2021 Annual Report
Stock Code: 600415 Stock Short Name: 小商品城
Zhejiang China Commodities City Group
Co., Ltd.
2021 Annual Report
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2021 Annual Report
Important Note
I. The Board of Directors, the Board of Supervisors and the directors, supervisors and
senior management of the Company hereby warrant the truthfulness, accuracy and
completeness of the contents of the Annual Report, guarantee that there are no false
representations, misleading statements or material omissions contained in this Annual
Report, and are jointly and severally responsible for the liabilities of the Company.
II. All directors of the Company were present at the board meeting.
III. Ernst & Young Hua Ming Certified Public Accountants (special general partnership) has
issued a standard unqualified audit opinion for the Company.
IV. ZHAO Wenge, Head of the Company, WANG Dong, Head in charge of accounting, and
ZHAO Difang, Head of the accounting department (Accounting Supervisor), declare that
they warrant the truthfulness, accuracy and completeness of the financial report in the
annual report.
V. The profit distribution plan for the reporting period or the plan for public reserve funds
into share capital that was approved by the board of directors
Based on the total share capital on the registration date of profit distribution equity in 2021,
cash dividends of RMB 0.73 (tax inclusive) will be distributed for every 10 shares. According to the
current total share capital of the Company, cash dividends of RMB 400,863,014.85 (tax inclusive)
will be distributed. In the event of changes in the total share capital of the Company before the
dividend distribution registration date, the scheme of allocation shall remain unchanged while the
total profits distribution will be adjusted accordingly.
VI. Risk statement with forward-looking representations
√Applicable □Not Applicable
The forward-looking representations involved in this Report such as future plans and
development strategies do not constitute the Company’s substantial commitments to investors.
Investors shall watch out for the investment risks.
VII. Is the Company’s cash occupied by its controlling shareholder or any of its affiliates for
non-operational purposes?
No
VIII. Has the Company provided external guarantee in violation of the prescribed decision-
making procedures?
No
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IX. Whether more than half of the directors can not warrant the truthfulness, accuracy and
completeness of the annual report disclosed by the Company
No
X. Reminder of major risks
The Company has described the risks that may exist in this Report in details. Please refer to
“Potential Risks” in “Section III. Discussion and Analysis of Managers” of this Report.
XI. Others
□Applicable √Not Applicable
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2021 Annual Report
Table of Contents
Section I. Definitions .......................................................................................................................... 5
Section II. Company Profile and Financial Highlights .................................................................... 6
Section III. Discussion and analysis of managers ......................................................................... 11
Section IV. Corporate Governance .................................................................................................. 48
Section V. Environmental and Social Responsibilities................................................................. 69
Section VI. Significant Matters .......................................................................................................... 70
Section VII. Changes in Shares and Shareholders ........................................................................ 83
Section VIII. Preferred Shares ............................................................................................................ 92
Section IX. Bonds ............................................................................................................................... 93
Section X. Financial Report............................................................................................................ 102
Accounting statements with the signatures and stamps of the person
incharge of the Company, person in charge of accounting and person in
charge of the accounting body.
Documents for
Resolution of the Board of Directors and resolution of the Board of
Inspection
Supervisors
Written confirmation opinions of directors, supervisors and senior
management on the Company's 2021 Annual Report and Summary
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Section I. Definitions
I. Definitions
For the purpose of this Report, unless otherwise stated in the context, the following terms shall
have the following meanings:
Definitions
SCO means Yiwu State-owned Capital Operation Co., Ltd.
MDG means Yiwu Market Development Group Co., Ltd.
CCCH means Yiwu China Commodities City Holdings Limited
CCCP means Yiwu China Commodities City Property Development
Co., Ltd.
CCCF means Yiwu China Commodities City Financial Holdings Co.,
Ltd.
Huishang Micro-finance means Yiwu Huishang Micro-finance Co., Ltd.
Haicheng Company means Haicheng Yiwu China Commodities City Investment
Development Co., Ltd.
Binjiang Shangbo means Hangzhou Binjiang Shangbo Property Development
Co., Ltd.
Yiwu Shanglv means Yiwu Shanglv Investment Development Co., Ltd.
Chouzhou Financial Lease means Zhejiang Chouzhou Financial Lease Co., Ltd.
Yiwu Shangbo means Yiwu Shangbo Property Co., Ltd.
Handing Shangbo means Yiwu Handing Shangbo Real Estate Co., Ltd.
Gongchen Shangbo means Yiwu Gongchen Shangbo Property Co., Ltd.
Huangyuan Shangbo means Yiwu Huangyuan Shangbo Property Co., Ltd.
The Company, the Listed means Zhejiang China Commodities City Group Co., Ltd.
Company or the Group
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Section II. Company Profile and Financial Highlights
I. Company profile
Chinese name Zhejiang China Commodities City Group Co., Ltd.
Chinese short name 小商品城
English name Zhejiang China Commodities City Group Co.,Ltd
English short name YIWU CCC
Legal representative ZHAO Wenge
II. Contact information
Board Secretary Securities Affairs Representative
Name XU Hang RAO Yangjin
Address Haiyang Business Building, No.105 Haiyang Business Building, No.105
Futian Road, Yiwu Futian Road, Yiwu
Telephone 0579-85182812 0579-85182812
Fax 0579-85197755 0579-85197755
Email Hxu@cccGroup.com.cn Hxu@cccGroup.com.cn
III. Basic Information
Registered address Haiyang Business Building, No.105 Futian Road, Yiwu,
Zhejiang Province
Office address Haiyang Business Building, No.105 Futian Road, Yiwu,
Zhejiang Province
Postal code at the office address 322000
Corporate website www.cccGroup.com.cn
Email 600415@cccGroup.com.cn
IV. Places for information diclosure and access to the annual report
Media's names and websites selected by the China Securities Journal, Shanghai Securities News
Company for annual report disclosure and Securities Times
Stock exchange website selected by the www.sse.com.cn
Company for annual report disclosure
Place for access to the Company’s annual Securities Department of the Company
report
V. Stock profile
Stock profile
Type of stock Exchange Stock short name Stock code Stock short name
before change
A-share Shanghai Stock 小商品城 600415 None
Exchange
VI. Other relevant information
Name Ernst & Young Hua Ming Certified Public Accountants
CPAs engaged
(special general partnership)
by the
Office address 16 th Floor, Ernst & Young Building, Oriental Plaza, 1
Company
Chang'an Street, Dongcheng District, Beijing, China
(domestic)
Name of the YIN Guowei, HUANG Zhigang
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Signing Certified
Public
Accountants
VII. Major accounting data and financial indicators in the past three years
(i) Major accounting data
Unit: RMB
Major YoY
2021 2020 2019
accounting data Change (%)
Operating
6,033,842,972.95 3,725,686,100.39 61.95 4,042,767,521.18
revenue
Net profits
attributable to
shareholders of 1,334,095,906.95 926,626,706.42 43.97 1,255,276,023.70
the Listed
Company
Net profits
attributable to
shareholders of
the Listed 1,221,808,001.15 517,246,267.88 136.21 930,676,526.71
Company with
non-recurring
items excluded
Net cash flow
from operating 2,033,082,507.76 828,788,261.95 145.31 -1,538,907,257.55
activities
YoY
December 31, 2021 December 31, 2020 December 31, 2019
Change (%)
Net assets
attributable to
shareholders of 14,610,845,868.33 13,558,228,377.08 7.76 13,020,619,449.36
the Listed
Company
Total assets 31,014,635,513.35 28,750,127,146.86 7.88 31,323,233,994.44
(ii) Major financial indictors
Major financial indictors 2021 2020 YoY Change (%) 2019
Basic EPS (RMB) 0.25 0.17 47.06 0.23
Diluted EPS (RMB) 0.25 0.17 47.06 0.23
Basic EPS after deducting non-
recurring gains and losses 0.22 0.10 120.00 0.17
(RMB/share)
Weighted average ROE (%) Up 2.50 percentage
9.38 6.88 10.04
points
Weighted average ROE after
Up 4.75 percentage
deducting non-recurring gains and 8.59 3.84 7.44
points
losses (%)
Explanation of main accounting data and financial indicators of the Company in the previous three
years at the end of the report period
√Applicable □Not Applicable
1. The Company’s operating revenue increased by RMB 23.08 million YoY, mainly due to the
increase in the sales of goods during the current period.
