious, steady and sound development.
6. Information disclosure and transparency
In strict accordance with the requirements of Regulations Concerning Information Disclosure Management,
Regulations Concerning Investors Relations Management and Regulations of Registration and Management System
on Learners of Insider Information, the Company designates the Secretary of the Board to be responsible for
information disclosure, receiving shareholders’ visits and consultations and to disclose the relevant information in an
authentic, accurate, complete, timely and fair manner in accordance with relevant regulations so as to ensure that all
shareholders of the Company can have equal access to the information.
7. Performance appraisal and incentives
During the reporting period, the Company constantly improved working performance evaluation system and
incentive mechanism. The appointment and remuneration of the Company’s directors, supervisors and senior
executives were open and transparent, which met the requirements of relevant laws and regulations. The Company
regularly and comprehensively evaluated employees’ working skills, values and their recognition of corporate culture
by an evaluation method based on quantitative indicators of performance and qualitative standards to ensure that both
the work results and growth of employees were given attention to.
8. Investor relations management
During the reporting period, the Company constantly strengthened the management of investor relations and
safeguarded the legitimate rights and interests of the Company’s shareholders. The Company designates the Secretary
of the Board as the head of investor relations management to organize and implement the daily management of
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Offcn Education Technology Co., Ltd. 2022 Annual Report
investor relations, and promptly answer investors’ questions through phone calls, emails, interactive platform and
online briefings of business performance, which ensures that all the investors have equal access to the Company’s
information and fully guarantees investors’ rights to know.
Are there any material differences between the Company’s actual governance status and the laws, administrative
regulations and rules on the governance of listed companies issued by CSRC?
□ Yes √ No
There is no material difference between the Company’s actual governance status and the laws, administrative
regulations and rules on the governance of listed companies issued by CSRC.
Section II. Details of the Company’s separation from its controlling shareholders and actual
controllers to ensure the Company’s independence on assets, personnel, finance, organization
and business affairs
The Company standardized its operation, established and improved corporate governance structure in strict
accordance with Company Law, Securities Law, Articles of Corporation, and other relevant laws and regulations.
The Company is independent in business, personnel, assets, organization and finance affairs from the controlling
shareholders, actual controllers and other enterprises under their control, and is capable of operating independently
with its complete and independent business.
1. Business independence: With independent and complete business structure, the Company is capable of
running market-oriented business independently. There is no horizontal competition among the Company, controlling
shareholders, and other enterprises under their control.
2. Personnel independence: The Company has independent personnel. It has set up various independent
departments, including R&D, sales, administration, finance and operation management divisions, and established
independent human resources and payroll management system. The directors, supervisors and senior executives of
the Company do not hold any posts prohibited by regulations in other companies with the same or similar business
to the Company’s.
3. Assets Completeness: The property relations between the Company and the controlling shareholders are clear.
No assets, funds, or other resources owned by the Company are illegally occupied or controlled by the controlling
shareholders.
4. Institutional independence: The Company has set up a sound organization system. General Meeting of
Shareholders, Board of Directors, Supervisory Committee, management and all the functional departments operate
independently from each other. The Company as well established corresponding internal management and control
system to make each department have clearly defined responsibilities, perform its own duties and cooperate with
each other, thus composing an organic whole and guaranteeing the legal operation of the Company. There is no
subordinate relationship between the Company’s institutions and the functional departments of the controlling
shareholders.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
5. Financial independence: The Company has set up complete and independent financial department equipped
with adequate full-time financial accountants, established independent accounting calculation system and financial
management system, and independently opened bank accounts, paid taxes and made financial decisions. There is no
interference from the controlling shareholders in the financial management of the Company.
Section III. Horizontal Competition
□ Applicable √ Not applicable
Section IV. Annual general meeting and extraordinary general meetings convened during the
reporting period
1.Particulars about the shareholders’ general meeting during the reporting period
Investor Convening Disclosure
Session Type Resolution
Participation % date date
For details, refer to the
2022 First
Announcement on Resolutions of the First
Extraordinary Extraordinary January 28, January 29,
75.06% Extraordinary General Meeting of
General General Meeting 2022 2022
2022(No. 2022-012) disclosed on
Meeting
www.cninfo.com.cn.
For details, refer to the Announcement on
2021Annual
Annual General June 27, June 28, Resolutions of the Annual General Meeting
General 78.27%
Meeting 2022 2022 of 2021 (No. 2022-052) disclosed on
Meeting
www.cninfo.com.cn.
2. Extraordinary general meetings requested by preferred shareholders with restored voting rights:
□ Applicable √ Not applicable
Section V. Directors, supervisors and senior executives of the Company
1. Basic information
Quantity Quantity
Shares Other Quantity
of shares of shares Reasons
held at the increased of shares
increased decreased for
Tenure Start date beginning or held at the
Name Title Gender Age End date in the in the increase or
status of the decreased end of the
current current decrease
period changes period
period period of shares
(share) (share) (share)
(share) (share)
38
Offcn Education Technology Co., Ltd. 2022 Annual Report
Chairman Reduce
Li February 1, January 27, 1,131,41 158,803, 972,611,
of the Incumbent Male 47 shareholdi
Yongxin 2019 2025 5,121 785 336
Board ng
Director, Reduce
Wang February 1, January 27, 852,885, 92,110,0 760,775,
general Incumbent Male 47 shareholdi
Zhendong 2019 2025 418 00 418
manager ng
February 1, January 27,
Shi Lei Director Incumbent Male 47
2019 2025
February 1, January 27,
Yi Ziting Director Incumbent Female 49
2019 2025
Wang Independe February 1, January 28,
Resigned Male 46
Qiang nt director 2019 2022
Independe February 1, January 28,
Tong Yan Resigned Female 46
nt director 2019 2022
Independe January 28, January 27,
Jiang Tao Incumbent Male 49
nt director 2022 2025
Chen Independe January 28, January 27,
Incumbent Female 58
Yuqin nt director 2022 2025
Zhang Independe February 1, January 27,
Incumbent Male 45
Xuanming nt director 2019 2025
Chairman
of the
Yu July 22, January 27,
Supervisor Incumbent Female 57
Hongwei 2019 2025
y
Committee
February 1, January 27,
He Di Supervisor Incumbent Male 46
2019 2025
February 1, January 27,
Li Wen Supervisor Incumbent Female 44
2019 2025
Deputy
Wang February 1, January 28,
general Resigned Male 60
Xuejun 2019 2022
manager
Deputy
February 1, January 27,
He Youli general Incumbent Male 48
2019 2025
manager
Chief
February 1, January 27,
Luo Xue Financial Incumbent Male 55
2019 2025
Officer
Secretary
Gui Incumbent Male 52 February 1, January 27,
of the
39
Offcn Education Technology Co., Ltd. 2022 Annual Report
Hongzhi Board, 2019 2025
deputy
general
manager
1,984,30 0 250,913, 0 1,733,38
Total -- -- -- -- -- -- --
0,539 785 6,754
During the reporting period, is there any resignation of directors and supervisors or dismissal of senior executives
during their term of office?
□ Yes √ No
Changes of directors, supervisors, and senior executives
√ Applicable □ Not Applicable
Name Title Type Date Reasons
Resignation Because of his expiration of appointment, Mr.
Independent
Wang Qiang after expiration January 28, 2022 Wang Qiang no longer serves as an independent
director
of appointment director of the Company.
Resignation Because of her expiration of appointment, Ms.
Independent
Tong Yan after expiration January 28, 2022 Tong Yan no longer serves as an independent
director
of appointment director of the Company.
Resignation Because of his expiration of appointment, Mr.
Deputy general
Wang Xuejun after expiration January 28, 2022 Wang Xuejun no longer serves as the deputy
manager
of appointment general manager of the Company.
According to the election results of the
Company’s 2022 First Extraordinary
Independent General Meeting and the First Meeting of the
Jiang Tao Elected January 28, 2022
director Sixth Board of Directors, Mr. Jiang Tao was
elected as an independent director of the
Company’s Sixth Board of Directors.
According to the election results of the
Company’s 2022 First Extraordinary
Independent General Meeting and the First Meeting of the
Chen Yuqin Elected January 28, 2022
director Sixth Board of Directors, Ms. Chen Yuqin was
elected as an independent director of the
Company’s Sixth Board of Directors.
2. Resumes of key personnel
The professional background, main working experience and their main duties in the Company of current directors,
supervisors, and senior executives.
(1)Directors and independent directors
Mr. Li Yongxin, born in 1976, is a Chinese citizen and has no permanent residency abroad. He received his
bachelor’s degree in law from the Department of Political Science and Public Administration, Peking University in
1999. Mr. Li founded his own company in education industry in the same year and started to focus his business on
training for public service recruitment examination in the year of 2000. Up to now, he has accumulated nearly 20
years of experience in R&D, teaching and business management in the field of training for public service recruitment.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
From 2005 to 2010, he served as the general manager of Beijing Offcn Online Education Technology Co., Ltd. From
2010 to November 2015, he was the president of Beijing Offcn Future Education Consultancy Co., Ltd. From
November 2015 to December 2018, he served as the Chairman of Board of Beijing Offcn Education Technology
Stock Co., Ltd. From December 2018 to present, he has served as the Chairman of Board of Beijing Offcn Education
Technology Co., Ltd. From February 2019 to present, he has served as the Chairman of Board of Offcn Education
Technology Co., Ltd.
Mr. Wang Zhendong, born in 1976, is a Chinese citizen and has no permanent residency abroad. He received
his bachelor’s degree in law from the Department of Political Science and Public Administration, Peking University
in 1999. In the year of 2001, Mr. Wang Zhendong started his career in education industry. From 2005 to 2010, he was
in charge of the internal operation and management of Beijing Offcn Online Education Technology Co., Ltd. From
2010 to November 2015, he served as the executive director and general manager of Beijing Offcn Future Education
Consultancy Co., Ltd. From November 2015 to December 2018, he was the director and general manager of Beijing
Offcn Education Technology Stock Co., Ltd. From December 2018 to present, he has served as the director and
general manager of Beijing Offcn Education Technology Co., Ltd. From February 2019 to present, he has served as
the director and general manager of Offcn Education Technology Co., Ltd.
Mr. Shi Lei, born in 1976, is a Chinese citizen and has no permanent residency abroad. He started his career in
education industry in the year of 1999. From 2005 to 2010, he was in charge of marketing operations and management
of Beijing Offcn Online Education Technology Co., Ltd. From 2010 to November 2015, he was the vice president of
Beijing Offcn Future Education Consultancy Co., Ltd. From November 2015 to December 2018, he served as a
director, the Chief Financial Officer and secretary of the Board of Beijing Offcn Education Technology Stock Co.,
Ltd. From December 2018 to present, he has served as a director of Beijing Offcn Education Technology Co., Ltd.
From February 2019 to present, he has served as a director of Offcn Education Technology Co., Ltd.
Ms. Yi Ziting, born in 1974, is a Chinese citizen and has no permanent residency abroad. She has a master’s
degree. Ms. Yi Ziting switched her career path to education industry in the year of 2011. From 1994 to 2004, she
served successively as a technician and an assistant engineer in Zhuzhou Smelting Group Co., Ltd. From 2007 to
2011, she was the head of legal department of China Crop Protection Industry Association (CCPIA). Starting from
2011, Ms. Yi Ziting has been successively holding the posts of head of Teaching Evaluation and Management
Committee, assistant president, and associate president of Beijing Offcn Future Education Consultancy Co., Ltd.
From November 2015 to December 2018, she served as a director of Beijing Offcn Education Technology Stock Co.,
Ltd. From December 2018 to present, she has served as the chairman of the Supervisory Committee of Beijing Offcn
Education Technology Co., Ltd. From February 2019 to present, she has served as a director of Offcn Education
Technology Co., Ltd.
Ms. Chen Yuqin, born in 1965, is a Chinese citizen and has no permanent residency abroad. She is a senior
economist and a member of CPC. She got a bachelor’s degree in economics from Renmin University of China as a
full-time student and was an on-the-job graduate student in Tsinghua University. From August 1987 to March 1992,
she worked as a teacher in Tsinghua University. From April 1992 to August 2005, she worked in a state-owned bank,
and served successively as the deputy department manager of the sub-branch (in charge of work), the department
manager (credit approver and the office director of the Risk Management and Internal Control Committee), the sub-
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Offcn Education Technology Co., Ltd. 2022 Annual Report
branch manager (and the Party branch secretary). From August 2005 to December 2020, She worked in the joint-
stock bank, and served successively as a full-time approver in the branch, assistant manager of the sub-branch (in
charge of work), manager of the sub-branch (and the Party branch secretary) and etc. She retired at the end of
December 2020. From August 4, 2021 to present, she has been working as a non-independent director of Hengxin
Shambala Culture Co., Ltd. From January 2022 to present, she has been serving as an independent director of Offcn
Education Technology Co., Ltd.
Mr. Jiang Tao, born in 1974, is a Chinese citizen and has no permanent residency abroad, a postdoctor in
economics from Sichuan University. He is currently an associate professor of Southwestern University of Finance
and Economics, deputy director of the Finance Department of Accounting Institute, and financial consultant for
Sichuan Trade Petroleum Energy Co., Ltd. and Doppler Elevator Co., Ltd. From September 2020 to present, he has
been serving as an independent director of Chengdu Xinzhu Road & Bridge Machinery Co., Ltd. From January 2022
to present, he has been serving as an independent director of Offcn Education Technology Co., Ltd.
Mr. Zhang Xuanming, born in 1978, is a Chinese citizen and has no permanent residency abroad. He has a
master’s degree and is qualified as a Chinese lawyer. From 2003 to 2005, he worked as a full-time lawyer in Beijing
Weizheng Law Firm. From 2005 to 2010, he was a partner of Beijing Hechuan Law Firm. From April 2017 to present,
he has served as the director of Beijing Meixin Law Firm. From July 2013 to present, he has served as a supervisor
of Tongling Friendship Real Estate Co., Ltd. From October 2015 to present, he has served as a supervisor of Hebei
Xinmiao Tourism Development Co., Ltd. From February 2019 to present, he has served as an independent director
of Offcn Education Technology Co., Ltd.
(2)Supervisors
Ms. Yu Hongwei, born in 1966, is a Chinese citizen and has no permanent residency abroad. She has a
bachelor’s degree. From 1985 to 1995, Ms. Yu Hongwei served as a Naval Officer. From 1995 to 2002, she was the
chief representative of GATX Beijing Office. From 2002 to 2008, she served as the administrative director of the
Zhuoyue College in the University of International Business and Economics. From 2008 to 2013, she worked for the
Chinese Academy of Science as the director of Senior Talents Department in the Personnel Exchange and
Development Center, then as the deputy Party secretary, and chairman of Trade Union. From 2013 to October 2015,
Ms. Yu Hongwei served as a department director of Beijing Offcn Future Education Consultancy Co., Ltd. From
November 2015 to December 2018, she successively held the posts of department director, the secretary of Party
Branch and the secretary of Party Committee of Beijing Offcn Education Technology Stock Co.,Ltd. From December
2018 to present, she has served as the secretary of Party Committee of Beijing Offcn Education Technology Co., Ltd.
From July 2019 to present, she has served as the Chairman of the Supervisory Committee of Offcn Education
Technology Co., Ltd.
Mr. He Di, born in 1977, is a Chinese citizen and has no permanent residency abroad. He received a bachelor’s
degree. From 2010, he served as an assistant president of Beijing Offcn Future Education Consultancy Co., Ltd. From
November 2015 to December 2018, he worked as a supervisor of Beijing Offcn Education Technology Stock Co.,Ltd.
From December 2018 to present, he has served as a supervisor of Beijing Offcn Education Technology Co., Ltd.
From February 2019 to present, he has served as a supervisor of Offcn Education Technology Co., Ltd.
Ms. Li Wen, born in 1979, is a Chinese citizen and has no permanent residency abroad. She owns a master’s
degree and is qualified as a Chinese lawyer. She started her journey in education industry in the year of 2007. From
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Offcn Education Technology Co., Ltd. 2022 Annual Report
2007 to 2010, she worked as a teacher and R&D staff in Beijing Offcn Online Education Technology Co., Ltd.
Starting from 2010, she firstly served as a teacher, then the dean’s assistant and successively the dean of Interview
Training Department in Offcn Ltd. From November 2015 to December 2018, she served as the supervisor
representing employees of Beijing Offcn Education Technology Stock Co., Ltd. From December 2018 to present, she
has served as a supervisor of Beijing Offcn Education Technology Co., Ltd. From February 2019 to present, she has
served as a supervisor of Offcn Education Technology Co., Ltd.
(3)Senior Executives
Please see the above for Mr. Wang Zhendong’s resume.
Mr. He Youli, born in 1975, is a Chinese citizen and has no permanent residency abroad. He started working in
education industry in the year of 1999. From 2005 to 2010, he was in charge of marketing operations of Beijing Offcn
Online Education Technology Co., Ltd. From 2010 to November 2015, he served as an assistant president and
successively the vice president of Beijing Offcn Future Education Consultancy Co., Ltd. From November 2015 to
December 2018, he was employed as the deputy general manager of Beijing Offcn Education Technology Stock
Co.,Ltd. From December 2018 to present, he has served as the deputy general manager of Beijing Offcn Education
Technology Co., Ltd. From February 2019 to present, he has served as the deputy general manager of Offcn Education
Technology Co., Ltd.
Mr. Luo Xue, born in 1968, is a Chinese citizen and has no permanent residency abroad. He owns a bachelor’s
degree and is a certified public accountant, a registered asset appraiser and an intermediate accountant. From July
1991 to September 2000, he worked at the Zhongyuan Oil Field of Sinopec. From October 2000 to January 2011, he
was successively employed by Beijing Pan-China CPA Ltd., Deloitte Touche Tohmatsu CPA Ltd. and Reanda
Certified Public Accountants LLP, where he held the posts from audit manager to technical partner. From February
2011 to August 2014, he served as the financial director and secretary of the Board of Cortech Drilling Equipment
Ltd. From August 2014 to December 2016, he was employed as the CFO of LandOcean Energy Services Co., Ltd.
From 2017 to December 2018, he was the head of the financial department of Beijing Offcn Education Technology
Stock Co., Ltd. From February 2019 to present, he has served as the financial director of Offcn Education Technology
Co., Ltd.
Mr. Gui Hongzhi, born in 1971, is a Chinese citizen and has no permanent residency abroad. He owns an MBA
degree. From April 2003 to August 2006, he worked at the CRED Holding Co., Ltd. as the manager of Securities
Department. In the same company, he served as the deputy general manager and secretary of the Board from August
2006 to July 2015. From September 2015 to December 2018, he was employed as head of Securities Affairs
Department by Beijing Offcn Education Technology Stock Co., Ltd. From February 2019 to present, he has served
as the deputy general manager and secretary of the Board of Offcn Education Technology Co., Ltd.
Positions held in shareholders entities:
√ Applicable □ Not applicable
Position in the Start End Receiving payment
Name Name of the shareholder entity
shareholder entity date date from the shareholder
43
Offcn Education Technology Co., Ltd. 2022 Annual Report
entity or not?
Beijing Offcn Future Information April
To
Wang Zhendong Consulting Center (Limited Executive Partner 10, N/A
date
Partnership) 2018
Particulars about holding
position in shareholders None
entities
Employment in other companies
√ Applicable □ Not applicable
Receiving
Positions held payment
Name Name of the company in the Start date End date from the
company company or
not?
Beijing Offcn Education Technology Co., Chairman of
Li Yongxin December 27, 2018 To date Yes
Ltd the Board
President of
Li Yongxin Kunming Wuhua Offcn Training School January 18, 2015 To date N/A
the council
Li Yongxin Beijing Offcn Future Group Co., Ltd. Supervisor June 13, 2019 To date N/A
Yanyuan Alumni Investment Management
Li Yongxin Supervisor January 21, 2019 To date N/A
Co., Ltd.
President of
Li Yongxin Beijing Haidian Offcn Training School July 22, 2009 To date N/A
the council
Beijing Haidian Baoquan Financial President of
Li Yongxin May 19, 2014 To date N/A
Training Center the council
Chairman of
Li Yongxin Urumqi Shayibake Offcn Training Center January 13, 2014 To date N/A
the Board
Beijing Offcn Education Technology Co.,
Shi Lei Director December 27, 2018 To date Yes
Ltd
Hainan Huiyou Film&TV Technology
Shi Lei Director March 10, 2017 To date N/A
Co., Ltd.
Taiyuan Hi-Tech Zone Offcn Training Council
Shi Lei March 4, 2013 To date N/A
School member
Council
Shi Lei Urumqi Shayibake Offcn Training Center January 13, 2014 To date N/A
member
Guangxi Oriental Dreamland
Shi Lei Director February 24, 2021 To date N/A
Tourism&Healthcare Investment Co., Ltd.
44
Offcn Education Technology Co., Ltd. 2022 Annual Report
Wang Beijing Offcn Education Technology Co.,
Director December 27, 2018 To date Yes
Zhendong Ltd.
Wang Beijing Offcn Future Education
Director March 25, 2020 To date N/A
Zhendong Technology Co., Ltd
Executive
Wang Lu’an Yazhong Real Estate Information director and
January 10, 2022 To date N/A
Zhendong Consulting Co., Ltd. general
manager
Executive
Wang Lu’an Zhongke Real Estate Information director and
January 10, 2022 To date N/A
Zhendong Consulting Co., Ltd. general
manager
Executive
Wang Beijing Offcn Century Education director and
November 11, 2021 To date N/A
Zhendong Technology Co., Ltd general
manager
Wang Beijing Xindezhiyuan Enterprise
Supervisor August 6, 2014 To date N/A
Zhendong Management Consultancy Co., Ltd.
Wang Beijing Offcn Xinzhiyu Network
Supervisor May 8, 2012 To date N/A
Zhendong Technology Co., Ltd.
Executive
Wang Beijing Offcn Future Research Education director and
December 4, 2020 To date N/A
Zhendong Technology Co., Ltd. general
manager
Wang Taiyuan Hi-Tech Zone Offcn Training President of
March 4, 2013 To date N/A
Zhendong School the council
Wang President of
Tangshan Lunan Offcn Training School March 1, 2013 To date N/A
Zhendong the council
Wang Council
Urumqi Shayibake Offcn Training Center January 13, 2014 To date N/A
Zhendong member
Shanghai Yuqinyangde Information
Chen Yuqin Supervisor March 15, 2021 To date N/A
Technology Consulting Co., Ltd.
Chen Yuqin Hengxin Shambala Culture Co., Ltd. Director August 5, 2021 To date Yes
Chengdu Xinzhu Road & Bridge Independent
Jiang Tao October 16, 2019 To date Yes
Machinery Co., Ltd. director
Southwestern University of Finance and
Jiang Tao Professor September 1, 2008 To date Yes
Economics
Beijing Offcn Education Technology Co.,
He Di Supervisor December 27, 2018 To date Yes
Ltd
45
Offcn Education Technology Co., Ltd. 2022 Annual Report
Beijing Offcn Future Education
He Di Supervisor March 25, 2020 To date N/A
Technology Co., Ltd.
Tianjin Hexi Offcn Training School Co.,
He Di Director July 15, 2019 To date N/A
Ltd.
He Di Yuxi Offcn Training School Co., Ltd. Director December 24, 2018 To date N/A
Lu’an Yazhong Real Estate Information
He Di Supervisor January 10, 2022 To date N/A
Consulting Co., Ltd.
Lu’an Zhongke Real Estate Information
He Di Supervisor January 10, 2022 To date N/A
Consulting Co., Ltd.
Beijing Offcn Century Education
He Di Supervisor November 11, 2021 To date N/A
Technology Co., Ltd.
Beijing Offcn Future Research Education
He Di Supervisor December 4, 2020 To date N/A
Technology Co., Ltd.
Zhang Hebei Xinmiao Tourism Development
Supervisor October 18, 2015 To date Yes
Xuanming Co., Ltd
Chairman of
Beijing Offcn Education Technology Co., the
Yi Ziting December 27, 2018 To date Yes
Ltd Supervisory
Committee
Beijing Offcn Education Technology Co.,
Li Wen Supervisor December 27, 2018 To date Yes
Ltd
Details of penalties in the past three years from securities regulatory institutions to directors, supervisors, and senior
executives who are currently holding the positions in the Company and those who had resigned from the Company
during the reporting period
√ Applicable □ Not applicable
On December 25, 2021, the Company was filed and investigated by China Securities Regulatory Commission (CSRC)
on suspicion of failing to disclose related party transaction information and violating the laws and regulations of
information disclosure. On April 27, 2022, the Company and the relevant parties received the official Decision of
Administrative Penalty. Due to the Company’s failure to truthfully disclose related-party relationships and related-
party transactions as required, the Anhui Securities Regulatory Bureau of the CSRC decided to give a warning to and
impose a fine of RMB 2 million yuan on the Company’s Chairman of the Board of Directors Li Yongxin and Director
Shi Lei respectively, give a warning to and impose a fine of RMB 1 million yuan on Wang Zhendong, the Director
and General Manager of the Company, and give a warning to and impose a fine of RMB 0.5 million yuan on the
Company’s CFO Luo Xue and the Secretary of the Board Gui Hongzhi respectively.
On August 24, 2022, the Company and corresponding parties received the Decision on Publicly Reproaching Offcn
46
Offcn Education Technology Co., Ltd. 2022 Annual Report
Education Technology Co., Ltd. and Corresponding Parties issued by the Shenzhen Stock Exchange. Shenzhen Stock
Exchange publicly condemned the Company and its chairman of the board of directors Li Yongxin, director and
general manager Wang Zhendong, director Shi Lei, chief financial officer Luo Xue, and board secretary Gui Hongzhi
for the above-mentioned failure to truthfully disclose related-party relationships and related-party transactions as
required.
3. Remuneration for directors, supervisors and senior executives
The decision-making procedure, determination basis and actual payment of remuneration for directors, supervisors
and senior executives
In order to further improve the remuneration system for the Company’s directors, supervisors, and senior executives,
and fully motivate the enthusiasm for work of the Company’s directors, supervisors, and senior executives, the
Company formulated the Regulations of Remuneration System of Directors, Supervisors, and Senior Executives. On
June 27, 2022, the shareholders’ meeting reviewed and approved the Proposal on Determining the Remuneration
Plan in the year of 2022 for Directors, Supervisors and Senior Executives of the Company, which further clarified
the remuneration plan for directors, supervisors and senior executives. The allowances for independent directors are
issued quarterly. The Company does not provide additional allowances for internal directors or internal supervisors.
The remuneration of the Company’s internal directors, internal supervisors and senior executives is issued according
to the Company’s salary system.
Remuneration of directors, supervisors, senior executives during the reporting period:
Unit: RMB 10 thousand yuan
Whether gained
Total before-tax
remuneration
remuneration
Name Position Gender Age Tenure Status from the related
gained from the
parties of the
Company
Company
Li Yongxin Chairman of the Board Male 47 Incumbent 17.75 N/A
Director, general
Wang Zhendong Male 47 Incumbent 26.98 N/A
manager
Shi Lei Director Male 47 Incumbent 43.79 N/A
Yi Ziting Director Female 49 Incumbent 35.7 N/A
Wang Qiang Independent director Male 46 resigned 1.00 N/A
Tong Yan Independent director Female 46 resigned 1.00 N/A
47
Offcn Education Technology Co., Ltd. 2022 Annual Report
Jiang Tao Independent director Male 49 Incumbent 11.00 N/A
Chen Yuqin Independent director Female 58 Incumbent 11.00 N/A
Zhang
Independent director Male 45 Incumbent 12.00 N/A
Xuanming
Chairman of the
Yu Hongwei Female 57 Incumbent 18.00 N/A
Supervisory Committee
He Di Supervisor Male 46 Incumbent 34.82 N/A
Li Wen Supervisor Female 44 Incumbent 35.63 N/A
Wang Xuejun Deputy general manager Male 60 resigned 3.58 N/A
He Youli Deputy general manager Male 48 Incumbent 44.18 N/A
Luo Xue Chief financial officer Male 55 Incumbent 43.57 N/A
Secretary of the Board,
Gui Hongzhi Male 52 Incumbent 33.57 N/A
deputy general manager
Total -- -- -- -- 373.57 --
Section VI. Performance of duties by directors during the reporting period
1. Board meetings during the reporting period
Session Convening date Disclosure date Resolution
For details, refer to the
The 25th Meeting of the 5th Announcement on Resolutions of the 25th
January 12, 2022 January 13, 2022
Board of Directors Meeting of the 5th Board of Directors (No.
2022-002) disclosed on www.cninfo.com.cn.
For details, refer to the
The 1st Meeting of the 6th Announcement on Resolutions of the 1st Board
January28, 2022 January29, 2022
Board of Directors Meeting of the 6th Board of Directors (No.
2022-013) disclosed on www.cninfo.com.cn.
For details, refer to the
The 2nd Meeting of the 6th Announcement on Resolutions of the 2nd Board
April 28, 2022 April 29, 2022
Board of Directors Meeting of the 6th Board of Directors (No.
2022-042) disclosed on www.cninfo.com.cn.
The 3rd Meeting of the 6th Reviewed and approved the Full Text and
August 30, 2022 —
Board of Directors Abstract of 2022 Semi-annual Report
The 4th Meeting of the 6th Reviewed and approved the Third Quarter
October 28, 2022 —
Board of Directors 2022 Report of the Company
The 5th Meeting of the 6th For details, refer to the
November 4, 2022 November 8, 2022
Board of Directors Announcement on Resolutions of the 5th Board
48
Offcn Education Technology Co., Ltd. 2022 Annual Report
Meeting of the 6th Board of Directors (No.
2022-071) disclosed on www.cninfo.com.cn.
For details, refer to the
The 6th Meeting of the 6th Announcement on Resolutions of the 6th Board
December 16, 2022 December 17, 2022
Board of Directors Meeting of the 6th Board of Directors (No.
2022-090) disclosed on www.cninfo.com.cn.
2. Attendance of directors at board meetings and shareholders’ meetings
Attendance of directors at board meetings and shareholders’ meetings
Non-
Sessions Attendance
Attendanc attendance in Attendance in
required to by way of Entrusted
e in Absence person for shareholders’
Director attend during telecommuni presence
person (times) two meetings
the reporting cation (times)
(times) consecutive (times)
period (times) (times)
(times)
Li Yongxin 7 7 0 0 0 N/A 2
Wang Zhendong 7 7 0 0 0 N/A 2
Shi Lei 7 7 0 0 0 N/A 2
Yi Ziting 7 7 0 0 0 N/A 2
Wang Qiang 1 0 1 0 0 N/A 0
Tong Yan 1 0 1 0 0 N/A 0
Zhang
7 0 7 0 0 N/A 1
Xuanming
Jiang Tao 6 0 6 0 0 N/A 0
Chen Yuqin 6 0 6 0 0 N/A 1
Explanation of non-attendance in person for two consecutive times
None
3. Particulars about directors objecting on relevant issues of the Company
Whether there were any objections on relevant issues of the Company from directors
□Yes √ No
During the reporting period, there were no objections from directors on relevant issues of the Company.
49
Offcn Education Technology Co., Ltd. 2022 Annual Report
4. Other explanations on the performance of duties by directors
Whether relevant advice to the Company from directors were adopted
√ Yes □ No
Explanation of advice from directors to the Company being adopted or not being adopted
During the reporting period, the Company’s directors scrupulously exercised their rights and performed their duties
in strict accordance with relevant regulations. They carefully reviewed the issues raised by the Board of Directors
and the professional committees and actively expressed opinions and views. With rich professional experience, the
independent directors of the Company expressed their thoughtful, rational and independent opinions on each issue
that required their judgements. They also put forward many instructive and reasonable suggestions on the Company’s
development strategy and standardized operation, which played a catalytic role in scientific decision-making of the
Company. For more details, please refer to the 2022 Independent Directors’ Debriefing Report published on
www.cninfo.com on the same day as this annual report.
Section VII. Performance of duties by special committees under the Board during the reporting
period
Detai
Other
ls of
Times Important particulars
objec
of Convening comments and about the
Committee Member Contents of meetings tions
meeting date suggestions put performan
（if
s forward ce of
any
duties
）
1.Proposal on Election of the
Performin
Chairman and Members of
the Audit Committee of the g duties in
The Company was
Sixth Session of the Board of strict
Directors advised to
January accordanc
2.The Company's Internal strengthen internal None
24, 2022 e with
Audit Report for Q4 2021 control to prevent
Shi Lei, laws and
3.The Company's Annual operational risks.
Audit regulation
Jiang Tao, 6 Internal Audit Report for
Committee s
Chen Yuqin 2021
1. 2021 Annual Self-
The Company was Performin
evaluation Report on Internal
Control advised to enhance g duties in
April 27,
2.Review on 2021 Annual efforts to reduce strict None
2022
Audit Report costs and increase accordanc
3.Proposal on the Estimated
efficiency, maintain e with
Amount of Daily Related-
50
Offcn Education Technology Co., Ltd. 2022 Annual Report
Party Transactions in 2022 refined operations, laws and
4.Proposal on Appointment strengthen capital regulation
of the Audit Institution in
planning and s
2022
5.Job Evaluation of the Audit control, remain
Institution in 2021 cautious on
investment, and
6.Full Text and Main Body
maintain a healthy
of the 2022 First Quarter
Report financial structure
7.2022 First Quarter Internal and cash flow to
Audit Report cope with complex
external
environmental
impacts.
Performin
The Company was g duties in
1.Full Text and Abstract of advised to balance strict
August 18, 2022 Semi-annual Report income and costs, accordanc
None
2022 2.2022 Second Quarter be profit-oriented, e with
Internal Audit Report and optimize laws and
product structure regulation
s
Performin
1. Full Text and Main Body g duties in
of 2022 Third Quarter strict
October Report accordanc
None None
20, 2022 e with
2.2022 Third Quarter laws and
Internal Audit Report regulation
s
The Company was Performin
advised to actively g duties in
Proposal on the Company's
raise funds through strict
controlling shareholder
November multi-channels to accordanc
providing loans to the None
2, 2022 solve the current e with
Company's wholly-owned
problems of laws and
subsidiaries
temporary financial regulation
pressure. s
1. Proposal on the Performin
Company's controlling g duties in
shareholder providing loans
December strict
to the Company's wholly- None None
15, 2022 owned subsidiaries accordanc
e with
2.2022 Annual Internal Audit laws and
51
Offcn Education Technology Co., Ltd. 2022 Annual Report
Plan regulation
s
Performin
g duties in
Proposal on Election of the
strict
Chairman and Members of
January accordanc
the Remuneration and None None
24, 2022 e with
Appraisal Committee of the
laws and
Chen Yuqin, Sixth Board of Directors
Remuneratio regulation
Jiang Tao,
n and s
Wang 2
Appraisal The Company was Performin
Zhendong
Committee advised to actively g duties in
Proposal on the 2022
motivate employees strict
Remuneration Plan for the
April 25, through multiple accordanc
Company’s Directors, None
2022 channels to improve e with
Supervisors and Senior
employees' sense of laws and
Executives
belonging and regulation
achievement s
Proposal on Election of Non- Performin
Independent Director
g duties in
Candidates for the Sixth
Board of Directors strict
January 6, accordanc
None None
2022 Proposal on Election of e with
Independent Director laws and
Candidates for the Sixth regulation
Board of Directors s
Performin
g duties in
Proposal on the Election of
Zhang strict
the Chairman and Members
Nomination Xuanming, January accordanc
3 of the Nomination None None
Committee Jiang Tao, Li 17, 2022 e with
Committee of the Sixth
Yongxin laws and
Board of Directors
regulation
s
Performin
g duties in
Proposal on the Performance strict
April 11, of Duties of Professional accordanc
None None
2022 Committees under the Board e with
of Directors laws and
regulation
s
52
Offcn Education Technology Co., Ltd. 2022 Annual Report
Performin
g duties in
Proposal on the Election of
strict
the Chairman of the Strategy
January accordanc
and Investment Committee None None
17, 2022 e with
of the Sixth Board of
laws and
Directors
regulation
s
The Company was
advised to actively
rectify the problems
that occurred in its
business
development over
the past year, make
up for the
deficiencies in the
management
process, improve
the weak parts in
the budget work and
Strategy and Li Yongxin,
fully launch the new
Investment Shi Lei and 2
year's business Performin
Committee Chen Yuqin
1. .Summary of the promotion plan. g duties in
Company's 2021 Business
Measures, including strict
Condition and 2022 Business
April 27, Strategy Analysis comprehensive accordanc
None
2022 adjustment of the e with
2.Proposal on the Company's product structure, laws and
2022 Profits Distribution internal regulation
optimization by s
reducing cost and
enhancing
efficiency ,
accelerated online
and offline
integration and
rapid deployment of
new vocational
education business,
should be taken to
facilitate the
Company to return
to the development
track as soon as
53
Offcn Education Technology Co., Ltd. 2022 Annual Report
possible.