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2. The net profit attributable to shareholders of the listed company increased by RMB 407
million over the same period of the previous year. This was mainly due to an increase of RMB 92
million in net operating revenue and operating cost, an increase of RMB110 million in investment
income, a decrease of RMB 24 million in non-operating expenses and a decrease of RMB172
million in income tax expense compared with the same period of the previous year
3. The net profit attributable to shareholders of the Listed Company after deduction of the non-
recurring gains and losses increased by RMB 704 million over the same period of the previous year.
This was mainly due to an increase of RMB 407 million in net profit attributable to shareholders of
the Listed Company in the same period of the previous year, and a decrease of RMB 297 million in
non-recurring gains and losses.
4. The net flow generated by operating activities increased by RMB 1.204 billion over the same
period of the previous year, mainly due to an increase of RMB 1.375 billion in net cash deducted
from payment for selling goods and providing services.
VIII. Differences in accounting data between foreign and Chinese accounting standards
(i) Differences between the net profit and net assets attributable to shareholders of the
Company disclosed in accordance with international accounting standards and China
accounting standards in the financial report
□Applicable √Not Applicable
(ii) Differences between the net profit and net assets attributable to shareholders of the
Company disclosed in accordance with overseas accounting standards and China
accounting standards in the financial report
□Applicable √Not Applicable
(iii) Explanation of differences between domestic and overseas accounting standards
□Applicable √Not Applicable
IX. Key financial indicators by quarter in 2021
Unit: RMB
1st Quarter 4th Quarter
2nd Quarter 3rd Quarter
January to October to
April to June July to September
March December
Operating
773,146,503.41 1,299,481,223.59 2,053,219,737.59 1,907,995,508.36
revenue
Net profits
attributable to
shareholders of 377,396,281.59 473,118,179.34 358,731,419.31 124,850,026.71
the Listed
Company
Net profit
attributable to
shareholders of
the Listed
346,787,473.15 458,193,426.29 344,238,070.51 72,589,031.20
Company after
deducting non-
recurring gains
and losses
Net cash flow
from operating -267,130,288.24 433,866,112.99 1,053,274,803.88 813,071,879.13
activities
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Explanation of difference between quarterly data and disclosed data in regular reports
□Applicable √Not Applicable
X. Non-recurring items and amounts thereof
√Applicable □Not Applicable
Unit: RMB
Amount for Remark (if Amount for Amount for
Non-recurring items
2021 applicable) 2020 2019
Gain or loss from the disposal
-561,416.89 383,206,932.21 108,675,734.58
of non-current assets
Government grants that are Please refer
recognized in the current profit to details of
or loss, excluding the other income
government grants that are and
closely related to the normal government
operation of the Company and 23,559,898.01 grants 18,655,980.14 9,031,831.74
are provided in a fixed amount accounted
or quantity continuously for profit or
according to the national loss for the
polices and certain standards current
period
Cash occupation fees charged Fees paid for
from non-financial enterprises using fund
that are recognized in the collected
current profit or loss from joint
ventures
107,299,598.45 124,744,826.38 241,150,826.18
including
Tonghui
Shangbo
and Handing
Shangbo
Gain arising from investment
costs for acquisition of
subsidiaries, associates and
joint ventures by the
- 31,308,053.80 -
corporation being less than its
share of fair value of
identifiable net assets of the
investees on acquisition
Gain or loss from changes in
Mainly due
fair value of held-for-trading
to gains or
financial assets, derivative
losses from
financial assets, financial
the changes
liabilities held for trading and
in fair value
derivative financial liabilities,
arising from
and investment income from
the holding
the disposal of held-for-trading
7,298,587.58 of held-for- -32,578,800.48 68,526,573.42
financial assets, derivative
trading
financial assets, financial
financial
liabilities held for trading,
assets and
derivative financial liabilities
other
and other debt instruments,
noncurrent
except for effective hedging
financial
during the ordinary course of
assets
business
Profits and losses arising from
- 11,786,857.07 -
external entrusted loans
Net income from other non- 3,504,923.76 -4,107,200.75 1,049,413.04
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operating activities
Other profit and loss items that
meet the definition of non- 1,604,200.49 688,953.43 -
recurring profit and loss
Less: effect of income tax 28,698,936.71 122,917,029.51 103,828,184.21
Effect of minority interest
1,718,948.89 1,408,133.75 6,697.76
(after-tax)
Total 112,287,905.80 409,380,438.54 324,599,496.99
Expanation about defining the non-recurring profit and loss items listed in the Explanatory Notice
No. 1 of Information Disclosure of Companies Publicly Issuing Securities - Non-recurring Profit and
Loss items as the current profit and loss items
□Applicable √Not Applicable
XI. Items measured at fair value
√Applicable □Not Applicable
Unit: RMB10,000
Changes for
Opening Amount of impact
Item Closing balance the current
balance on current profits
period
Held-for-trading
5,171.27 7,537.51 2,366.24 91.80
financial assets
Other equity
instruments 66,225.63 64,218.80 -2,006.83 1,254.27
investment
Other non-current
152,392.52 152,481.93 89.41 2,881.82
financial assets
Total 223,789.42 224,238.24 448.82 4,227.89
XII. Others
□Applicable √Not Applicable
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Section III. Discussion and analysis of managers
I. Discussion and analysis of operation
(I) Market operation
In 2021, facing the complex international trade development environment, and based on the
new forms and models of trade, the Company performed digital innovation in trade services,
attracted emerging advantageous industries, and implemented a differentiated rent price system;
the Company focused on talents, brand, quality and standards, and continued to bring university
graduates, design, live broadcast, and standards into the market; the Company integrated the
market property, and promoted itself to transform from a management company to a service
company.
During the report period, the Company took multiple measures to promote the upgrading of the
market, enhance its advantages, and guide market traders to upgrade from information trade era to
digital trade era. The occupancy rate of the shops in the market maintained above 98% in 2021,
and the volume of business reached RMB 186.679 billion, up 14.77% YoY, showing strong
resilience and vitality.
1. Precise and intelligent monitoring and control for prevention of the Covid-19 pandemic
The Company promoted the intelligent upgrading for prevention of the pandemic, installed self-
service personal health report equipment, and intelligent channel turnstiles, to provide technical
support and data guarantee; fully activated the combat model of "communist party members +
units", and orderly conducted nucleic acid testing and pandemic prevention drills in various markets
to prevent the market from the pandemic and ensure stable operation of the markets.
2. Construction of digital market
Focusing on digitalization empowering the market, and based on management and service, the
two application systems of digital management and digital service were built, by setting up the data
sharing and application mechanism and sorting and restructuring existing business, thus promote
the market's development toward being informational, intelligent and user-friendly.
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(1) Building digital customer service center
During the report period, the Company completed the development of the modules of pledging,
lease renewal, transfer, online basic management and upgrading of module of market trader
integrity credit, and conducted trial operation of digital customer service center.
(2) Launch of online platform for purchasers
On August 21, 2021, the Company launched the online platform for purchasers, which includes
the service modules such as market navigation, online goods searching and intelligent parking, and
has a average daily traffic of 64k.
(3) Development of intelligent design system
Starting from product package design and pattern, the Company joined hands with universities
and colleges including Zhejiang University and Yiwu Industrial & Commercial College to develop an
intelligent design system, to provide intelligent product design for merchants in the markets.
3. Empowering the market
(1) Bringing university graduates into the market
Through design competition that includes 100 universities and colleges, more than 9300
undergraduates in design provided design service for market traders; undergraduates "selling
goods in booth" activities were conducted, and a communication platform for merchants and
undergraduates was established, matching over 2000 people; college graduates and people with
higher education level accounted for 26.9% of all the merchants in the market, indicating a rising
year-by-year trend.
(2) Bringing design into the market
During the report period, the Company successfully held the Forth "Yiwu China Commodities
City Cup" International Commodities Creative Design Competition, set up 20 design markets and 8
planning and design booths, attracted 1000 designers and identified 1000 designer shops and
launched 12.6k new products.
(3) Bringing live broadcast into the market
In 2021, the Company set up chinagoods live broadcast center and digital live broadcast
industrial incubator, organized market traders to perform live broadcast for over 1000 times, and
conducted 147 trainings for live broadcast e-commerce for nearly 5000 people. The Company
joined hands with Kuaishou platform to hold the first "Yiwu China Commodities City 415 Live
Broadcast Purchase Festival", which was promoted in all channels and provided with 100 million
traffic and allowed brands to be exposed to consumers across China, with a GMV of RMB 1.69
achieved. The Company cooperated with top live e-commerce agencies in China such as "Make
Friends", to help merchants in the market seize the opportunity of "e-commerce + live stream".
(4) Bringing standards into the market
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During the report period, the Company sorted standards at home and abroad for 12 major
industries, released 25 relevant reports, guided industrial association to develop multiple Group
standards, and conducted 43 trainings on standardization for over 5500 people.
4. Direction of market service
Based on the operation concept of "Find products for buyers, and expand channels for sellers",
the Company sorted its core business, built the frame of manager salary system, set up the path for
transformation from manager to operation specialist, and eventually promoted the Company's
transformation from a management company to a service company.
5. Constructing oversea market
Dubai Yiwu China Commodity City, the first oversea market of the Company, will start trail
operation in March 2022, and its shop occupancy rate has reached 99%. It's a comprehensive
wholesale market with multiple functions including product display, warehousing as well as bonding,
and has 1600 shops and 324 warehouses, covering eight industries. The market can give full play
to the Dubai's advantages in policies and make full use of Dubai's radiation effect on Mideast, North
Africa and other regions, thus complementing each other with Yiwu China Commodity City. Through
commodity sales exhibition, bonded warehousing, transshipment, and others, the market can
promote bilateral trade and industrial investment between China and UAE and its neighboring
countries, and strive to be a win-win cooperation model of the "Belt and Road" Initiative.
(II) Promote trade digitalization
In 2021, the Company optimized the digital functions and applications of the chinagoods
platform for display transactions, logistics performance, trade finance, and some other fields in
depth. The big data company (the operator of the chinagoods platform) has realized a revenue of
RMB 140 million and a net profit of RMB 27.47 million. The platform has achieved a total GMV of
RMB 16.8 billion in 2021.
1. Implementing digital top-layer design
During the report period, the Company enhanced digital new architecture, completed 5G
covering in main markets and modification of Gigabit broadband; built Data Center Manager and
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completed collecting, cleaning and filing of data for hundreds of systems; set up the implementation
path for digitalization, improved the data security system and guaranteed network operation
maintenance security.
2. Iteration and optimization of chinagoods platform
In 2021, Chinese Website, English Website, Arabic Website and Spanish National Website
were launched on the platform and digitalization of traders and goods; The Company promoted
R&D of core products of the platform and explored linked trade between the platform and oversea
business. 60000 shops have been launched on the platform, with 460 kinds of commodities and
over 1.2 million registered purchasers.
3. Results of application
The integration of chinagoods and the online purchase platform was accelerating, which would
create commodity digital trade application scenario. Daikuanbao realized transaction amount over
RMB 100 million; Caigoubao was launched, laying the foundation for subject manifestation and data
provenance; Digital trade cockpit was launched, enabling display of all trade data on one screen.
chinagoods platform is an important measure of the Company for digital transformation, is an
important means for the Company's transformation, upgrading, expansion and development in the
era of trade digitalization and information technology revolution, is a sign of integration of the
Company's online and offline markets.
(III) Build a global supply chain service system
Yiwu market is an important platform connecting the domestic and international trade supply
chains, and is at the key node of the global small commodity supply chain. It plays an important role
in smoothing the internal circulation, improving the external circulation, and serving the new pattern
of "dual circulation".
1. Warehousing and logistics system
The warehousing and logistics system was developing steadily. The united warehousing
information platform, cargo space booking system and express and drayage operation platform
were launched. Chinagoods digital cloud warehouse and Huanqiuyida Logistics Supply Chain
Industry Park were put into operation. 206 international logistics lines were launched and
accumulated goods delivered reached 1 million cubic meters.
2. Oversea warehouses
The expansion of oversea warehouses was accelerating. As of the end of the report period, the
Company laid out 120 oversea warehouses, with a total area over 600k ㎡, covering 46 countries
and regions and serving export over RMB 6 billion. The Company laid out 15 "Bring you to China"
exhibition halls, with a total area over 4200 ㎡, displaying 21k SUK of commodities The five
exhibition halls in Czech, Rwanda, Benin, Philippines, and Thailand achieved "oversea warehouse
+ exhibition hall" operation mode. The Company brought Yimi Supply Chain and other enterprises
to conduct trial operation of "chinagoods national website+ oversea warehouse + exhibition hall"
mode.