Section VIII. Performance of duties by the Supervisory Committee
Were there any risks in the Company according to the supervision of the Supervisory Committee during the reporting
period?
□ Yes √ No
The Supervisory Committee raised no objection to matters under supervision during the reporting period.
Section IX. Employees of the Company
1. Number of employees, role type, and educational background
Number of current employees of the parent company at the end of the 0
reporting period (person)
Number of current employees of the major subsidiaries at the end of the 22,652
reporting period (person)
Total number of current employees at the end of the reporting period 22,652
(person)
Total number of employees receiving remuneration from the Company 22,652
during the reporting period (person)
Number of retired employees for which the parent company and major 0
subsidiaries need to bear the expenses (person)
Role type
Category Number (person)
Management personnel 2,337
R&D staff 1,694
Teachers 9,024
Customer service staff 2,494
Marketing staff 7,103
Total 22,652
Educational background
Category Number (person)
Master’s degree and above 4,363
Bachelor’s degree 16,739
Postsecondary specialised college 1,538
Secondary specialised school and below 12
54
Offcn Education Technology Co., Ltd. 2022 Annual Report
Total 22,652
2. Remuneration policy
During the reporting period, the Company, based on the post value, set salary difference scientifically and further
improved the performance appraisal system of human resources. The Company regularly and comprehensively
evaluated employees’ working skills and their recognition of corporate culture by an evaluation method based on
quantitative indicators of performance and qualitative standards to ensure that both the work results and growth of
employees were given attention to. The Company attracts and retains its core talents through a diversified
performance-oriented incentive mechanism, so that the core personnel can be more closely aligned with the interests
of the Company and its shareholders. In this way, the Company's long-term operating performance will be driven to
grow continuously.
3. Training plan
During the reporting period, the Company continuously invested high-quality resources in optimizing the training
system and enhancing the capabilities of the teaching team. Employees are well supported with knowledge resources
and abundant learning choices to develop their talents and careers. The Company accelerated the trend of online
learning for all staff. By integrating online and offline resources, the Company has realized the plan of the whole
curriculum system sharing, empowering employees with more opportunities to learn and grow.
In terms of training organizing, the Company mobilized human resources department both at the headquarter and
branches as well as management personnel to ensure that the staff trainings are well organized. The human resources
department at the headquarter are responsible for the “planning, research and coordination” of the Company’s overall
training, focusing on the construction of training resources and training platform as well as the design and
implementation of key talent training projects. The human resources departments of branches are responsible for
exploring the training needs of employees, providing training solutions, executing the training plans, and focusing
on the daily-basis operation and training. Management personnel are responsible for employees’ ability-building,
taking training of team members as part of their work tasks, so as to foster more talents for the Company.
4. Labor outsourcing
□ Applicable √ Not applicable
Section X. Profit distribution of the Company and conversion of capital reserve into share capital
The formulation, implementation and adjustment of the profits distribution policy, especially the cash dividends policy, during the
55
Offcn Education Technology Co., Ltd. 2022 Annual Report
reporting period.
□ Applicable √ Not applicable
The Company was profitable during the reporting period and the parent company’s profit available for distribution to shareholders was
positive but did not propose a plan for the distribution of cash dividend.
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve into share capital during the reporting period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividends or bonus shares, nor to increase share capital by converting
capital reserve.
Section XI. Implementation of the Company’s equity incentive plan, employee stock ownership
plan or other employee incentive measures
Applicable √Not applicable
There were no equity incentive plan, employee stock ownership plan or other employee incentive measures being implemented during
the reporting period of the Company.
Section XII. Establishment and implementation of the Company’s internal control system during
the reporting period
1. The establishment and implementation of the Company’s internal control
During the reporting period, in accordance with the Basic Standards for Enterprise Internal Control as well as its
corresponding supporting regulations, and the Company’s Regulations of Internal Audit, based on regular supervision
and special supervision of internal control, the Company, adhering to the risk-oriented principle, continuously
improves and optimizes its internal control system to adapt to the ever-changing external environment and meet the
internal management requirements. The Company’s Board of Directors establishes, improves and effectively
implements internal control, evaluates its effectiveness, and truthfully discloses the evaluation report on internal
control, in accordance with the regulations of the Company’s internal control standard system; the Supervisory
Committee supervises the Board of Directors on the establishment and implementation of internal control. The
Company’s management personnel take responsibility for organizing and leading the regular operation of the
Company’s internal control. The Company established an internal audit department equipped with full-time auditors
and formulated internal audit-related management regulations. The internal audit department is responsible for and
reports to the Audit Committee of the Board of Directors; in accordance with the requirements of national laws, rules
and regulations, the internal audit department independently and objectively exercises its powers of internal audit,
56
Offcn Education Technology Co., Ltd. 2022 Annual Report
inspects and supervises the internal control of the Company and its controlled subsidiaries, conducts internal audit
for their finance and operations, provides audit suggestions,, and implements the internal control rectification.
2. Particulars about material weakness found in the Company’s internal control during the reporting period
□ Yes √ No
Section XIII. The Company’s management and control of subsidiaries during the reporting
period
Not applicable
Section XIV. Self-evaluation report or audit report on internal controls
1. Self-evaluation report on internal controls
Disclosure date of full text of self-
April 28, 2023
evaluation report on internal control
Disclosure index of full text of self- CNINFO (www.cninfo.com.cn)
evaluation report on internal control Offcn Education Technology Co., Ltd. 2022 Self-evaluation Report on Internal Control
Proportion of assets evaluated in total
assets stated in the consolidated financial 100.00%
statement of the Company
Proportion of operating income evaluated
in total operating income stated in the
100.00%
consolidated financial statement of the
Company
Deficiency Standards
Category Financial Report Non-Financial Report
Material Weakness: one deficiency, or a Material Weakness: ①Severe violations
combination of deficiencies in internal of national laws and regulations in the
control that may result in a significant Company’s operation; ②Negative news
deviation from the control objectives of the frequently disclosed by the media and
Qualitative criteria Company. Those with the following the negative impact has not been
characteristics should be recognized as eliminated; ③Serious loss of middle
material weakness: ①Fraud of directors, and senior management personnel and
supervisors and senior executives; ② senior technical personnel; ④Lack or
Correction of misstatement in previously ineffectiveness of policy for major
57
Offcn Education Technology Co., Ltd. 2022 Annual Report
issued financial statements; ③Material business; ⑤Rectifications are not made
misstatement in current financial statements for the material weaknesses or
that are not detected by the Company’s significant deficiencies in the
internal control; ④Invalid supervision of Company’s internal control.
internal control over financial reporting by Significant Deficiency: one deficiency,
the Company’s Audit Committee and or a combination of deficiencies in
internal audit department. internal control that is less severe or has
Significant Deficiency: one deficiency, or a minor economic consequences than a
combination of deficiencies in internal material weakness, yet may still result in
control that is less severe than a material a deviation from control objectives of
weakness, yet may still result in a deviation the Company.
from control objectives of the Company. Controllable Deficiency: Other internal
Controllable Deficiency: Other internal control deficiencies that do not meet the
control deficiencies that do not meet the standards of material weakness or
standards of material weakness or significant deficiency.
significant deficiency.
Material Weakness: Misstatements account
for more than 5% of total profits.
Significant Deficiency: Misstatements Refer to the quantitative criteria for the
account for 2% to 5% (including 5%) of evaluation of internal control
Quantitative criteria
total profits. deficiencies in financial reports.
Controllable Deficiency: Misstatements
account for less than 2% (including 2%) of
total profits.
Number of material weaknesses in the
0
financial report
Number of material weaknesses in the
0
none-financial report
Number of significant deficiencies in the
0
financial report
Number of significant deficiencies
0
in the non-financial report
2. Audit report on internal control
√Applicable Not applicable
Deliberative opinions section in audit report on internal control
Offcn Education maintained effective internal control related to financial reporting in all important respects on December 31, 2022
in accordance with the Basic Standards for Enterprise Internal Control and relevant regulations.
Disclosure of audit report on internal control Disclosure
Disclosure date of the full text of audit report on internal
April 28, 2023
control
58
Offcn Education Technology Co., Ltd. 2022 Annual Report
Disclosure index of the full text of audit report on internal Offcn Education Technology Co., Ltd. 2022 Annual Audit
control Report on Internal Control disclosed on www.cninfo.com.cn
Types of opinions on audit report on internal control standard unmodified opinion
Whether there are material deficiencies in non-financial
No
reporting
Whether the accounting firm issued the audit report on internal control with non-standard opinions
□Yes√No
Whether the audit report on internal control issued by the accounting firm is consistent with the self-evaluation
report of the board of directors
√Yes □No
Section XV. Special actions on self-examination and rectification of the listed Company’s
governance
Not applicable
59
Offcn Education Technology Co., Ltd. 2022 Annual Report
Chapter 5 Environmental and Social Responsibilities
Section I. Environmental protection
Do the listed Company and its subsidiaries belong to the major pollutant discharge units announced by the Ministry
of Ecology and Environment？
□ Yes √ No
Situations of receiving administrative penalty due to environmental issues during the reporting period
Not applicable
Other environmental information disclosed in reference with major pollutant discharge units
The Company always practices its corporate social responsibilities, complies with national and local laws and
regulations on environmental protection and emission targets, conscientiously implements various environmental
protection management regulations, and continuously promotes energy conservation, emission reduction and
environmental protection by promoting paperless operations. At the same time, the Company also integrates and
implements the concept of environmental protection into all levels of strategic decision-making and business, and
encourages its employees to carry out green volunteer activities to jointly contribute to the harmonious development
of society. During the reporting period, the Company had no violations of environmental protection laws and
regulations and no disputes over pollution accidents, and was not subject to administrative penalties for violating
relevant environmental protection laws and regulations.
Measures taken to reduce carbon emissions during the reporting period and their effects
□ Applicable √ Not applicable
Reasons of not disclosing other environmental information
□ Applicable √ Not applicable
Section II. Social Responsibilities
For details of the Company's performance of social responsibilities, please refer to the 2022 Annual Report on
Social Responsibilities of OFFCN EDU disclosed by the Company on CNINFO ( www.cninfo.com) on the same
day.
60
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section III. Conducts to consolidate and expand the achievements of poverty alleviation and
rural revitalization
□ Applicable √ Not applicable Chapter 6 Significant Events
Section I. Fulfillment of commitments
1. Commitments that the Company’s actual controllers, shareholders, related parties, acquirers, the Company
itself and other relevant parties have fulfilled during the reporting period and have not fulfilled as of the end
of the reporting period
√Applicable □ Not applicable
The commitments made by all parties involved in major asset restructuring are as follows:
Commit Commit
Commitment Commitment
Main contents of commitment ment ment Performance
Party Type
time period
1. Within 36 months after the completion of the
transaction (starting from the date of the listing of
shares issued in this transaction), the shares of Yaxia
Auto that held by the company/myself/the plan with
rights and interests shall not be transferred.
2. After the completion of the transaction, the shares
held by the company/myself/the plan, derived from
Yaxia Industrial, Yaxia Auto shares due to the distribution of stock
Zhou Xiayun, Zhou Letter of dividends and the conversion of capital reserve to
Hui, Zhou Li, commitment share capital, shall also comply with the above- May 4, Jan. 31,
Fulfilled
Phase-I employee on lock-up mentioned arrangement of restricted sale of shares. 2018 2022
stock ownership period 3. If the China Securities Regulatory Commission
plan (CSRC) and/or Shenzhen Stock Exchange (SSE)
have/has other provisions for the above-mentioned
lock-up period arrangement, the company/I/the plan
will adjust and implement the above-mentioned
lock-up period arrangement according to the latest
regulations of the CSRC and/or SSE. If violating the
above commitments, the company/I/the plan will
bear all losses caused to Yaxia Auto.
Letter of 1. The shares of the listed Company subscribed by
Apr. 27, Jan. 31,
Li Yongxin Commitment myself in this transaction shall not be transferred or Fulfilled
2018 2022
on lock-up dealt with in any other forms within 36 months from
61
Offcn Education Technology Co., Ltd. 2022 Annual Report
period for the date of the listing of the shares. Within 6 months
subscription of after the listing of the shares, if the closing price of
shares the listed Company stock is lower than the issue
price for consecutive 20 trading days, or the closing
price of the stock at the end of the 6 months after the
listing of the shares is lower than the issue price, the
lock-up period of consideration shares acquired by
myself shall be automatically extended for 6 months.
(If dividend or bonus shares distribution, conversion
of capital reserve or allotment by the listed Company
occurred during the above-mentioned period, the
aforementioned issue price shall be calculated based
on the price adjusted by factors as ex-dividend and
ex-rights, etc.)
2. As the transferee of 72,696,561 Yaxia Auto shares
held by Anhui Yaxia Industrial Co., Ltd., I shall not
transfer such shares within 36 months from the
registration date of such shares in my securities
account.
3. The aforesaid arrangement of share lock-up does
not affect the implementation of profit compensation
for this transaction, that is, when I need to make
profit compensation, the listed Company has the
right to relieve the lock-up of shares in
corresponding amount in advance for profit
compensation.
4. I promise to abide by the following provision: if
the transaction is investigated by judiciary
authorities or CSRC on suspicion of
misrepresentations, misleading statements, or
material omissions in regard to the information
provided or disclosed, the shares of the listed
Company acquired in this transaction shall not be
transferred until the conclusion of the investigation
is clarified.
5. After the completion date of this transaction, my
increased shares due to bonus shares distribution or
conversion of capital reserve of the listed Company
shall also comply with the foregoing requirements.
6. If the aforementioned lock-up period arrangement
does not comply with the latest laws and regulations
or the latest regulatory requirements of the securities
regulatory institution, I agree to implement the
arrangement in accordance with the latest laws and
62
Offcn Education Technology Co., Ltd. 2022 Annual Report
regulations and the requirements of the securities
regulatory institution.
7. After the lock-up period expires, it will be
implemented in accordance with the relevant
regulations of CSRC and SSE.
1. The shares of the listed Company subscribed by
myself in this transaction shall not be transferred or
dealt with in any other forms within 36 months from
the date of the listing of the shares. Within 6 months
after the listing of the shares, if the closing price of
the listed company stock is lower than the issue price
for consecutive 20 trading days , or the closing price
of the stock at the end of the 6 months after the listing
of the shares is lower than the issue price, the lock-
up period of consideration shares acquired by myself
shall be automatically extended for 6 months. (If
dividend or bonus shares distribution, conversion of
capital reserve or allotment by the listed company
occurred during the above-mentioned period, the
aforementioned issue price shall be calculated based
on the price adjusted by factors as ex-dividend and
Letter of ex-rights, etc.)
commitment 2. The aforesaid arrangement of share lock-up does
on lock-up not affect the implementation of profit April 27, Jan 31,
Lu Zhongfang Fulfilled
period for compensation for this transaction, that is, when I 2018 2022
subscription of need to make profit compensation, the listed
shares Company has the right to relieve the lock-up of
shares in corresponding amount in advance for
profit compensation.
3. I promise to abide by the following provision: if
the transaction is investigated by judiciary
authorities or CSRC on suspicion of
misrepresentations, misleading statements, or
material omissions in regard to the information
provided or disclosed, the shares of the listed
Company acquired in this transaction shall not be
transferred until the conclusion of the investigation
is clarified.
4. After the completion date of this transaction, my
increased shares due to bonus shares distribution or
conversion of capital reserve of the listed Company
shall also comply with the foregoing requirements.
5. If the aforementioned lock-up period
63
Offcn Education Technology Co., Ltd. 2022 Annual Report
arrangement does not comply with the latest laws
and regulations or the latest regulatory requirements
of the securities regulatory institution, I agree to
implement the arrangement in accordance with the
latest laws and regulations and the requirements of
the securities regulatory institution.
6. After the lock-up period expires, it will be
implemented in accordance with the relevant
regulations of CSRC and SSE.
1. The shares of the listed Company subscribed by
Kerui Technology Innovation in this transaction
shall not be transferred or dealt with in any other
forms within 36 months from the date of the listing
of the shares. Within 6 months after the listing of the
shares, if the closing price of the listed Company
stock is lower than the issue price for consecutive 20
trading days, or the closing price of the stock at the
end of the 6 months after the listing of the shares is
lower than the issue price, the lock-up period of
consideration shares acquired by Kerui Technology
Innovation shall be automatically extended for 6
months. (If dividend or bonus shares distribution,
conversion of capital reserve or allotment by the
Letter of listed Company occurred during the above-
commitment mentioned period, the aforementioned issue price
Kerui Technology on lock-up shall be calculated based on the price adjusted by July 27, Jan. 31,
Fulfilled
Innovation period for factors as ex-dividend and ex-rights, etc.) 2018 2022
subscription of 2. The enterprise promises to abide by the following
shares provision: if the transaction is investigated by
judiciary authorities or CSRC on suspicion of
misrepresentations, misleading statements, or
material omissions in regard to the information
provided or disclosed, the shares of the listed
Company acquired in this transaction shall not be
transferred until the conclusion of the investigation
is clarified.
3. After the completion date of this transaction, the
enterprise’s increased shares due to bonus shares
distribution or conversion of capital reserve of the
listed Company shall also comply with the
foregoing requirements.
4. If the aforementioned lock-up period
arrangement does not comply with the latest laws
64
Offcn Education Technology Co., Ltd. 2022 Annual Report
and regulations or the latest regulatory requirements
of the securities regulatory institution, the enterprise
agrees to implement the arrangement in accordance
with the latest laws and regulations and the
requirements of the securities regulatory institution.
5. After the lock-up period expires, it will be
implemented in accordance with the relevant
regulations of CSRC and SSE.
Within 36 months from the date of the transfer of
80,000,000 shares of Yaxia Auto held by Anhui
Yaxia Industrial Co., Ltd. to the enterprise, the shares
Letter of
shall not be transferred. The lock-up period of the
commitment
shares increased during the above period due to April 27, Jan 31,
Offcn Partnership on the lock-up Fulfilled
bonus shares distribution, conversion of capital 2018 2022
of shares
reserve or allotment of shares by Yaxia Auto, shall
also comply with the foregoing requirements.
If the enterprise violates commitments listed above,
it will bear all losses caused to Yaxia Auto.
Within 36 months from the date of the transfer of
80,000,000 shares of Yaxia Auto held by Anhui
Yaxia Industrial Co.,Ltd. to Beijing Offcn Future
Information Consulting Center (Limited
Letter of Partnership), I or the enterprise shall not in any way
commitment transfer the shares of Beijing Offcn Future
Li Yongxin and on the lock-up Information Consulting Center (Limited
July 27, Jan 31,
other 10 of Offcn Partnership) or withdraw from the partnership with Fulfilled
2018 2022
counterparties Partnership’s Beijing Offcn Future Information Consulting
contribution Center (Limited Partnership), nor do we transfer,
shares assign or authorize other entities in any way to fully
or partially have the rights and interests indirectly
related to the shares of Yaxia Auto held by Beijing
Offcn Future Information Consulting Center
(Limited Partnership).
1. Guarantee the independence of the listed
Company’s personnel
Letter of (1) It is guaranteed that after the completion of this
Li Yongxin, commitment transaction, the personnel, human resources and
Under normal
Lu Zhongfang, on maintaining remuneration management of the listed Company April 27, Long-
implementatio
Wang Zhendong, independence shall be completely independent from myself/Offcn 2018 term
n
Offcn Partnership of the listed Partnership, and from other related parties, such as
Company companies, enterprises or economic organizations,
controlled by myself/Offcn Partnership.
(2) It is guaranteed that after the completion of this
65
Offcn Education Technology Co., Ltd. 2022 Annual Report
transaction, senior executives shall work as full-time
employees and receive remuneration in the listed
Company. They shall not hold any positions other
than directors or supervisors in other companies,
enterprises, or economic organizations controlled by
myself/Offcn Partnership.
(3) It is guaranteed that after the completion of this
transaction, the official powers of the shareholders’
meeting and board of directors on personnel
appointments and dismissals shall not be interfered.
2. Guarantee the independence of institutes of the
listed Company
(1) It is guaranteed that after the completion of this
transaction, the listed Company shall build a sound
structure of corporate governance and develop an
independent and complete organizational structure.
(2) It is guaranteed that after the completion of this
transaction, the general meeting of shareholders, the
board of directors, and the supervisory committee
shall independently exercise their powers in
accordance with laws, regulations and the
Company’s Articles of Corporation.
3. Guarantee the independence and completeness of
the assets of the listed Company.
(1) It is guaranteed that after the transaction, the
listed Company shall have independent and
complete assets related to production and operation.
(2) It is guaranteed that after the completion of this
transaction, the business premises of the listed
Company shall be independent from myself/Offcn
Partnership, and other related parties, such as
companies, enterprises, or other economic
organizations controlled by myself/Offcn
Partnership.
(3) It is guaranteed that after the completion of this
transaction, except for normal business dealings,
there shall be no capital and assets of the listed
Company occupied by myself/Offcn Partnership, or
other related parties, such as companies, enterprises
or economic organizations, controlled by myself or
Offcn Partnership.
4. Guarantee the independence of the listed
Company’s business.
(1) It is guaranteed that after the completion of this
66
Offcn Education Technology Co., Ltd. 2022 Annual Report
transaction, the listed Company shall have the
qualifications of independently conducting business
activities and the capabilities of running market-
oriented, independent, autonomous, sustainable
business.
(2) It is guaranteed that after the completion of this
transaction, I/Offcn Partnership, or other related
parties, such as companies, enterprises, or other
economic organization controlled by myself/Offcn
Partnership shall avoid businesses which have a
competitive relationship with the listed Company
and its subsidiaries.
(3) It is guaranteed that after the completion of this
transaction, I/Offcn Partnership, or related parties,
such as companies, enterprises, or other economic
organizations controlled by myself/Offcn
Partnership shall reduce related-party transactions
with the listed Company and its subsidiaries.
Related-party transactions that are really necessary
and unavoidable shall be conducted in a market-
oriented and fair way and perform relevant approval
processes and information disclosure obligations in
accordance with relevant laws, regulations and
regulatory documents.
5. Guarantee the financial independence of the listed
Company.
(1) It is guaranteed that after the completion of this
transaction, the listed Company shall establish an
independent financial department with independent
financial accounting systems and standardized and
independent financial accounting rules.
(2)It is guaranteed that after the completion of this
transaction, the listed Company shall open bank
accounts independently and shall not share bank
accounts with myself/Offcn Partnership/other
related parties, such as companies, enterprises or
other economic organizations controlled by myself
or Offcn Partnership.
(3) It is guaranteed that after the completion of this
transaction, financial personnel hired by the listed
Company shall not hold any part-time positions in
other related parties, such as companies, enterprises
or other economic organizations controlled by
myself or Offcn Partnership
67
Offcn Education Technology Co., Ltd. 2022 Annual Report
(4) It is guaranteed that after the completion of this
transaction, the listed Company can make financial
decisions independently. I/Offcn Partnership shall
not interfere with the use of funds by the listed
Company.
(5) It is guaranteed that after the completion of this
transaction, the listed Company will pay taxes
independently according to laws.
I/Offcn Partnership shall be liable for all losses
caused to the listed Company and its subsidiaries
due to my/Offcn Partnership’s failure in fulfilling
the above commitments.
1. As of the date of signing this commitment letter, 1. The
myself, my close relatives and other companies, transfer
enterprises or economic organizations controlled by of
myself and my close relatives, except for Beijing Kairuier
Offcn Online Education Technology Co., Ltd. Training
(hereinafter referred to as Offcn Online), controlled School
As of the end
by my relatives Xuhua and Lu Yan, and its affiliated in
of the
schools which are involved in the same or similar Haidian
reporting
businesses conducted by Offcn Ltd., other related District
period,
parties are not involved in any same, similar or of
Kairuier
related businesses conducted by the listed Company, Beijing:
Training
Offcn Ltd. and its affiliated companies and schools. within
School in
Except for Li Yongxin serving as a director in 24
Haidian
Kunming Wuhua Offcn training school, which is months
Letter of District of
affiliated to Offcn Online, I neither hold any full- from the
commitment Septemb Beijing had
Li Yongxin, time or part-time positions nor provide consultancy date of
on avoiding er 20, been
Lu Zhongfang at any companies or enterprises, which conducts the
horizontal 2018 transferred to
competitive businesses with the listed Company, signing
competition an unrelated
Offcn Ltd. and their affiliates. I also do not directly of this
third party.
or indirectly hold any equity or shares of companies letter of
Other
or enterprises conducting the same, similar or related commit
commitments
businesses as the listed Company, Offcn Ltd. and its ment
are under
affiliates. 2. The
normal
2. As of the date of signing this commitment letter, transfer
implementatio
Offcn Online and its two subordinate training of
n
schools’ disposals are as follow: Offcn Online Kunming
conducts no education businesses (to be canceled Wuhua
after subordinate schools transferred). Kairuier Offcn
Training School in Haidian District of Beijing is to Training
be transferred to an unrelated third party and the School:
transfer agreement has been signed. If the transfer is within 12
not completed within 24 months since the date of months
68
Offcn Education Technology Co., Ltd. 2022 Annual Report
signing this commitment letter, I will urge Offcn after the
Online to cancel Kairuier Training School in Haidian formal
District of Beijing. Kunming Wuhua Offcn Training promulg
School, associated with Offcn Online, has been ation and
closed and it will be transferred to an unrelated third impleme
party or will be canceled within 12 months after the ntation
formal promulgation and implementation of the of the
amended Implementing Regulations of the Law on Impleme
the Promotion of Private Education of the People’s nting
Republic of China (hereinafter referred to as Regulati
Implementing Regulations) and the promulgation ons and
and implementation of the supporting regulations the
formulated by the relevant local education promulg
authorities in accordance with the amended ation and
Implementing Regulations. impleme
3. As of the date of signing this commitment letter, ntation
Offcn Ltd. as the organizer intends to transfer its of the
100% of the organizer’s rights of 33 private schools supportin
for non-academic qualifications to Li Yongxin and g
singed the Agreement on Transfer of Organizer’s regulatio
Rights of Private Non-enterprise Schools Affiliated ns
to Beijing Offcn Education Technology Co., Ltd. Li formulat
Yongxin is willing to entrust the transferred 33 ed by the
private non-enterprise schools to Offcn Ltd. and relevant
signed the Trusteeship Agreement of Private Non- local
enterprise Schools. educatio
4. After the completion of this transaction, except for n
the above-mentioned cases, I promise that during the authoriti
time of being the actual controller of the listed es in
Company, I, my close relatives and other related accordan
parties, such as companies, enterprises or other ce with
economic organizations, controlled by myself or my the
close relatives shall not in any way (including but not amended
limited to self operated or with other parties to Impleme
operate joint venture, cooperation, joint operation, nting
investment, mergence, and trustee operation home Regulati
and aboard) engage in the same, similar, related or ons.
competitive businesses with the listed Company,
including:
(1) I will not directly or indirectly operate,
participate in or assist others to conduct same,
similar businesses or other economic activities
which directly or indirectly constitute a competitive
relationship with businesses currently operated by
69
Offcn Education Technology Co., Ltd. 2022 Annual Report
the listed Company and its affiliates.
(2) I will not directly or indirectly invest on any
economic entities whose businesses constitute a
direct or indirect competitive relationship with the
listed Company and its affiliates.
(3) I will not be hired by any competitors that
directly or indirectly compete with the listed
Company and its affiliates, or provide any advice,
assistance or business opportunities directly or
indirectly to such competitors;
(4) I will not instigate, mislead, encourage or
otherwise induce, persuade, or coerce the employees
or management personnel in the listed Company and
its affiliates to terminate their labor or employment
relationship with the Company and its affiliates.
(5) I will not urge others to hire employees or
management personnel from the listed Company and
its affiliates.
5. I promise that if I, my close relatives or other
related parties, such as companies, enterprises or
other economic organizations controlled by myself
and my close relatives obtain any business
opportunities from any third party, which can or may
compete with the listed Company and its affiliates in
the future, I will notify the listed Company and its
affiliates in writing within 5 working days. After
obtaining the third party’s agreement, I will attempt
to transfer these business opportunities to the listed
Company and its affiliates.
6. I guarantee that I will never use my knowledge
about and the information I’m aware of the listed
Company and its affiliates to assist third parties to
engage, participate, or invest in businesses or
projects that compete with the listed companies and
its affiliates.
7. If I violate the above commitments, the benefits
obtained by the violation of commitments shall
belong to the listed Company and I shall be liable for
all losses caused to the listed Company and its
affiliates. Within 30 working days since receiving
the writing notice from the listed Company,
compensation shall be made in cash.
8. I will disclose relevant information in a timely
manner if commitments fail to be fulfilled or to be
70
Offcn Education Technology Co., Ltd. 2022 Annual Report
fulfilled on schedule because of objective reasons,
such as changes in relevant laws, regulations and
policies, or natural disasters. Except for the above-
mentioned objective reasons, if the commitment is
anyhow unable to be fulfilled or fulfilling the
commitment is not conducive to safeguarding the
rights and interests of the listed Company, I should
fully disclose the reasons and either provide a new
commitment to the listed Company and related
investors to replace the original one, or propose an
exemption from fulfilling the commitment.
9. The commitment is valid starting from the
signing date of the commitment letter, to the time
when I cease to be the actual controller of the listed
Company.
1. As of the date of signing this commitment letter,
myself, my close relatives and other companies,
enterprises or economic organizations controlled by
myself, my close relatives or Offcn Partnership, are
not involved in any same, similar or related
businesses conducted by the listed Company, Offcn
Ltd. and its affiliated companies and schools. Except
for Wang Zhendong serving as a director in Kairuier
Training School in Haidian District of Beijing, which
is affiliated to Offcn Online (Offcn Online tends to
transfer the rights of Kairuier Training School to an
unrelated third party and after this transfer, Wang
Letter of Zhendong will no longer hold the post as a director
Commitment in the school), I neither hold any full-time or part- Under normal
Wang Zhendong, April 27, Long-
on avoiding time positions nor provide consultancy at any implementatio
Offcn Partnership 2018 term
horizontal companies or enterprises, which conducts n
competition competitive businesses with the listed Company,
Offcn Ltd. and their affiliates. I also do not directly
or indirectly hold any equity or shares of companies
or enterprises conducting the same, similar or related
businesses as the listed Company, Offcn Ltd. and its
affiliates.
2. After the completion of this transaction, I/Offcn
Partnership promise(s) that during the time of being
shareholders of the listed Company, I, my close
relatives and other related parties, such as
companies, enterprises or other economic
organizations, controlled by myself, my close
relatives or Offcn Partnership shall not in any way
71
Offcn Education Technology Co., Ltd. 2022 Annual Report
(including but not limited to self operated or with
other parties to operate joint venture, cooperation,
joint operation, investment, mergence, and trustee
operation home and aboard) engage in the same,
similar, related or competitive businesses with the
listed Company, including:
(1) I will not directly or indirectly operate,
participate in or assist others to conduct same,
similar businesses or other economic activities
which directly or indirectly constitute a competitive
relationship with businesses currently operated by
the listed Company and its affiliates.
(2) I will not directly or indirectly invest on any
economic entities whose businesses constitute a
direct or indirect competitive relationship with the
listed Company and its affiliates.
(3) I will not be hired by any competitors that
directly or indirectly compete with the listed
Company and its affiliates, or provide any advice,
assistance or business opportunities directly or
indirectly to such competitors;
(4) I/Offcn Partnership will not instigate, mislead,
encourage or otherwise induce, persuade, or coerce
the employees or management personnel in the
listed Company and its affiliates to terminate their
labor or employment relationship with the
Company and its affiliates.
(5) I/Offcn Partnership will not urge others to hire
employees or management personnel from the
listed Company and its affiliates.
3. I/Offcn Partnership promise that if I, my close
relatives or other related parties, such as companies,
enterprises or other economic organizations
controlled by myself, my close relatives or Offcn
Partnership obtain any business opportunities from
any third party, which can or may compete with the
listed Company and its affiliates in the future,
I/Offcn Partnership will notify the listed Company
immediately, and transfer these business
opportunities to the listed Company and its affiliates
after obtaining the third party’s agreement.
4. I/Offcn Partnership guarantee(s) that I/Offcn
Partnership will never use my knowledge about and
72
Offcn Education Technology Co., Ltd. 2022 Annual Report
the information I’m aware of the listed Company
and its affiliates to assist third parties to engage,
participate, or invest in businesses or projects that
compete with the listed Company and its affiliates.
I/Offcn Partnership shall be liable for all losses
caused to the listed Company and its affiliates due
to my/Offcn Partnership’s failure in fulfilling the
above-mentioned commitments.
1. After the completion of this transaction, during the
time of being the actual controller of the listed
Company, I, my close relatives and other companies,
enterprises or other economic organizations
controlled by myself or my close relatives will try to
avoid and reduce the related-party transactions with
the listed Company and its affiliates; unless it is
necessary for the business development of the listed
Company, any related-party transactions with the
listed Company and its affiliates will not be
conducted.
2. After the completion of this transaction, for the
related-party transactions which are unavoidable or
reasonable to happen with the listed Company and
its affiliates, I, my close relatives and other
Letter of companies, enterprises or economic organizations
Commitment controlled by myself or my close relatives, will sign
Under normal
Li Yongxin, on reducing related-party transaction agreements with the listed July 27, Long-
implementatio
Lu Zhongfang and regulating Company and its affiliates in accordance with the 2018 term
n
related-party relevant laws, regulations and regulatory documents
transactions and follow the general business principles of
equality, willingness, equivalence and paid-use. The
prices of related-party transactions shall be fair.
Decision-making procedures, lawful information
disclosure obligations and relevant reporting and
approval procedures regarding the related-party
transactions, shall be followed. The status of
shareholders shall not be used to damage the
legitimate rights and interests of the listed Company
and other shareholders.
3. After the completion of this transaction, I will not
use the shareholders’ rights of the listed Company to
manipulate or instruct the listed Company or its
directors, supervisors and senior executives to make
the listed Company provide or accept funds,
commodities, services or other assets under inequal
73
Offcn Education Technology Co., Ltd. 2022 Annual Report
conditions or engage in any behaviors that would
damage the interests of the listed Company.
4. I will urge my close relatives and other companies,
enterprises and other economic organizations
controlled by myself or my close relatives to fulfill
the aforementioned commitments.
5. If I, my close relatives and other companies,
enterprises and other economic organizations
controlled by myself or my close relatives violate
the above commitments, the profits obtained by the
violation of commitments shall belong to the listed
Company, and I shall be liable for all losses caused
to the listed Company and its affiliates. Within 30
working days since receiving the written notice
from the listed Company, compensation shall be
made in cash.
6. The commitment is valid starting from the signing
date of the commitment letter, to the time when I
cease to be the actual controller of Yaxia Auto or
have any other related relationship with Yaxia Auto.
1. After the completion of this transaction, during the
time of being the actual controller/shareholder of the
listed Company, I, my close relatives, Aerospace
Industry, Offcn Partnership and other companies,
enterprises or other economic organizations
controlled by myself, my close relatives, Aerospace
Industry or Offcn Partnership will try to avoid and
reduce the related-party transactions with the listed
Company and its affiliates.
Letter of
2. After the completion of this transaction, for the
Commitment
Wang Zhendong, related-party transactions which are unavoidable or
on reducing Under normal
Aerospace reasonable to happen with the listed Company and April 27, Long-
and regulating implementatio
Industry, its affiliates, I, my close relatives, Aerospace 2018 term
related-party n
Offcn Partnership Industry, Offcn Partnership and other companies,
transactions
enterprises or economic organizations controlled by
myself, my close relatives, Aerospace Industry or
Offcn Partnership, will follow the general business
principles of equality, willingness, equivalence and
paid-use. The prices of related-party transactions
shall be fair. Decision-making procedures, lawful
information disclosure obligations and relevant
reporting and approval procedures regarding the
related-party transactions shall be followed and
fulfilled in accordance with the relevant laws,
74
Offcn Education Technology Co., Ltd. 2022 Annual Report
regulations and regulatory documents. The status of
shareholders shall not be used to damage the
legitimate rights and interests of the listed Company
and other shareholders.
3. After the completion of this transaction,
I/Aerospace Industry/Offcn Partnership will not use
the shareholders’ rights of the listed Company to
manipulate or instruct the listed Company or its
directors, supervisors and senior executives to make
the listed Company provide or accept funds,
commodities, services or other assets underunequal
conditions or engage in any behaviors that would
damage the interests of the listed Company.
I/Aerospace Industry/Offcn Partnership shall be
liable for all losses caused to the listed Company
and its affiliates due to my/Aerospace
Industry’s/Offcn Partnership’s failures in fulfilling
commitments.
Whether the
commitments are Yes
fulfilled on time
2. Should there be any profit forecast for any of the Company’s assets or projects and the current reporting
period is still within the forecast period, the Company shall explain whether the performance of the asset or
project matches with the profit forecast and why.
□Applicable √Not applicable
Section II. The capital occupation of the listed Company for non-operating purposes by the
controlling shareholder and its related parties
□Applicable √Not applicable
During the reporting period, there was no such situation for the Company.
Section III. Illegal external guarantee
□Applicable √Not applicable
There is no illegal external guarantee in the Company during the reporting period.
75
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section IV. Statement of the Board of Directors on the latest "non-standard audit report"
□Applicable √Not applicable
Section V. Statement of the Board of Directors, Supervisory Committee, and independent
directors (if any) on the accounting firm's "non-standard audit report" during the reporting
period
□Applicable √Not applicable
Section VI. Particulars of changes in accounting policies and accounting estimates or corrections
of major accounting errors compared with the financial report of the previous year
□Applicable √Not applicable
There is no changes in accounting policies and accounting estimates or corrections of major accounting errors during the reporting
period of the Company.
Section VII. Explanation of the changes in the scope of the consolidated statement compared
with the financial statements of the previous year
√ Applicable □ Not applicable
Full name of subsidiary Ratio of shareholding (%) Reasons for changes
1. Sichuan Offcn Luming Cultural Media Co., Ltd. 100.00 Newly established
2. Beijing Offcn Shengjing Education Technology 100.00 Newly established
Co., Ltd
3. Henan Offcn Education Consulting Co., Ltd 100.00 Newly established
4. Lhasa Offcn Training School Co., Ltd 100.00 Newly established
5. Tianjin Offcn Technology Co., Ltd 100.00 Newly established
6. Tianjin Jinnan Offcn LexueTraining School Co., Ltd 100.00 Newly established
7. Tianjin Baodi Offcn Lexiang Training School Co., 100.00 Newly established
Ltd.
8. Tianjin Jizhou Offcn LechengTraining School Co., 100.00 Newly established
Ltd.
9. Nantong Sigang Huizhi Technology Co., Ltd 51.00 Newly established
76
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section VIII. Appointment and dismissal of the CPA firm
CPA firm appointed at present
Name of the domestic CPA firm Baker Tilly China Certified Public Accountants LLP
Remuneration of domestic CPA firm (RMB MillionYuan) 1.80
Consecutive years of the audit service of domestic CPA firm 5 years
Name of the CPAs in domestic CPA firm Zhou Baiming, Li Qiang
Consecutive years of audit service of the CPAs of domestic CPA
5 consecutive years for Zhou Baiming and 2 years for Li Qiang
firm
Whether to reappoint another CPA firm in the current period
Yes √ No
Appointment of internal control auditing CPA firms, financial consultants or sponsors
□ Applicable √ Not applicable
Section IX. Facing delisting after the disclosure of the annual report
□ Applicable √ Not applicable
Section X. Bankruptcy and reorganization related matters
□ Applicable √Not applicable
There is no such situation of bankruptcy and reorganization of the Company during the reporting period.
Section XI. Major litigation and arbitration matters
□ Applicable √Not applicable
There is no major litigation or major arbitration during the reporting period.
During the reporting period, other litigation and arbitration matters of the Company and its subsidiaries are
as follows:
1. During the reporting period, the amount of litigation involved in closed cases was RMB 17.8630 million yuan, and
the actual amount of judgments in effective legal documents was approximately RMB 1.8651 million yuan. The
results of the litigation cases had no significant impact on the Company's operations;
2. At the end of the reporting period, the amount of litigation involved in unsettled cases was RMB 41.9088 million
yuan, and the amount of litigation involved in these pending cases accounted for 5.37% of the unaudited net assets
attributable to shareholders of the listed Company in 2022, which had no significant impact on the Company's
operations.
77
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section XII. Penalties and rectifications
√ Applicable □ Not applicable
Type of
Conclusion Date of
Name Type Reason investigation Index of disclosure
(if any) disclosure
and punishment
Failing to
disclose
related-
Filed and
party Ordered to The Announcement on Offcn
investigated by
transaction make Education Technology Co., Ltd.
China
information corrections, and the Relevant Parties’
Offcn Education Securities
and given a Apr. 28, Reception of Decision of
Technology Co., Other Regulatory
violating warning, and 2022 Administrative Penalty (No.
Ltd. Commission
the laws imposed a 2022-032)
(CSRC) or
and fine of RMB disclosed on
punished
regulations 4 million www.cninfo.com.cn.
administratively
of
information
disclosure
Failing to
disclose
related-
Filed and
party The Announcement on Offcn
investigated by
transaction Education Technology Co., Ltd.
China Given a
information and the Relevant Parties’
Securities warning, and
Actual and Apr. 28, Reception of Decision of
Li Yongxin Regulatory imposed a
controller violating 2022 Administrative Penalty (No.
Commission fine of RMB
the laws 2022-032)
(CSRC) or 2 million
and disclosed on
punished
regulations www.cninfo.com.cn
administratively
of
information
disclosure
Failing to
disclose
related-
Filed and
party The Announcement on Offcn
investigated by
transaction Education Technology Co., Ltd.
China Given a
information and the Relevant Parties’
Securities warning, and
and Apr. 28, Reception of Decision of
Shi Lei Director Regulatory imposed a
violating 2022 Administrative Penalty (No.
Commission fine of RMB
the laws 2022-032)
(CSRC) or 2 million
and disclosed on
punished
regulations www.cninfo.com.cn
administratively
of
information
disclosure
Failing to Filed and The Announcement on Offcn
Given a
disclose investigated by Education Technology Co., Ltd.
warning, and
Senior related- China Apr. 28, and the Relevant Parties’
Wang Zhendong imposed a
executive party Securities 2022 Reception of Decision of
fine of RMB
transaction Regulatory Administrative Penalty (No.
1 million
information Commission 2022-032) disclosed on
78
Offcn Education Technology Co., Ltd. 2022 Annual Report
and (CSRC) or www.cninfo.com.cn.
violating punished
the laws administratively
and
regulations
of
information
disclosure
Failing to
disclose
related-
Filed and
party
investigated by The Announcement on Offcn
transaction
China Given a Education Technology Co., Ltd.
information
Securities warning, and and the Relevant Parties’
Senior and Apr. 28,
Gui Hongzhi Regulatory imposed a Reception of Decision of
executive violating 2022
Commission fine of RMB Administrative Penalty (No.
the laws
(CSRC) or 0.5 million 2022-032) disclosed on
and
punished www.cninfo.com.cn.
regulations
administratively
of
information
disclosure
Failing to
disclose
related-
Filed and
party
investigated by The Announcement on Offcn
transaction
China Given a Education Technology Co., Ltd.
information
Securities warning, and and the Relevant Parties’
Senior and Apr. 28,
Luo Xue Regulatory imposed a Reception of Decision of
executive violating 2022
Commission fine of RMB Administrative Penalty (No.
the laws
(CSRC) or 0.5 million 2022-032) disclosed on
and
punished www.cninfo.com.cn.
regulations
administratively
of
information
disclosure
Particulars on rectification
√ Applicable □ Not applicable
On April 27, 2022, the Company and the relevant parties received the official Decision of Administrative Penalty
from Anhui Securities Regulatory Bureau of CSRC. In response to this administrative penalty, the Company has
completed the rectification in strict accordance with the requirements. The Company will learn lessons, strengthen
the standardization of internal governance, strictly abide by relevant laws and regulations, and comprehensively
improve the level of compliance management and internal control to avoid the recurrence of similar problems.
Section XIII. Integrity of the Company and its controlling shareholders and actual controllers:
□ Applicable √Not applicable
79
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section XIV. Significant related-party transactions
1. Related-party transactions relevant to daily operations
√Applicable □Not applicable
Ji'an Jingkai Lixiangxue Financial Information Service Co., Ltd. / Shanghai
Related party
Beiding Network Technology Co., Ltd.
Relationship Enterprise controlled by the director of the Company
Total
Type of related-party transaction Purchasing products and goods from the related party
Content of related-party
Commission fee
transaction
Pricing principle for related-party
Fair market pricing --
transaction
Price of related-party transaction Fair market pricing --
Amount of related-party
transaction (RMB 10 thousand 7,801.04 7,801.04
yuan)
Proportion of the amount of
5.77% --
similar transactions
Approved transaction limit (RMB
7,800 7,800
10 thousand yuan)
Whether exceeding the approved
Yes --
transaction limit
Settlement method of related-
Wire transfer --
party transaction
Available market price for similar
None --
transactions
Date of disclosure April 29，2022 --
CNINFO (http://www.cninfo.com.cn)
Index of disclosure Announcement on the Estimated Limit of Daily Related-party Transactions --
in the Year of 2022 (No. 2022-035)
Details of large sales returns N/A
Actual performance during the
reporting period of the total
amount of the daily related-party N/A
transactions estimated by
categories in this period (if any)
Reasons for large differences
between transaction prices and
N/A
market reference prices (if
applicable)
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Offcn Education Technology Co., Ltd. 2022 Annual Report
2. Related-party transactions arising from acquisition and sale of assets or equity
□ Applicable √Not applicable
There is no related-party transaction arising from acquisition and sale of assets or equity of the Company during the reporting period.
3. Related party transactions of joint foreign investments
□ Applicable √ Not applicable
There is no related-party transaction of joint foreign investments of the Company during the reporting period.
4. Related credit and debt transactions
√ Applicable □ Not applicable
Debt payable to related parties:
Repayment
Newly added Interest in
Opening amount in Closing
amount in current
Related balance(RMB current Interest balance
current period period
Relationship Reason period (RMB 10
party 10 thousand (RMB 10 rate (RMB 10
(RMB 10 thousand
thousand thousand
yuan) thousand yuan)
yuan) yuan)
yuan)
Person in
Lu concert with Shareholder
0 95,924 0 0.00% 0 95,924
Zhongfang the actual loans
controller
The influence of related
debt on the Company’s
Enhancing the liquidity of the Company’s funds.
operation results and
financial status
5. Transactions with related financial companies
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the Company and its related financial companies or other related
parties.
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the Company and related
parties.
81
Offcn Education Technology Co., Ltd. 2022 Annual Report
7. Other significant related-party transactions
□ Applicable √ Not applicable
There is no other significant related-party transaction in the Company during the reporting period.
Section XV. Major contracts and their performance
1. Trusteeship, contracting and leasing matters
(1) Trusteeship
√Applicable □ Not applicable
Details of trusteeship
On September 20, 2018, Offcn Ltd. and Li Yongxin signed Agreement on Transfer of Organizer’s Rights of Non-
enterprise Private Schools Affiliated to Beijing Offcn Education Technology Co., Ltd.. All 100% rights of organizers
as of September 20, 2018 were to be transferred to Li Yongxin. On the same day, Li Yongxin and Offcn Ltd. signed
the Trusteeship Agreement of Private Non-enterprise Schools stipulating that Li Yongxin would entrust the
transferred private non-enterprise schools to Offcn Ltd. for management. The period of trusteeship started from the
date when Li Yongxin paid all the transfer price to the date when the private non-enterprise schools’ 100% rights of
organizers were transferred to the unrelated third party or canceled (Note: within 12 months after the revised
Implementation Regulations was officially promulgated and the relevant local education authorities passed the
supporting regulations in accordance with the revised Implementation Regulations, Li Yongxin transferred 100% of
the owner’s rights to the unrelated third party or canceled them.)
Projects with trusteeship that profits or losses reached more than 10% of the total profits of the Company of the
reporting period
□ Applicable √Not applicable
There was no project with trusteeship that profit or loss reached more than 10% of the total profits of the Company
during the reporting period.
(2) Contracting
□ Applicable √Not applicable
There was no contracting of the Company during the reporting period.
82
Offcn Education Technology Co., Ltd. 2022 Annual Report
(3) Leasing
□ Applicable √Not applicable
There was no leasing of the Company during the reporting period.
2. Major guarantee
□ Applicable √Not applicable
There was no major guarantee of the Company during the reporting period.
3. Particulars about entrusted cash assets
(1) Particulars about entrusted financial management
√Applicable □ Not applicable
Particulars about entrusted financial management during the reporting period
Unit: RMB 10 thousand yuan
Impairment
accrued of the
Source of entrusted Amount of entrusted Overdue amount
Type Undue balance overdue financial
financing financing yet to be recovered
product yet to be
recovered
Bank financial
Self-owned fund 10,870 0 0 0
product
Total 10,870 0 0 0
Particulars of high-risk entrusted financial management with a large single amount, low security or poor liquidity
□ Applicable √ Not applicable
It is estimated that the principal of the entrusted financing cannot be recovered or there are other cases that may cause
impairments to the entrusted financing.
□ Applicable √Not applicable
(2) Entrusted loans
□ Applicable √Not applicable
There is no entrusted loan of the Company during the reporting period.
83
Offcn Education Technology Co., Ltd. 2022 Annual Report
4. Other significant contracts
√Applicable □ Not applicable
84
Offcn Education Technology Co., Ltd. 2022 Annual Report
85
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section XVI. Other significant events
√Applicable □ Not applicable
On December 15, 2021, the Company received the Notice of Filing (No. SR Filing 0232021010) from the CSRC
for being suspected of failing to disclose related-party transaction information and violating the laws and regulations
of information disclosure.
On April 27, 2022, the Company and the relevant parties received the official Decision of Administrative Penalty
from the Anhui Securities Regulatory Bureau, which determines Offcn Edu, its subsidiaries Beijing Offcn Education
Technology Co., Ltd. and Liaoning Zhongcheng Real Estate Development Co.,Ltd. constitute a related-party
relationship with Shaanxi Guancheng Industrial Co., Ltd., Beijing Chuangsheng Construction Decoration
Engineering Co., Ltd., Shanghai Beiding Network Technology Co., Ltd., Ji'an Jingkai Lixiangxue Financial
Information Service Co., Ltd. and Liaoning Hanhui Industrial Co., Ltd.. The total amount involved in related
transactions was RMB 1232.395 million yuan, including RMB 196.335 million yuan in year 2019 and RMB 1036.060
million yuan in year 2020, which account for 6.65% and 30.19% of the net assets of Offcn Edu in the latest period
respectively. The Company did not disclose the above-mentioned information in accordance with relevant laws and
regulations and there was a material omission of the Company’s information disclosure. A warning was given to and
a fine was imposed on the Company and the relevant persons responsible for the situation, and corresponding
rectification is required. Specific information is stated in the announcement (No. 2022-032) disclosed by the
Company on CNINFO (www.cninfo.com.cn) and other designated media for information disclosure.
On August 24, 2022, the Company and the relevant parties received the Decision on Publicly Reproaching Offcn
Education Technology Co., Ltd. and Corresponding Parties from Shenzhen Stock Exchange. In response to the
above-mentioned failure to truthfully disclose related party relationships and transactions in accordance with
regulations, the Shenzhen Stock Exchange publicly reproached the Company and its chairman Li Yongxin, director
and general manager Wang Zhendong, director Shi Lei, CFO Luo Xue, and board secretary Gui Hongzhi.
Section XVII. Significant events of the Company’s subsidiaries
□ Applicable √ Not applicable
86
Offcn Education Technology Co., Ltd. 2022 Annual Report
Chapter 7 Share Changes and Shareholders
Section I. Changes in Shares
1. Changes in Shares
Unit: share(s)
Before Change Increase or Decrease (+ or -) After Change
Convers
New ion of
Bon
share equity
Number of us Number of
Proportion s reserves Other Subtotal Proportion
shares shar shares
issue into
es
d share
capital
1. Shares with trading restrictions 4,564,776,021 74.01% -3,076,550,617 -3,076,550,617 1,488,225,404 24.13%
(1) Shares held by state
(2) Shares held by state-owned legal
person
(3) Other shares held by domestic
capital 4,564,776,021 74.01% -3,076,550,617 -3,076,550,617 1,488,225,404 24.13%
Of which: shares held by domestic
legal person 89,117,723 1.44% -89,117,723 -89,117,723 0 0.00%
Shares held by domestic
natural person 4,475,658,298 72.57% -2,987,432,894 -2,987,432,894 1,488,225,404 24.13%
(4) Shares held by overseas capital
Of which: shares held by overseas
legal person
Shares held by overseas
natural person
2. Shares without trading
restrictions 1,602,623,368 25.99% 3,076,550,617 3,076,550,617 4,679,173,985 75.87%
(1) RMB ordinary shares 1,602,623,368 25.99% 3,076,550,617 3,076,550,617 4,679,173,985 75.87%
(2) Domestic - listed shares for
oversea investors
(3) Foreign - listed shares for
overseas investors
(4) Other
3. Total number of shares 6,167,399,389 100.00% 0 0 6,167,399,389 100.00%
Reasons for changes in shares
87
Offcn Education Technology Co., Ltd. 2022 Annual Report
√Applicable □ Not applicable
Mainly due to the release of sales restrictions on part of the shares issued by the major asset restructuring and the change of key
executive’s lock-up shares during the reporting period
Approval of changes in shares
□ Applicable √ Not applicable
Transfer of share changes
□ Applicable √ Not applicable
The impact of share changes on financial indicators such as basic earnings per share and diluted earnings per share,
net assets per share attributable to the Company’s ordinary shareholders, etc. in the most recent year and the most
recent period
□ Applicable √ Not applicable
Other content that the Company deems necessary or required by the securities regulatory agency to disclose
□ Applicable √ Not applicable
2. Changes in shares with sales restrictions
√ Applicable □ Not applicable
Unit: share(s)
Number of
Number of Number of Number of
shares with
shares with shares with shares with Date of
sales
Name of sales sales sales releasing
restrictions Reasons for sales restrictions
shareholder restrictions restrictions restrictions restrictions on
at the
increased in released in the at the end of sales
beginning of
the period period the period
the period
Releasing sales restriction on shares
from major assets replacement and
November 30,
Li Yongxin 1,131,070,121 282,508,780 848,561,341 shares issued for assets purchase;
2022
Change of key executive’s lock-up
shares.
Releasing sales restriction on shares
November
Lu Zhongfang 2,550,549,260 2,550,549,260 0 from major assets replacement and
2,2022
shares issued for assets purchase
Wang Zhendong 721,853,563 82,189,500 639,664,063 Releasing sales restriction on shares According to
88
Offcn Education Technology Co., Ltd. 2022 Annual Report
from major assets replacement and the relevant
shares issued for assets purchase; regulations of
Change of key executive’s lock-up senior
shares. executive’s
lock-up shares
According to
the relevant
Change of key executive’s lock-up regulations of
Guo Shihong 36,092,677 36,092,677 0
shares. senior
executive’s
lock-up shares
According to
the relevant
Change of key executive’s lock-up regulations of
Zhang Yongsheng 36,092,677 36,092,677 0
shares. senior
executive’s
lock-up shares
Beijing Kerui
Technology
Releasing sales restriction on shares
Innovation February
89,117,723 89,117,723 0 from major assets replacement and
Investment Center 11, ,2022
shares issued for assets purchase.
(Limited
Partnership)
Total 4,564,776,021 0 3,076,550,617 1,488,225,404 — —
Section II. Issuance and listing of securities
1. Issuance of securities (excluding preferred shares) during the reporting period
□ Applicable √ Not applicable
2. Explanation of changes in the Company’s total shares and shareholder structure, and changes in the
Company’s asset and liability structure
□ Applicable √ Not applicable
89
Offcn Education Technology Co., Ltd. 2022 Annual Report
3. Existing internal employee shares
□ Applicable √ Not applicable
Section III. Shareholders and actual controllers
1. Numbers of Shareholders and Shareholdings
Unit: Share(s)
Total number of
Total number of preferred
Total number of shareholders with Total number of shareholders whose
shareholders ordinary shares at preferred shareholders voting rights have
with ordinary the end of the with voting rights been restored at the
207,174 206,003 0 0
shares at the end previous month restored at the end of end of the previous
of the reporting before the the reporting period (if month before the
period disclosure date of any) (See Note 8) disclosure date of
the annual report the annual report (if
any) (See Note 8)
Shareholders with over 5% shares or top 10 shareholders
Sharehol Increase/decrease Number of Number of Pledged, marked or Frozen
Total shares held
Name of Nature of ding of shares during shares held shares held
at the end of the Number of
Shareholder shareholder Percenta the reporting with sales without sales Status of shares
reporting period shares
ge (%) period restrictions restrictions
Li Yongxin Domestic natural Person 15.77% 972,611,336 -158,803,785 848,561,341 124,049,995 Pledged 606,782,856
Lu Zhongfang Domestic natural Person 14.94% 921,148,498 -1,629,400,762 0 921,148,498 Pledged 842,500,000
Wang
Domestic natural person 12.34% 760,775,418 -92,110,000 639,664,063 121,111,355 Pledged 353,470,000
Zhendong
Hunan Chasing
Fund
Management
Co., Ltd. --
Other 5.51% 339,820,822 339,820,822 0 339,820,822
Hunan Chasing
Changqin No.1
Fund
Partnership
90
Offcn Education Technology Co., Ltd. 2022 Annual Report
(Limited
Partnership)
Shanghai
Tuopai Private
Funds
Management
Co., Ltd.－
Other 5.00% 308,369,970 308,369,970 0 308,369,970
Tuopai
Xingfeng No. 9
Private Security
Investment
Fund
Guangzhou
Kangqi Asset
Management
Center (Limited
Partnership)－
Other 5.00% 308,369,970 308,369,970 0 308,369,970
Kangqi Asset
Chuxin No.1
Private Security
Investment
Fund
Shanghai
Kaishuang
Private Funds
Management
Co., Ltd.－
Kaishuang Other 2.58% 159,355,594 159,355,594 0 159,355,594
Gongga No. 10
Private
Security
Investment
Fund
Hong Kong
Overseas legal person 1.26% 77,568,205 52,563,619 0 77,568,205
Securities
91
Offcn Education Technology Co., Ltd. 2022 Annual Report
Clearing Co.,
Ltd.
Wang Junfei Domestic natural Person 1.21% 74,883,785 74,883,785 0 74,883,785
Beijing Kerui
Technology
Innovation Domestic non-state-owned
0.89% 54,887,323 -34,230,400 0 54,887,323
Investment legal person
Center (Limited
Partnership)
Strategic investors or ordinary legal person
become the top 10 shareholders by the No
placement of new shares (if any) (See Note 3)
The Company’s controlling shareholder and actual controller Lu Zhongfang and Li Yongxin are in a parent-child
relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future Information Consulting Center (Limited
Description of the above-mentioned Partnership) constitute persons acting in concert.
shareholders’ relationship or concerted actions It is unknown whether there is an associated relationship among the above-mentioned other shareholders, and
whether the above-mentioned shareholders belong to the parties acting in concert as stipulated in the
Administrative Measures on Disclosure of Information Disclosure of Shareholding Changes in Listed Companies.
Explanation of the above-mentioned
shareholders’entrusting/entrusted voting rights N/A
and waiver of voting rights
Explanation of for the existence of a special
repurchase account among the top 10 N/A
shareholders (if any) (See Note 10)
Description of top 10 shareholders without sales restrictions
Type
Name of Shareholder Number of shares without sales restrictions at the end of the reporting period
Type Quantities
RMB ordinary
Lu Zhongfang 921,148,498 921,148,498
shares
Hunan Chasing Fund Management Co., Ltd.-
RMB ordinary
Hunan Chasing Changqin No.1 Fund 339,820,822 339,820,822
shares
Partnership (Limited Partnership)
Shanghai Tuopai Private Funds Management
RMB ordinary
Co., Ltd.-Tuopai Xingfeng No. 9 Private 308,369,970 308,369,970
shares
Security Investment Fund
92
Offcn Education Technology Co., Ltd. 2022 Annual Report
Guangzhou Kangqi Asset Management Center
RMB ordinary
(Limited Partnership)-Kangqi Asset Chuxin 308,369,970 308,369,970
shares
No.1 Private Security Investment Fund
Shanghai Kaishuang Private Funds
RMB ordinary
Management Co., Ltd.-Kaishuang Gongga No. 159,355,594 159,355,594
shares
10 Private Security Investment Fund
RMB ordinary
Li Yongxin 124,049,995 124,049,995
shares
RMB ordinary
Wang Zhendong 121,111,355 121,111,355
shares
Hong Kong Central Clearing Company RMB ordinary
77,568,205 77,568,205
Limited shares
RMB ordinary
Wang Junfei 74,883,785 74,883,785
shares
Beijing Kerui Technology Innovation RMB ordinary
54,887,323 54,887,323
Investment Center (Limited Partnership) shares
The Company’s controlling shareholder and actual controller Lu Zhongfang and Li Yongxin are in a parent-child
Description of the relationship or concerted
relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future Information Consulting Center (Limited
actions among the top 10 shareholders without
Partnership) constitute persons acting in concert.
sales restrictions, and between the top 10
It is unknown whether there is an associated relationship among the above-mentioned other shareholders, and
shareholders without sales restrictions and the
whether the above-mentioned shareholders belong to the parties acting in concert as stipulated in the
top 10 shareholders
Administrative Measures on Disclosure of Information Disclosure of Shareholding Changes in Listed Companies.
Description of the top 10 ordinary shareholders
participating in the margin trading or short
N/A
selling business (if any)
Whether the Company’s top 10 ordinary shareholders and top 10 ordinary shareholders without sales restrictions
conducted agreed repurchase transactions during the reporting period
□ Yes √ No
The Company’s top 10 ordinary shareholders and top 10 ordinary shareholders without sales restrictions didn’t
conduct agreed repurchase transactions during the reporting period
2. The controlling shareholders of the Company
Nature of controlling shareholders: natural person holding
Type of controlling shareholders: natural person
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Name of controlling shareholder Nationality Whether obtained any permanent residency abroad
Lu Zhongfang China No
Li Yongxin China No
Major occupations and jobs Li Yongxin is the Chairman of the Board of the Company.
Particulars about controlling or holding shares
of other companies listed at home and/or N/A
abroad during the reporting period
Change of controlling shareholder during the reporting period
□ Applicable √ Not applicable
Controlling shareholders of the Company did not change during the reporting period.
3. The actual controllers of the Company and the person acting in concert
Nature of actual controllers: domestic natural person
Type of actual controllers: natural person
Relationship with the Whether obtained any permanent residency
Name of actual controller Nationality
actual controller abroad
Lu Zhongfang herself China No
Li Yongxin himself China No
Acting in concert
Beijing Offcn Future Information
（including agreements,
Consulting Center (Limited China No
relatives, or under
partnership)
common control）
Li Yongxin, the founder and actual controller of the Company, is the current Chairman of the
Major occupations and jobs
Board of the Company.
Particulars about controlling shares
of other companies listed at home
N/A
and/or abroad in past 10 years
Change of actual controller during the reporting period
□ Applicable √ Not applicable
The actual controllers of the Company did not change during the reporting period.
Block diagram of the property rights and control relationship between the Company and the actual controllers
94
Offcn Education Technology Co., Ltd. 2022 Annual Report
The actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
4. The Company’s controlling shareholder or the largest shareholder and its concert parties have pledged 80%
of the number of shares held by them
□ Applicable √ Not applicable
5. Other legal person shareholders holding more than 10% of the shares
□ Applicable √ Not applicable
6. Controlling shareholders, actual controllers, restructuring parties and other committed entities with
restricted shareholding reductions
□ Applicable √ Not applicable
Section IV. Details of implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing repurchased shares by means of centralized bidding
□ Applicable √ Not applicable
95
Offcn Education Technology Co., Ltd. 2022 Annual Report
Chapter 8 Preferred Shares
□ Applicable √ Not applicable
There were no preferred shares during the reporting period.
96
Offcn Education Technology Co., Ltd. 2022 Annual Report
Chapter 9 Corporate Bonds
□ Applicable √ Not applicable
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Chapter 10 Financial Statements
Section I. AUDITOR’S REPORT
Audit Opinion Standard unmodified audit opinion
Audit Report sign-off Date April 27, 2023
Audit Institution Name Baker Tilly China Certified Public Accountants (LLP)
Audit Report Number Baker Tilly China [2023] No. 23905
CPA Name Zhou Baiming, Li Qiang
Auditor’s Report
Baker Tilly China [2023] No. 23905
To the Shareholders of Offcn Education Technology Co.,Ltd.
I. Opinion
We have audited the accompanying financial statements of Offcn Education Technology Co.,Ltd. (“Offcn Education” or “the
Company”), which comprise the consolidated and parent's balance sheets as at 31 December 2022, and the 2022 consolidated and
parent's income statements, the consolidated and parent's statement of cash flows and the consolidated and parent's statements of
changes in owners' equity for the year then ended, and the notes to the financial statements.
In our opinion, the financial statements of Offcn Education present fairly, in all material respects, the consolidated and parent's
financial position as at 31 December 2022, and the 2022 consolidated and parent's result of operations and cash flows for the year ended
in accordance with the requirements of the Accounting Standards for Business Enterprises.
II. Basis of opinion
We conducted our audit in accordance with China Standards on Auditing (“CAS”). Our responsibilities under those standards are
further described in the Auditor’s responsibilities section of our report. We are independent of Offcn Education in accordance with China
Code of Ethics for Certified Public Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with
the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Ⅲ. Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
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AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
Key Audit Matters How our audit addressed the Key Audit Matter
Recognition of revenue
For example, in the notes to the financial statements In response to the key audit matter, we performed
"V. The Company’s Significant Accounting Policies And procedures as follows:
Accounting Estimates (32)” and “VII. Consolidated Financial
1.Understood and tested internal controls relating to
Statement Project Notes (34)”, education and training recognition of revenue and evaluated the effectiveness of
income accounted for 99.52% of the company’s operating related internal controls.
income in 2022.
2.Understood the revenue recognition policies of comparable
The company's revenue mainly includes ordinary class companies in the same industry, discussed the characteristics of
revenue and agreement class revenue. When the ordinary training business with management, checked business
class face-to-face training service is completed, all the contracts, identify contract terms and conditions related to
training fees received in advance are recognized as education and training services, and evaluated the
revenue. Revenue from online training in ordinary classes appropriateness of revenue recognition policies.
is recognized on a straight-line basis during the validity 3.Implemented substantive analysis procedures for revenue
period of the service provided. Non-refundable portion of and gross profit margin during the reporting period, evaluated
revenue from agreement class is recognized as revenue the overall rationality of revenue.
upon completion of training services; According to the
4.Selected samples of the revenue confirmed during the
agreement, the refund part is recognized as revenue when
reporting period, checked the receipts, bank flow, contracts,
the non-refundable conditions are met.
examination announcement and refunds, and evaluated
In view of the significant amount of education and whether the relevant revenue confirmation is in line with the
training revenue, which is the main source of company's company's revenue recognition accounting policy.
profits. And the frequent occurrence of transactions, the 5.For the education and training revenue items confirmed
risk of misstatement is high. Therefore, we identified the before and after the balance sheet date, selected samples,
company's education and training revenue as a key audit checked the supporting documents for revenue recognition,
matter. and evaluated whether they are recorded in the correct
accounting period.
AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
Ⅳ. Other Information
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Management of the Company is responsible for the other information.The other information comprises all of the information
included in 2022 annual report of the Company other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,in doing so,consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Ⅴ . Responsibilities of Management and Those in Charge of Governance for the Financial
Statements
The management is responsible for the preparation of the financial statements that give a true and fair view in accordance with
Accounting Standards for Business Enterprises and designing, implementing and maintaining internal control as the management
determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
management either intend to liquidate Offcn Education or to cease operations or have no realistic alternative but to do so.
Those in charge of governance are responsible for overseeing the Company’s financial reporting process.
AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
Ⅵ Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with CAS will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgement and maintain professional skepticism throughout
the audit. We also:
1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
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opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.
4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report.
AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
However, future events or conditions may cause the Company to cease to continue as a going concern.
5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
6) Acquire sufficient and appropriate audit evidence based on the financial information of the Company or business activities to
express its audit opinion on the consolidated financial statements. We are responsible for the direction, supervision, and execution of the
group audit and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those in charge of governance, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
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AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
Chinese Certified Public
Accountant: Zhou Baiming
Beijing, China (Engagement partner)
27 April,2023
Chinese Certified Public
Li Qiang
Accountant:
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Section II. Financial Statements
The unit of the statement in the financial notes: RMB
1.Consolidated balance sheet
Prepared by: Offcn Education Technology Co., Ltd.