3. Comprehensive Bonded Zone
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Yiwu Comprehensive Bonded Zone, as an exemplary project of Yiwu that was taken into free
trade trial zone, was one important mission that the state and Zhejiang Provincial Government
granted Yiwu. During the report period, the growth of Yiwu Comprehensive Bonded Zone was sped
up and the phase I project was put into operation on October 22, 2021; the planning and
construction of phase II project has started. As of the end of the report, nearly 20 key projects such
as "Zhejiang Non-ferrous Metal Trading Allocation Center Project", "Comprehensive Bonded Zone
Store-Warehouse-Field Whole Industry Chain Project", "B2B Intelligent Manufacturing Allocation
Warehouse Project" were signed. The Company attracted big enterprises with existing enterprises,
getting multiple top trade enterprises to enter the Bonded Zone.
Since it was put into operation, bonded logistics business such as cross-border e-commerce
1210 and general trade import and export was conducted steadily, with great achievements: Whole-
area Supply Chain Financial Service Platform (Phase I) was launched, tariff guarantee product
"Guanshuibao" and "Customs Separate Payment Guarantee" and other business were
implemented; first "Bonded Zone-port linkage + staple commodity" business was completed; on
November 24, first cross-border bonded live broadcast was conducted in warehouse D2; on
December 9, first check business for returned goods entering the Bonded Zone was completed in
Yiwu Comprehensive Bonded Zone. After two months of operation, Yiwu Comprehensive Bonded
Zone achieved total amount of import and export of RMB 2.8 billion.
(IV) Self-operated business stepped into a new phase
During the report period, the Company integrated the source supply chain resources of Yiwu
market, combined "Trendy domestic commodities" and "Imported good commodities", built a trade
system of "All good commodities" for sales at home and abroad, to serve the dual circulation of
domestic circulation and international circulation, and promote the brands of "Yiwu Selection" and
"ICMall". As of the end of the report period, the income from commodity sales reached RMB 2.593
billion, which was a big leap.
1. On supply side
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In 2021, the Company's two self-run brands "Yiwu Selection" and "ICMall" through direct
sourcing, domestic agency, OEM production and other ways, gained a total of 108 domestic and
foreign brand agencies, 20,000 + SKU of high-quality single products, 2000 core suppliers in the
warehouse, 3000 advantageous commodities. The business scope covered seven categories of
home life, beauty makeup and skin care, maternal and child products, snacks and drinks,
entertainment and cultural innovation, toys and digital products, and cross-border goods. It aimed to
create a supply chain service platform with full-scene digitization, full-link new experience and O2O
online-offline integrated development.
2. On sales and distribution side
The Company's expansion of online and offline sales and distribution channels for "Yiwu
Selection" and "ICMall" was accelerating. On the offline side, the Company actively expanded
domestic second-level wholesale market and industry dealer channels, and accumulated over 2000
cooperation channels by parent brand authorization, subsidiary brand joining, supply chain
cooperation and other means, and was selected as a trial project of first special campaign for
optimization and upgrading of national commodity market. On the online side, the Company
explored cross-border incubation mechanism, set up short video and live broadcast business, and
opened and operated chinagoods oversea flagship shop, TikTok self-operated shop, Kuaishou self-
operated shop and others, completing 149k online orders.
3. On service side
The Company enhanced its supply chain service ability, signed over 30 warehousing service
providers and over 50 logistics service providers and completed customs clearance for over 4000
TEU imported commodities. As of the end of the report period, the accumulated signed import trade
amount reached RMB 1.86 billion.
(V) Speeding up digitalization of exhibition
During the report period, the Company's subsidiary Shangcheng Exhibition took the opportunity
that Yiwu market is a pilot of digitalization transformation, took Yiwu's construction of intelligent city
into account, and made full use of IoT, internet, cloud computing, intelligent analysis and other
technologies, to build a intelligent service exhibition system; based chinagoods platform, built a safe,
reliable, efficient and useful cloud digital exhibition platform, and promoted the online-offline dual
drive exhibition mode to be mature and standardize; cooperated with Yiwu Market Development
Committee and other government authorities the "Visit Exhibition Hall Here" platform, which would
provide more convenient and comfortable exhibition experience for exhibitors, participants and
audience; fined data management, and analyzed Group features, information channels and
preferred types and other dimensions of data, to form digital economy that takes data as the key
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2021 Annual Report
element; explored in depth the value of digital venues and maximized digital technologies' new
advantages.
To get rid of the restrictions that the pandemic imposed on offline exhibition as soon as
possible, and find the new opportunity of exhibition industry, Shangchen Exhibition actively explored
the construction of online exhibition platform in depth and successfully made a breakthrough. In
2021, Shangcheng Exhibition expanded the scale of online exhibition, and successfully held
multiple online-offline combined exhibitions including online China Yiwu International Commodities
Fair, online China Yiwu International Forest Product Fair and online China Yiwu Cultural and
Tourism Products Trade Fair, with 250 million visits for online exhibition, which formed a new
development trend of online-offline combination of exhibition.
II. Description of the industry of the Company during the reporting period
In 2021, thanks to China's stable economic and social development and its leading position in
the world in epidemic prevention and control, China's potential of the foreign trade industry was fully
tapped and its comprehensive competitiveness continued to improve. The changing flow of
commerce promoted the emergence and evolution of the structural trend of foreign trade. China is
at the key point of "top-down" comprehensive transformation and upgrading of foreign trade in the
national strategy, and Yiwu plays a pivotal role in this key point.
1. National policies for the industry
In July 2021, "Opinions about speeding up the development of new forms and modes of foreign
trade" (hereinafter referred to as the "Opinions") issued by the General Office of the State Council,
clearly supports the development of cross-border e-commerce, overseas warehouse, market
procurement trade mode, comprehensive service enterprises in foreign trade, offshore trade,
convenient trade payment and settlement, and ither new forms and modes of foreign trade, to inject
new vitality to the development of foreign trade.
The "Opinions" stressed that "the policy frame for market procurement trade mode will be
optimized, and that by 2025, 10 integrated markets for domestic and foreign trade with export
amount over RMB 100 billion will be produced, and a host of famous brands will be created", which
points out the direction and specifies the goals for market procurement trade mode in the new
phase.
2. Yiwu market
Yiwu relies on its over 2.1 million micro, small and medium-sized enterprises to maintain trade
with over 230 countries and regions across the world, with an export-oriented degree of 65%.
Focusing on the goods aggregation of nearly RMB 400 billion import and export amount in the
market, cross-border rail and air transportation capacity develops rapidly, which, together with the
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2021 Annual Report
low cost of domestic logistics, bring super high logistics efficiency for LCL export, thus drives
emergence and development of a considerable numer new B2C cross-border e-commerce
enterprises.