December 31, 2022
Unit: RMB
ITEM December 31, 2022 January 1, 2022
Current assets:
Monetary funds 385,328,555.74 1,970,361,272.64
Settlement reserve
Lendings
Transactional financial assets 346,726,621.74
Derivative financial assets
Notes receivable
Accounts receivable 37,323,682.88 40,374,842.27
Receivables financing
Prepayments 556,093.00 1,438,350.00
Premium receivable
Accounts receivable reinsurance
Reserve for reinsurance Receivable contracts
Other receivables 193,617,379.76 219,501,061.83
Inc： Interest receivables
Dividends receivables
Buying back the sale of financial assets
Inventory
Contract assets
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Assets held-for-sale
Non-current assets due within one year
Other current assets 4,559,823.18 36,959,129.80
Total current assets 621,385,534.56 2,615,361,278.28
Non-current assets:
Loans and advances
Debt investment 7,058,993.55
Other debt investment
Long-term receivables
Long-term equity investment 46,835,952.63 46,850,364.40
Other equity investment 121,300,000.00 130,400,000.00
Other non-current financial assets 27,680,000.00 30,260,000.00
Investment property 450,260.54 644,936,541.46
Fixed assets 1,970,536,339.75 1,770,372,338.85
Construction in progress 323,273,645.99 294,785,678.31
Productive biological assets
Oil and gas assets
Right-of-use asset 1,112,202,447.58 1,342,280,387.08
Intangible assets 1,162,266,659.34 866,627,549.85
Development expenditure
Goodwill 99,867,720.38 99,867,720.38
Long-term prepaid expenses 285,134,318.63 380,191,006.38
Deferred tax assets 602,280,444.37 424,027,271.38
Other non-current assets 1,654,201,029.49 1,652,164,395.78
Total Non-current Assets 7,406,028,818.70 7,689,822,247.42
Total Assets 8,027,414,353.26 10,305,183,525.70
Current liabilities:
Short-term loan 3,152,945,812.59
Borrowing from the central bank
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Borrowings from banks and other financial institutions
Transactional financial liabilities
Derivative Financial liabilitiels
Notes payable
Accounts payable 287,088,393.76 282,032,916.52
Deposit received
Contract liabilities 3,949,799,538.71 3,063,721,290.28
Financial assets sold for repurchase
Absorbing deposits and interbank deposits
Acting trading securities
Acting underwriting securities
Payroll payable 609,823,739.07 422,886,856.60
Taxes payable 9,593,498.07 12,566,751.84
Other payable 1,096,787,345.65 129,043,599.22
Inc：Interest payable
Dividend payable
Fees and commissions payable
Reinsurance amounts payable
Liabilities held-for-sale
Non-current Liabilities due within one year 578,821,921.03 531,876,007.31
Other current liabilities 118,495,201.91 91,925,853.39
Total Current Liabilities 6,650,409,638.20 7,686,999,087.75
Non-current Liabilities:
Insurance contract reserve
Long-term loan
Bonds payable
Inc: Bonds payable_preferred stock
Bonds payable_perpetual bond
Lease liability 508,752,253.77 635,691,184.87
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Long-term payables
Long-term salary payable
Estimated liabilities
Deferred Income
Deferred tax liability 88,360,124.03 93,712,172.62
Other non-current liabilities
Total Non-current Liabilities 597,112,377.80 729,403,357.49
Total Liabilities 7,247,522,016.00 8,416,402,445.24
Owners' equity:
Share capital 103,807,623.00 103,807,623.00
Other equity instruments
Inc: Other equity instruments_preferred stock
Other equity instruments_perpetual bond
Capital reserve 1,225,481,049.50 1,225,481,049.50
less: Treasury stock
Other comprehensive income 6,375,000.00 13,200,000.00
Special reserve
Surplus reserves 45,000,000.00 45,000,000.00
General risk preparation
Undistributed profits -600,729,736.73 501,330,081.70
Total Owners' Equity Attributable To the Parent Company 779,933,935.77 1,888,818,754.20
Minority shareholders' equity -41,598.51 -37,673.74
Total Owners' Equity 779,892,337.26 1,888,781,080.46
Total Liabilities and Owners' Equity 8,027,414,353.26 10,305,183,525.70
Legal representative: Wang Zhendong Person in charge of accounting: Shi Lei Head of accounting department: Luo Xue
2.Parent company balance sheet
Unit:RMB
ITEM December 31, 2022 January 1, 2022
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Current assets:
Monetary funds 4,549,980.47 59,197,879.74
Transactional financial assets 1,573,219.32
Derivative financial assets
Notes receivable
Accounts receivable 26,484,984.35 28,806,097.45
Receivables financing
Prepayments
Other receivables 22,848,853.79 20,699,731.33
Including:interest receivable
Dividend receivable
Inventory
Contract assets
Assets held-for-sale
Non-current assets due within one year
Other current assets
Total current assets 53,883,818.61 110,276,927.84
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment 19,190,401,583.37 19,190,415,995.14
Other equity investment 121,300,000.00 130,400,000.00
Other non-current financial assets
Investment property 363,531.57 370,687,463.01
Fixed assets 557,438,989.80 371,414,975.96
Construction in progress 72,569,103.57 72,569,103.57
Productive biological assets
Oil and gas assets
Right-of-use assets
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Intangible assets 161,459,750.00
Development expenditure
Goodwill
Long-term prepaid expenses
Deferred tax assets
Other non-current assets 1,618,411,145.38 1,618,391,145.38
Total non-current assets 21,721,944,103.69 21,753,878,683.06
Total assets 21,775,827,922.30 21,864,155,610.90
Current liabilities:
Short-term loan 1,201,317,569.59
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 43,621,752.26 83,621,752.26
Deposit received
Contract liabilities
Payroll payable
Taxes payable 1,693,081.17 1,600,302.00
Other payable 2,533,250,496.78 1,307,916,006.49
Including:interest payable
Dividend payable
Liabilities held-for-sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 2,578,565,330.21 2,594,455,630.34
Non-current liabilities:
Long-term loan
Bonds payable
Bonds payable preferred stock
Bonds payable perpetual bond
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Lease liability
Long-term payables
Long-term salary payable
Estimated liabilities
Deferred income
Deferred tax liability 2,125,000.00 4,418,304.83
Other non-current liabilities
Total non-current liabilities 2,125,000.00 4,418,304.83
Total Liabilities 2,580,690,330.21 2,598,873,935.17
Owners’equity:
Share capital 6,167,399,389.00 6,167,399,389.00
Other equity instruments
Other equity instruments preferred stock
Other equity instruments perpetual bond
Capital reserve 12,775,326,370.33 12,775,326,370.33
Less:Treasury stock
Other comprehensive income 6,375,000.00 13,200,000.00
Special reserve
Surplus reserves 387,458,806.65 387,458,806.65
Undistributed profits -141,421,973.89 -78,102,890.25
Owners’equity 19,195,137,592.09 19,265,281,675.73
Liabilities and owner’s equity 21,775,827,922.30 21,864,155,610.90
3.Consolidated income statement
Unit: RMB
ITEM Year 2022 Year 2021
I.Total operating income 4,824,814,105.43 6,911,723,331.79
Inc: Operating income 4,824,814,105.43 6,911,723,331.79
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Interest income
Premium earned
Fee and commission income
II. Total operating costs 6,138,728,386.78 9,842,898,477.96
Inc: Operating costs 2,979,787,310.55 4,993,717,363.58
Interest expense
Fee and commission expenses
Surrender money
Net reimbursement expenditure
Withdrawal of net insurance liability contract reserves
Policyholder dividend expenses
Reinsurance expenses
Taxes and surcharges 33,295,722.91 35,355,169.74
Sales expenses 1,359,096,659.05 2,105,098,912.06
Management expenses 935,818,353.08 1,315,643,022.03
Research and development expenses 592,208,850.10 901,469,538.57
Financial expenses 238,521,491.09 491,614,471.98
Inc:Interest 82,900,952.64 274,734,405.81
Interest income 7,965,614.53 58,235,304.20
Add: Other income 52,156,799.52 96,084,140.34
Investment income (Loss is listed with "-") 9,804,270.34 79,269,900.92
Including: investment income from associates and joint ventures -14,411.77 -2,149,635.60
Derecognition income of financial assets measured at amortized
cost
Exchange earnings ((Loss is listed with "-")
Net exposure hedge income(Loss is listed with "-")
Fair value change income (Loss is listed with "-") -6,026,850.74 -21,490,322.52
Expected credit loss(Loss is listed with "-") -9,746,689.55 -8,529,849.40
Asset impairment loss(Loss is listed with "-")
Asset disposal income(Loss is listed with "-") -9,500,665.47 -163,075.82
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III. Operating profit (Loss is listed with "-") -1,277,227,417.25 -2,786,004,352.65
Add: non-operating income 18,141,095.89
Less: non-operating expenses 4,778,597.36 1,303,782.47
IV. Total profit(The total loss is listed with "-") -1,282,006,014.61 -2,769,167,039.23
Less: Income tax expenses -179,942,271.41 -399,652,322.88
V. Net profit (Net loss is listed with "-") -1,102,063,743.20 -2,369,514,716.35
i. Classified by business continuity
1.Net profit from continuing operations (Net loss is listed with "-") -1,102,063,743.20 -2,369,514,716.35
2.Net profit from discontinued operations (Net loss is listed with "-
")
ii. Classification by ownership
1.Net profit attributable to the owner of the parent company -1,102,059,818.43 -2,369,509,039.00
2.Net profit attributable to minority shareholders -3,924.77 -5,677.35
VI. Net other comprehensive income -6,825,000.00 -16,800,000.00
Net other comprehensive income after tax attributable to the parent company
-6,825,000.00 -16,800,000.00
owner
i. Other comprehensive income that cannot be reclassified into profit or loss -6,825,000.00 -16,800,000.00
1.Inc: Changes from the remeasurement of the defined benefit plan
2.Other comprehensive income that cannot be transferred to profit or
loss under the equity method
3.Changes in the fair value of other equity instruments -6,825,000.00 -16,800,000.00
4.Changes in fair value of the company's own credit risk
5. Other
ii. Other comprehensive income that will be reclassified into profit or loss
1.Other comprehensive income of convertible profit and loss under the
equity method
2.Changes in fair value of other debt investments
3.Financial assets reclassified into other comprehensive income
4.Other credit impairment provisions for investment of creditor's
rights
5.Effective portion of profit or loss on cash flow hedging
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6.Foreign currency financial statement translation difference
7.Other
Net other comprehensive income after tax attributable to non-controlling
interest
VIII. Total comprehensive income -1,108,888,743.20 -2,386,314,716.35
Total comprehensive income attributable to owners of the parent -1,108,884,818.43 -2,386,309,039.00
Total comprehensive income attributable to minority shareholders -3,924.77 -5,677.35
IX. Earnings per share
Basic earnings per share -0.18 -0.38
Diluted earnings per share -0.18 -0.38
If a business combination under the same control occurs in the current period, the net profit realized by the combined party before
the combination is: RMB 0.00. The net profit realized by the combined party in the previous period was: RMB 0.00.
Legal representative: Wang Zhendong Person in charge of accounting: Shi Lei
Head of accounting department: Luo Xue
4.Parent company income statement
Unit:RMB
ITEM Year 2022 Year 2021
I. Total operating income 1,483,143.55 14,831,488.06
Inc: Operating income 1,483,143.55 14,831,488.06
Interest income
Premium earned
Fee and commission income
II. Total operating costs 60,132,786.17 88,480,334.21
Inc: Operating costs 10,359.40 11,230,514.83
Interest expense
Fee and commission expenses
Surrender money
Net reimbursement expenditure
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Withdrawal of net insurance liability contract reserves
Policyholder dividend expenses
Reinsurance expenses
Taxes and surcharges 6,221,746.23 4,240,824.77
Sales expenses
Management expenses 41,458,152.87 25,966,438.27
Research and development expenses
Financial expenses 12,442,527.67 47,042,556.34
Inc:Interest 13,356,255.38 47,157,530.56
Interest income 927,488.10 134,790.30
Add: Other income 2,487.65 138,234.55
Investment income (Loss is listed with "-") 1,719,685.26 -836,172.91
Including: investment income from associates and
-14,411.77 -2,174,511.83
joint ventures
Derecognition income of financial assets
measured at amortized cost
Exchange earnings ((Loss is listed with "-")
Net exposure hedge income(Loss is listed with "-
")
Fair value change income (Loss is listed with "-") -73,219.32 42,765.95
Expected credit loss(Loss is listed with "-") -2,336,393.54 -1,557,086.35
Asset impairment loss(Loss is listed with "-")
Asset disposal income(Loss is listed with "-") -223,987.77
III. Operating profit (Loss is listed with "-") -59,337,082.57 -76,085,092.68
Add: non-operating income
Less: non-operating expenses 4,000,305.90
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IV. Total profit(The total loss is listed with "-") -63,337,388.47 -76,085,092.68
Less: Income tax expenses -18,304.83 20,539,842.93
V. Net profit (Net loss is indicated by "-") -63,319,083.64 -96,624,935.61
Net profit from continuing operations (Net loss
-63,319,083.64 -96,624,935.61
is listed with "-")
Net profit from discontinued operations (Net loss is
listed with "-")
VI. Net other comprehensive income -6,825,000.00 -16,800,000.00
1. Other comprehensive income that cannot be
-6,825,000.00 -16,800,000.00
reclassified into profit or loss
Inc: Changes from the remeasurement of the
defined benefit plan
Other comprehensive income that cannot be
transferred to profit or loss under the equity method
Changes in the fair value of other equity
-6,825,000.00 -16,800,000.00
instruments
Changes in fair value of the company's own
credit risk
2. Other comprehensive income that will be
reclassified into profit or loss
Other comprehensive income of convertible profit
and loss under the equity method
Changes in fair value of other debt investments
Financial assets reclassified into other
comprehensive income
Other credit impairment provisions for investment
of creditor's rights
Effective portion of profit or loss on cash flow
hedging
Foreign currency financial statement translation
difference
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Other
VIII. Total comprehensive income -70,144,083.64 -113,424,935.61
IX. Earnings per share
Basic earnings per share
Diluted earnings per share
5.Consolidated cash flow statement
Unit: RMB
Items 2022 2021
I.Cash Flows from Operating Activities:
Cash received from the sale of goods and the services 5,878,642,804.40 5,172,563,759.32
Net increase in customer deposits and interbank deposits
Net increase in borrowing from central bank
Net increase in funds borrow from other financial institutions
Cash received from the original insurance contract premium
Net cash received from reinsurance business
Net increase in policyholders’ deposits and investment funds
Cash charged with interest, handling fees and commissions
Net increase in funds borrowed in
Net increase in repurchase funds
Net cash received from agent buying and selling of securities
Taxes refund
Other cash received related to other business activities 42,585,502.18 171,941,814.92
Subtotal of cash inflow from operating activities 5,921,228,306.58 5,344,505,574.24
Cash paid for the purchase of goods and services 737,440,108.29 1,687,330,079.68
Net increase in customer loans and advances
Net increase in deposit of central bank and interbank
Cash paid for the original insurance contract
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Net increase in borrowed funds
Cash paid for interest, handling fees and commissions
Cash paid for policy dividends
Cash paid to and for employees 3,731,688,834.19 6,340,168,377.45
Various taxes paid 160,757,951.44 295,559,702.01
Other cash paid for business activities 504,149,454.38 1,119,408,964.00
Subtotal of cash outflows from business activities 5,134,036,348.30 9,442,467,123.14
Net Cash Flow from Operating Activities 787,191,958.28 -4,097,961,548.90
II.Cash Flows from Investing Activities:
Cash received from investment recovery 466,570,799.16 8,918,329,229.00
Cash received from investment income 9,827,675.66 247,231,808.99
Net cash received from disposal of fixed assets, intangible assets and other
3,012,387.24
long-term assets
Net cash received from disposal of subsidiaries and other business units 51,000,000.00
Other cash received related to investing activities 200,000,000.00
Subtotal of cash inflows from investing activities 476,398,474.82 9,419,573,425.23
Cash paid for the purchase and construction of fixed assets, intangible assets 106,763,167.69
1,366,834,155.42
and other long-term assets
Cash paid for investment 116,841,028.16 6,312,200,000.00
Net increase in pledge loans
Net cash paid for aquiring subsidiaries and other business units
Other cash paid related to investing activities
Subtotal of cash outflows from investment activities 223,604,195.85 7,679,034,155.42
Net Cash Flow from Investing Activities 252,794,278.97 1,740,539,269.81
III.Cash Flows from Financing Activities:
Cash received from investment absorption
Including:cash received from subsidiaries in absorbing minority
shareholders'investment
Cash received from loans 4,569,000,000.00
Other cash received related to fundraising activities 959,240,000.00
Sub-total of cash inflows from financing activities 959,240,000.00 4,569,000,000.00
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Cash paid for debt repayment 3,149,000,000.00 5,389,000,000.00
Cash paid for dividends, profits or interest payments 52,155,602.76 196,236,215.13
Including:dividends and profits paid by subsidiaries to minority
shareholders
Other cash paid related to financing activities 386,990,744.68 606,571,985.34
Subtotal of cash outflows from financing activities 3,588,146,347.44 6,191,808,200.47
Net Cash Flow from Financing Activities -2,628,906,347.44 -1,622,808,200.47
IV.Effect of the changes of the exchange rate on cash and the equivalents
V.Net Increase in Cash and Cash Equivalents -1,588,920,110.19 -3,980,230,479.56
Add: balance of cash and cash equivalents at the beginning of the period 1,969,806,009.56 5,950,036,489.12
VI.Balance of cash and cash equivalents at the end of the period 380,885,899.37 1,969,806,009.56
6.Parent company cash flow statement
Unit:RMB
ITEM Year 2022 Year 2021
I. Cash flow from operating activities:
Cash received from the sale of goods and services 1,572,581.17
Tax refund
Other cash received related to other business activities 1,186,259,251.75 800,735,886.99
Subtotal of cash inflow from operating activities 1,187,831,832.92 800,735,886.99
Cash paid for the purchase of goods and services
Cash paid to and for employees
Various taxes paid 6,203,155.71 4,860,974.71
Other cash paid for business activities 24,725,106.92 1,030,790,404.92
Subtotal of cash outflows from business activities 30,928,262.63 1,035,651,379.63
Net cash flow from operating activities 1,156,903,570.29 -234,915,492.64
II. Cash flows from investing activities:
Cash received from investment recovery 1,500,000.00 82,700,000.00
Cash received from investment income 1,734,097.03 1,338,338.92
Net cash received from disposal of fixed assets, intangible assets and
2,507,345.00
other long-term assets
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Net cash received from disposal of subsidiaries and other business units
Other cash received related to investing activities
Subtotal of cash inflows from investment activities 3,234,097.03 86,545,683.92
Cash paid for the purchase and construction of fixed assets, intangible
20,000.00 55,497.58
assets and other long-term assets
Cash paid for investment 131,600,000.00
Net cash paid for acquiring subsidiaries and other business units
Other cash paid related to investing activities
Subtotal of cash outflows from investment activities 20,000.00 131,655,497.58
Net cash flows from investing activities 3,214,097.03 -45,109,813.66
III. Cash flow from financing activities:
Cash received from investment absorption
Cash received from the loan 1,200,000,000.00
Other cash received related to fundraising activities
Subtotal of cash inflows from financing activities 1,200,000,000.00
Cash paid for debt repayment 1,200,000,000.00 870,000,000.00
Cash paid for dividends, profits or interest payments 14,673,824.97 46,923,835.97
Other cash paid related to financing activities
Subtotal of cash outflows from financing activities 1,214,673,824.97 916,923,835.97
Net cash flow from financing activities -1,214,673,824.97 283,076,164.03
IV. Effect of the changes of the exchange rate on cash and the equivalents
V. Net increase in cash and cash equivalents -54,556,157.65 3,050,857.73
Add:balance of cash and cash equivalents at the beginning of the period
58,831,214.10 55,780,356.37
VI. Balance of cash and cash equivalents at the end of the period 4,275,056.45 58,831,214.10
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7.Consolidated Statement of Changes in Owners' Equity
Unit: RMB
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Unit: RMB
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8.Statement of Changes in Owners' Equity
Unit: RMB
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Unit: RMB
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Section III. General Information
1. Overview of the company
Offcn Education Technology Co.,Ltd.（referred to as the “company” or “the company”）was formerly known as Yaxia Automobile
Co.,Ltd.（refered to as “Yaxia Automobile”），Yaxia Automobile ,a limited company established by Wuhu Yaxia Industrial Co., Ltd.
On 30 November 30 2006, obtained the Enterprise Business license of Enterprise Legal Person NO. 3402012104768 issued by Wuhu
Administration for industry and commerce. Yaxia Automobile was approved by the China Securities Regulatory Commission (referred
to as the "CSRC") for the approval of the initial public offering of Wuhu Yaxia Automobile Co., Ltd. (CSRC License [2011] No. 1046)
and issued 22 million RMB ordinary shares to the public and traded on the Shenzhen Stock Exchange in August 2011. The controlling
shareholder is Anhui Yaxia Industrial Co., Ltd. (referred to as “Yaxia Industrial”).On 1 July 2016, the company obtained the No.
91340200711040703A “Enterprise Business license of Enterprise Legal Person” issued by the Wuhu Administration for Industry and
Commerce. As of 31 December 2021, the company's share capital is RMB 6,167,399,389.00.
In accordance with the resolution of the third extraordinary general meeting of shareholders of Yaxia Automobile in 2018 and the
resolution of the 24th meeting of the 4th Board of Directors, and approved by the China Securities Regulatory Commission's Securities
Regulatory Commission (2018) 1975, “On the approval of the major asset restructuring of Yaxia Automobile Co., Ltd. and the issuance
of shares to Lu Zhongfang and other assets of the approval of assets ” that Yaxia Automobile swapped all assets and liabilities (“exchange-
out assets”) other than the retained assets that do not constitute business as of the date of the assessment of the benchmark for the
equivalent portion (“exchange-in assets”) of 100.00% of the equity in Beijing Offcn Education Technology Co., Ltd. (referred to as
"Offcn Limited") respectively held by 11 counterparts, including Li Yongxin.And pay the difference between the exchange-out assets
and the exchange-in assets by issuing shares.
On 27 December 2018, Yaxia Automobile and the counterpart Yaxia Industrial signed the Confirmation of Delivery of Assets. The
closing date of the exchange-out assets is 27 December 2018, from the date of delivery, Yaxia Automobile, the counterparty will complete
the delivery obligations, regardless of whether the exchange-out assets (including but not limited to land use rights, home ownership,
intellectual property rights and qualifications, permits, other intangible assets, etc.) is actually completed, the ownership of the assets
belongs to Yaxia Industrial, and all the rights, obligations, responsibilities and risks related to the disposed assets (including contingent
liabilities, hidden liabilities) are owned and undertaken by Yaxia Industrial, which has the actual control and disposal rights over the
exchange-out assets, and Yaxia Automobile no longer has any actual rights. On the same day, Offcn Limited completed the registration
procedures for industrial and commercial changes on shareholder changematters. After the completion of this alteration, Yaxia
Automobile holds a 100.00% stake in Offcn Limited, accordingly, the controlling shareholder and actual controller of the company will
be changed to Li Yongxin and Lu Zhongfang. On 2 February 2019, Yaxia Automobile changed its name and changed its scope of business.
On 23 January 2019, the registration procedures for the transfer of shares of the company and the new shares of the company related
to the restructuring transaction were completed.
Unified social credit code：91340200711040703A
Company residence：Yaxia Automobile City, Yijiang North Road, Jiujiang District, Wuhu City, Anhui Province
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Headquarters Address：Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District, Beijing
The nature of the industry：Education
Customer nature：Mainly natural persons
Scope of business: technology development, technical services, technology promotion, technology transfer ,technical consulting
and technology education and training (only branch to carry out this business)in the field of education and science ; offering exhibition
services, organizing cultural and artistic exchange activities (excluding performances), conference services, and consult business
management.(Projects subject to approval according to law can only carry out business activities after approval by the relevant
departments)
The financial reporting was approved by the Board of Directors of the Company on April 27, 2023.
2. The scope of the consolidated financial statements
The consolidated scope of the consolidated financial statements of the company is determined on a control basis, including the
financial statements of the company and all subsidiaries.A subsidiary is an enterprise or entity controlled by the company.The scope of
the consolidated financial statements is detailed in note IX (1) “Interest in subsidiaries” of this report. Changes in the scope of
consolidated financial statements are detailed in Note VIII “Changes In The Consolidated Scope” of this report.
Section IV. Basis Of Preparation Of Financial Statements
1. Basis of preparation
The financial statements are prepared on a going concern basis，according to the practical transactions，in accordance with the
relevant provisions of the Accounting Standards for Business Enterprises, and based on the important accounting policies and accounting
estimates described below.
2. Going concern
As of December 31, 2022,, Offcn Edu's undistributed profits amounted to RMB -600.7297 million yuan, and the total amount of
current liabilities exceeded the total amount of current assets by RMB 6,029.0241 million yuan (including contract liabilities of RMB
3,949.7995 million yuan and amounts owed to shareholders of RMB 959.24 million yuan). Because the Company's shareholders Li
Yongxin and Lu Zhongfang agreed not to collect the Company's outstanding amounts in the foreseeable future, and agreed to provide
all necessary financial support for the Company's debts that need to be repaid in the foreseeable future to maintain its continued operation,
this financial statement is prepared based on the assumption of going concern.
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Section V. The Company’s Significant Accounting Policies And Accounting Estimates
1. Statement of compliance with the Accounting Standards for Business Enterprises.
The financial statements based on the above-mentioned preparation basis meet the requirements of the latest Accounting Standards
for Business Enterprises and its application guidelines, interpretations, and other relevant regulations (collectively referred to as
"Enterprise Accounting Standards") issued by the Ministry of Finance, which truly and completely present the company's financial
position , financial performance,cash flows and other information for the year then ended.
In addition, the financial report compiled by reference to the listing and disclosure requirements of the disclosure provisions of the
Rules for the Information Disclosure and Compilation of Companies Publicly Issuing Securities NO.15:--General Provisions for
Financial Report(Revised in 2014) of CSRC as well as the Notice on Implementation of the New Accounting Standards for Listed
Companies(Letter of the accounting department [2018] no. 453).
2. Accounting period and business cycle
The Company’s accounting period starts from 1 January and ends on 31 December.
3. Recording currency
The Company adopts Renminbi (RMB) as their recording currency.
4. Measurement attributes of the report items change and used in the current period
Measurement attributes are adopted by the company including history cost，replacement cost，net realizable value，present value，
and fair value.
5. Business combinations
5.1 The accounting treatment of business combinations involving enterprises under common control
The company realize achieve a merger under the same control in one transaction or through step-by-step multiple transactions.
Assets and liabilities obtaining from the merger of enterprise is measured according to the share of book value of consolidated financial
statements of final controlling party under the owner’s equity of combined party within combining date. The difference between the
book value of the net assets obtained from company and the book value of the consideration the combination of payment (or the aggregate
face value of shares issued as consideration) is adjusted to the capital reserve. If the capital reserve is insufficient to offset, the retained
earnings shall be adjusted.
5.2 The accounting treatment of business combinations involving enterprises under uncommon control
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Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference
is treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. If the combination cost is less than the
share of identifiable fair value of net assets of acquiree, firstly, conducting the review of measurement is necessary to achieve the acquiree
the identifiable assets, liabilities and the fair value of contingent liabilities as well as the combination costs. The acquiree combination
costs after reviews are still less than the fair value of identifiable net asset, the difference will be included into the current profits and
losses.
Step-by-step multiple transaction to achieve business combinations not under common control should be handled in the following
order：
（1）Adjust the initial investment cost of long-term equity investments. If the equity held before the purchase date is accounted
for using the equity method, it is remeasured at the fair value of the equity on the purchase date, and the difference between the fair value
and its book value is included in the current investment income; Changes in other comprehensive income and other owners' equity under
the equity method shall be converted to the current income at the acquisition date, except for other comprehensive income arising from
the net liabilities or net assets’changes of the benefit plan remeasured by the investee and. arising from changes in the fair value of
investment in other equity instruments held.
（2）Recognize goodwill (or the amount included in the current profit or loss). Compare the initial investment cost of the adjusted
long-term equity investment with the fair value of the identifiable net assets of the subsidiary that should be enjoyed on the purchase
date. If the former is greater than the latter, the difference is recognized as goodwill; if he former is less than the latter, and the difference
is booked into the current profit and loss.
Circumstances of disposing of equity through multiple transactions to the loss of control of subsidiaries
(1)Determine whether the various transactions in the process of step-by-step disposal of equity to the loss of control of subsidiaries
belong to the "package deal" principle
Generally transactions in stages are treatment as a package deal in accounting if the transaction terms, conditions, and economic
impact of disposal of the subsidiary's equity interests comply with one or more of the following:
1）These transactions are made simultaneously or with consideration of influence on each other;
2）These transactions can only achieve a complete business outcome when treated as a whole;
3）The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
4）A transaction is uneconomical when treated alone, but is economical when considered together with other transactions.
(2) Each transaction in the process of disposing of the equity in stages to the loss of control of the subsidiary belongs to the
"package deal" accounting method
Disposal of various transactions in the equity investment of the subsidiary until the loss of control belongs to a package of
transactions, each transaction should be accounted for as a transaction that disposes of the subsidiary and loses control; however, Before
losing he control each time, the difference between the price and the share of the subsidiary's net asset share corresponding to the disposal
of the investment shall be recognized as other comprehensive income in the consolidated financial statements, and shall be transferred
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to the profit and loss for the period when control is lost.
In the consolidated financial statements, the remaining equity should be remeasured at its fair value on the date when control is
lost.The sum of the consideration obtained from the disposal of the equity and the fair value of the remaining equity, minus the difference
between the shares of the net assets that should be continuously calculated by the atomic company since the purchase date based on the
original shareholding ratio, shall be included in the investment income of the period when the company loses control.. Other
comprehensive income related to the original subsidiary 's equity investment shall be converted to current investment income or retained
earnings when control is lost.
（3）Each transaction in the process of disposing of equity in steps to the loss of control of a subsidiary is not an accounting
treatment of “package deal”
If the disposal of the investment in the subsidiary does not lose control, the difference between the disposal price in the consolidated
financial statements and the share of the subsidiary ’s net asset to the disposal investment is included in the capital reserve (capital
premium or equity premium). If the capital premium is insufficient to offset,the retained earnings should be adjusted.
When disposing of the loss of control over the investment in a subsidiary, in the consolidated financial statements, the remaining
equity should be remeasured at its fair value on the date when control is lost. The sum of the consideration obtained from the disposal
of equity and the fair value of the remaining equity minus the share of the net assets that should have been calculated by the original
subsidiary from the date of purchase based on the original shareholding ratio is included in the investment income. Other comprehensive
income related to the equity investment of the original subsidiary shall be converted to current investment income or retained earnings
when control is lost.
6. Preparation of consolidated financial statements
Consolidated financial statements are based on the Parent’s and its subsidiaries’ financial statements in accordance with Accounting
Standards for Business Enterprises No.33 – Consolidated financial statement.
7. Classification of joint arrangement and accounting methods of joint operations
7.1 Joint venture arrangements classification and Co-operation accounting treatment
A joint arrangement refers to an arrangement jointly by two or more parties . The joint arrangement has the following characteristics:
(1) all participants are bound by the arrangement; (2) two or more participants exercise joint control over the arrangement. No single
party shall be able to control the arrangement, and any party that has joint control over the arrangement shall be able to prevent any other
party or combination of parties from controlling the arrangement alone.
Joint control refers to the shared control over a certain economic activity as required in the contract, and only exists when all
investors sharing such control related to the activity have consented.
A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a joint arrangement whereby the
joint operators have rights to the assets,and obligations for the liabilities, relating to the arrangement. A joint venture is a joint
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arrangement whereby the joint ventures only have the rights to the net assets under this arrangement.
7.2 Accounting treatment of joint venture arrangement
A joint operator shall recognize the following items in relation to its interest in a joint operation, and account for them in
accordance with relevant accounting standards:1) Its solely-held assets, and its share of any assets held jointly;2) Its solely-assumed
liabilities, and its share of any liabilities incurred jointly;3) Its revenue from the sale of its share of the output arising from the joint
operation;4) Its share of the revenue from sale of the output by the joint operation; 5) Its solely-incurred expenses and its share of any
expenses incurred jointly.
The participants in a joint venture shall, in accordance with the Accounting Standards for Enterprises No.2 long-term equity
investment, make accounting arrangements for the investment.
8. Criteria for the determination of cash and cash equivalents
The term "cash" of cash flow statement refers to cash on hand and deposits that are available for payment at any time. The term of
“cash equivalents” refers to short-term (usually due within 3 months from the acquisition date) and highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
9. Foreign currency transaction and foreign currency statement translation
9.1 Transactions denominated in foreign currencies
On initial recognition, a foreign currency amount, including share capital and capital reserves, is translated into functional currency
by applying the spot exchange rate on the date of the transaction announced by People’s Bank of China. At the balance sheet date, foreign
currency balance comprised of foreign currency monetary items and foreign currency non-monetary items, shall be adjusted: foreign
currency monetary items, of which the exchange difference between initial exchange rate and the spot exchange rate at the end of the
period, shall be recognized into profit and loss for the period; exchange differences related to a specific-purpose borrowing denominated
in foreign currency for constructing an asset that qualifies for capitalization shall be capitalized before it’s ready for intended use and
recognized into cost of construction in progress; foreign currency non-monetary items measured at fair value, the difference of which
shall be recognized into profit and loss for the period as fair value changes.
9.2 Translation of financial statements denominated in foreign currencies
The assets and liabilities of the balance sheet are translated using the spot exchange rate at the balance sheet date; all items except
for 'undistributed profits' of the owner's equity are translated at the spot exchange rate on the transaction date. The revenue and expenses
in the income statement are translated using the approximate rate of the spot exchange rate on the transaction date. Differences arising
from the translation of foreign currency financial statements are recognised as the other comprehensive income.
10. Financial instruments
10.1 Recognition and derecognition of financial instruments
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The company recognizes a financial asset or a financial liability when it becomes one party to the contractual provisions of the
instrument.
All regular ways purchasing or selling of financial assets are recognized and derecognized on a trade date basis. Regular way
purchasing or selling, means that receive or deliver financial assets within the time limit stipulated by regulations or common practices,
as agreed in the terms of the contract. Trade date, is the date the company promises to buy in or sell out the financial assets.
The company derecognize the financial assets(either a part, or a part of a similar group),which is writing it off the balance sheet, if
following conditions are met:
（1）Expiration of the right to receive cash flow from financial assets;
（2）The right to receive cash flow from financial assets has been transferred, or bear the obligation to pay all cash received to
third party in time due to “Hand-Over arrangement”; and (a) all risks and benefits of the financial assets have been transferred virtually,
or (b) though not all risks and benefits of the financial assets have been transferred, but lose the control of the financial assets.
10.2 Classification and measurement of financial assets
According to the business model for managing financial assets and the contractual cash flow characteristics of financial assets,the
company’s financial assets have initially been classified as follows: financial assets at amortized cost, and financial assets at fair value
through other comprehensive income,financial assets at fair value through profit or loss. Subsequent measurement of financial assets
depends on their categories.
The company's classification of financial assets is based on the company's business model and its characteristics of cash flow.
（1）Financial assets at amortized cost
Financial assets are classified as financial assets at amortized cost when following conditions are met: the company’s business
model for managing financial assets targets to receive contractual cash flow; The contractual terms of the financial asset stipulate that
the cash flow generated on a specific date is only the payment of the principal and the interest based on the outstanding principal amount.
For such financial assets, using effective interest rate method and subsequently measure at amortized cost, gains or losses arising from
amortization or impairment are recognized in current profit or loss.
（2）Liability investment at fair value through other comprehensive income
Financial assets are classified as liability investment at fair value through other comprehensive income when following conditions
are met:the company’s business model for managing financial assets targets both the collection of contractual cash flows and the sale of
financial assets; The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment
of the principal and the interest based on the outstanding principal amount. For such financial assets, subsequently measure at fair value.
The discount or premium is amortized using the effective interest method and recognized as interest income or expense. Except for the
impairment loss and the exchange differences of foreign monetary financial assets are recognized as profit or loss for the period, the
changes in the fair value of such financial assets are recognized in other comprehensive income, the accumulated gains or losses is
transferred to profit or loss until it’s derecognized. Interest income related to such financial assets is included in the current profit and
loss.
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（3）Equity investment at fair value through other comprehensive income
The company irrevocably designated the non-trading equity investment as financial assets at fair value through other comprehensive
income, and only the related dividend income is recognized in profit or loss. The accumulated gains or losses is transferred to retained
earnings until it’s derecognized.
（4）Financial assets at fair value through profit or loss
Any financial assets that are not held in one of the two business models mentioned above are measured at fair value through profit
or loss.At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, financial assets can be
designated as financial assets at fair value through profit or loss.For such financial assets, subsequently measured at fair value, and all
changes in fair value are recognized in profit or loss.
When and only when,the company changes its business model for managing financial assets it must reclassify all affected financial
assets.
For financial assets at fair value through profit or loss, the related transaction expense is directly recognized in current profit or loss
as incurred,and other financial assets’transaction expense is included in the initial recognition amount.
10.3 Classification and measurement of financial liabilities
The company’s financial assets have initially been classified as follows: financial liabilities at amortized cost and financial liabilities
at fair value through profit or loss.
The financial liabilities meeting any of the following conditions can be designated as the financial liabilities at fair value through
profit and loss：（1） Such designation can eliminate or significantly reduce accounting mismatches.（2）According to corporate risk
management or investment strategies as stated in formal written documents, the management and performance evaluation of financial
liability portfolios or combinations of financial assets and financial liabilities are based on fair value , and reported to key management
personnel on this basis within the enterprise.（3）Such financial liabilities include embedded derivatives that need to be split separately.
The company determines the classification of financial liabilities at initial recognition. For financial liabilities measured at fair value
through profit or loss, the related transaction expense is directly recognized in current profit or loss. The related transaction expense of
other financial liabilities is included in the initial recognition amount.
Subsequent measurement of financial liabilities depends on its categories:
（1）Financial liabilities at amortized cost
Based on amortized cost, subsequently measure it using the effective interest rate method.
（2）Financial liabilities at fair value through profit or loss
It includes financial liabilities (including derivatives that are financial liabilities) and financial liabilities that are designated at fair
value through profit or loss.
10.4 Offsetting of financial instruments
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If the following conditions are met at the same time, the net amount of the financial assets and financial liabilities offset each other
shall be shown in the balance sheet: there is a legal right to offset the recognized amount, and such legal right is currently
enforceable;Plans to liquidate the financial asset on a net basis or simultaneously liquidate the financial liability.
10.5 Impairment of financial assets
Based on expected credit losses, the Company undertakes impairment treatment and confirms loss provisions of financial assets at
amortised cost, debt instrument investments at fair value through other comprehensive income and financial guarantee contracts.Credit
loss refers to the difference between the cash flow of all contracts discounted at the original effective interest rate and the expected cash
flow of all contracts receivables, i.e.the present value of all cash shortages.
The company estimates, individually or in combination, the expected credit losses of financial assets measured at amortized cost
and financial assets (debt instruments) measured at fair value and whose changes are accounted for in other comprehensive income,
taking into account all reasonable and evidence-based information, including forward-looking information.
(1) General model of expected credit loss
If the credit risk of the financial instrument has increased significantly since the initial recognition, the company shall measure the
loss provision at the amount equivalent to the expected credit loss of the financial instrument for the entire life of the instrument; If the
credit risk of the financial instrument has not increased significantly since the initial recognition, the company shall measure the loss
provision at the amount equivalent to the expected credit loss of the financial instrument in the next 12 months. The increase or rollover
amount of the loss provision shall be recorded in the current profit and loss as an impairment loss or gain. For the company's specific
assessment of credit risk, please refer to Note X of this report for details. “Risks Associated With Financial Instruments”.
The credit risk of the instrument is generally deemed to have increased significantly if the default is more than 30 days, unless there
is conclusive evidence that the credit risk of the instrument has not increased significantly since the initial recognition.
Specifically, the company divides the process of credit impairment of financial instruments without credit impairment at the time
of purchase or origination into three stages. There are different accounting treatments for the impairment of financial instruments at
different stages:
Stage 1: credit risk has not increased significantly since initial recognition.
For the financial instrument at this stage, the enterprise shall measure the loss provision according to the expected credit loss in the
next 12 months, and calculate the interest income according to its book balance (that is, the impairment provision is not deducted) and
the actual interest rate (if the instrument is a financial asset, the same below).
Stage 2: credit risk has increased significantly since the initial recognition, but credit impairment has not yet occurred.
For a financial instrument at this stage, the enterprise shall measure the loss provision according to the expected credit loss of the
instrument throughout its life, and calculate interest income according to its book balance and actual interest rate.
Stage 3: credit impairment occurs after initial recognition
For the financial instrument in this stage, the enterprise shall calculate the loss provision according to the expected credit loss of
the instrument throughout its lifetime, but the calculation of interest income is different from that of the financial asset in the first two
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stages. For the financial assets whose credit impairment has occurred, the enterprise shall calculate the interest income at its amortized
cost (book balance less the impairment provision, that is, book value) and the actual interest rate.
For financial assets whose credit impairment has occurred at the time of purchase or origin, the enterprise shall only recognize the
changes in the expected credit loss during the whole duration after the initial recognition as loss provision, and calculate interest income
at its amortized cost and the actual interest rate adjusted by credit.
（2）The company chooses not to compare the credit risk of a financial instrument with a lower credit risk on the balance sheet
date with the credit risk at the time of the initial recognition, but directly assumes that the credit risk of the instrument has not increased
significantly since the initial recognition.
If the enterprise determine financial instruments, the lower the risk of default in the borrowers in the short-term ability to fulfill its
obligation to pay the contract cash flow is very strong, and even the economic situation and business environment in a long term adverse
change, also will not necessarily reduce the borrower's ability to fulfill its obligation to pay the contract cash flow, then the financial
instruments can be seen as a lower credit risk.
（3）Receivables and lease receivables
The company for the accounting standards for enterprises No. 14 - revenues, excluding provisions by major financing elements
(including according to the criteria does not consider no more than a year of financing elements) in the contract of receivables, the
simplified model of credit losses, always in accordance with the expected amount of credit losses throughout the duration of measuring
its losses.
For receivables containing significant financing elements and lease receivables specified in the accounting standards for business
enterprises No. 21 -- leasing, the company makes an accounting policy choice and chooses to adopt a simplified model of expected credit
loss, that is, to measure the loss provision according to the amount equivalent to the expected credit loss in the whole duration.
10.6 Financial asset transfer
If almost all the risks and rewards of ownership of financial assets have been transferred to the transferee, the financial assets are
derecognized; if almost all the risks and rewards of ownership of the financial assets are retained, the financial assets are not derecognized.
Neither transfer nor retain almost all risks and rewards of ownership of financial assets, which are dealt with as follows: If the
financial assets are abandoned, derecognize the financial assets and recognize the assets and liabilities; If not abandoned, recognize the
relevant financial assets according to the extent to which they continue to be involved in the transferred financial assets, and recognize
the related liabilities.
If the transferred financial assets are continued to be involved by financial warranty, the assets should be recognized at lower of the
book value of the financial assets and the financial warranty amount. The financial warranty amount refers to the maximum amount of
the consideration received that will be required to be repaid.
11. Accounts receivable
For accounts receivable, whether significant financing is involved or not, the simplified model of expected credit loss is adopted.
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The Company will always measure its provision for loss based on the amount equivalent to the expected credit loss of its entire duration,
and the increase or reversal amount of the provision for loss resulting therefrom is included in the profit and loss of the period as an
impairment loss or gain.
The company considers all reasonable and evidence-based information, including forward-looking information, to estimate the
expected credit loss of the accounts receivables individually or in combination.
When a single financial asset can evaluate the expected credit loss information at a reasonable cost, the company chooses to calculate
the credit loss individually. When a single financial asset cannot evaluate the expected credit loss information at a reasonable cost, the
company will divide the accounts receivables into several combinations in accordance with the characteristics of credit risk, and the
expected credit loss is calculated on the basis of the combination. The basis for determining the combination is as follows:
Combination Type The basis for determining the combination
Combination 1 Receivables from related companies
Combination 2 Receivables from hotel services
Combination 3 Other receivables
For the accounts receivable classified as a combination, the company refers to the historical credit loss experience, combines the
current situation and the forecast of future economic conditions, and prepared a comparison table between the age of accounts receivable
and the expected credit loss rate for the entire duration to calculate the expected credit loss.
12. Receivables financing
If a financial asset meets the following conditions at the same time, it is classified as a financial assets at fair value through other
comprehensive income: The company's business model for managing the financial asset is to both collect contract cash flows and sell
financial assets; The contractual terms of the financial asset stipulate that the cash flows generated on a particular date are only payments
of principal and interest based on the amount of outstanding principal.
The company will transfer the receivables held in the form of discount or endorsement, and this type of business is more frequent
and the amount involved is larger whose management business model is essentially to receive both contract cash flows and sell.In
accordance with the relevant provisions of financial instruments. the company classifies them as financial assets that measure changes
at fair value and account for changes in other comprehensive income.
13. Other receivables
The company adopts the general model of expected credit loss to deal with other receivables, as detailed in Note V (10) “Financial
Instruments”.
The company considers all reasonable and substantiated information, including forward-looking information, to estimate the
expected credit losses of other receivables individually or in combination.
When individual financial assets can expect credit losses at a reasonable cost evaluation of information, the company choose
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individual credit losses, when individual financial assets not credit losses at a reasonable cost evaluation of information, the company
on the basis of credit risk characteristics could be divided into several other receivables portfolio, based on the combination of computing
expected credit losses, determine the basis of a combination is as follows:
Type Basis
Combination 1 Amounts due from related parties
Combination 2 Staff receivables, deposits, security deposits
Combination 3 Receivables other than Portfolio 1, Portfolio 2
For other receivables divided into portfolios, the company calculates the expected credit loss through default risk exposure and
expected credit loss rate in the next 12 months or the whole duration, by referring to the historical credit loss experience and combining
the current situation with the forecast of future economic conditions.
14. Inventory
14.1 Classification of inventories
Inventories refer to the finished goods or commodities held for sale in daily activities, goods in progress in the production
process, consumed materials and supplies in the production process or providing services of the Company.
14.2 Measurement of inventories transferred out
Finished goods are accounted for using the weighted average at the end of the month method upon issuance.
14.3 Basis for determining net realizable value of inventories and provision methods for decline in value of inventories.
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the net realizable value is below
the cost of inventories, a provision for decline in value of inventories is made. For inventories of goods directly used for sale,in the
normal production and operation process, the net realizable value is determined by the amount of the estimated selling price of the
inventory less the estimated sales cost and relevant taxes and fees; for material inventories that need to be processed, in the normal
production and operation process, the net realizable value is determined by the amount of the estimated selling price of finished products
produced less the estimated cost to be occurred at the time of completion, the estimated selling expenses and related taxes; on the balance
sheet date, in the same inventory, if some has contract price agreement, and the other has not, the net realizable value is determined
separately and compared with its corresponding cost to determine the amount of the provision for inventory depreciation or reversal.
14.4 Inventory count system
The perpetual inventory system is maintained for stock system.
14.5 Amortization of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized by one-time write-off.
(2) Packages
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Packages are amortized by one-time write-off.
15. Contract asset
1.Confirmation methods and standards of contract assets
The company presented as contract assets or contract liabilities in the statement of financial position based on the relationship
between performance obligations and customer payments.The right that the company are entitled to collect the consideration for having
transferred goods or services to the client（except receivables）is presented as contract asset.
2. Determination methods and accounting treatment methods of expected credit loss of contract assets
The company adopts the simplified expected credit loss model for contract assets, regardless of whether it contains major financing
components, that is, the loss reserves are always measured according to the amount of expected credit losses during the entire lifetime,
and the resulting increase or reversal of the loss reserves are included in the current profit and loss as an impairment loss or gain.
16. Assets held-for-sale
The company divides the corporate components（or non-current asset） that meet all of the following conditions into holding for
sale:（1）Based on the usual practice of selling such assets or disposal groups in similar transactions, they can be sold immediately under
current conditions;（2）The sale is highly probable, a resolution has been made on a sale plan and a firm purchase commitment has been
obtained and it is expected that the sale will be completed within one year. Approvals from relevant authorities or regulatory authorities
have been obtained in accordance with relevant regulations.
The Company adjusts the expected net salvage value held for sale to reflect the net amount of its fair value less costs to sell(not
over its carrying amount). The difference between the original book value and the adjusted net residual value is included in the profit or
loss of the current period as an asset impairment loss. At the same time, provision for impairment of assets held for sale was made. For
the amount of impairment loss of assets confirmed by the disposal group held for sale, the book value of goodwill in the disposal group
should be offset first, and then the proportion of the book value of various non-current assets measured in the disposal group according
to the application of this standard measurement. Proportionately deducts its book value.
If the fair value of the non-current assets held for sale on the balance sheet date is less than the net value of the selling expenses,
the amount of the previous write-down shall be restored and the impairment of assets recognized after being classified as held for sale
shall be made. The amount of the loss is reversed and the amount reversed is included in the current profit or loss. Impairment losses on
assets recognized prior to classification as held for sale shall not be reversed. If the fair value of the disposal group held for sale on the
subsequent balance sheet day is increased, the net amount after the sale expense is increased, the amount of the previously written down
amount shall be restored, and shall apply to the measurement requirements of this standard after being classified as held for sale. The
impairment loss of assets confirmed by non-current assets is reversed within the amount, and the reversed amount is included in the
current profit or loss. The carrying amount of the goodwill that has been eliminated and the non-current assets applicable to the
measurement of this standard will not be reversed if it is recognized before the assets are classified as held for sale. The subsequent
reversal of the asset impairment loss confirmed by the disposal group held for sale shall be based on the proportion of the book value of
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various non-current assets measured and applied in the disposal group in addition to goodwill, and shall increase its book value
proportionately.
The company is committed to a sale plan involving loss of control of subsidiary shall classify all the assets and liabilities of that
subsidiary held for sale in consolidated balance sheets when the above criteria are met, regardless of whether the Company retain a
non-controlling interests in its former subsidiary after the sale.In the balance sheets of parent company the investment should be
classified as held for sale in full.
17. Debt investment
The Company uses the general model of expected credit losses for debt investment. For details, please refer to Note
V.(10) .“Financial Instruments”.
18. Long-term equity investment
18.1 Determination of investment costs
(1) The business combinations under common control, the combined party to pay in cash, transfers non-cash assets, assumed debt
or equity securities as combined consideration, on the combining date according to the owner's equity in the combined party on the final
control party's share of the book value of the consolidated financial statements as its initial investment cost. The difference between
initial investment cost in the long-term equity investment and book value of the paid merger consideration of the total amount of the
face value of the issued shares to adjust capital reserves; if capital reserves are insufficient to write-downs, it needs to adjust the retained
earnings.
Where a business combination under the same control is realized step by step, the combination date calculated on the basis of the
shareholding ratio shall enjoy the share of the book owner ’s equity of the combined party as the initial investment cost of the investment.
The difference between the initial investment cost and the book value of the original long-term equity investment plus the sum of the
book values of further consideration paid for the new shares paid on the merger date is adjusted for capital reserve (capital premium or
equity premium).if capital reserve insufficient to offset,then adjust retained earnings.
(2) The business combinations not under common control, in accordance with the payment of the fair value of the merger
consideration is its initial investment cost on the acquisition date.
(3) Except for the formation of enterprise merger: if the purchase price is paid in cash, the initial investment cost shall be the
purchase price actually paid;Where equity securities are issued, the fair value of equity securities issued shall be taken as the initial
investment cost;Where an investor invests, the initial investment cost shall be the value agreed upon in the investment contract or
agreement (except where the value agreed upon in the contract or agreement is not fair).
18.2 Subsequent measurement and recognition methods of profits and losses
For the long-term equity investment controlled by the company to the investee, the company shall adopt the cost method in the
individual financial statements of the company; Long-term equity investments with joint control or significant influence shall be
accounted for using the equity method.
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Under the cost method, a long-term equity investment is measured at initial investment cost . Except for cash dividends or profits
already declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the investment,
investment income is recognized in the period in accordance with the attributable share of cash dividends or profit distributions declared
by the investee,and at the same time whether long-term investment in accordance with the relevant policy considerations of the declined
value of asset impairment.
For checking by the equity method, the initial investment cost of the long-term equity investment is not adjusted if it is greater than
the fair value share of the net identifiable assets of the investee in the investment; if the initial investment cost of the long-term equity
investment is smaller than the fair value share of the net identifiable assets of the investee in the investment, the balance is charged to
current profit and loss and the cost of the long-term equity investment is adjusted.
When the equity method is adopted, after the acquisition of long-term equity investment, the investment profit and loss shall be
recognized and the book value of long-term equity investment shall be adjusted according to the share of net profit and loss realized by
the investee that should be enjoyed or Shared. Upon confirmation of the invested entity shall be accorded to the net profits and losses of
the share, in order to obtain the invested entity, when the fair value of the identifiable assets such as basis, according to the company's
accounting policies and accounting periods, and offset and associated enterprises and joint ventures between insider trading profits and
losses according to the shareholding calculation belongs to part of the investment enterprise (but insider trading loss belongs to the asset
impairment loss, should be a full confirmation), net income of the invested entity after adjustment for confirmation. According to the
profit or cash dividend declared to be distributed by the investee, calculate the share payable, and correspondingly reduce the book value
of the long-term equity investment. The company shall recognize the net loss incurred by the investee to the extent that the book value
of the long-term equity investment and other long-term rights and interests substantially constituting the net investment of the investee
shall be written down to zero, except where the company is obligated to bear additional losses. For the changes of owners' equity other
than the net profit and loss of the investee, the book value of the long-term equity investment shall be adjusted and included in the
owners' equity.
18.3 Determine the basis of controlling and significant influence on the invested entity
Control refers to having the power over the investee, enjoying the variable return through participating in the investee's relevant
activities, and having the ability to use the power over the investee to affect the return amount; Major influence means that the investor
has the right to participate in the decision-making of the financial and business policies of the investee, but cannot control or jointly
control the formulation of these policies with other parties.
18.4 Disposal of long-term equity investments
（1）Partial disposal of a long-term equity investment in a subsidiary without loss of control
If part of the long-term equity investment in the subsidiary is disposed of without losing control, the difference between the disposal
price and the book value corresponding to the disposal investment shall be recognized as the current investment income.
（2）Loss of control over a subsidiary by partial disposal of an equity investment or other reasons
If the company loses control over the subsidiary due to the disposal of equity investment or other reasons, the book value of the
long-term equity investment corresponding to the sold equity shall be carried forward, and the difference between the sale price and the
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book value of the disposal long-term equity investment shall be recognized as investment income (loss); Meanwhile, the remaining
equity shall be recognized as long-term equity investment or other relevant financial assets according to its book value. If the remaining
equity after disposal is able to exert joint control or significant influence on the subsidiary, accounting treatment shall be conducted
according to the relevant provisions of the conversion from cost method to equity method.
18.5 Methods of impairment assessment and determining the provision for impairment loss
For the long term investment in subsidiaries, joint venture and associates, the Company reviews the long-term equity investments
at each balance sheet date to determine whether there is any indication that they have suffered an impairment loss. If an impairment
indication exists, the recoverable amount is estimated. If such recoverable amount is less than its carrying amount, a provision for
impairment losses in respect of the deficit is recognized in profit or loss for the period.
19. Investment property
19.1 The Company’s investment properties include a land use right that is leased out; a land use right held for transfer upon capital
appreciation; and a building that is leased out.
19.2 The Company uses the cost model for subsequent measurement of investment property, and adopts a depreciation or
amortization policy for the investment property, which is consistent with that for fixed assets or intangible assets. The Company reviews
the investment properties at each balance sheet date to determine whether there is any indication that they have suffered an impairment
loss. If there is any indication that such assets may be impaired, the recoverable amounts are estimated for such assets. If the recoverable
amount of an asset or an asset Company is less than its carrying amount, the deficit is accounted for as an impairment loss and is
recognized in profit or loss for the period.
20. Fixed asset
20.1 Recognition, measurement and depreciation criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or for
administrative purposes, and have useful lives of more than one accounting year.
Fixed assets are initially measured at acquisition cost, and depreciated over its useful life using the straight-line method since the
month subsequent to the one in which it is ready for intended use.
20.2 Deprecation methods for each category of fixed assets
Depreciation Residual value Annual depreciation
Category Deprecation methods
period (years) rate (%) rate (%)
Houses and buildings Straight-line depreciation method 20-40 5 2.38-4.75
Decoration of fixed assets Straight-line depreciation method 4-10 -- 10.00-25.00
Transportation equipment Straight-line depreciation method 4 5 23.75
Electronic equipment Straight-line depreciation method 3-5 5 19.00-31.67
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Depreciation Residual value Annual depreciation
Category Deprecation methods
period (years) rate (%) rate (%)
Office equipment Straight-line depreciation method 3-5 5 19.00-31.67
20.3 Impairment method of fixed assets, impairment preparation provision method
The date of balance sheet, some indications state clearly that the fixed assets conduct impairment, according to the difference
between the book value and recoverable amount provision the corresponding impairment loss.
21. Construction in progress
21.1 Construction in progress should be transferred into fixed assets at its actual costs after it has reached the working condition for
its intended use. Construction in progress that has reached the working condition but not completed, shall be transferred at its estimated
costs. The estimated cost of construction in progress should be adjusted against the actual costs after completion of settlement, while the
depreciation already provided will not be adjusted.
21.2 The Company assesses at each balance sheet date whether there is any indication that construction in progress may be impaired.
If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets.
22. Borrowing cost
22.1 Recognition criteria of capitalization
Borrowing costs are capitalized when expenditures for such asset and borrowing costs are incurred and activities relating to the
acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced.
Other borrowing costs are recognized as an expense in the period in which they are incurred.
22.2 Period of capitalization
（1）Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalized when
expenditures for such asset and borrowing costs are incurred and activities relating to the acquisition, construction or production of the
asset that are necessary to prepare the asset for its intended use or sale have commenced.
（2）Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes ready
for its intended use or sale. Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or
production of a qualifying asset is suspended abnormally and when the suspension is for a continuous period of more than 3 months.
Capitalization is suspended until the acquisition, construction or production of the asset is resumed.
（3）Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes ready
for its intended use or sale，the borrowing costs stop capitalization.
22.3 Capitalization amount of borrowing costs
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interest expense
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incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the
asset or any investment income on the temporary investment of those funds. Where funds are borrowed under general-purpose
borrowings, the Company determines the amount of interest to be capitalized on such borrowings by applying a capitalization rate to the
weighted average of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The
capitalization rate is the weighted average of the interest rates applicable to the general-purpose borrowings.
23. Right-of-use assets
Except for short-term leases and leases for which the underlying asset is of low value, at the commencement date of the lease, the
Company recognizes a right-of-use assets.
The Company measures the right-of-use assets at cost. The cost of the right-of-use assets comprises:
23.1 The amount of the initial measurement of the lease liabilities.
23.2 Any lease payments made at or before the commencement date, less any lease incentives.
23.3 Any initial direct costs incurred by the Company.
23.4 An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which
it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. If the aforementioned
costs are incurred for the production of inventory, it is applicable to ASBE No.1-Inventory.
The company recognizes and measures the costs mentioned in item 4 above in accordance with the ASBE No. 13 - Contingencies.
Initial direct costs are the incremental costs incurred to achieve the lease. Incremental costs are those costs that would not have been
incurred if the enterprise had not acquired the lease.
Right-of-use assets are depreciated by the Company in accordance with the ASBE No.4 Fixed Assets. If the Company is reasonably
certain, that the lease will transfer ownership of the underlying asset to the Company by the end of the lease term, the right-of-use assets
is depreciated from the commencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-use assets is
depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term.
The Company applies ASBE No. 8 Impairment of Assets, to determine whether the right-of-use assets are impaired and perform
accounting treatment to identified impairment loss.
24. Intangible assets
24.1 Intangible assets, including land use rights etc. are recognized at costs.
24.2 Intangible assets with finite useful lives are amotized in accordance with the expected realization method of the economic
benefits related to the intangible asset over its estimated useful life. If it is not possible to reliably determine the expected realization
method,use the straight-line method.The specific years are as follows:
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Item Useful life(Year)
Land use rights 40
Software use rights 5-10
Trademark rights 10
24.3 The Company assesses at each balance sheet date whether there is any indication that the intangible assets with definite life
may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. If the
recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and
is recognized in profit or loss for the period. For an intangible asset with infinite useful life, the Company reviews the useful life and
amortization method at the end of the period.
24.4 Expenditure during the development phase that meets all of the following conditions at the same time is recognized as
intangible asset. Expenditure during development phase that does not meet the following conditions is recognized in profit or loss for
the period.(1) It is technically feasible to complete the intangible asset so that it will be available for use or sale;(2) The Company has
the intention to complete the intangible asset and use or sell it;(3) The Company can demonstrate the ways in which the intangible asset
will generate economic benefits, including the evidence of the existence of a market for the output of the intangible asset or the intangible
asset itself or, if it is to be used internally, the usefulness of the intangible asset;(4) The availability of adequate technical, financial and
other resources to complete the development and the ability to use or sell the intangible asset; and(5) The expenditure attributable to the
intangible asset during its development phase can be reliably measured.
25. Long-term asset impairment
The enterprise should judge whether there is any indication that the asset may be impaired at the balance sheet date.
The goodwill and intangible assets with an uncertain useful life resulting from a business combination should be tested for
impairment annually, regardless of whether there is any indication of impairment.
If the following signs exist, the assets may be impaired:
(1) The market price of assets fell sharply in the current period, and the decline was significantly higher than the expected decline
due to the passage of time or normal use; (2) Significant changes of the economic, technical or legal environment in which the enterprise
operates and the market in which the assets are located will occur in the current period or in the near future, which will adversely affect
the company; (3) The market interest rate or other market investment returns have increased during the current period, which affects the
company's discount rate for calculating the present value of the expected future cash flow of assets, leading to the recoverable amount
has been greatly reduced; (4) There is evidence that the assets have become obsolete or their entities have been damaged; (5) The assets
have been or will be idle, terminated or planned to be disposed of in advance; (6)The evidence reported by the enterprise indicates that
economic performance of the assets has been or will be lower than expected, such as the net cash flow created by the assets or the realized
operating profit (or loss) is far lower (or higher) than the expected amount; (7) Other indications that the asset may have signs of
impairment.
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If there are any signs of asset impairment, the recoverable amount should be estimated.
The recoverable amount should be determined based on the higher of the net amount of the fair value of the asset minus the disposal
costs and the present value of the estimated future cash flows of the asset.
Disposal costs include legal costs related to asset disposal, related taxes, transportation charges, and direct costs incurred to make
the asset available for sale.
The present value of the estimated future cash flows of the asset should be determined by discounting the amount of the asset
based on the expected future cash flow generated during the continuous use of the asset and at the time of final disposal. The present
value of the expected future cash flow of the asset should take into account factors such as the estimated future cash flow of the asset,
its useful life, and the discount rate.
The measurement results of the recoverable amount indicate that if the recoverable amount of the asset is lower than its book
value, the book value of the asset should be written down to the recoverable amount, and the reduced amount should be recognized as
the asset impairment loss and included in the current profit and loss.Meanwhile, corresponding provisions for asset impairment should
be made.
26. Long-term prepaid expenses
Long-term prepaid expenses are recorded according to the actual amount incurred and amortized in the period of benefit or within
the prescribed period.If the long-term deferred expense item cannot benefit the subsequent accounting period, the amortized value of the
item that has not been amortized will be transferred into the current profit and loss.
27. Contract liabilities
The company presented as contract assets or contract liabilities in the statement of financial position based on the relationship
between performance obligations and customer payments. The company's obligation to transfer goods or provide services to customers
for consideration received or receivable from customers is presented as contract liabilities.
28. Employee's salary
Employee salary is to point to the all forms of remuneration or compensation that Company receive services rendered by employees or give
except share-based payment in order to terminate the labor relationship. Employee salary includes short-term salary, severance welfare, dismissal
benefits and other long-term employee benefits. The salary that Company offered to the worker spouse, children, dependents, the deceased
employee survivors and other beneficiaries, also belong to employee’s salary.
28.1 Short-term employee benefits
During the accounting period when the employees provide services, the company shall recognize the actual short-term compensation as
liabilities and record it into the current profit and loss or the cost of related assets. Among them, non-monetary welfare is measured according to
fair value.
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28.2 Termination benefits
When the Company terminates the employment relationship with employees before the expiration of the employment contracts or
provides compensation as an offer to encourage employees to accept voluntary redundancy, if the Company has a formal plan for
termination of employment relationship or has made an offer for voluntary redundancy which will be implemented immediately, and the
Company cannot unilaterally withdraw from the termination plan or the redundancy offer, a provision for the compensation payable
arising from the termination of employment relationship with employees is recognized with a corresponding charge to the profit or loss
for the period, and include in current profits or losses.
28.3 Defined contribution plan
Pursuant to the relevant laws and regulations of the PRC, employees of the Company participate in the social insurance system
established and managed by government organization. The Company makes social insurance contributions, including contributions to
basic pension insurance at the applicable benchmarks and rates stipulated by the government for the benefit of its employees. The pension
insurance contributions are recognized as part of the cost of assets or charged to profit or loss on an accrual basis.
29. Lease liabilities
Substantial on the commencement date of the lease term, the Company recognizes the present value of the unpaid lease payments
as lease liabilities.
The lease liabilities are initially measured at the present value of the lease payment not yet paid on the start date of the lease term.
Lease payments include the following five items:
29.1 Fixed payments and in-substance fixed payments, if there is a lease incentive, deduct the amount related to the lease incentive.
29.2 Variable lease payments that depend on an index or rate, which is determined at the time of initial measurement based on the
index or rate at the commencement date of the lease term.
29.3 Exercise price for a purchase option provided that the lessee is reasonably certain that the option shall be exercised.
29.4 Payments for exercising the option to terminate the lease provided that the lease term reflects that the lessee shall exercise the
option to terminate the lease option.
29.5 Estimated payments due based on guaranteed residual value provided by the lessee.
When calculating the present value of lease payments, the Company adopts the interest rate implicit in the lease as the discount
rate; if the interest rate implicit in the lease cannot be determined, the Company adopts the incremental borrowing rate as the discount
rate.
30. Estimated liabilities
30.1 The company shall recognize this obligation as contingent liability when the obligations arising from the provision of external
guarantees, litigation matters, product quality guarantees, loss contracts and other contingencies become the current obligations assumed
by the company and the fulfillment of such obligations is likely to result in the outflow of economic benefits from the company and the
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amount of such obligations can be reliably measured.
30.2 The company shall initially measure the provisions according to the best estimate of the expenses required to perform the
relevant current obligations, and shall review the book value of the estimated liabilities on the balance sheet date.
31. Share-based payment
31.1 Categories of share-based payments
Share-based payments comprise equity-settled and cash-settled payments.
31.2 Determination of fair value of equity instruments
（1）If there is an active market, it should be determined based on the quoted price in the active market.
（2）If there is no active market, it is determined by using valuation techniques, including considering the prices used in recent
market transactions made by parties familiar with the situation and taking transactions voluntarily, and considering the current fair values
and cash flows of other financial instruments that are substantially the same discount method and option pricing model.
31.3 Basis for determining the best estimate of exercisable equity instruments
The Company would make best estimate in accordance with the newly acquired information such as changes in the number of
employees entitled to equity instruments.
31.4 Relevant accounting treatment of implementation, modification and termination of share-based payment plan
（1）Equity-settled share-based payments
Equity-settled share-based payments that are immediately available after the grant in exchange for employee services are included
in related costs or expenses based on the fair value of the equity instruments on the grant date, and the capital reserve is adjusted
accordingly. Equity-settled share-based payments for services that have been completed during the waiting period or that are exercisable
only if the required performance conditions are met are exchanged for employee services. At each reporting date during the waiting
period, the best estimate of the number of exercisable equity instruments is based on the fair value of the equity instrument grant date,
the services obtained in the current period are included in related costs or expenses, and the capital reserve is adjusted accordingly.
For equity-settled share-based payments in exchange for services provided by other parties, if the fair value of services provided
by other parties can be reliably measured, they should be measured at the fair value of the services of other parties on the acquisition
date; if the fair values of services provided by other parties cannot be measured reliably, but for the equity instruments whose fair value
can be reliably measured, they should be measured at the fair value of the equity instrument on the date of service acquisition and
included in related costs or expenses, increasing owner's equity accordingly.
（2）Cash-settled share-based payments
The cash-settled share-based payment in exchange for employee services immediately after the grant is included in the related costs
or expenses at the fair value of the liability assumed by the company on the grant date, and the liability is increased accordingly. Cash-
settled share-based payments for services that have been completed within the waiting period or that have met the required performance
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conditions in exchange for employee services are based on the best estimate of the right to exercise at each balance sheet date during the
waiting period, According to the fair value of liabilities assumed by the company, the services obtained in the current period are included
in related costs or expenses and corresponding liabilities.
（3）Modifying and terminating the share payment plan
If the amendment increases the fair value of the equity instruments granted, the company will recognize the increase in the
acquisition of services in accordance with the increase in the fair value of the equity instruments; if the amendment increases the number
of equity instruments granted, the company will increase the value of the equity instruments. The fair value is correspondingly recognized
as an increase in access to services; if the company modifies the conditions of the exercisable rights in a manner that benefits employees,
the company considers the modified conditions of the exercisable rights when processing the conditions of the exercisable rights.
If the amendment reduces the fair value of the equity instrument granted, the company continues to recognize the amount of services
obtained based on the fair value of the equity instrument on the grant date, without considering the decrease in the fair value of the equity
instrument; if the amendment reduces the equity granted For the number of instruments, the company will treat the reduction as the
cancellation of the granted equity instruments; if the conditions of the exercisable rights are modified in a manner that is not conducive
to employees, the revised conditions of the exercisable rights are not considered when processing the conditions of the exercisable rights.
If the company cancels the granted equity instruments or clears the granted equity instruments during the waiting period (except
for those that are cancelled because the conditions of the exercisable rights are not met), the cancellation or settlement is treated as an
expedited exercisable right and the original Amount recognized during the remaining waiting period
32. Income
32.1 Recognition of income
The company's income is mainly education and training income.
The company recognizes the income upon fulfillment of its performance obligations within the contract, that is, when the client
obtains control of the relevant goods.
32.2 The company classifies the nature of the relevant performance obligations in accordance with the relevant provisions of the
income standards to be "performance obligations performed within a specified period " or "performance obligations performed at a
specified time point ", and income recognition is carried out in accordance with the following principles.
（1）The performance obligations are to be performed within a specified period once the company meets one of the following
conditions:
① The client obtains and consumes the economic benefits while the company is fulfilling the performance obligations;
② The client can control assets under construction while the company is still in the process of fulfilling the performance obligations.
③ The asset generated while the company is in the process of performing the contract are indispensable, and the company has the
right to collect partial payments for the cumulative performance obligations that have been fulfilled so far within the contract period.
If the performance obligations are performed within the specified period , the company will recognize the income within this period
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in accordance with the progress of the contract’s performance, however,except the performance progress cannot be reasonably
determined. The company considers the nature of the goods and adopts the output method or input method to determine the appropriate
performance progress.
（2）If the performance obligations are performed at the specified time point , the company will recognize the income at the time
when the client obtains control over the relevant goods.
In judging whether the client has obtained control over goods or services, the company shall consider the following signs:
① The company has the current right to collect payment for the goods, that is, the customer has the current obligations to pay for
the goods.
② The company has transferred legal ownership of the goods to the customer, that is, the customer already has the legal ownership
of the goods.
③ The company has transferred physical possession of the goods to the customer, that is, the customer has taken physical
possession of the goods .
④ The company has transferred the main risks and rewards of the ownership of the goods to the customer, that is, the customer
has obtained the main risks and rewards of the ownership of the goods.
⑤ The customer has accepted the goods.
⑥ Other signs that the customer has obtained control of the product.
The specific policy of the company's income recognition:
The company's income mainly includes ordinary class income and agreement class income. The income from face-to-face training
of ordinary classes is recognized as income for all pre-collected training fees upon completion of training services; income from online
training of ordinary classes is recognized on a straight-line basis during the effective period of service provision. The non-refundable
portion of the income from the agreement class is recognized as revenue when the training service is completed; the refundable portion
is recognized as revenue when the non-refundable conditions are met according to the agreement.
32.3 Measurement of income
The company shall measure revenue based on the transaction price allocated to each individual performance obligation. When
determining the transaction price, the company considers the influence of factors such as variable consideration, major financing
components in the contract, non-cash consideration, and consideration payable to customers.
（1）Variable consideration
The company determines the best estimate of the variable consideration based on the expected value or the most likely amount, but
the transaction price including the variable consideration should not exceed the amount of the accumulated recognized revenue that it is
very likely that a significant reversal not occur when the relevant uncertainty is eliminated. When an enterprise assesses whether it is
very likely that a significant reversal of accumulated recognized revenue will not occur, it should also consider the possibility of reversal
of revenue and its proportion.
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（2）Major financing components
When there is a significant financing component in the contract, the company shall determine the transaction price based on the
amount payable in cash when the customer is assumed to obtain control of the goods. The difference between the transaction price and
the contract consideration shall be amortized using the effective interest method during the contract period.
（3）Non-cash consideration
If the customer pays a non-cash consideration, the company shall determine the transaction price based on the fair value of the non-
cash consideration. If the fair value of the non-cash consideration cannot be reasonably estimated, the company determines the
transaction price indirectly by referring to the stand-alone selling price of the goods it promises to transfer to the customer.
（4）Consideration payable to customers
For the consideration payable to the customer, the consideration payable shall be offset by the transaction price, and the current
income is offset at the later point when the relevant income is recognized and the customer's consideration is paid, except when the
customer's consideration is payable to obtain other clearly distinguishable products from the customer.
If the enterprise pays the customer consideration to obtain other clearly distinguishable goods from the customer, it shall confirm
the purchased goods in a manner consistent with other purchases by the enterprise. If the consideration payable by the enterprise to the
customer exceeds the fair value of the clearly distinguishable commodity obtained from the customer, the exceeding amount shall be
offset against the transaction price. If the fair value of the clearly distinguishable goods obtained from the customer cannot be reasonably
estimated, the enterprise shall offset the consideration payable to the customer in full from the transaction price.