(1) The overall situation of Yiwu market
In 2021, Yiwu's total import-export amount reached RMB 390.31 billion, up 24.7% YoY; of
which, the total export amount was RMB 365.92 billion, up 21.7% YoY, and the total export amount
exceeded that of 18 provinces; the total import amount was RMB 24.39 billion, up 95.3% YoY.
Cross-border e-commerce export volume and market
procurement trade export volume of China (2016-2021)
Cross-border e-commerce export volume of China (RMB 100mn)
Market procurement trade export volume of China (RMB 100mn)
Proportion of cross-border e-commerce and market procurement trade
export volume in total export volume of China
In 2021, Yiwu's foreign trade export achieved excellent performance, and market procurement
trade was an important booster.
(2) Market procurement trade in Yiwu
Since 2013, China's Ministry of Commerce and other relevant departments have first carried
out pilot projects under market procurement trade mode in Yiwu. In the business process,
supervision, information construction and other aspects, Yiwu took the lead, with tailored support
policies, VAT exemption without refund, simplified declaration and other breakthroughs in policy. A
relatively complete territorial comprehensive management system and commodity identification
system were gradually formed. Since then, China has recognized 31 market procurement trade pilot
units in 15 provinces for 5 batches.
Date of
Pilot Projects of Market Procurement establishment
First batch Pilot Project of Market Procurement of Zhejiang Yiwu Market April 2013
Second batch Jiangsu Haimen Diishiqiao International Home Textile City, Zhejiang Decmeber 2015
Haining Leather City
Third batch Changshu Clothing City, Jiangsu Province; Huadu Leather and September 2016
Leather Goods Market, Guangzhou, Guangdong Province; Linyi City,
Shandong Province; Hankou North International Commodity
Exchange Center, Wuhan, Hubei Province; Baigou Bag Market,
Hebei Province
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2021 Annual Report
Fourth batch Zhejiang Wenzhou (Lucheng) Light Industrial Products Trading November 2018
Center, Quanzhou Shishi Clothing Mall, Fujian Province, Gaoqiao
Market, Hunan Province, Foshan (Shunde) Asia International
Furniture Material Trade Center, Zhongshan City and Lighting
Exhibition Center, Zhongshan City, Sichuan Province, Chengdu
International Trade Center
Fifth batch Liaoning Xiliu Clothing City, Zhejiang Shaoxing Keqiao China Light September 2020
Textile City, Zhejiang Taizhou Luqiao Daily Necessities and Plastic
Products Trading Center, Zhejiang Huzhou (Zhili) Children's Wear
and Daily Consumer Goods Trading and Management Center, Anhui
Bengbu Zhongheng Trade City, Fujian Jinjiang International Shoes
Textile City , Shandong Qingdao Jimo International Trade City,
Shandong Yantai three station wholesale trading market, Henan
China (Xuchang) International Hair products trading market,
Hubei Yichang Three Gorges Logistics Park, Guangdong
Shenzhen South China International Industrial Raw Materials
City, Guangdong Shantou Bao 'ao International Toy City,
Guangdong Dongguan Dalang Wool Trade Center, Yunnan Kunming
Junfa - New Luosiwan International Trade City, Yunnan Ruili
International Commodity Exchange Market (border Trade Commodity
Market), Inner Mongolia Manzhouli Mangou Center (Border Trade
Commodity Market), Guangxi Sample Export Commodity Purchase
Center (Border Trade Commodity Market)
Yiwu is the leader and demonstration center of market procurement trade in China, and has
maintained high-speed growth for 7 years in a row, with a compound annual growth rate over 30%,
which has effectively unlocked the validity of the market subject and further improved the
convenience level of trade.
In 2021, China's total import under market procurement trade mode was RMB 930.39 billion, of
which Yiwu's total import under market procurement trade mode was RMB 290.16 billion,
accounting for 31.2% of that of China, up 30.1% YoY.
(3) Siphonic effect of logistcs of Yiwu
There is a continueous "siphonic effect" of Yiwu, due to its strong goods sources guarantee,
good business environment, and multi-dimensional domestic-international logistics network
consisting of sea, road, air and railway, express, China-Euro Railway Express, and others. In 2021,
Yiwu's express delivery service enterprises completed 9289.574 million express orders, up 29.50%
YoY.
Top 10 cities in express delivery service and
their accumulated volumes in 2021 Unit: 100mn pcs
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Guangzhou Yiwu Shenzhen Shanghai Hangzhou Jieyang Dongguan Suzhou Beijing Quanzhoou
2021 Annual Report
III. Description of the business of the Company during the reporting period
According to the definitions in the Guidelines for Industry Classification of Listed Companies
(revised in 2012) released by the CSRC, the Company is engaged in “Business Service” (L72) in
“Lease and Business Service” (L).
(I) Main businesses
The Company is engaged in market development and operation and supporting services,
providing online trading platform and services, online trading market development and operation,
etc., belonging to the comprehensive industry category.
(II) Operating model
1. Market operation
Market operation business is mainly operated and managed by the Company's subordinate
market branches. The main business income of the market operation segment is mainly the income
from the use of shops. The Company adopts a shop rental model, that is, the ownership of the
shops belongs to the Company, and market traders only have the right to use the shop within the
contract period. The Company and market traders sign a contract to clearly stipulate the use period,
usage fee and business purpose of the shops. The merchant shall not change the agreed business
purpose, and shall not sublet without the Company’s consent. Generally, the payment methods of
usage fee are one-time payment or installment payment according to the contract terms. Currently
the markets that the Company is responsible for operating include Zone 1 to Zone 5 of the
International Trade City, Importing Market, Zone 1 East Expansion Market, Huangyuan Market and
International Production Goods Market.
2. Online trade platform
Relying on the Company's market resources of 75,000 off-line shops, Yiwu market official
website “chinagoods” platform (www.chinagoods.com, referred to as "chinagoods platform")
provides service for 2.1 million micro, small, and medium enterprises in the upper reaches of the
industry chain. With trade data integration as the core driver, it meets the needs of both supply and
demand parties in manufacturing, display transactions, warehousing and logistics, financial credit,
market management and other links to achieve effective and accurate allocation of market
resources, and build a true, open, and integrated digital trade comprehensive service platform.
IV. Analysis of core competencies during the reporting period
√Applicable □Not Applicable
(I) First-mover advantages
At the start of China’s reform and opening-up, Yiwu took the lead in establishing the
commodities market. During the recent forty years, the market has been upgraded five times and
expanded ten times and has been among the top comprehensive national markets with the highest
turnover, pointing to its remarkable first-mover advantages. As the largest commodities distribution
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2021 Annual Report
center in the world, the Yiwu commodities market provides more than 2million products, which fall in
26 categories and supports one-stop purchase. The market boasts enormous resources and huge
business flow, goods flow, cash flow and information flow.