33. Contract cost
Contract costs are divided into contract performance costs and contract acquisition costs.
If the cost incurred by the company to fulfill the contract meets the following conditions at the same time, it shall be recognized as
an asset as the contract performance cost:
（1）The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing expenses
(or similar expenses), clearly the cost borne by the customer, and other costs incurred only due to the contract;
（2）This cost increases the company's future resources for fulfilling its performance obligations;
（3）The cost is expected to be recovered.
The incremental cost incurred by the company to obtain the contract is expected to be recovered, and recognized as an asset as the
contract acquisition cost; however, if the asset amortization does not exceed one year, it can be included in the current profit and loss
when it occurs.
Assets related to contract costs are amortized on the same basis as the recognition of the revenue of goods or services related to the
asset.
If the book value of assets related to contract costs is higher than the difference between the following two items, the company will
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make provision for impairment of the excess part and recognize it as an asset impairment loss:
（1）The remaining consideration expected to be obtained due to the transfer of goods or services related to the asset;
（2）Estimate the costs that will be incurred for the transfer of the related goods or services.
If the aforementioned asset impairment provision is subsequently reversed, the book value of the asset after the reversal shall not
exceed the book value of the asset on the date of reversal under the assumption that no impairment provision is made.
34. Government subsidy
34.1 Government grants include asset related government grants and income related government grants.
34.2 If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a
government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined, it is
measured at a nominal amount.
34.3 The government grant adopts the total method
（1）A government grant related to an asset is recognized as deferred income, and amortized to profit or loss on a reasonable and
systematic basis over the useful life of the related asset. If the relevant assets are sold, transferred, scrapped or damaged before the end
of their useful lives, the undistributed balance of related deferred income will be transferred to the profit or loss of the asset disposal in
the current period.
（2）If a government grant related to income is used to compensate for the related expenses or losses in the subsequent period, it
shall be recognized as deferred income and shall be recorded in the current profit or loss in which the relevant expenses are recognized;
For the compensation of related expenses or losses that have occurred, they shall be directly included in the current profits and losses.
For government grants that include both the asset-related portion and the income-related portion, the different parts are separately
accounted for; if it is indistinguishable, the overall classification is revenue-related government subsidies.
34.4 Government grants related to the company's daily activities in accordance with the nature of the economic business are included
in other income or written down the related costs; Government grants that are unrelated to the daily activities of the company shall be
included in non-operating income and expenditure.
35. Deferred income tax assets and the deferred income tax liabilities
35.1 According to the book value of the assets, liabilities and its tax base the difference between the (not confirmed project as assets
and liabilities of its tax base can be determined in accordance with the provisions of the tax law, the tax base and the difference between
the book number), according to the forecast of the asset is recovered or the applicable tax rate calculation during the debt confirmed
deferred income tax assets and deferred income tax liabilities.
35.2 Confirm the deferred income tax assets to probably get used to making the deductible temporary differences are limited to the
amount of taxable income. During the balance sheet date, there is strong evidence that the future is likely to obtain sufficient taxable
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income to offset the deductible temporary difference, confirm the unconfirmed deferred income tax assets in previous accounting periods.
35.3 On the balance sheet date, review the book value of the deferred income tax assets, and if during the period of the future may
not be able to obtain sufficient taxable income to offset the benefit of the deferred income tax assets, the write-downs on the book value
of the deferred income tax assets. If it is likely to obtain sufficient taxable income, return the amount of write-downs.
35.4 The Company's current income tax and deferred income tax as recorded into the profits and losses of the current income tax
expenses, or earnings, but the income tax in the followings are not included: (1) The business combination; (2) Transactions or events
directly confirmed in the owner's equity.
36. Lease
36.1 Lessee
When the Company is the lessee, on the commencement date of the lease period, except for short-term leases and low-value asset
leases that are selected for simplified treatment, the right-of-use assets and lease liabilities are recognized for leases.
After the commencement date of the lease period, the Company adopts the cost model for subsequent measurement of the right-of-
use asset. With reference to the relevant depreciation provisions of "ASBE No. 4 - Fixed Assets", depreciation is provided for right-of-
use assets. If the lessee can reasonably determine that it will obtain the ownership of the leased asset at the expiration of the lease term,
it shall accrue depreciation over the remaining useful life of the leased asset. If it cannot be reasonably determined that the ownership of
the leased asset can be obtained at the expiration of the lease term, depreciation shall be accrued in the shorter period between the lease
term and the remaining useful life of the leased asset. The Company determines whether the right-of-use asset is impaired in accordance
with the "ASBE No. 8 - Impairment of Assets", and performs accounting treatment on the identified impairment losses.
The company calculates the interest expense of the lease liability during the lease term at a fixed interest rate and includes it in the
current profit and loss. According to the "ASBE No. 17 - Borrowing Expenses" and other standards that should be included in the cost
of relevant assets, such provisions shall apply.
36.2 Lessor
（1）Finance lease
As the lessor, on the commencement date of the lease term, the Company recognizes the finance lease receivables for the finance
lease, derecognizes the finance lease assets, and calculates and recognizes the interest income in each period of the lease term according
to the fixed periodic interest rate.
（2）Operating lease
As the lessor, the Company shall, in each period of the lease term, adopt the straight-line method or other systematic and reasonable
method to recognize the lease receipts from operating leases as rental income. Capitalize the initial direct expenses related to operating
leases, amortize them on the same basis as rental income recognition during the lease term, and include them in the current profit and
loss by installments.
For the fixed assets in the operating lease assets, the company shall adopt the depreciation policy for similar assets to accrue
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depreciation; for other operating lease assets, it shall use a systematic and reasonable method for amortization according to the enterprise
accounting standards applicable to the assets. In accordance with the provisions of "ASBE No. 8 - Impairment of Assets", the company
determines whether the operating lease assets are impaired and performs corresponding accounting treatment.
37. Major changes in accounting policies and accounting estimates
37.1. Changes in Accounting Policies
Applicable □ Not applicable
(1) Since January 1, 2022, our company has adopted the relevant provisions of the "Interpretation of Accounting Standards for
Business Enterprises No. 15" (FA [2021] No. 35) to adjust the amount of relevant items in the financial statements based on the
cumulative impact. The changes in accounting policies have no impact on the company.
(2) Since January 1, 2022, our company has adopted the relevant provisions of the "Interpretation of Accounting Standards for
Business Enterprises No. 16" (FA [2022] No. 31) to adjust the amount of relevant items in the financial statements based on the
cumulative impact. The changes in accounting policies have no impact on the company.
37.2. Changes in Accounting Estimates
□ Applicable Not applicable
Section VI Taxation
1. Major categories of taxes and tax rates
Category of tax Basis of tax computation Tax rate
Taxable revenue for sales of goods
Value-added tax 3%、5%、6%
and supply of services
City maintenance and construction
Circulation Taxes payable 5%、7%
tax
Corporate income tax Taxable income 15%、20%、25%
Education surcharge Circulation Taxes payable 3%
Local education surcharge Circulation Taxes payable 2%
1.1 Value-added tax
According to the "Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Launching the
Pilot Project of Changing Business Tax to Value-added Tax" (FT [2016] No. 36) and the "Ministry of Finance and State Administration
of Taxation on Clarifying the Reinsurance, Notice of the Real Estate Leasing and Non-Certificate Education Policy (FT [2016] No. 68)
related provisions, the company's subsidiaries and affiliates' income from non-degree education services are subject to VAT at 3% and
6% tax rates .
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The company and its subsidiaries operate leased buildings and buildings in accordance with the relevant provisions of the
“Statement of the State Administration of Taxation on Issuing the Interim Measures for the Administration of Value-added Tax Levy of
Real Estate Operating Leasing Services Provided by Taxpayers” (State Administration of Taxation Announcement 2016 No. 16) You can
choose to apply the simple tax calculation method and calculate the amount of VAT payable according to the 5% levy rate.
1.2 Corporate income tax
（1）The company's subsidiary, Offcn Limited Income Tax, is paid in advance by each branch at the place of registration, and the
head office is settled and paid.
（2）The company has different taxpayers with different corporate income tax rates, as detailed below：
Name of the company Tax rate
1. The Company 25%
2. Offcn Ltd. 15%
3. Wuhu Yawei Automobile Sales Service Co., Ltd 20%
4. Ningguo Yaxia Motor Vehicle Driver Training School (Co., Ltd.) 20%
5. Huangshan Yaxia Fudi Automobile Sales Services Co., Ltd. 20%
6. Chaohu Yaxia Kaixuan Automobile Sales Service Co., Ltd. 20%
7. Bozhou Yaxia Motor Vehicle Driver Training School Co., Ltd. 20%
8. Suzhou Bokai Automobile Sales Service Co., Ltd. 20%
9. Shaanxi Offcn Education Technology Co. Ltd. 25%
10. Chengdu Offcn Future Education Training School Co. Ltd. 20%
11. Lu’an Yazhong Real Estate Information Consulting Co., Ltd. 25%
12. Lu’an Zhongke Real Estate Information Consulting Co., Ltd. 25%
13. Sichuan Offcn Luming Cultural Media Co., Ltd.Sichuan Offcn Luming Cultural 20%
Media Co., Ltd.
14. Zhejiang Offcn Education Technology Co., Ltd. 25%
15. Taizhou Offcn Future Enterprise Management Consulting Co., Ltd. 20%
16. Wenling Offcn Information Consulting Co., Ltd. 20%
17. Beijing Offcn Xinzhiyu Online Technology Co., Ltd. 25%
18. Hulun Buir Hailar Offcn Education Information Consulting Co., Ltd. 20%
19. Xilinhot Offcn Future Education Consulting Co., Ltd. 20%
20. Yueqing Lecheng Offcn Training Center Co., Ltd. 20%
21. Jiaozuo Offcn Future Education Service Co., Ltd. 20%
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Name of the company Tax rate
22. Xinzheng Offcn Cultural Communication Co., Ltd. 20%
23. Chongqing Jiangbei Offcn Vocational Examination Training Co., Ltd. 25%
24. Nanning Offcn Future Education Consulting Co., Ltd. 25%
25. Baiyin Offcn Future Education Consulting Co., Ltd. 20%
26. Beijing Xinde Zhiyuan Enterprise Management Consulting Co., Ltd. 25%
27. Nanjing Huiyue Hotel Management Co., Ltd. 25%
28. Shandong Kunzhong Yuhua Technology Co., Ltd.Shandong Kunzhong Real Estate 25%
Co., Ltd.
29. Sanmenxia Offcn Cultural Communication Co., Ltd. 20%
30. Liaoning Offcn Academic & Cultural Exchange Co., Ltd. 25%
31. Liaoning Offcn Education Technology Co., Ltd. 25%
32. Shandong Offcn Education Technology Co., Ltd. 20%
33. Jilin Changyi Offcn Education Training School Co., Ltd. 25%
34. Yuxi Offcn Training School Co., Ltd. 20%
35. Tonghua Offcn Training School Co., Ltd. 15%
36. Hunan Lightsalt Offcn Education Technology Co., Ltd. 20%
37. Tianjin Hexi Offcn Training School Co., Ltd. 25%
38. Tianjin Jinnan Offcn Lexue Training School Co., Ltd. 25%
39. Tianjin Baodi Offcn Lexiang Training School Co., Ltd.Tianjin Baodi Offcn 25%
Lexiang Training School Co., Ltd.
40. Tianjin Jizhou Offcn LechengTraining School Co., Ltd.Tianjin Jizhou Offcn 25%
Lecheng Training School Co., Ltd.
41. Chengdu Offcn Education Training School Co., Ltd. 25%
42. Shandong Zhuoda Business Management Co., Ltd. 25%
43. Liaoning Zhongcheng Real Estate Development Co., Ltd. 25%
44. Wuhu Offcn Training School Co., Ltd. 25%
45. Wuhan Guoshang Human Resource Service Co., Ltd. 25%
46. Jinan Zhangqiu Offcn Training School Co., Ltd. 25%
47. Mengzi Offcn Education Training Co., Ltd. 20%
48. Beijing Offcn Technology Development Co., Ltd. 20%
49. Shanghai Offcn Education Technology Co., Ltd. 25%
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Name of the company Tax rate
50. Guangzhou Offcn Intelligence Education Technology Co., Ltd. 20%
51. Nantong Sigang Huizhi Technology Co., Ltd.Nantong Sigang Huizhi Technology 25%
Co., Ltd.
52. Pingshan Offcn Education Technology Co., Ltd. 25%
53. Shandong Offcn Education Training School Co., Ltd. 25%
54. Lanzhou Offcn Education Training School Co., Ltd. 20%
55. Anshan Tiedong Offcn Education Training School Co., Ltd. 20%
56. Diqing Offcn Training School Co., Ltd. 20%
57. Dali Offcn Education Training School Co., Ltd. 20%
58. Harbin Nangang Offcn Education Training School Co., Ltd. 20%
59. Nujiang Offcn Training School Co., Ltd. 20%
60. Weixi Offcn Education Training School Co., Ltd. 20%
61. Beijing Offcn Century Education Technology Co., Ltd. 25%
62. Beijing Offcn Shengjing Education Technology Co., Ltd. 20%
63. Henan Offcn Education Consulting Co., Ltd. 25%
64. Lhasa Offcn Training School Co., Ltd. 20%
65. Tianjin Offcn Technology Co., Ltd. 25%
2. Policies and basis of the important tax incentives
2.1 Value-added tax
（1）According to the "Announcement of the Ministry of Finance and the State Administration of Taxation on Clarifying the VAT
Exemption Policy for Small-scale VAT Taxpayers" (FT [2021] No. 11), in order to further support the development of small and micro
enterprises, from 1 April 2021 to 31 December 2022, small-scale value-added taxpayers with monthly sales of less than RMB 150,000
(including the principal) are exempt from value-added tax. The company's subsidiaries and subsidiaries that meet the exemption
conditions are exempt from VAT.
（2）According to the Notice of the Ministry of Finance and the State Administration of Taxation on the Relevant Policies on
Deduction of Value Added Tax for Special Equipment and Technical Maintenance Costs of Value Added Tax Control System (FT [2012]
No. 15), the VAT taxpayers in 2011 for the first purchase of special equipment for the VAT tax control system (including separate ticket
machines) after December 1 (including the same below), the VAT invoice obtained from the purchase of special equipment for the VAT
tax control system can be used for the full amount of the VAT payable is deducted (the deduction is the total amount of price and tax),
and the deduction that is insufficient can be carried forward to the next period to continue the deduction. The VAT taxpayer's technical
maintenance fee paid after 1 December 2011 (excluding the technical maintenance fee paid before 30 November 2011) can be added to
the value of the technical maintenance fee invoice issued by the technical maintenance service unit. The full amount of the tax payable
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Offcn Education Technology Co., Ltd. 2022 Annual Report
is deductible, and those that are insufficient for deduction can be carried forward to the next period to continue the deduction. The
company and the qualified subsidiaries and subsidiaries should deduct the VAT payable amount in full according to the regulations.
（3）According to the "Notice of the Ministry of Finance and the State Administration of Taxation on the Relevant Policies on
Deduction of Value Added Tax for Special Equipment and Technical Maintenance Costs of Value Added Tax Control System" (FT [2012]
No. 15), the VAT taxpayers in 2011 for the first purchase of special equipment for the VAT tax control system (including separate ticket
machines) after December 1 (including the same below), the VAT invoice obtained from the purchase of special equipment for the VAT
tax control system can be used for the full amount of the VAT payable is deducted (the deduction is the total amount of price and tax),
and the deduction that is insufficient can be carried forward to the next period to continue the deduction. The VAT taxpayer's technical
maintenance fee paid after December 1, 2011 (excluding the technical maintenance fee paid before November 30, 2011) can be added
to the value of the technical maintenance fee invoice issued by the technical maintenance service unit. The full amount of the tax payable
is deductible, and those that are insufficient for deduction can be carried forward to the next period to continue the deduction. The
Company and the qualified subsidiaries and subsidiaries should deduct the VAT payable amount in full according to the regulations.
（4）In accordance with the "Announcement of the Ministry of Finance, the State Administration of Taxation and the General
Administration of Customs on Relevant Policies for Deepening the Reform of Value-added Tax "(FT [2019] No. 39) and the
"Announcement of the Ministry of Finance, the State Administration of Taxation on Relevant Value-added Tax Policies for Promoting
the Relief and Development of Difficult Industries in the Service Sector" (FT [2022] No. 11), from April 1, 2019 to December 31, 2022,
taxpayers in the production and living service industries are allowed to deduct 10% of the input tax in accordance with the current period.
The Company’s qualified subordinate branches and subsidiaries will additionally deduct the value-added tax payable according to this
preferential policy.
2.2Corporate income tax
(1) On October 21, 2020, Offcn Co., Ltd. passed the high-tech enterprise certification organized by the Beijing State Taxation
Bureau, Beijing Local Taxation Bureau, Beijing Finance Bureau, and Beijing Science and Technology Commission, and obtained the
high-tech enterprise certificate numbered GR202011002730. The certificate is valid from October 21, 2020 to October 20, 2023. Offcn
Co., Ltd. and its subordinate branch calculate and pay corporate income tax at a tax rate of 15%.
(2) On September 28, 2021, Tonghua Offcn Training School Co., Ltd., a subsidiary of the Company, was recognized by the Jilin
Provincial Taxation Bureau of the State Administration of Taxation, the Jilin Provincial Department of Finance, and the Jilin Provincial
Department of Science and Technology, and obtained the high-tech enterprise certificate No. GR202122000472. The certificate is valid
from September 28, 2021 to September 27, 2024. Tonghua Offcn Training School Co., Ltd. calculates and pays corporate income tax at
a rate of 15%.
(3) According to the "Announcement of Ministry of Science and Technology of the State Administration of Taxation on
Strengthening of Pre-tax Deduction for Scientific and Technological Innovation", (Announcement No. 28, 2022 of Ministry of Science
and Technology, the State Administration of Taxation, Ministry of Finance), from October 1, 2022 to December 31, 2022, the enterprises
which apply current pre-tax deduction of R & D expenses at a rate of 75%, their pre-tax deduction will be increased to the rate of 100%.
This tax incentive applies to qualified subsidiaries of the Company.
(4) According to the "Announcement of the State Administration of Taxation on Matters Concerning the Implementation of Income
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Tax Preferential Policies Supporting the Development of Small and Low-profit Enterprises and Individual Industrial and Commercial
Households" (State Administration of Taxation Announcement [2021] No. 8 ), from January 1, 2021 to December 31, 2022, the annual
taxable income of small and low-profit enterprises does not exceed 1 million yuan, which will be included in the taxable income at a
reduced rate of 12.5%, and the enterprise’s income tax will be paid at the tax rate of 20%. Qualified subsidiaries of the Company apply
this policy to calculate and pay corporate income tax.
2.3 Other tax incentives
Education surcharge, local education surcharge
(1) According to the "Notice of the Ministry of Finance and the State Administration of Taxation on Expanding the Exemption
Scope of Government Funds" (FT [2016] No. 12), starting from February 1, 2016, the exemption scope of education surcharge, local
education surcharge and water conservancy construction fund should be expanded from the current obligors who pay monthly taxes or
monthly sales or turnover of not more than RMB 30,000 (quarterly taxation of quarterly sales or turnover of not more than RMB 90,000)
to the obligors who pay the monthly sales or turnover of not more than RMB 100,000 (the quarterly sales or turnover of the quarterly
tax does not more than RMB 300,000). Subsidiaries and subsidiaries of the Company that meet the conditions for exemption are
exempted from education surcharge and local education surcharge.
(2) According to the "Announcement of the State Administration of Taxation of the Ministry of Finance on Further Implementation
of “Six Taxes Two Fees” Exemption Policy for SME" (FT [2022] No. 10), from January 1, 2022 to December 31, 2024, based on the
actual situation and the needs of macro adjustment and control, the provincial government, autonomous district government, municipality
government can reduce resource tax, city maintenance and construction tax, property tax, town land-use tax, stamp tax (securities
transaction stamp tax not included), cultivated land use tax, education surcharge and local education surcharge within the rate of 50%
from VAT small-scale taxpayers, small enterprises with little profit and individual business. Qualified subsidiaries of the Company apply
this policy to calculate and pay the related taxes.
Section VII. Consolidated Financial Statement Project Notes
“The opening balance” refers to the balance on 1 January 2022 and “the closing balance” refers to the balance on 31 December
2022. “The prior period” is the year of 2021 and “The current period” is the year of 2022.
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Cash 35,788.65 62,362.45
Bank balances 379,418,940.77 1,756,140,584.62
Other currency funds 5,873,826.32 214,158,325.57
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Closing balance Opening balance
Total 385,328,555.74 1,970,361,272.64
Note: 1. Other currency funds mainly include the balance of third-party payment platforms such as POS, Tenpay and Alipay and so
on
2. At the end of the period, there are mortgages, pledges, freezing, and other restricted funds. For details, please refer to
Note VII (51) “Assets with restricted ownership or use rights”.
3. There were no funds deposited overseas at the end of the period.
2. Transactional financial assets
Item Closing balance Opening balance
Financial assets classified as at fair value through profit or loss 346,726,621.74
Including: Debt instrument investment 346,726,621.74
Total 346,726,621.74
3. Accounts receivable
3.1 Disclosure by aging
Aging Closing balance Opening balance
Within 1 year (inclusive) 3,245,781.30 23,537,021.54
1-2 years (inclusive) 20,260,718.50 20,016,302.00
2-3 years (inclusive) 20,006,930.00
Less: Provision for bad debts 6,189,746.92 3,178,481.27
Total 37,323,682.88 40,374,842.27
3.2 Classified disclosure by bad debt accrual method
Closing balance
Book balance Bad debt provision
Item
Proportion Proportion Book value
Amount Amount
(%) (%)
Accounts receivables for which bad 43,513,429.80 100.00 6,189,746.92 14.22 37,323,682.88
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Closing balance
Book balance Bad debt provision
Item
Proportion Proportion Book value
Amount Amount
(%) (%)
debt provision has been assessed by
credit risk portfoliosTotal
Inc:Combination2 3,491,219.36 8.02 187,596.90 5.37 3,303,622.46
Combination3 40,022,210.44 91.98 6,002,150.02 15.00 34,020,060.42
Total 43,513,429.80 100.00 6,189,746.92 -- 37,323,682.88
Continued:
Opening balance
Book balance Bad debt provision
Item
Proportion Proportion Book value
Amount Amount
(%) (%)
Accounts receivables for which bad debt
provision has been assessed by credit risk 43,553,323.54 100.00 3,178,481.27 7.30 40,374,842.27
portfoliosTotal
Inc:Combination2 3,530,335.54 8.11 176,985.38 5.01 3,353,350.16
Combination3 40,022,988.00 91.89 3,001,495.89 7.50 37,021,492.11
Total 43,553,323.54 100.00 3,178,481.27 -- 40,374,842.27
Accounts receivables for which bad debt provision has been assessed by credit risk portfolios total：
Closing balance
Item
Accounts Receivable Bad debt provision Proportion (%)
Inc:Combination2 3,491,219.36 187,596.90 5.37
Inc:Combination3 40,022,210.44 6,002,150.02 15.00
Total 43,513,429.80 6,189,746.92 --
3.3 Bad debt provision
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Changes in the period
Opening Closing
Item recovery or Write- Other
balance Provision balance
reversal off changes
Provision for bad debts of
3,178,481.27 3,011,265.65 6,189,746.92
accounts receivable
Total 3,178,481.27 3,011,265.65 6,189,746.92
3.4 Top 5 accounts receivable at the end of the period
Creditor Nature of payment Closing balance Bad debt Aging Percentage of total accounts
provision receivable(（%)）
Yaxia Industrial Lease payments 40,000,000.00 6,000,000.00 1-3 years 91.93
Co., Ltd.
Customer 1 Hotel service 1,737,741.50 99,887.90 Within 2 year 3.99
Customer 2 Hotel service 555,536.40 27,776.82 Within 1 year 1.28
Customer 3 Hotel service 297,077.00 14,853.85 Within 1 year 0.68
Customer 4 Hotel service 294,057.00 14,702.85 Within 1 year 0.68
Total 42,884,411.90 6,157,221.42 98.56
4. Prepayments
4.1 Disclosure by aging
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year (inclusive) 556,093.00 100.00 1,438,350.00 100.00
Total 556,093.00 100.00 1,438,350.00 100.00
4.2 Top five entities with the largest balances of prepayments
Nature of Percentage of total Bad debt
Creditor Closing balance Aging
payment advances（%） provision
Nanjing Eurasian Air Passenger Within 1
Ticket 286,409.00 51.50
Transport Agent Co., Ltd year
Nanjing Tuniu International Travel Within 1
Ticket 269,684.00 48.50
Service Co., L year
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Nature of Percentage of total Bad debt
Creditor Closing balance Aging
payment advances（%） provision
Total 556,093.00 100.00
5. Other receivables
5.1 Classified listing
Item Closing balance Opening balance
Other receivables 193,617,379.76 219,501,061.83
Total 193,617,379.76 219,501,061.83
5.2 Other receivables
5.2.1 Disclosure by aging
Aging Closing balance Opening balance
Within 1 year (inclusive) 11,391,834.06 185,478,538.64
1-2 years (inclusive) 157,921,868.93 8,746,012.76
2-3 years (inclusive) 8,193,926.78 11,575,869.13
3-4 years (inclusive) 11,235,499.80 5,104,417.72
4-5 years (inclusive) 4,873,679.72 1,769,524.36
Over 5 years 13,596,150.34 13,686,855.19
Less: Provision for bad debts 13,595,579.87 6,860,155.97
Total 193,617,379.76 219,501,061.83
5.2.2 Other receivables by nature of the payment
Item Closing balance Opening balance
Deposits and guarantees 191,758,631.44 217,158,729.61
Reserve 292,215.00 265,275.00
Disbursement fee and other 1,566,533.32 2,077,057.22
Total 193,617,379.76 219,501,061.83
5.2.3 Withdrawing process of bad debt provision
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Offcn Education Technology Co., Ltd. 2022 Annual Report
The first stage second stage The third stage
Expected credit loss Expected credit losses for
Expected credit
Bad debt provision for the entire duration the entire duration (credit Total
losses in the next
(no credit impairment impairment loss has
12 months
loss) occurred)
Balance as of 1 January 2022 6,860,155.97 6,860,155.97
Balance of other receivables on 1 January
2022 during the current period
——transferred to stage 2
——transferred to stage 3
——transferred back stage 2
——transferred back to stage 1
Provision during the current period 6,735,423.90 6,735,423.90
Reversal during the current period
Resale during the current peiriod
Write-off during the current period
Other changes
Balance as of 31 December 2022 13,595,579.87 13,595,579.87
5.2.4 Situation of bad debt provision
Changes in the period
Opening
Item recovery or Other Closing balance
balance Provision Write-off
reversal changes
Provision for bad
debts of other 6,860,155.97 6,735,423.90 13,595,579.87
receivables
Total 6,860,155.97 6,735,423.90 13,595,579.87
5.2.5 Top 5 other receivable at the end of the period
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Percentage
of total other Closing balance of
Creditor Nature of payment Closing balance Aging
receivables bad debt provision
(%)
Beijing Construction Engineering Real Estate Co.,
Deposits and guarantees 124,498,000.00 1-2 year 60.08 12,449,800.00
LTD
Beijing Huaxia Shunxin Property Management
Deposits and guarantees 25,000,000.00 1-2 year 12.06
Co., Ltd
Beijing Hanhua Century Technology Co., Ltd Deposits and guarantees 5,908,912.31 Within 2 year 2.85
Shenyang Lijing Mingzhu Hotel Management Co.,
Deposits and guarantees 5,675,200.00 Over 5 years 2.74
Ltd
Chengdu Zhongman Weiye Cultural Industry
Deposits and guarantees 3,660,000.00 3-4 years 1.77
Development Co., Ltd
Total 164,742,112.31 79.50 12,449,800.00
6. Other current assets
Item Closing balance Opening balance
Prepaid expenses 4,318,475.88 10,255,632.25
Input tax to be deducted 239,685.75
Pending payment 1,661.55 12,833,701.81
Advance tax 13,869,795.74
Total 4,559,823.18 36,959,129.80
7. Debt investment
Closing balance Opening balance
Item Impairment Book Impairment
Book balance Book value Book value
provision balance provision
Time deposit 7,058,993.55 7,058,993.55
Total 7,058,993.55 7,058,993.55
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Offcn Education Technology Co., Ltd. 2022 Annual Report
8.Long-term equity investment
Changes for the year
Closing
Cash
Investment Other balance
The invested Other dividends Provision Closing
Opening balance profit under comprehensive of provision
entity Increase Decrease equity or profits for Others balance
equity income for
change announced of impairment
method adjustment impairment
issuance
I.Cooperatives
Offcn Xietong (Jiaxing) Human
2,266.22 2,266.22
Resources Co., Ltd.
Subtotal 2,266.22 2,266.22
II.Associates
Beijing Offcn Future Education
46,850,364.40 -16,677.99 46,833,686.41
Technology Co., Ltd.
Subtotal 46,850,364.40 -16,677.99 46,833,686.41
Total 46,850,364.40 -14,411.77 46,835,952.63
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Offcn Education Technology Co., Ltd. 2022 Annual Report
9. Other equity investment
9.1 Other equity investment
Item Closing balance Opening balance
Shanghai Zuihuibao Network Technology Co., Ltd. 99,600,000.00 103,600,000.00
Anhui Ningguo Rural Commercial Bank Co., Ltd. 21,700,000.00 26,800,000.00
Total 121,300,000.00 130,400,000.00
9.2 Investment in non-trading equity instruments
Amount of
Reasons for the
other Reasons for
designation as being
comprehensi transferring other
Recognized Cumulative Accumulat measured at fair value and
Item ve income comprehensive
dividend income gain ed loss the change included in
transferred income to retained
other comprehensive
to retained earnings
income
earnings
Shanghai Zuihuibao
Network Technology 13,600,000.00 Plan for long-term holding
Co., Ltd.
Anhui Ningguo Rural
Commercial Bank 1,659,840.00 -5,100,000.00 Plan for long-term holding
Co., Ltd.
Total 1,659,840.00 8,500,000.00
10. Other non-current financial assets
Item Closing balance Opening balance
Beijing Jinwu Venture Capital Center (Limited Partnership) 27,680,000.00 30,260,000.00
Total 27,680,000.00 30,260,000.00
11. Investment property
11.1 Investment real estate measurement model
Investment real estate with cost measurement model :
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Houses and buildings Land use rights Total
1.Original carrying amount
1.1 Opening balance 377,111,222.22 470,624,021.74 847,735,243.96
1.2 Increase in the current period
1.3 Decrease in the current period 376,581,430.71 470,624,021.74 847,205,452.45
1.3.1 Transferred to fixed assets 376,581,430.71 376,581,430.71
1.3.2 Transferred into intangible assets 470,624,021.74 470,624,021.74
1.4 Closing balance 529,791.51 529,791.51
2. Accumulated depreciation and amortization
2.1 Opening balance 59,891,662.72 82,709,435.86 142,601,098.58
2.2 Increase in the current period 68,086.80 68,086.80
2.2.1 Accrual or amortization 68,086.80 68,086.80
2.3 Decrease in the current period 59,880,218.55 82,709,435.86 142,589,654.41
2.3.1 Transferred to fixed assets 59,880,218.55 59,880,218.55
2.3.2 Transferred into intangible assets 82,709,435.86 82,709,435.86
2.4 Closing balance 79,530.97 79,530.97
3. Provision for impairment
3.1 Opening balance 6,556,268.55 53,641,335.37 60,197,603.92
3.2 Increase in the current period
3.3 Decrease in the current period 6,556,268.55 53,641,335.37 60,197,603.92
3.3.1 Transferred to fixed assets 6,556,268.55 6,556,268.55
3.3.2 Transferred into intangible assets 53,641,335.37 53,641,335.37
3.4 Closing balance
4.Book value
4.1 Closing balance 450,260.54 450,260.54
4.2 Opening balance 310,663,290.95 334,273,250.51 644,936,541.46
11.2 The situation of investment real estate that has not completed the property right certificate
Item Closing balance Reasons for not completing the property right certificate
Houses and buildings 450,260.54 In progress
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Offcn Education Technology Co., Ltd. 2022 Annual Report
12. Fixed assets
12.1 Presentation
Item Closing balance Opening balance
Fixed assets 1,970,536,339.75 1,770,372,338.85
Total 1,970,536,339.75 1,770,372,338.85
12.2 Fixed assets
12.2.1 Fixed assets situation
Houses and Decoration of Transportation Electronic Office
Item Total
buildings fixed assets equipment equipment equipment
I.Original carrying
amount
1.1 Opening balance 1,798,288,071.53 64,708,424.02 79,966,146.51 235,284,975.20 12,081,043.61 2,190,328,660.87
1.2 Increase in the
376,581,430.71 1,339.81 50,580.00 181,847.29 376,815,197.81
current period
1.2.1 Purchase 1,339.81 50,580.00 181,847.29 233,767.10
1.2.2 Investment real
376,581,430.71 376,581,430.71
estate reversal
1.3 Decrease in the
29,425.00 6,225.00 35,650.00
current period
1.3.1 Disposal or scrap 29,425.00 6,225.00 35,650.00
1.4 Closing balance 2,174,869,502.24 64,708,424.02 79,967,486.32 235,306,130.20 12,256,665.90 2,567,108,208.68
II.Accumulated
depreciation
2.1 Opening balance 148,830,688.16 33,613,748.22 71,001,620.93 155,398,465.35 11,032,815.02 419,877,337.68
2.2 Increase in the
124,702,581.77 9,836,387.16 2,090,521.87 33,246,751.35 216,903.71 170,093,145.86
current period
2.2.1 Provision 64,822,363.22 9,836,387.16 2,090,521.87 33,246,751.35 216,903.71 110,212,927.31
2.2.2 Investment real
59,880,218.55 59,880,218.55
estate reversal
2.3 Decrease in the
27,953.75 5,913.75 33,867.50
current period
2.3.1 Disposal or scrap 27,953.75 5,913.75 33,867.50
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Houses and Decoration of Transportation Electronic Office
Item Total
buildings fixed assets equipment equipment equipment
2.4 Closing balance 273,533,269.93 43,450,135.38 73,092,142.80 188,617,262.95 11,243,804.98 589,936,616.04
III. Provision for
impairment
3.1 Opening balance 4,309.80 74,674.54 78,984.34
3.2 Increase in the
6,556,268.55 6,556,268.55
current period
3.2.1 Provision
3.2.2 Investment real
6,556,268.55 6,556,268.55
estate reversal
3.3 Decrease in the
current period
3.3.1 Disposal or scrap
3.4 Closing balance 6,556,268.55 4,309.80 74,674.54 6,635,252.89
IV. Book value
4.1 Closing balance 1,894,779,963.76 21,258,288.64 6,875,343.52 46,684,557.45 938,186.38 1,970,536,339.75
4.2 Opening balance 1,649,457,383.37 31,094,675.80 8,964,525.58 79,882,200.05 973,554.05 1,770,372,338.85
12.2.2 The situation of fixed assets that have not completed the title certificate
Reasons for not completing the property right
Item Carrying amount
certificate
Houses and buildings 615,816,222.31 In progress
13. Construction in progress
13.1 Master list
Item Closing balance Opening balance
Construction in progress 323,273,645.99 294,785,678.31
Total 323,273,645.99 294,785,678.31
13.2 Construction in progress
13.2.1 Construction in progress
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Fushun Offcn
160,953,189.34 160,953,189.34 157,099,898.91 157,099,898.91
Building
Rizhao Learning
88,360,023.13 88,360,023.13 63,725,345.88 63,725,345.88
City
Bozhou Yaxia
62,847,721.95 62,847,721.95 62,847,721.95 62,847,721.95
Fortune Plaza
GAC-Toyota Bozhou
9,721,381.62 9,721,381.62 9,721,381.62 9,721,381.62
4S Stores
Huangshan Fudi
1,391,329.95 1,391,329.95 1,391,329.95 1,391,329.95
Stores
Total 323,273,645.99 323,273,645.99 294,785,678.31 294,785,678.31
13.2.2 Changes in important construction projects in the current period
Increase in the Transfer to Other
Item Budget amount Opening balance Closing balance
current period fixed assets decreases
Fushun Offcn
330,000,000.00 157,099,898.91 3,853,290.43 160,953,189.34
Building
Rizhao Learning City 1,000,000,000.00 63,725,345.88 24,634,677.25 88,360,023.13
Total 1,330,000,000.00 220,825,244.79 28,487,967.68 249,313,212.47
Continued：
Amount injected as a Construction Amount of Including: Interest
proportion of budget amount progress accumulated capitalized interest capitalization rate Source of funds
(%) (%) capitalized interest for the period for the period (%)
48.77 48.77 self-funds
8.84 8.84 self-funds
-- --
14. Right-of-use assets
Item Houses and buildings Total
1.Original carrying amount
167
Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Houses and buildings Total
1.1 Opening balance 1,786,074,513.91 1,786,074,513.91
1.2 Increase in the current period 335,810,444.38 335,810,444.38
1.2.1 Add a lease contract 335,810,444.38 335,810,444.38
1.3 Decrease in the current period 315,472,123.28 315,472,123.28
1.3.1 Lease expiry 188,529,870.35 188,529,870.35
1.3.2 Expires early 126,942,252.93 126,942,252.93
1.4 Closing balance 1,806,412,835.01 1,806,412,835.01
2. Accumulated amortization
1.Opening balance 443,794,126.83 443,794,126.83
2.2 Increase in the current period 494,927,273.69 494,927,273.69
2.2.1 Provision 494,927,273.69 494,927,273.69
2.3 Decrease in the current period 244,511,013.09 244,511,013.09
2.3.1 Lease expiry 188,529,870.35 188,529,870.35
2.3.2 Expires early 55,981,142.74 55,981,142.74
2.4 Closing balance 694,210,387.43 694,210,387.43
3. Impairment provision
3.1 Opening balance
3.2 Increase in the current period
3.3 Decrease in the current period
3.4 Closing balance
4. Book value
4.1 Closing balance 1,112,202,447.58 1,112,202,447.58
4.2 Opening balance 1,342,280,387.08 1,342,280,387.08
15.Intangible assets
15.1 Intangible assets
Item Land use rights Software use rights Trademark rights Total
1.Original carrying amount
1.1 Opening balance 910,052,741.43 7,774,286.02 7,140,521.53 924,967,548.98
1.2 Increase in the current period 470,624,021.74 470,624,021.74
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Item Land use rights Software use rights Trademark rights Total
1.2.1 Investment real estate reversal 470,624,021.74 470,624,021.74
1.3 Decrease in the current period
1.4 Closing balance 1,380,676,763.17 7,774,286.02 7,140,521.53 1,395,591,570.72
2. Accumulated amortization
2.1 Opening balance 50,645,032.49 4,516,942.00 3,174,913.64 58,336,888.13
2.2 Increase in the current period 119,925,884.48 693,657.36 724,035.04 121,343,576.88
2.2.1 Provision 37,216,448.62 693,657.36 724,035.04 38,634,141.02
2.2.2 Investment real estate reversal 82,709,435.86 82,709,435.86
2.3 Decrease in the current period
2.4 Closing balance 170,570,916.97 5,210,599.36 3,898,948.68 179,680,465.01
3. Impairment provision
3.1 Opening balance 3,111.00 3,111.00
3.2 Increase in the current period 53,641,335.37 53,641,335.37
3.2.1 Investment real estate reversal 53,641,335.37 53,641,335.37
3.3 Decrease in the current period
3.4 Closing balance 53,641,335.37 3,111.00 53,644,446.37
4. Book value
4.1 Closing balance 1,156,464,510.83 2,560,575.66 3,241,572.85 1,162,266,659.34
4.2 Opening balance 859,407,708.94 3,254,233.02 3,965,607.89 866,627,549.85
15.2 Land use right without property certification held
Reasons for not completing the property right
Item Closing balance
certificate
Land use rights 226,294,737.56 In progress
16. Goodwill
16.1 Original book value of goodwill
Name of the investee and Increase in the current Decrease in the current
Opening balance Closing balance
item resulting in goodwill period period
169
Offcn Education Technology Co., Ltd. 2022 Annual Report
Formed by
business others Dispose others
combination
Shandong Kunzhong Yuhua
39,378,573.51 39,378,573.51
Technology Co., Ltd
Nanjing Huiyue Hotel
60,489,146.87 60,489,146.87
Management Co., Ltd.