(II) Brand advantages
“Yiwu China Commodities City” is the first market identified by the SAIC as a well-known
trademark among the national commodities trading markets. The Company has taken multiple
measures to give play to the brand of “Yiwu China Commodities City” and is committed to improving
its influence and leading role in the industry. Its brand advantages and influence have kept
enhancing.
(III) Auxiliary services advantages
The People’s Government of Yiwu has been providing policy support for the development of
the market for years, and the auxiliary industries are developing rapidly in Yiwu.
1. Convenient logistics system
Yiwu has in place perfect commerce and trade auxiliary facilities and advantageous logistics
service. The logistics network has full coverage in Yiwu. A large number of large-sized international
and domestic express delivery and logistics companies have regional distribution centers in Yiwu,
and a world-oriented goods transport and distribution network has been established. Yiwu has been
listed among the “commerce and trade-oriented national logistics hubs” by the National
Development and Reform Commission and the Ministry of Transport. According to the operation of
the postal industry in 2021 that was announced by the State Post Bureau, the express delivery
business volume of Yiwu ranked second in China in 2021.
2. Industry support
During the recent years, thanks to the Yiwu China Commodities City, the Yiwu-centered
manufacturing industry cluster has been developing fast, an commodities industrial belt that is
centered in Yiwu and covers Jinhua, Lishui, Quzhou, Hangzhou, Jiaxing, Taihu, Shaoxing, Ningbo,
Wenzhou and Taizhou with an area of nearly 10,000 sq.m has been established, and a benign
mechanism under which the Yiwu wholesales market and the peripheral industry cluster develop
together has been formed.
3. Support from exhibition service
The major international trade exhibitions held by the Company’s exhibition business division
such as China Yiwu International Commodities Fair, China Yiwu International Forest Products Fair,
China Yiwu International Imported Commodities Fair and China Yiwu Hardware and Electrical Expo
support and cultivate vertical exhibition in multiple industries such as stationery and textiles, have
developed multiple professional and international exhibition brands, and are important national
platforms for the China Commodities City to lead industry development, develop the city economy
and maintain the clusters of traders and commodities.
(IV) Diversified businesses advantage
The Company has strengthened its presence in the related industries, made efforts on financial
investment, kept developing the exhibition business, created a new e-commerce model, developed
the hotel business and also run international trade, modern logistics, advertising information,
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2021 Annual Report
shopping and tourism businesses. It has created a Group structure and profit-making model of
shared and interactive development of market resources.
(V) Management advantage
In terms of personnel, management and technology, excellent operation and management
ability is one of the core competences of the Company as a professional market operating company.
The Company has developed a series of perfect management systems for market operation and
management, accumulated rich experience in operation and management, and has cultivated a
professional management team with reasonable knowledge and expertise structures and strategic
development insights.
(VI) Adavantage of online and offline platform integration
The Company’s international trade city is the global leading commodity market. The
Company’s official Yiwu CCC website, chinagoods platform, relying on the Company’s 75,000 off-
line shops, through integration of online and offline services, serves 2 million small, medium and
micro enterprises in the upper reaches of the industry chain. With trade data integration as the core
driver, it meets the needs of both supply and demand parties in manufacturing, display transactions,
warehousing and logistics, financial credit, market management and other links.
(VII) Advantage of international logistics
The Company's Huanqiuyida international logistics business, establishes a logistics platform to
replace the multi-layer freight forwarder system, thus shortening the level of freight forwarder
distribution, and improving logistics efficiency. In contrast, the traditional foreign trade freight
forwarders are divided into multiple levels, the logistics and transportation services are not
standardized, and the service prices vary widely and are usually not the lowest price.
V. Operating status during the reporting period
In 2021, the Company's operating revenue was RMB 6.034 billion, up RMB 2.308 billion, or
61.95% YoY; Net profit attributable to shareholders of the parent company was RMB 1.334 billion,
up RMB 407 million, or 43.97% YoY.
(i) Analysis of main business
1. Analysis of changes in related accounting subjects of income statement and cash flow
statement
Unit: RMB
Item Amount in the same
Amount in the
report period of the YoY change (%)
current report period
previous year
Operating revenue 6,033,842,972.95 3,725,686,100.39 61.95
Operating cost 4,027,543,138.56 1,811,136,443.99 122.38
Sales expenses 204,745,974.57 241,889,186.44 -15.36
Administrative expenses 453,543,427.80 377,516,845.45 20.14
Financial expenses 179,911,613.70 182,089,699.33 -1.20
R&D expenses 10,308,801.84 18,507,626.99 -44.30
Net cash flow from operating
2,033,082,507.76 828,788,261.95 145.31
activities
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2021 Annual Report
Net cash flow from investing
1,650,766,978.93 636,113,348.17 159.51
activities
Net cash flow from financing
-1,701,935,200.78 -2,855,836,638.69 Not applicable
activities
Reasons for the change in operating revenue: the Company’s operating revenue increased by
61.95% YoY, mainly due to the increase in the sales of goods during the current period.
Reasons for the change in operating cost: The Company’s operating cost increased by 122.38%
YoY, mainly due to the increase in the sales of goods during the current period.
Reasons for change in R&D expenses: the Company's R&D expenses decreased 44.30% YoY,
mainly due to the increase in expensed R&D investment during the current period.
Reasons for the change in the net flow generated by operating activities: mainly due to an increase
of RMB 1.375 billion in net cash deducted from payment for selling goods and providing services.
Reasons for changes in net cash flow from investment activities: mainly because the net outflow of
investment during the current period decreased by RMB 1.958 billion YoY, and cash paid for
purchasing and construction of fixed assets, intangible assets and other long-term assets increased
by RMB 830 million YoY.
Reasons for changes in net cash flow from financing activities: Mainly because the net inflow of
financing during the current period decreased by RMB 1.385 billion YoY, cash received for absorbed
investment decreased by RMB 142 million YoY, and cash paid for dividends and interest payments
increased by RMB 113 million YoY.
Details of material changes to the business types, the components, or sources of profits of
the Company in this reporting period
□Applicable √Not Applicable
2. Revenue and cost analysis
√Applicable □Not Applicable
In 2021, the Company's operating revenue was RMB 6.034 billion, up 61.95% YoY, and the
Company's operating cost was RMB 4.028 billion, up 122.38% YoY.
(1). Main business by industry, product and region
Unit: RMB10,000
Main business by industry
Change Change
Gross in in Change in gross
By Operating Operating
profit operating operating profit margin YoY
industry revenue cost
margin (%) revenue cost YoY (%)
YoY (%) (%)
Market Up 6.05 percentage
239,646.10 86,713.96 63.82 12.66 -3.47
operation points
Sales of Down 0.21
259,327.86 258,667.18 0.25 575.71 577.11
goods percentage points
Hotel Down 8.70
12,745.36 13,376.12 -4.95 -14.75 -7.04
service percentage points
Exhibition 11,953.88 12,296.06 -2.86 24.08 15.66 Up 7.49 percentage
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2021 Annual Report
and points
advertising
Other Up 11.60 percentage
34,932.61 16,028.14 54.12 43.42 14.48
services points
Down 13.86
Sub-total 558,605.81 387,081.46 30.71 82.59 128.24
percentage points
Explanation of main business by industry, product, region and sales mode
1. The revenue and cost of product sales increased by 575.71% and 577.11% respectively
year-on-year, mainly due to the large year-on-year increase in the commodity sales business of
import and export companies and supply chain companies in the current period
2. The revenue of other services increased by 43.42% year-on-year, mainly due to the
information technology services conducted by the big data company.
(2). Table of production and sales analysis
□Applicable √Not Applicable
(3). The performance of major purchage contracts and major sales contracts
□Applicable √Not Applicable
(4). Cost Analysis Table
Unit: RMB10,000
Status by industry
Percentage
Proportio change of
n in the Proportion in amount in
Amount in Amount in
total cost the total cost the current
By Cost the the same Situation
in the in the prior period
industry components current period of Remarks
current correspondin compared
period prior year
period g period (%) with the prior
(%) correspondin
g period (%)
Depreciation
Market
and 46,031.98 11.89 46,198.46 27.24 -0.36
operation
amortization
Market Wages and
22,111.44 5.71 20,669.29 12.19 6.98
operation benefits
Market
Other costs 18,570.54 4.80 22,967.84 13.54 -19.15
operation
Mainly due
Cost of to the
Sales of 258,667.1
product 66.82 38,201.55 22.53 577.11 increase in
goods 8
sales product
sales
Depreciation
Hotel
and 2,432.99 0.63 2,557.02 1.51 -4.85
service
amortization
Cost of food
and
Hotel
beverage 4,356.83 1.13 5,969.28 3.52 -27.01
service
raw
materials
Hotel Wages and
4,216.87 1.09 4,077.68 2.40 3.41
service benefits
Hotel Material and
759.03 0.20 716.93 0.42 5.87
service fuel
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2021 Annual Report
consumption
Hotel
Other costs 1,610.40 0.41 1,067.58 0.63 50.85
service
Exhibition Depreciation
advertisin and 4,167.15 1.08 3,771.71 2.22 10.48
g service amortization
Exhibition
Exhibition
and
advertisin 6,311.12 1.63 5,172.71 3.05 22.01
advertising
g service
cost
Exhibition
advertisin Other costs 1,817.79 0.47 1,687.16 0.99 7.74
g service
Property
Other
management 2,318.52 0.60 2,237.42 1.32 3.62
services
cost
Network
Other transformatio
7,542.35 1.95 7,975.07 4.70 -5.43
services n and
service
Mainly due
to the
increase in
costs of
Other warehousin
Other costs 6,167.27 1.59 3,788.81 2.24 62.78
services g and
logistics
during
current
period
No income
Real this year,
Cost of real
estate - - 2,537.33 1.50 - so it could
estate sales
sales not be
compared
387,081.4 169,595.8
Total 100.00 100.00 128.24
6 4
Explanation on cost analysis and other information
None
(5). Changes in consolidation scope due to the changes in main subsidiaries' share
ownership during the report period
□Applicable √Not Applicable
(6). Major changes or adjustment in the Company's business, products or services
□Applicable √Not Applicable
(7). Main sales customers and suppliers
A. Main sales customers of the Company
Case in which the sales to a single customer accounted for over 50% of the total sales, new
customers were added to the list of top 5 customers or the Company relied heavily on a few
customers during the report period
□Applicable √Not Applicable
B. Main suppliers of the Company
Case in which the purchase amount for a single supplier accounted for over 50% of the total
purchase amount, new suppliers were added to the list of top 5 suppliers or the Company relied
heavily on a few suppliers during the report period
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2021 Annual Report
□Applicable √Not Applicable
Other statements
None
3. Costs
√Applicable □Not Applicable
Unit: RMB10,000
Item 2021 2020 YoY change Change Explanation on changes
amount /%
Sales 20,474.60 24,188.92 -3,714.32 -15.36
expenses
Administrative 45,354.34 37,751.68 7,602.66 20.14
expenses
R&D 1,030.88 1,850.76 -819.88 -44.30 Due to decrease in expended
expenses R&D investment in this period
Financial 17,991.16 18,208.97 -217.81 -1.20
expenses
Income tax 32,752.52 49,975.50 -17,222.98 -34.46 Due to the YoY decrease in
expenses taxable income
Unit: RMB10,000
Item 2021 2020 YoY change Change / %
amount
Staff expenses and work
32,636.89 24,502.91 8,133.98 33.20
clothes
Advertising expenses 4,564.90 9,441.10 -4,876.20 -51.65
Security and insurance costs 3,830.60 2,711.54 1,119.06 41.27
R&D expenses 1,030.88 1,850.76 -819.88 -44.30
Depreciation and
3,869.35 3,868.23 1.12 0.03
amortization
Promotion and investment
12,124.46 10,567.68 1,556.78 14.73
promotion
Intermediary expenses 2,348.08 3,852.94 -1,504.86 -39.06
Office expenses 1,761.61 2,003.44 -241.83 -12.07
Water, electricity and fuel
135.19 365.14 -229.95 -62.98
consumption
Rent and property
307.15 307.15 - -
management
Other expenses 4,250.71 4,320.47 -69.76 -1.61
Subtotal of management,
66,859.82 63,791.36 3,068.46 4.81
R&D and sales expenses
1. Reasons for YoY increase in staff expenses and work clothes: mainly due to the increase in
performance and the increase in wages with gross wages management methods.
2. Reasones for YoY decrease in advertising expenses: mainly due to the cancellation of oversea
advertising under the influence of the Covid-19 pandemic.
4. R&D Investment
(1). Table of R&D investment status
√Applicable □Not Applicable
Unit: RMB10,000
Expended R&D investment in this 1,030.88
period
Capitalized R&D investment in this 2,860.04
period
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2021 Annual Report
Total R&D investment 3,890.92
Total R&D investment as a percentage 0.64
of operating income (%)
Proportion of capitalization of R&D 73.51
investment (%)
(2). Table of R&D personnel status
√Applicable □Not Applicable
Number of R&D personnel 139
Number of R&D personnel as a percentage of the Company’s
3.29
total personnel number (%)
The education level of R&D personnel
Education level People at this education level
Master's degree 7
Bachelor's degree 99
College graduates 33
Age of R&D personnel
Age range People in this age range
Below 30 (30 excluded) 62
30-40 (30 included, 40 excluded) 64
40-50 (40 included, 50 excluded) 11
50-60 (50 included, 60 excluded) 2
(3). Reasons for change
□Applicable √Not Applicable
(4). Reasons for major changes in the composition of the R&D personnel and their infuence
on the Company's future development
□Applicable √Not Applicable
5. Cash flow
√Applicable □Not Applicable
Unit: RMB10,000
Item 2021 2020 YoY change
Net cash flow (used)/generated from 203,308.25 82,878.83 120,429.42
operating activities
Net cash flow (used)/generated from 165,076.70 63,611.33 101,465.37
investing activities
Net cash flow (used)/generated from 115,390.14
-170,193.52 -285,583.66
financing activities
(Decrease)/increase in cash and cash 336,789.52
197,382.55 -139,406.97
equivalents
Analysis of main reasons for changes:
1. The net cash flow from operating activities in 2021 increased by RMB 1.204 billion compared
with that in 2020. Mainly due to an increase of RMB 1.375 billion in net cash deducted from
payment for selling goods and providing services.