Total 99,867,720.38 99,867,720.38
16.2 Goodwill impairment provision
None.
16.3 Relevant information of asset group or combination of asset group where goodwill is located
The company acquired Shandong Kunzhong Yuhua Technology Co., Ltd. in 2016, resulting in a goodwill of RMB 39,378,573.51 .
The goodwill was divided into related asset groups, which consist of long-term assets, goodwill, and deferred income tax liabilities. The
recoverable amount of the asset group is determined based on the net amount of fair value minus disposal expenses.
The company's acquisition of Nanjing Huiyue Hotel Management Co., Ltd. in 2018 generated goodwill of RMB 60,489,146.87.
The goodwill was divided into related asset groups, which consist of long-term assets, goodwill, and deferred income tax liabilities. The
recoverable amount of the asset group is determined based on the net amount of fair value minus disposal expenses.
16.4.Goodwill impairment testing process, key parameters and confirmation method of goodwill impairment loss
The method of provision for impairment is detailed in Note V (25) Long-term asset impairment.
The recoverable amount of the company's asset group including goodwill is estimated by using the net amount of the fair value of
the asset group in which the goodwill is located less the disposal costs. As the main assets have a fair value that can be referred to in the
market, the market comparison method is used to estimate the fair value of the base date of the assets to be estimated, taking into account
differences in time, transaction, regional and individual factors. For other assets, combined with the actual situation of assets, the cost
method is adopted to determine the fair value of the assets to be appraised on the base date .The company entrusted an asset assessment
company to conduct an impairment test on goodwill. After testing, no goodwill was found to be impaired, and no provision for
impairment was made.
17. Long-term prepaid expenses
Increase in the Amortization for Other
Item Opening balance Closing balance
period the period reductions
Decoration expenditure 369,131,058.86 3,085,277.79 96,032,184.33 276,184,152.32
170
Offcn Education Technology Co., Ltd. 2022 Annual Report
Increase in the Amortization for Other
Item Opening balance Closing balance
period the period reductions
Other 11,059,947.52 994,500.78 3,104,281.99 8,950,166.31
Total 380,191,006.38 4,079,778.57 99,136,466.32 285,134,318.63
18. Deferred income tax assets and Deferred income tax liabilities
18.1 Unoffset deferred income tax assets
Closing balance Opening balance
Deductible Deductible
Item Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
Provision for impairment losses of assets 13,820,010.31 2,202,090.78 7,097,408.69 1,143,919.39
Deductible losses 3,995,702,357.27 599,355,353.59 2,816,982,346.58 422,547,351.99
Changes in fair value of held-for-trading
4,820,000.00 723,000.00 2,240,000.00 336,000.00
financial assets
Total 4,014,342,367.58 602,280,444.37 2,826,319,755.27 424,027,271.38
18.2 Unoffset deferred income tax liabilities
Closing balance Opening balance
Taxable Taxable
Item Deferred income Deferred income
temporary temporary
tax liabilities tax liabilities
difference difference
Appraisal and Appreciation of
Consolidated Assets of Non-identical 344,940,496.08 86,235,124.03 355,061,963.00 88,765,490.76
Controlled Enterprises
Changes in fair value of other equity
8,500,000.00 2,125,000.00 17,600,000.00 4,400,000.00
instrument investments
Changes in fair value of financial assets
3,446,850.74 546,681.86
held for trading
Total 353,440,496.08 88,360,124.03 376,108,813.74 93,712,172.62
18.3 Unrecognized deferred income tax asset details
171
Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Closing balance Opening balance
Deductible losses 341,498,222.24 261,754,607.89
Deductible temporary difference 3,024,087.93 2,801,762.22
Total 344,522,310.17 264,556,370.11
18.4 The deductible losses of unrecognized deferred income tax assets will expire in the following years
Year Closing balance Opening balance
2022 14,669,961.10
2023 11,480,964.23 11,480,964.23
2024 38,853,304.84 38,853,304.84
2025 57,109,818.13 57,109,818.13
2026 125,120,829.40 139,640,559.59
2027 108,933,305.64
Total 341,498,222.24 261,754,607.89
19. Other non-current assets
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Prepayment for Fixed Assets 1,640,966,885.38 1,640,966,885.38 1,630,946,885.38 1,630,946,885.38
Input tax to be deducted / to
3,378,986.11 3,378,986.11 11,962,352.40 11,962,352.40
be certified
Prepaid construction
8,455,158.00 8,455,158.00 8,455,158.00 8,455,158.00
payments
Investment funds 1,400,000.00 1,400,000.00 800,000.00 800,000.00
Total 1,654,201,029.49 1,654,201,029.49 1,652,164,395.78 1,652,164,395.78
20. Short-term loan
Short-term loan classification
Item Closing balance Opening balance
Credit loans 3,152,945,812.59
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Closing balance Opening balance
Total 3,152,945,812.59
21. Accounts payable
List of accounts payable
Item Closing balance Opening balance
Start class fees 177,100,514.23 109,756,452.70
Fixed assets 43,112,000.00 83,112,000.00
Market promotion fees 29,539,866.76 15,623,180.88
Renovation costs 22,461,110.93 22,461,110.93
Project payments 14,874,901.84 51,080,172.01
Total 287,088,393.76 282,032,916.52
22.Contract liabilities
Summary of contract liabilities
Item Closing balance Opening balance
Training fees received in advance 3,949,759,013.68 3,063,247,467.84
Other 40,525.03 473,822.44
Total 3,949,799,538.71 3,063,721,290.28
23. payroll payable
23.1 List of employee salaries payable
Opening Closing
Item Increase Decrease
balance balance
I. Short-term salary 406,180,615.62 3,634,949,515.80 3,528,354,156.94 512,775,974.48
II.Post-employment welfare- defined contribution
16,666,240.98 282,307,507.24 201,925,983.63 97,047,764.59
plan liability
III. Dismissed welfare 40,000.00 1,909,768.03 1,949,768.03
Total 422,886,856.60 3,919,166,791.07 3,732,229,908.60 609,823,739.07
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Offcn Education Technology Co., Ltd. 2022 Annual Report
23.2 Short-term salary list
Opening Closing
Item Increase Decrease
balance balance
I. Wages or salaries, bonuses, allowances and
399,743,797.02 3,356,766,463.91 3,287,192,978.24 469,317,282.69
subsidies
II. Staff welfare 2,844,461.38 2,844,461.38
III. Social security contributions 5,769,694.98 166,706,018.80 154,805,103.79 17,670,609.99
Inc: 1.Medical insurance 5,379,517.86 158,382,167.52 147,915,236.63 15,846,448.75
2. Work injury insurance 389,970.93 6,274,281.73 4,878,138.89 1,786,113.77
3. Maternity insurance 206.19 2,049,569.55 2,011,728.27 38,047.47
IV. Housing fund 666,882.00 108,565,854.92 83,444,655.12 25,788,081.80
V. Labor union expenditure and employee
241.62 66,716.79 66,958.41
education expenditure
Total 406,180,615.62 3,634,949,515.80 3,528,354,156.94 512,775,974.48
23.3 Set deposit plan listing
Item Opening balance Increase Decrease Closing balance
I. Basic endowment insurance 16,059,305.75 272,705,057.11 194,825,024.03 93,939,338.83
II. Unemployment insurance 606,935.23 9,602,450.13 7,100,959.60 3,108,425.76
Total 16,666,240.98 282,307,507.24 201,925,983.63 97,047,764.59
23.4 Dismissed welfare
Item Amount of current payments Amount due but not yet paid
Compensation for termination of
1,949,768.03
employment
Total 1,949,768.03
24. Taxes payable
Item Closing balance Opening balance
1. Value-added tax 3,008,686.66 1,258,114.36
2. Corporate income tax 2,161,035.51 7,200,408.21
3. Land use tax 1,987,843.38 2,064,992.60
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Closing balance Opening balance
4. Property tax 1,845,218.31 1,604,934.51
5. City maintenance and construction tax 229,372.72 84,830.67
6. Education surcharge 166,226.69 37,072.06
7. Withholding individual income tax 122,182.62 227,163.18
8. Other 72,932.18 89,236.25
Total 9,593,498.07 12,566,751.84
25. Other payable
25.1 Master list
Item Closing balance Opening balance
Other payable 1,096,787,345.65 129,043,599.22
Total 1,096,787,345.65 129,043,599.22
25.2 Other payables
Item Closing balance Opening balance
Shareholder loans 959,240,000.00
Daily expenses 64,983,802.12 58,363,407.47
Equity transfer 61,283,300.00 61,283,300.00
Social Security and Provident Fund 1,790,029.54 683,275.40
Deposit and security deposit 285,500.00
Advances and others 9,204,713.99 8,713,616.35
Total 1,096,787,345.65 129,043,599.22
26. Non-current liabilities due within one year
Item Closing balance Opening balance
Lease liabilities due within one year 578,821,921.03 531,876,007.31
Total 578,821,921.03 531,876,007.31
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Offcn Education Technology Co., Ltd. 2022 Annual Report
27. Other current liabilities
Item Closing balance Opening balance
Value-added tax received in advance 118,495,201.91 91,925,853.39
Total 118,495,201.91 91,925,853.39
28. Lease liabilities
Item Closing balance Opening balance
Houses and buildings 508,752,253.77 635,691,184.87
Total 508,752,253.77 635,691,184.87
29. Share capital
Changes in the current period（+、-）
Opening Closing
Item Issue new Bonus Provident fund transfer to
balance other Total balance
shares share share capital
Share
103,807,623.00 103,807,623.00
capital
30. Capital reserve
Item Opening balance Increase Decrease Closing balance
Equity premium 1,225,481,049.50 1,225,481,049.50
Total 1,225,481,049.50 1,225,481,049.50
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31. Other comprehensive income
Amount incurred in this period
Less: transferred to Less: transferred to
other comprehensive other comprehensive Attributable to Attributable to
Opening Closing
Item Pre-tax amount income in the previous income in the previous Less: income the parent minority
balance balance
for the year period and transferred period and transferred tax expenses company, after shareholders,
to profit or loss in the to retained earnings in tax after tax
current period the current period
1. Other comprehensive income not 13,200,000.00 -9,100,000.00 -2,275,000.00 -6,825,000.00 6,375,000.00
reclassified into gains or losses
Changes in the fair value of other 13,200,000.00 -9,100,000.00 -2,275,000.00 -6,825,000.00 6,375,000.00
equity instruments
2. Other comprehensive income
classified into gains or losses
Total 13,200,000.00 -9,100,000.00 -2,275,000.00 -6,825,000.00 6,375,000.00
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32. Surplus reserve
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 45,000,000.00 45,000,000.00
Total 45,000,000.00 45,000,000.00
33. Undistributed profit
Amount for the current Amount for the prior
Item
period period
Undistributed profits at the end of previous year 501,330,081.70 2,870,839,120.70
Adjusting undistributed profits at the beginning of the
period(Increase +, decrease-)
Undistributed profits at the beginning of the year 501,330,081.70 2,870,839,120.70
Add: net profit attributable to owners of the Parent -1,102,059,818.43 -2,369,509,039.00
Company
Less: appropriation of statutory surplus reserve
Appropriation of arbitrary surplus reserves
Dividend payable for ordinary shares
Other
Undistributed profits at the end of period -600,729,736.73 501,330,081.70
34. Operating income and operating costs
Amount for the current period Amount for the prior period
Item
Operating income Operating costs Operating income Operating costs
Prime operating
4,801,848,887.15 2,958,900,025.02 6,860,282,371.30 4,945,732,913.85
income
Including:Education
4,801,848,887.15 2,958,900,025.02 6,860,282,371.30 4,945,732,913.85
and Training
Other business 22,965,218.28 20,887,285.53 51,440,960.49 47,984,449.73
Total 4,824,814,105.43 2,979,787,310.55 6,911,723,331.79 4,993,717,363.58
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35. Taxes and surcharges
Item Amount for the current period Amount for the prior period
Property tax 9,723,963.25 7,049,854.14
City maintenance and construction tax 8,407,331.30 8,522,400.03
Land holding tax 8,194,807.45 11,321,827.24
Education surcharge 5,981,579.32 6,082,104.43
Stamp tax 342,515.83 1,767,176.26
Vehicle usage tax 192,396.26 206,086.78
Other 453,129.50 405,720.86
Total 33,295,722.91 35,355,169.74
36. Sales expenses
Item Amount for the current period Amount for the prior period
Employee's salary 971,517,620.77 1,483,858,537.49
Marketing fee 127,248,692.75 270,366,194.33
Rent property and depreciation
218,563,006.35 223,882,255.51
amortization
Travel expenses 32,113,996.39 113,757,589.64
Other 9,653,342.79 13,234,335.09
Total 1,359,096,659.05 2,105,098,912.06
37. Management expenses
Item Amount for the current period Amount for the prior period
Employee's salary 582,274,034.60 895,338,308.25
Rental property and depreciation
176,542,656.54 189,782,209.74
amortization
Office expenses 111,547,826.48 123,857,061.80
Travel expenses 33,446,817.68 67,023,692.53
Welfare fee 1,436,229.70 8,856,771.23
Other 30,570,788.08 30,784,978.48
Total 935,818,353.08 1,315,643,022.03
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Offcn Education Technology Co., Ltd. 2022 Annual Report
38. Research and development expenses
Item Amount for the current period Amount for the prior period
Employee's salary 533,594,904.48 821,900,871.61
Travel expenses 8,865,669.17 27,128,292.82
Other 49,748,276.45 52,440,374.14
Total 592,208,850.10 901,469,538.57
39. Financial expenses
Item Amount for the current period Amount for the prior period
Interest expenses 82,900,952.64 274,734,405.81
Less: Interest income 7,965,614.53 58,235,304.20
Service Charge 163,586,152.98 275,115,370.37
Total 238,521,491.09 491,614,471.98
40. Other income
Item Amount for the current period Amount for the prior period
Stable subsidy 23,803,190.19 6,034,820.96
VAT exemption 19,539,883.84 68,480,064.80
Tax handling fee refund 5,170,874.49 107,735.71
Financial support 3,000,000.00 20,000,000.00
Rent subsidy income 417,165.00 273,750.00
Small financial support income 225,686.00 1,187,768.87
Total 52,156,799.52 96,084,140.34
41. Investment income
Amount for the current Amount for the prior
Item
period period
Investment income from Financial product 8,152,962.12 56,955,660.58
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Amount for the current Amount for the prior
Item
period period
Dividend income obtained during the holding period of other equity
1,659,840.00 1,327,872.00
instrument investments
Interest income obtained during the period of debt investment
5,879.99 23,083,807.21
holding
Long-term equity investments income under equity method -14,411.77 -2,149,635.60
Investment income from disposal of long-term equity investments 26,620.33
Gains arising from remeasurement of remaining equity at fair value
25,576.40
after loss of control
Total 9,804,270.34 79,269,900.92
42. Fair value change income
Item Amount for the current period Amount for the prior period
Tradable financial assets -6,026,850.74 -21,490,322.52
Total -6,026,850.74 -21,490,322.52
43. Expected credit loss
Item Amount for the current period Amount for the prior period
Accounts receivable bad debt losses -3,011,265.65 -2,047,094.28
Other receivables bad debt -6,735,423.90 -6,482,755.12
Total -9,746,689.55 -8,529,849.40
44. Asset disposal income
Item Amount for the current period Amount for the prior period
Right-of-use assets -9,500,665.47
Fixed assets -163,075.82
Total -9,500,665.47 -163,075.82
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45.Non-operating income
Amount for the Amount for the prior Amount included in current
Item
current period period non-recurring profit and loss
Liquidated damages income 18,141,095.89
Total 18,141,095.89
46. Non-operating expenses
Amount for the Amount for the prior Amount included in current non-
Item
current period period recurring profit and loss
Forfeiture and Late Payments 4,676,810.32 833,516.13 4,676,810.32
External donation 100,004.54 415,001.84 100,004.54
Fixed assets disposal losses 1,782.50 5,264.50 1,782.50
Compensation expenses 50,000.00
Total 4,778,597.36 1,303,782.47 4,778,597.36
47. Income tax expense
47.1 Statement of income tax expense
Item Amount for the current period Amount for the prior period
Income tax expenses -179,942,271.41 -399,652,322.88
Inc: Current tax expense 1,387,950.17 8,133,783.70
Deferred tax expense -181,330,221.58 -407,786,106.58
47.2 Accounting profit and income tax expense adjustment process
Amount for the current Amount for the prior
Item
period period
Total profit -1,282,006,014.61 -2,769,167,039.23
Income tax expenses calculated pursuant to statutory/applicable tax
-192,300,902.19 -415,375,055.88
rate(s)
Impact from different tax rates applicable to subsidiaries -6,716,410.45 -5,079,231.58
Impact from adjustment to income tax in prior periods 594,060.35 604,294.24
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Amount for the current Amount for the prior
Item
period period
Profit and loss attributable to joint ventures and associates 3,602.94 537,408.90
Impact of non-taxable income -414,960.00 -331,968.00
Impact from non-deductible cost, expense and loss 5,523,795.35 4,510,631.06
Tax deduction -6,220,931.15 -30,794,981.36
Impact from using deductible losses of previously unrecognized
-4,632,738.80 -611,337.11
deferred income tax assets
The effect of deductible temporary differences or deductible losses of
24,222,212.54 46,887,916.85
deferred income tax assets not recognized in the current period
Income tax expenses -179,942,271.41 -399,652,322.88
48. Other comprehensive income items and their income tax impact and transfer-in profit and loss
See this report for details Note “VII (31) Other comprehensive income”.
49. Items in cash flow statement
49.1 Other cash receipts relating to operating activities
Item Amount for the current period Amount for the prior period
Other income and non-operating income 32,199,861.80 45,745,171.43
Interest income 7,965,614.53 58,235,304.20
Deposits and guarantees 1,743,889.01 67,046,115.88
Reserve 30,705.91 120,357.15
Disbursement fee and others 645,430.93 794,866.26
Total 42,585,502.18 171,941,814.92
49.2 Other cash payments relating to operating activities
Item Amount for the current period Amount for the prior period
Daily expenses 313,445,398.41 701,531,709.86
Service Charge 179,480,460.40 218,115,370.37
Deposits and guarantees 6,305,837.79 197,610,304.93
Reserve 57,645.91 385,512.15
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Item Amount for the current period Amount for the prior period
Non-operating expenses 4,778,597.36 1,303,782.47
Disbursement fee and others 81,514.51 462,284.22
Total 504,149,454.38 1,119,408,964.00
49.3 Other cash receipts relating to investing activities
Item Amount for the current period Amount for the prior period
Engineering deposit 200,000,000.00
Total 200,000,000.00
49.4 Other cash receipts relating to financing activities
Item Amount for the current period Amount for the prior period
Shareholder loans 959,240,000.00
Total 959,240,000.00
49.5 Other cash payments relating to financing activities
Item Amount for the current period Amount for the prior period
Cash paid to repay principal and interest on lease
386,990,744.68 606,571,985.34
liability
Total 386,990,744.68 606,571,985.34
50. Supplementary Information on Cash Flow Statement
50.1 Supplementary Information on Cash Flow Statement
Amount for the current Amount for the prior
Additional materials
period period
1. Reconciliation of net profit to cash flow from operating
activities:
Net profit -1,102,063,743.20 -2,369,514,716.35
Add: Provision for impairment losses of assets
Credit impairment loss 9,746,689.55 8,529,849.40
Depreciation of fixed assets, depletion of oil and gas assets,
110,281,014.11 120,413,023.55
depreciation of bearer biological assets
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Amount for the current Amount for the prior
Additional materials
period period
Amortization of right-of-use assets 494,927,273.69 503,643,895.04
Amortization of intangible assets 35,949,732.07 20,823,493.07
Amortization of long-term prepaid expenses 96,032,184.33 66,684,829.78
Losses/(gains) on disposal of fixed assets, intangible assets
9,500,665.47 163,075.82
and other long-term asset
Losses /(gains) on write-off of fixed assets 1,782.50 5,264.50
Losses/(gains) on changes in fair values 6,026,850.74 21,490,322.52
Financial expenses/ (income) 82,900,952.64 274,734,405.81
Losses/(gains) arising from investments -9,804,270.34 -79,269,900.92
Decrease /(increase) in deferred tax assets -178,253,172.99 -402,420,834.61
Increase/(decrease) in deferred tax liabilities -3,077,048.59 -5,365,271.97
Decrease /(increase) in inventories
Decrease /(increase) in receivables from operating activities 52,536,061.91 -172,950,120.86
Increase/(decrease) in payables from operating activities 1,182,486,986.39 -2,084,928,863.68
Others
Net cash flow from operating activities 787,191,958.28 -4,097,961,548.90
2.Significant investing and financing activities that do not involve
cash flow
Conversion of debt into capital
Reclassification of current portion of convertible bonds to
current liabilities
Fixed assets capitalized under finance lease
3. Net changes in cash and cash equivalents:
Closing balance of cash 380,885,899.37 1,969,806,009.56
Less: Opening balance of cash 1,969,806,009.56 5,950,036,489.12
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -1,588,920,110.19 -3,980,230,479.56
50.2. Composition of Cash and Cash Equivalents
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Closing balance Opening balance
I. Cash 380,885,899.37 1,969,806,009.56
Including: Cash on hand 35,788.65 62,362.45
Bank deposits 374,976,284.40 1,755,585,321.54
Other monetary funds 5,873,826.32 214,158,325.57
II. Cash equivalents
Including: Investments in debt securities due within three months
III. Closing balance of cash and cash equivalents 380,885,899.37 1,969,806,009.56
Including: Cash and cash equivalents with restricted use of parent company or
subsidiaries within the group
51. Assets with restricted ownership or use rights
Item Closing balance Reason for restriction
Cash and cash equivalents 4,442,656.37 Guaranteed deposit, Not used for a long time/Not checked, Judicial freeze
Total 4,442,656.37
52. Government subsidy
Details of Government subsidy
Amount included in current
Species Amount Listed items
profit and loss
Financial support 3,000,000.00 Other income 3,000,000.00
Stable subsidy 23,803,190.19 Other income 23,803,190.19
Rent subsidy income 417,165.00 Other income 417,165.00
Small financial support income 225,686.00 Other income 225,686.00
Total 27,446,041.19 27,446,041.19
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Section VIII. Changes In the Scope Of Consolidation
1. Business combinations not under common control
None.
2. Business combination under the same control
None.
3. Reverse purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the scope of consolidation due to other reasons
Proportion of
The name of the subsidiary Reason for changes
shareholding (%)
Sichuan Offcn Luming Cultural Media Co., Ltd. 100.00 New establishment
Beijing Offcn Shengjing Education Technology Co., Ltd. 100.00 New establishment
Henan Offcn Education Consulting Co., Ltd. 100.00 New establishment
Lhasa Offcn Training School Co., Ltd. 100.00 New establishment
Tianjin Offcn Technology Co., Ltd. 100.00 New establishment
Tianjin Jinnan Offcn LexueTraining School Co., Ltd. 100.00 New establishment
Tianjin Baodi Offcn Lexiang Training School Co., Ltd. 100.00 New establishment
Tianjin Jizhou Offcn LechengTraining School Co., Ltd. 100.00 New establishment
Nantong Sigang Huizhi Technology Co., Ltd. 51.00 New establishment
6. Other
None.
187
Offcn Education Technology Co., Ltd. 2022 Annual Report
Section IX. Interests In Other Entities
1. Interests in subsidiaries
1.1 Composition of the company
Voting
Principal
Place of Nature of Proportion of rights Acquisition
Name Business
registration business shareholding（%） ratio Method Direct
Address
（%）
Direct Indirect
1.Offcn Limited Beijing Beijing Service 100.00 100.00 Reverse purchase
2.Wuhu Yawei Automobile Sales Service Co.,
Wuhu Wuhu Sales 100.00 100.00 New establishment
Ltd.
3.Ningguo Yaxia Motor Vehicle Driver
Ningguo Ningguo Service 100.00 100.00 New establishment
Training School (Co., Ltd.)
4.Huangshan Yaxia Fudi Automobile Sales
Huangshan Huangshan Sales 100.00 100.00 New establishment
Service Co., Ltd.
5.Chaohu Yaxia Kaixuan Automobile Sales
Hefei Hefei Sales 100.00 100.00 New establishment
Service Co., Ltd.
6.Bozhou Yaxia Motor Vehicle Driver Training
Bozhou Bozhou Service 100.00 100.00 New establishment
School Co., Ltd.
7.Suzhou Bokai Automobile Sales Service Co.,
Suzhou Suzhou Sales 100.00 100.00 Acquisition
Ltd.
8.Shaanxi Offcn Education Technology
Xi'an Xi'an Service 100.00 100.00 New establishment
Co.,Ltd.
9.Chengdu Offcn Future Education Technology
Chengdu Chengdu Service 100.00 100.00 New establishment
Co.,Ltd..
10.Lu’an Yazhong Real Estate Information
Lu'an Lu'an Real estate 100.00 100.00 Acquisition
Consulting Co., Ltd.
11.Lu’an Zhongke Real Estate Information
Lu'an Lu'an Real estate 100.00 100.00 Acquisition
Consulting Co., Ltd.
12.Sichuan Offcn Luming Cultural Media Co., Culture,
Chengdu Chengdu 100.00 100.00 New establishment
Ltd. sports and
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Voting
Principal
Place of Nature of Proportion of rights Acquisition
Name Business
registration business shareholding（%） ratio Method Direct
Address
（%）
Direct Indirect
entertainme
nt
13.Zhejiang Offcn Education Technology Co.
Hangzhou Hangzhou Service 100.00 100.00 New establishment
Ltd.
14.Taizhou Offcn Future Enterprise
Taizhou Taizhou Service 100.00 100.00 New establishment
Management Consulting Co., Ltd.
15.Wenling Offcn Information Consulting Co.,
Wenling Wenling Service 100.00 100.00 New establishment
Ltd.
16.Beijing Offcn Xinzhiyu Network
Beijing Beijing Service 100.00 100.00 New establishment
Technology Co., Ltd.
17.Hulun Buir Hailar Offcn Education
Hulunbeier Hulunbeier Service 100.00 100.00 New establishment
Information Consulting Co., Ltd.
18.Xilinhot Offcn Future Education Consulting
Xilinhaote Xilinhaote Service 100.00 100.00 New establishment
Co., Ltd
19.Yueqing Lecheng Offcn Training Center
Yueqing Yueqing Service 100.00 100.00 New establishment
Co., Ltd.
20.Jiaozuo Offcn Future Education Service Co.,
Jiaozuo Jiaozuo Service 100.00 100.00 New establishment
Ltd.
21.Xinzheng Offcn Cultural Communication
Zhengzhou Zhengzhou Service 100.00 100.00 New establishment
Co., Ltd.
22.Chongqing Jiangbei Offcn Vocational
Chongqing Chongqing Service 100.00 100.00 New establishment
Examination Training Co., Ltd.
23.Nanning Offcn Future Education Consulting
Nanning Nanning Service 100.00 100.00 New establishment
Co., Ltd.
24.Baiyin Offcn Future Education Consulting
Baiyin Baiyin Service 100.00 100.00 New establishment
Co., Ltd.
25.Beijing Xindezhiyuan Enterprise
Beijing Beijing Service 100.00 100.00 New establishment
Management Consultancy Co., Ltd.
26.Nanjing Huiyue Hotel Management Co.,
Nanjing Nanjing Service 100.00 100.00 Acquisition
Ltd.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Voting
Principal
Place of Nature of Proportion of rights Acquisition
Name Business
registration business shareholding（%） ratio Method Direct
Address
（%）
Direct Indirect
27.Shandong Kunzhong Yuhua Technology
Jinan Jinan Service 100.00 100.00 Acquisition
Co., Ltd
28.Sanmenxia Offcn Cultural Communication
Sanmenxia Sanmenxia Service 100.00 100.00 New establishment
Co., Ltd.
29.Liaoning Offcn Academic & Cultural
Shenyang Shenyang Service 100.00 100.00 New establishment
Exchange Co., Ltd.
30.Liaoning Offcn Education Technology Co.,
Shenfuxinqu Shenfuxinqu Service 100.00 100.00 New establishment
Ltd.
31.Shandong Offcn Education Technology Co.,
Qingdao Qingdao Service 100.00 100.00 New establishment
Ltd.
32.Jilin Changyi Offcn Education Training
Jilin Jilin Service 100.00 100.00 New establishment
School Co., Ltd.
33.Yuxi Offcn Training School Co., Ltd. Yuxi Yuxi Service 100.00 100.00 New establishment
34.Tonghua Offcn Training School Co., Ltd. Tonghua Tonghua Service 100.00 100.00 New establishment
35.Hunan Lightsalt Offcn Education
Changsha Changsha Service 90.00 90.00 New establishment
Technology Co., Ltd.
36.Tianjin Hexi Offcn Training School Co.,
Tianjin Tianjin Service 100.00 100.00 New establishment
Ltd.
37.Tianjin Jinnan Offcn Lexue Training School
Tianjin Tianjin Service 100.00 100.00 New establishment
Co., Ltd.
38.Tianjin Baodi Offcn Lexiang Training
Tianjin Tianjin Service 100.00 100.00 New establishment
School Co., Ltd.
39.Tianjin Jizhou Offcn LechengTraining
Tianjin Tianjin Service 100.00 100.00 New establishment
School Co., Ltd.
40.Chengdu Offcn Education Training School
Chengdu Chengdu Service 100.00 100.00 New establishment
Co., Ltd.
41.Shandong Zhuoda Business Management
Rizhao Rizhao Service 100.00 100.00 New establishment
Co., Ltd.
42.Liaoning Zhongcheng Real Estate Shenfuxinqu Shenfuxinqu Real estate 100.00 100.00 Acquisition
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Voting
Principal
Place of Nature of Proportion of rights Acquisition
Name Business
registration business shareholding（%） ratio Method Direct
Address
（%）
Direct Indirect
Development Co.,Ltd.
43.Wuhu Offcn Training School Co.,Ltd. Wuhu Wuhu Service 100.00 100.00 New establishment
44.Wuhan Guoshang Human Resource Service
Wuhan Wuhan Service 100.00 100.00 New establishment
Co.,Ltd.
45.Jinan Zhangqiu Offcn Training School
Jinan Jinan Service 100.00 100.00 New establishment
Co.,Ltd.
46.Mengzi Offcn Education Technology
Mengzi Mengzi Service 100.00 100.00 New establishment
Co.,Ltd.
47.Beijing Offcn Technology Development
Beijing Beijing Service 100.00 100.00 New establishment
Co.,Ltd.
48.Shanghai Offcn Education Technology
Shanghai Shanghai Service 100.00 100.00 New establishment
Co.,Ltd.
49.Guangzhou Offcn Intelligence Education
Guangzhou Guangzhou Service 100.00 100.00 New establishment
Technology Co.,Ltd.
50.Nantong Sigang Huizhi Technology Co., Culture,
Ltd. sports and
Nantong Nantong 51.00 51.00 New establishment
entertainme
nt
51.Pingshan Offcn Education Technology
Shijiazhuang Shijiazhuang Service 100.00 100.00 New establishment
Co.,Ltd.
52.Shandong Offcn Education Training School
Jinan Jinan Service 100.00 100.00 New establishment
Co.,Ltd.
53.Lanzhou Offcn Education Training School
Lanzhou Lanzhou Service 100.00 100.00 New establishment
Co.,Ltd.
54.Anshan Tiedong Offcn Education Training
Anshan Anshan Service 100.00 100.00 New establishment
School Co., Ltd.
55.Diqing Offcn Training School Co., Ltd. diqingzhou diqingzhou Service 100.00 100.00 New establishment
New establishment
56.Dali Offcn Education Training School Co.,
Dali Dali Service 100.00 100.00
Ltd.
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Voting
Principal
Place of Nature of Proportion of rights Acquisition
Name Business
registration business shareholding（%） ratio Method Direct
Address
（%）
Direct Indirect
New establishment
57.Harbin Nangang Offcn Education Training
Haerbin Haerbin Service 100.00 100.00
School Co., Ltd.
New establishment
58.Nujiang Offcn Training School Co., Ltd. Nujiangzhou Nujiangzhou Service 100.00 100.00
New establishment
59.Weixi Offcn Education Training School Co.,
Weixixian Weixixian Service 100.00 100.00
Ltd.
New establishment
60.Beijing Offcn Century Education
Beijing Beijing Service 100.00 100.00
Technology Co., Ltd.
New establishment
61.Beijing Offcn Shengjing Education
Beijing Beijing Service 100.00 100.00
Technology Co., Ltd.
New establishment
62.Henan Offcn Education Consulting Co., Ltd. Zhengzhou Zhengzhou Service 100.00 100.00
New establishment
63. Lhasa Offcn Training School Co., Ltd. Lasa Lasa Service 100.00 100.00
New establishment
64. Tianjin Offcn Technology Co., Ltd. Tianjin Tianjin Service 100.00 100.00
1.2 Material non-wholly owned subsidiaries
None.
1.3 Main financial information in respect of material non-wholly owned subsidiaries
None.
1.4 Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
None.
1.5 Financial support or other support provided to structured entities included in the scope of consolidated financial statements
None.
2. The transactions that have led to changes in the share of ownership in the subsidiary but still control the
subsidiary
None.
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3. Investment subject
None.
4. Interests in joint arrangements or joint ventures
Financial summary for non-important Joint venture and associated enterprise
Ending balance / Opening balance /
Item
Current period Last Period
Joint venture
Total book value of investment 2,266.22
Amount based on share-holding ratio 2,266.22
--Net profit 2,266.22
--Other comprehensive income
--Total comprehensive income
Associated enterprise：
Total book value of investment 46,833,686.41 46,850,364.40
Amount based on share-holding ratio -16,677.99 -2,149,635.60
--Net profit -16,677.99 -2,149,635.60
--Other comprehensive income
--Total comprehensive income
5. Significant joint operations
None.
6. Interests in structured entities not included in the scope of consolidated financial statements
None.
7. Other
None.
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Section X. Risks Associated With Financial Instruments
The company's main financial instruments include cash and cash equivalents, financial assets held for trading, accounts receivable,
other receivables, debt investments, other equity instrumens, other non-current financial assets, etc. The risks associated with these
financial instruments and the risk management policies adopted by the company to reduce these risks are described below. The company's
management manages and monitors these exposures to ensure that these risks are contained within a defined range.
Risk management objective and policy：The Company’s risk management is to strike an appropriate balance between risks and
benefits, minimize the negative impact of risks on the Company's business performance and maximize the interests of shareholders and
other equity investors. Based on this risk management objective, the basic strategy of the Company's risk management is to determine
and analyze various risks faced by the Company, establish an appropriate bottom line for risk tolerance, make risk management and
timely and reliably supervise various risks to control the risks within the limited scope.
The main risks caused by the Company's financial instruments are credit risk, liquidity risk and market risk.
1. Classification of financial instruments
1.1Carrying value of various financial assets
（1）31 December 2022
Financial assets
Financial assets
Financial assets measure at fair value
measured at fair
Item measured at amortized through other Total
value through
cost comprehensive
profit or loss
income
Monetary funds 385,328,555.74 385,328,555.74
Accounts Receivable 37,323,682.88 37,323,682.88
Other receivables 193,617,379.76 193,617,379.76
Other current assets 1,661.55 1,661.55
Other equity investment 121,300,000.00 121,300,000.00
Other non-current financial assets 27,680,000.00 27,680,000.00
（2）31 December 2021
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Financial assets
Financial assets
Financial assets measure at fair value
measured at fair
Item measured at amortized through other Total
value through
cost comprehensive
profit or loss
income
Monetary funds 1,970,361,272.64 1,970,361,272.64
Financial assets held for trading 346,726,621.74 346,726,621.74
Accounts Receivable 40,374,842.27 40,374,842.27
Other receivables 219,501,061.83 219,501,061.83
Debt investment 7,058,993.55 7,058,993.55
Other current assets 12,833,701.81 12,833,701.81
Other equity investment 130,400,000.00 130,400,000.00
Other non-current financial assets 30,260,000.00 30,260,000.00
1.2 Carrying value of various financial liabilities at the balance sheet date as follows：
（1）31 December 2022
Financial liabilities at fair
Item Other liabilities Total
value through profit or loss
Accounts payable 287,088,393.76 287,088,393.76
Other payable 1,096,787,345.65 1,096,787,345.65
Non-current liabilities due within one year 578,821,921.03 578,821,921.03
Lease liability 508,752,253.77 508,752,253.77
（2）31 December 2021
Financial liabilities at fair
Item Other liabilities Total
value through profit or loss
Short-term borrowings 3,152,945,812.59 3,152,945,812.59
Accounts payable 282,032,916.52 282,032,916.52
Other payable 129,043,599.22 129,043,599.22
Non-current liabilities due within one year 531,876,007.31 531,876,007.31
Lease liability 635,691,184.87 635,691,184.87
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2. Credit risk
The financial assets of the company include cash and cash equivalents, financial assets held for trading, accounts receivable, other
receivables, etc.The credit risk of these financial assets is caused by the default of the counterparty. The maximum risk exposure is equal
to the book amount of these instruments, including:
The Company's working capital is deposited in banks with high credit rating, so the credit risk of working capital is low.
The book value of accounts receivable and other receivables in the consolidated balance sheet is the biggest credit risk that the
company may face. The company continuously monitors the balance of accounts receivable and other receivables to ensure that the
overall credit risk of the company is under control. The quantitative data of the Company's credit risk exposure arising from accounts
receivable and other receivables can be found in Note VII (3) “Accounts receivable “ and Note VII (5) “Other receivables”.
3. Liquidity risk
The company adopts the revolving liquidity plan tool to manage the risk of capital shortage. The facility considers both the maturity
date of its financial instruments and the expected cash flow generated by the company's operations.
The goal of the company is to maintain the balance between the sustainability and flexibility of financing by using a variety of
financing instruments, including bank loans and other interest-bearing loans.
When managing liquidity risks, the Company shall maintain sufficient cash and cash equivalents as deemed by the management
and monitor them to meet the Company's operational needs and reduce the impact of cash flow fluctuations.The managements monitor
the use of bank loans and ensure compliance with loan agreements.
Maturity analysis of financial liabilities based on undiscounted contract cash flow:
31 December 2022
Item
Within 1 year 1-5 years Over 5 years Total
Accounts payable 287,088,393.76 287,088,393.76
Other payable 1,096,787,345.65 1,096,787,345.65
Non-current liabilities due
595,905,159.21 595,905,159.21
within one year
Lease liability 504,849,923.25 37,638,017.00 542,487,940.25
Continued：
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Offcn Education Technology Co., Ltd. 2022 Annual Report
31 December 2021
Item
Within 1 year 1-5 years Over 5 years Total
Short-term loan 3,152,945,812.59 3,152,945,812.59
Accounts payable 282,032,916.52 282,032,916.52
Other payable 129,043,599.22 129,043,599.22
Non-current liabilities due
550,685,331.89 550,685,331.89
within one year
Lease liability 650,123,884.68 22,037,457.51 672,161,342.19
4. Market risk
Market risk refers to the risk that the fair value of financial instruments or future cash flow fluctuates due to changes in market
prices.Market risk mainly includes interest rate risk and foreign currency risk.
4.1. Interest rate risk
None.
4.2. Currency risk
None.
Section XI. Capital Management
The main objective of the company's capital management is to ensure the company's ability to continue operations and maintain
healthy capital ratios to support the business and maximize shareholder value.
The company manages the capital structure and adjusts it according to the economic situation and changes in the risk characteristics
of related assets.
To maintain or adjust the capital structure, the company may adjust the distribution of profits to shareholders, return capital to
shareholders or issue new shares. The company is not subject to external mandatory capital requirements. There have been no changes
in capital management goals, policies, or procedures in 2022 and 2021.
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Section XII. Fair Value Disclosure
1. The ending fair value of assets and liabilities measured at fair value
Fair value at the end of the period
Item
Level 1 Level 2 Level 3 Total
I. Continuous fair value measurement
(I) Transaction financial asset 27,680,000.00 27,680,000.00
1. Financial asset at fair value through profit or loss 27,680,000.00 27,680,000.00
（1）Debt instruments 27,680,000.00 27,680,000.00
（2）Equity instruments
（3）Derivative financial assets
2. Designated as financial asset at fair value through profit
or loss
（1）Debt instruments
（2）Equity instruments
(II) Other debt investments
(III) Other equity instruments
(IV) Investment properties 121,300,000.00 121,300,000.00
(V) Biological assets
Total assets measured continuously at fair value
(VI) Transaction financial liabilities 148,980,000.00 148,980,000.00
1. Financial liabilities at fair value through profit or loss
Including：Issued held-for-trading bonds
Derivative financial liabilities
Other
2. Designated as financial asset at fair value through profit
or loss
Total liabilities measured continuously at fair value
II. Non-continuous fair value measurement
(I) Assets held for sales
Total assets measured non-continuously at fair value
Total liabilities measured non-continuously at fair value
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2. The basis for determining the market price of continuous and non-continuous first-level fair value
measurement projects
None.
3. Qualitative and quantitative information on the valuation techniques used and important parameters for
continuous and non-continuous second-level fair value measurement projects
None.
4. Qualitative and quantitative information on the valuation techniques used and important parameters for
continuous and non-continuous third-level fair value measurement projects
The company's sustainable third-level fair value measurement items are mainly non-tradable equity instrument investment and debt
instrument investment.The fair value is determined by market method and liquidity discount.
5. Continuous third-level fair value measurement project, adjustment information between the opening and
closing book value and sensitivity analysis of unobservable parameters
None.
6. Continuous fair value measurement items, if conversions between various levels occurred during the current
period, the reasons for the conversions and the policies for determining the timing of the conversions
None.
7. Changes in valuation techniques that occurred during the period and the reasons for the changes
None.
8. The fair value of financial assets and financial liabilities not measured at fair value
None.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
9. Other
None.
Section XIII. Related Party Relationships And Transactions
1. Basis of identifying related party
Parties are considered to be related if one party has the ability to control or joint control the other party or exercise significant
influence over the other party. Parties(two or more than two) are also considered to be related if they are subject to common control,joint
control or significant influence from other party.
2. The controlling shareholder of the company
The company is ultimately controlled by Li yongxin and Lu zhongfang. As of 31 December 2022, their combined shareholding
accounted for 30.71% of the company's share capital.
3. Subsidiaries of the company
The details of the subsidiaries of the company are detailed in Note IX.(1) “Interest in subsidiaries”.
4. Joint ventures and associates of the company
Principal Proportion of
Place of Nature of Accounting
Name Business shareholding（%）
registration business treatment
Address Direct Indirect
Joint ventures
Offcn Xietong (Jiaxing) Human Jiaxing Jiaxing Retail 50.00 Equity met hod
Resources Co., Ltd.
Associates
Beijing Offcn Future Education Beijing Beijing Service 49.00 Equity method
Technology Co., Ltd.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
5. Other related parties of the company
Name Relationship
Li Yongxin The controlling shareholder
Lu Zhongfang The concerted action of the actual controller
Wang Zhendong The company's directors / senior managers / shareholders who directly
hold more than 5% (including 5%) of the company's shares
Shi Lei Director of the company
Yi Ziting Director of the company
Chen Yuqin Independent director of the company
Jiang Tao Independent director of the company
Zhang XuanMing Independent director of the company
Wang Qiang Independent director of the company,Term from February 1,2019 to
January 28,2022
Tong Yan Independent director of the company,Term from February 1,2019 to
January 28,2022
Yu Hongwei Supervisor of the company
Li Wen Supervisor of the company
He Di Supervisor of the company
He Youli Senior management of the company
Gui Hongzhi Senior management of the company
Luo Xue Senior management of the company
Wang Xuejun Senior management of the company,Term from February 1,2019 to
January 28,2022
Shenyang Lijing Mingzhu Hotel Management Co.,
Enterprises controlled by the directors of the company
Ltd.
Beijing Taifu Hotel Management Co., Ltd. Enterprises controlled by the directors of the company
Beijing Chuangsheng Construction Decoration
Enterprises controlled by the directors of the company
Engineering Co., Ltd.
Shanghai Beiding Network Technology Co., Ltd. Enterprises controlled by the directors of the company
Ji'an Jingkai Lixiangxue Financial Information
Enterprises controlled by the directors of the company
Service Co., Ltd.
Shaanxi Guancheng Industrial Co., Ltd. Enterprises controlled by the directors of the company
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Name Relationship
Beijing Qianqiu Intelligence Book & Media Co., Ltd. Actual controller
Beijing Haidian Offcn Training School Actual controller
Beijing Haidian Baoquan Financial Training Center Actual controller
Zhanjiang Xiashan Offcn Training Center Actual controller
Haikou Meilan Offcn Training School Actual controller
Baoding Lianchi Offcn Training School Actual controller
Cangzhou Yunhe Offcn Training School Actual controller
Handan Congtai Offcn Training School Actual controller
Tangshan Lunan Offcn Training School Actual controller
Heihe Aihui Offcn Training School Actual controller
Chifeng Hongshan Offcn Training Centre Actual controller
Leshan Shizhong Offcn Training School Actual controller
Kiamusze Offcn Training School Actual controller
Mudanjiang Xi’an Offcn Training School Actual controller
Urumqi Shayibake Offcn Training Center Actual controller
Yiyang Heshan Offcn Training School Actual controller
Shaoyang Shuangqing Offcn Training School Actual controller
Chengdu Wuhou Offcn Training School Actual controller
Note: This report only lists related parties that have business dealings with the company during the reporting period.
6. Related-party transaction
6.1 Related transactions for the purchase and sale of goods, provision and receipt of services
6.1.1 the table of procurement of goods/acceptance of labor services
Content of related party Amount for the current Amount for the previous
Related parties
transaction period period
Zhanjiang Xiashan Offcn Training Center Joint school running 340,000.00 320,000.00
Beijing Haidian Offcn Training School Joint school running 280,000.00 450,000.00
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Content of related party Amount for the current Amount for the previous
Related parties
transaction period period
Baoding Lianchi Offcn Training School Joint school running 100,000.00 130,000.00
Cangzhou Yunhe Offcn Training School Joint school running 80,000.00 120,000.00
Handan Congtai Offcn Training School Joint school running 75,000.00 140,000.00
Beijing Haidian Baoquan Financial Training
Joint school running 60,000.00 120,000.00
Center
Mudanjiang Xi’an Offcn Training School Joint school running 48,500.00 60,500.00
Leshan Shizhong Offcn Training School Joint school running 45,000.00 150,000.00
Tangshan Lunan Offcn Training School Joint school running 40,000.00 140,000.00
Kiamusze Offcn Training School Joint school running 28,500.00 60,500.00
Chifeng Hongshan Offcn Training Centre Joint school running 10,000.00 50,000.00
Heihe Aihui Offcn Training School Joint school running 9,000.00 66,500.00
Chengdu Wuhou Offcn Training School Joint school running 280,000.00
Urumqi Shayibake Offcn Training Center Joint school running 208,600.00
Shaoyang Shuangqing Offcn Training
Joint school running 170,000.00
School
Yiyang Heshan Offcn Training School Joint school running 80,000.00
Haikou Meilan Offcn Training School Joint school running 20,000.00
Ji'an Jingkai Lixiangxue Financial
Fee 78,010,378.21 181,824,220.00
Information Service Co., Ltd.
Shanghai Beiding Network Technology Co.,
Fee 1,320,000.00
Ltd.
Beijing Taifu Hotel Management Co., Ltd. Accommodation and catering
11,802,340.00
services
6.1.2The table of sale of goods/provision of labor services
Content of related party Amount for the current Amount for the previous
Related parties
transaction period period
Beijing Qianqiu Intelligence Book &
Exhibition Service 2,647,169.74 3,364,150.85
Media Co., Ltd.
6.2 Related fiduciary management / contracting and entrusted management / outsourcing
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Offcn Education Technology Co., Ltd. 2022 Annual Report
6.2.1 The company's entrusted management / contracting situation table:
Entrustment
Trustee Trustee / Entrustment / Custody income / Annually recognized
/ Contract
/Outsourcer Contractor Type contracting contracting income custody income /
Termination
Name Name start date pricing basis contracting income
Date
Li Yongxin Offcn Limited 33 Civil non- 19 October All reasonable returns on
Long term 28,301.89
schools 2018 the entrusted assets
Total 28,301.89
6.2.2 The company's entrusted management / contracting situation table：
None.
6.3 Related lease
6.3.1 The company as the lessor：
None.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
6.3.2 The company as the lessee：
Rental expense of Variable lease payments
simplified short-term that are not covered in the Interest expenses on the lease
Paid rent Added right-of-use assets
leases and low-value asset measurement of the lease liabilities assumed
Name of lessor Category
leases (if applicable) liabilities (if applicable)
Current Prior Current Current
Prior period Current period Prior period Prior period Current period Prior period
period period period period
Shenyang Lijing
Operating
Mingzhu Hotel 25,030,700.00 25,030,700.00 2,026,413.28 8,993,436.23 -6,499,022.41 136,619,924.16
lease
Management Co., Ltd.
Total 25,030,700.00 25,030,700.00 2,026,413.28 8,993,436.23 -6,499,022.41 136,619,924.16
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Offcn Education Technology Co., Ltd. 2022 Annual Report
6.4 Related party guarantee
6.4.1 The company act as the guarantor
None.
6.4.2 The company is the guaranteed party
None.
6.5 Borrowing of funds from related parties
Related parties Amount of money Start Date Due Date Illustrate
Dismantling
Lu Zhongfang 119,240,000.00 2022-11-4 2023-11-4
Lu Zhongfang 840,000,000.00 2022-12-6 2023-12-6
6.6 Related party assets transfer and debt restructuring
Content of related Amount for the Amount for the
Related parties Asset pricing basis
party transaction current period previous period
Beijing Chuangsheng Construction
purchase assets Agreement price 513,815.00
Decoration Engineering Co., Ltd.
Total 513,815.00
6.7 Key executive compensation
Item Amount for the current period Amount for the prior period
Key executive compensation 3,735,559.47 6,120,389.56
6.8 Other related transactions
6.8.1 Commissioned decoration/engineering
Amount for the current period Amount for the prior period
Related parties Pricing basis
Contract amount Amount Contract amount Amount
Beijing Chuangsheng
Agreement
Construction Decoration 35,458,590.00
price
Engineering Co., Ltd.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Amount for the current period Amount for the prior period
Related parties Pricing basis
Contract amount Amount Contract amount Amount
Total 35,458,590.00
6.8.2 Liquidated damages income
Related parties Amount for the current period Amount for the prior period
Liaoning Hanhui Industrial Co., Ltd. 18,141,095.89
Total 18,141,095.89
7. Related party accounts receivable and payable
7.1 Accounts receivables
Closing balance opening balance
Item Related party Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Shenyang Lijing Mingzhu Hotel
Other receivable 5,675,200.00 5,675,200.00
Management Co., Ltd.
Other non-current Beijing Offcn Future Education
1,618,411,145.38 1,618,391,145.38
assets Technology Co., Ltd.
Total 1,624,086,345.38 1,624,066,345.38
7.2 Accounts payable
Item Related party Closing balance opening balance
Account payable Shaanxi Guancheng Industrial Co., Ltd. 43,060,000.00 83,060,000.00
Beijing Chuangsheng Construction Decoration
Account payable 14,506,981.00 59,506,981.00
Engineering Co., Ltd.
Other account payable Lu Zhongfang 959,240,000.00
Ji'an Jingkai Lixiangxue Financial Information Service
Other account payable 14,383,404.77 57,000,000.00
Co., Ltd.
Total 1,031,190,385.77 199,566,981.00
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Offcn Education Technology Co., Ltd. 2022 Annual Report
8. Related party commitments
None.
9. Other
None.
Section XIV. Share-based Payment
1. Overview of share-based payment
None.
2. Equity-settled share payments
None.
3. The Stock payment settled by cash
None.
4. Modification and termination of the stock payment
None.
5. Other
None.
Section XV. Contingencies and commitments
1. Important commitment
As of December 31, 2022, the Company was involved in some investors' lawsuits against the Company's liability for
misrepresentation of securities. Because some litigation materials, case pleadings and other necessary information have not been
completely handed over to the Company by Beijing Financial Court, the Company could not fully sort out the litigation amount, and
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Offcn Education Technology Co., Ltd. 2022 Annual Report
therefore could not estimate the amount of possible losses.
2. Contingencies
Significant contingencies on the balance sheet date.
As of December 31, 2022, the company was involved in some cases of investors suing the company for liability disputes over
securities misrepresentation. Because some litigation materials, case pleadings and other necessary information have not been completely
handed over to the company by the Beijing Financial Court, the company could not fully sort out the litigation amount, and could not
estimate the amount of possible losses of the company.
3. Other
None.
Section XVI. Events After Balance Sheet Date
1. Significant unadjusted events
None.
2. Profit distribution
None.
3. Sales return
None.
4. Other adjustment events after balance sheet date
None.
Section XVII. Other Significant Events
1. Debt Restructuring
None.
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Offcn Education Technology Co., Ltd. 2022 Annual Report
2. Assets exchange
None.
3. Annuity plan
None.
4. Discontinued operations;
None.
5.Segment information
5.1 Report segment determining and accounting policy
The company's main production and operation activities are decided by the company, which is mainly engaged in education and
training business. Therefore, the company is managed as an operating segment. For accounting policies, please refer to Note V to this
report, "The Company’s Significant Accounting Policies And Accounting Estimates”.
5.2 Other information
5.2.1 Revenue from external transactions for each product and service or each similar product and service.
Item Amount for the current period Amount for the prior period
Main business 4,801,848,887.15 6,860,282,371.30
Including：Education and training 4,801,848,887.15 6,860,282,371.30
Other business 22,965,218.28 51,440,960.49
Total 4,824,814,105.43 6,911,723,331.79
5.2.2 The total amount of foreign transaction income obtained by the enterprise from its own country and from other countries or
regions.
Area name Amount for the current period Amount for the prior period
Domestic area 4,824,814,105.43 6,911,723,331.79
Total 4,824,814,105.43 6,911,723,331.79
5.2.3 The extent of dependent on its major customers.
The company's customers are relatively scattered, consisting of a large number of customers, and there is no dependence on major
customers.
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6. Borrowing costs
The company has no capitalized borrowing costs during the reporting period.
7. Foreign currency translation
None.
8. Lease
8.1 Lessor
8.1.1 Financial leasing.
None.
8.1.2 Operating lease
Assets leased out under operating leases:
Item Closing balance Opening balance
Land use rights 310,663,290.95
Buildings 450,260.54 334,273,250.51
Total 450,260.54 644,936,541.46
Item Amount
I.Income situation 1,602,191.15
Lease income 1,602,191.15
Income related to variable lease payments not included in lease income
II.Lease income not turned into cash for five consecutive fiscal years after the balance sheet date 3,328,000.00
Year 1 800,000.00
Year 2 800,000.00
Year 3 864,000.00
Year 4 864,000.00
Year 5 800,000.00
III.Lease income received for remaining years that is not turned into cash 6,202,010.00
Within 1 year (inclusive)
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Item Amount
1-2 years (inclusive) 800,000.00
2-3 years (inclusive) 800,000.00
Over 3 years 4,602,010.00
8.2 Lessee
The lessee shall disclose the following information related to the lease
Item Amount
Interest expense on lease liability 34,691,162.47
Short-term lease expenses included in current profit and loss
Low-value asset leasing expense included in current profit and loss
Variable lease payments not included in the measurement of the lease liability
Income derived from sublease of right-of-use assets
Total cash outflow related to lease 386,990,744.68
Gains and losses arising from sale and leaseback transactions
9. Other significant transactions and matters that may affect investors' decision making
None.
10. Other
None.
Section XVIII. Notes Of Main Items In the Financial Statements of the Company as the Parent
1. Accounts receivable
1.1 Disclosure by aging
Item Closing balance Opening balance
Within 1 year (inclusive) 15,280.44 15,570,863.42
1-2 years (inclusive) 15,570,863.42 15,570,863.56
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Item Closing balance Opening balance
2-3 years (inclusive) 15,570,863.56
Less: Provision for bad debts 4,672,023.07 2,335,629.53
Total 26,484,984.35 28,806,097.45
1.2 Disclosure by bad debt accrual method
Closing balance
Book balance Bad debt
Item
Percentage Percentage of Book value
Amount Amount
（%） provision (%)
Accounts receivable with
a collective bad debt 31,157,007.42 100.00 4,672,023.07 15.00 26,484,984.35
provision
Combination3 31,157,007.42 100.00 4,672,023.07 15.00 26,484,984.35
Total 31,157,007.42 100.00 4,672,023.07 -- 26,484,984.35
Continued：
Opening balance
Book balance Bad debt
Item
Percentage Percentage of Book value
Amount Amount
（%） provision (%)
Accounts receivable with
a collective bad debt 31,141,726.98 100.00 2,335,629.53 7.50 28,806,097.45
provision
Combination3 31,141,726.98 100.00 2,335,629.53 7.50 28,806,097.45
Total 31,141,726.98 100.00 2,335,629.53 -- 28,806,097.45
Collective bad debt provision:
Closing balance
Item
Accounts receivables Bad debt provision Percentage of provision
Combination3 31,157,007.42 4,672,023.07 15.00
Total 31,157,007.42 4,672,023.07 --
1.3 Bad debt provision in the current period:
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Amount of change in the current period
Opening Closing
Item Recovery or
balance Provision Write-off Others balance
reversal
Bad debt provision for
2,335,629.53 2,336,393.54 4,672,023.07
accounts receivable
Total 2,335,629.53 2,336,393.54 4,672,023.07
1.4 Top five debtors with the biggest ending balances of accounts receivable
Name Nature Closing balance Provision Age Percentage of total
accounts receivable
(%)
Yaxia Industrial Lease 31,141,726.98 4,671,259.05 Within 3 years 99.95
Chuzhou Xinqiao Vehicle Lease 10,120.20 506.01 Within 1 year 0.03
Brokerage Services Co.,
Ltd.
Chuzhou Dongfang Lease 5,160.24 258.01 Within 1 year 0.02
Zhilian Logistics Co., Ltd.
Total 31,157,007.42 4,672,023.07 -- 100.00
2. Other receivables
2.1 Classified listing
Item Closing balance Opening balance
Other receivables 22,848,853.79 20,699,731.33
Total 22,848,853.79 20,699,731.33
2.2 Other receivables
2.2.1 Disclosure by aging
Aging Closing balance Opening balance
Within 1 year (inclusive) 2,149,122.46 1,758,288.04
1-2 years (inclusive) 1,758,288.04 991,922.30
2-3 years (inclusive) 991,922.30 17,949,520.99
3-4years (inclusive) 17,949,520.99
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Aging Closing balance Opening balance
Less: Provision for bad debts
Total 22,848,853.79 20,699,731.33
2.2.2 Other receivables by nature of the payment
Item Closing balance Opening balance
Current account 22,843,253.79 20,694,131.33
Deposits and guarantees 5,600.00 5,600.00
Total 22,848,853.79 20,699,731.33
2.2.3 Withdrawing process of bad debt provision
None.
2.2.4 Bad debt provision in the current period
None
2.2.5 Top 5 other receivable at the end of the period
Percentage of total
Nature of Bad debt
Creditor Closing balance Aging other receivables
payment provision
(%)
Bozhou Yaxia Motor Vehicle Driver Current
10,702,771.11 within 4 years 46.84
Training School Co., Ltd account
Wuhu Yawei Automobile Sales and Current
4,079,684.08 within 4 years 17.86
Service Co., Ltd account
Suzhou Bokai Automobile Sales Current
3,953,693.27 within 4 years 17.30
and Service Co., Ltd account
Huangshan Yaxia Fudi Automobile Current
2,067,252.57 within 4 years 9.05
Sales Service Co., Ltd. account
Lu'an Zhongke Real Estate Current
990,500.00 within 1 year 4.34
Information Consulting Co., Ltd account
Total 21,793,901.03 95.39
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3. Long-term equity investments
Closing balance Opening balance
Impairme Impairme
Item
Book balance nt Book value Book balance nt Book value
provision provision
Investment in subsidiaries 19,143,591,207.14 19,143,591,207.14 19,143,591,207.14 19,143,591,207.14
Investment for associates and joint venture 46,810,376.23 46,810,376.23 46,824,788.00 46,824,788.00
Total 19,190,401,583.37 19,190,401,583.37 19,190,415,995.14 19,190,415,995.14
3.1 Investment in subsidiaries
Impairment reserve closing
Investee Opening balance Increase Decrease Closing balance Provision for impairment
balance
Offcn Limited
18,500,000,000.00 18,500,000,000.00
Lu’an Zhongke Real Estate Information Consulting Co.,
489,131,700.00 489,131,700.00
Ltd.
Lu’an Yazhong Real Estate Information Consulting Co.,
72,151,600.00 72,151,600.00
Ltd.
Wuhu Yawei Automobile Sales Service Co., Ltd.
23,000,000.00 23,000,000.00
Ningguo Yaxia Motor Vehicle Driver Training School
17,474,782.14 17,474,782.14
(Co., Ltd.)
Huangshan Yaxia Fudi Automobile Sales Service Co., Ltd.
5,000,000.00 5,000,000.00
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Impairment reserve closing
Investee Opening balance Increase Decrease Closing balance Provision for impairment
balance
Chaohu Yaxia Kaixuan Automobile Sales Service Co.,
5,000,000.00 5,000,000.00
Ltd.
Bozhou Yaxia Motor Vehicle Driver Training School Co.,
20,000,000.00 20,000,000.00
Ltd.
Suzhou Bokai Automobile Sales Service Co., Ltd.
11,833,125.00 11,833,125.00
Total 19,143,591,207.14 19,143,591,207.14
3.2 Investment in associates and joint ventures
Closing
Changes for the year balance
of
The invested Other Cash dividends
Opening balance Investment Other Provision Closing balance provision
entity comprehensive or profits
profit under for
Increase Decrease equity for Others
income announced of
equity method impairme
change impairment
adjustment issuance nt
I. Joint ventures
Offcn Xietong (Jiaxing)
Human Resources Co., 2,266.22 2,266.22
Ltd.
subtotal 2,266.22 2,266.22
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Closing
Changes for the year balance
of
The invested Other Cash dividends
Opening balance Investment Other Provision Closing balance provision
entity comprehensive or profits
profit under for
Increase Decrease equity for Others
income announced of
equity method impairme
change impairment
adjustment issuance nt
II.Associates
Beijing Offcn Future
Education Technology 46,824,788.00 -16,677.99 46,808,110.01
Co., Ltd.
subtotal 46,824,788.00 -16,677.99 46,808,110.01
Total 46,824,788.00 -14,411.77 46,810,376.23
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Offcn Education Technology Co., Ltd. 2022 Annual Report
4. Share capital
Changes in the current period（+、-）
Provident
Item Opening balance Issue Closing balance
Bonus fund transfer
new other Total
share to share
shares
capital
1. Shares with limited
4,564,776,021.00 -3,076,550,617.00 -3,076,550,617.00 1,488,225,404.00
sale conditions
1.1. Other domestic
4,564,776,021.00 -3,076,550,617.00 -3,076,550,617.00 1,488,225,404.00
shares
Inc: Domestic legal
89,117,723.00 -89,117,723.00 -89,117,723.00
person shares
Domestic natural
4,475,658,298.00 -2,987,432,894.00 -2,987,432,894.00 1,488,225,404.00
person holdings
2. Shares in circulation
without restrictions on 1,602,623,368.00 3,076,550,617.00 3,076,550,617.00 4,679,173,985.00
sale
common stock 1,602,623,368.00 3,076,550,617.00 3,076,550,617.00 4,679,173,985.00
Total 6,167,399,389.00 6,167,399,389.00
5. Operating income and operating costs
Amount for the current period Amount for the prior period
Item
Operating income Operating costs Operating income Operating costs
Other businesses 1,483,143.55 10,359.40 14,831,488.06 11,230,514.83
Total 1,483,143.55 10,359.40 14,831,488.06 11,230,514.83
6. Investment income
Amount for Amount for
Item
the current period the prior period
Long-term equity investments income under equity method -14,411.77 -2,174,511.83
Dividend income obtained during the holding period of other equity
1,659,840.00 1,327,872.00
instrument investments
Investment income from Financial product 74,257.03 10,466.92
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Amount for Amount for
Item
the current period the prior period
Total 1,719,685.26 -836,172.91
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Section XIX. Supplementary Information
1. Pursuant to the Explanatory Announcement for Information Discliosure of Companies Offering Securities to the Public No.1-
Non-recurring Profit and Loss issued by China Securities Regulatory Commision,non-recurring profit and loss as follows.
Breakdown of non-recurring profit and loss during the reporting period
Breakdown of non-recurring profit and loss Amount Description
（1）Profit and loss on disposal of non current assets -9,500,665.47
（ 2 ） Tax refunds, reductions or exemptions without approval or without formal approval
documents
（3）Government subsidies included in the current profit and loss (closely related to the business
of the enterprise, except for government subsidies that are fixed or quantified in accordance with 27,446,041.19
national unified standards)
（4）Capital occupation fees charged to non-financial enterprises included in the current profit
and loss
（5）The company can obtain the differences when the investment cost of an enterprise's
acquisition of subsidiaries, associates and joint ventures is less than the income derived from the
fair value of the identifiable net assets of the investee.
（6）Non-monetary asset exchange gains and losses
（7）Profit or loss from entrusting others to invest or manage assets 8,152,962.12
（8）Impairments for assets due to force majeure factors, such as natural disasters
（9）Debt restructuring gains and losses
（10）Enterprise restructuring costs, such as expenses for relocating employees, integration costs,
etc.
（11）Gains and losses in excess of fair value resulting from transactions where the transaction
price was significantly unfair
（12）Net profit or loss for the period from the beginning of the subsidiary to the business
combination date resulting from a business combination under the same control.
（13）Gains and losses from contingencies unrelated to the company's normal business operations
（14）In addition to the effective hedging business related to the company's normal business
operations, the holding of financial assets held for trading, derivative financial assets, financial
liabilities held for trading, and changes in fair value arising from derivative financial liabilities, -6,026,850.74
and disposal of financial assets held for trading, derivative finance investment income from assets,
financial liabilities held for trading, derivative financial liabilities and other debt investments
（15）Receivables and contract asset impairment reserves that are individually tested for
impairment are reversed.
（16）Gains and losses from external entrusted loans
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Offcn Education Technology Co., Ltd. 2022 Annual Report
Breakdown of non-recurring profit and loss Amount Description
（17）Gains and losses from changes in the fair value of investment real estate that are
subsequently measured at the fair value model
（18）The impact on the current profit and loss should be adjusted in one time in accordance
with the requirements of tax and accounting laws
（19）Custody fee income from entrusted operations 28,301.89 ,
（20）Non-operating income and expenses other than the above -4,778,597.36
（21）Other profit and loss items that meet the definition of non-recurring profit and loss
Total non-recurring profit and loss 15,321,191.63
Less：Amount of income tax impact 4,303,758.56
Non-recurring profit and loss after deducting income tax effects 11,017,433.07
Inc：Non-recurring profit and loss attributable to owners of the parent company 11,017,433.07
Non-recurring profit and loss attributable to minority shareholders
2. Return on equity and earnings per share
Weighted average Earnings per share
Profit for the reporting period return on net assets Basic earnings per Diluted earnings per
(%) share share
Net profit attributable to ordinary shareholders of the
-82.59 -0.18 -0.18
company
Net profit attributable to ordinary shareholders of the
-83.42 -0.18 -0.18
company after deducting non-recurring gains and losses
222