2. The net cash flow from investment activities in 2021 increased by RMB 1.015 billion compared
with that in 2020. Mainly because the net outflow of investment during the current period decreased
by RMB 1.958 billion YoY, and cash paid for purchasing and construction of fixed assets, intangible
assets and other long-term assets increased by RMB 830 million YoY.
3. The net cash flow from finacing activities in 2021 increased by RMB 1.154 billion compared with
that in 2020. Mainly because the net inflow of financing during the current period decreased by
RMB 1.385 billion YoY, cash received for absorbed investment decreased by RMB 142 million YoY,
and cash paid for dividends, profits or interest payments increased by RMB 113 million YoY.
27 / 228
2021 Annual Report
(ii) Material changes to profits caused by non-main businesses
□Applicable √Not Applicable
(iii) Analysis of assets and liabilities
√Applicable □Not Applicable
1. Assets and liabilities
Unit: RMB10,000
Propor
tion in Closing Percentage
total balance’s change of the
Closing Closing
assets proportion closing balance
balance in balance in Reasons for
Item at the in total of the current
current the prior change
end of assets in period compared
period period
the the prior with the prior
current period (%) period (%)
period
Total 3,101,463. 2,875,012.
assets
100.00 100.00 7.88
55 71
Monetary 561,264.2
capital
483,146.84 15.58 19.52 -13.92
9
Mainly due to
Held-for-
buying bank
trading
financial
7,537.51 0.24 5,171.27 0.18 45.76 wealth
management
assets
products
Accounts
receivable
18,523.75 0.60 15,357.35 0.53 20.62
Mainly due to
the growth of the
Prepaymen product sales
ts
87,516.77 2.82 10,518.75 0.37 732.01 and the increase
in advance
payment
Mainly due to
recovering of
Other 270,847.8 financial
receivables
135,592.43 4.37 9.42 -49.94 assistance
1
during the reprot
period
132,946.7
Inventory 132,740.26 4.28 4.62 -0.16
7
Mainly due to
Other
the increase in
current 24,866.22 0.80 17,972.47 0.63 38.36 overpaid input
assets
VAT tax
Mainly due to
the increase in
Long-term
receivables
22,230.74 0.72 12,675.66 0.44 75.38 the financial aids
from Dubai
project company
Mainly due to
the capital
increase of joint
Long-term
383,289.7 ventures and
equity 577,245.52 18.61 13.33 50.60 incease in
investment 5
investment
income by equity
method
Other
equity
instrument
64,218.80 2.07 66,225.63 2.30 -3.03
s
28 / 228
2021 Annual Report
investment
Other non-
current 152,392.5
financial
152,481.93 4.92 5.30 0.06
3
assets
Mainly bacause
BD zone of the
comprehensive
Property 196,042.6
investment
297,393.64 9.59 6.82 51.70 Bonded Zone
3 was completed
and transferred
in
Fixed 523,429.3
assets
507,859.09 16.37 18.21 -2.97
8
Constructio
n in 109,057.80 3.52 98,289.19 3.42 10.96
progress
Presented for
the adjustment
Right-of-
use assets
22,534.71 0.73 - - Not applicable under the new
standard for
lease
Intangible 390,078.1
assets
404,356.46 13.04 13.57 3.66
0
Developme Mainly due to
nt 635.98 0.02 2,222.31 0.08 -71.38 the transfer-in of
expenses intangible assets
Mainly because
the
Long-term transformation of
prepaid 18,818.44 0.61 11,072.87 0.39 69.95 Yindu Hotel was
expenses completed and it
was transferred
in
Deferred Mainly because
income tax 13,573.70 0.44 9,966.43 0.35 36.19 it was re-
assets determined
Mainly due to
Other non-
prepayment for
current 21,132.96 0.68 15,249.52 0.53 38.58 the pay license
assets
of Kuaijietong
Total 1,638,379. 1,517,541.
liabilities
52.83 52.78 7.96
34 78
Short-term 125,717.9
borrowings
94,273.61 3.04 4.37 -25.01
4
Accounts
payable
49,336.04 1.59 63,646.38 2.21 -22.48
Mainly due to
Advances the increase in
from 15,356.63 0.50 11,275.29 0.39 36.20 advance rent of
customers Business Center
and others
Mainly due to
the growth of the
Contract 244,221.1 product sales
liabilities
405,841.92 13.09 8.49 66.18 and the increase
8
in advances
from customers
Mainly due to
Payroll calculation by
payable
24,396.48 0.79 16,149.90 0.56 51.06 gross wanges
method
Tax
payable
55,949.65 1.80 49,540.05 1.72 12.94
Other 190,874.28 6.15 164,634.5 5.73 15.94
29 / 228
2021 Annual Report
payables 6
Mainly due to
Non-
the transfer-in of
current
131,502.6 medium and
liabilities 366,424.19 11.81 4.57 178.64 long-term notes
due within 6
due within one
one year
year
Other
302,360.8
current 308,138.48 9.94 10.52 1.91
liabilities 0
Mainly due to
Long-term
borrowings
77,125.00 2.49 28,200.00 0.98 173.49 new long-term
borrowings
Mainly due to
the transfer-out
Bonds 355,216.1 of medium and
payable
- - 12.36 -100.00 long-term notes
7
due within one
year
Mainly due to
the transfer-in
because of the
Lease
liabilities
20,594.27 0.66 - - Not applicable adjustment
under the new
standard for
lease
Estimated
liabilities
11,062.03 0.36 11,062.03 0.38 -
Mainly due to
receiving the
Deferred start-work
income
7,817.01 0.25 2,654.53 0.09 194.48 reward of
comprehensive
Bonded Zone
Deferred
income tax 11,189.75 0.36 11,360.29 0.40 -1.50
liabilities
Other statements
None
2. Overseas assets
√Applicable □Not Applicable
(1). Scale of assets
Among them: offshore assets was RMB 636 million, accounting for 2.05% of the total assets.
(2). Explanation one the high proportion of offshore assets
□Applicable √Not Applicable
3. Encumbrances on major assets as of the end of the reporting period
√Applicable □Not Applicable
Unit: RMB
Item 2021 2020
Monetary capital 60.78 60.58
Long-term equity investment 102,918,559.00 102,918,559.00
Other non-current financial assets 636,870,392.09 617,511,352.00
Total 739,789,011.87 720,429,971.58
1. As of December 31, 2021, bank deposits with a book value of RMB 60.78 (December 31,
2020: RMB 60.58) were restricted for ownership or use rights due to being as security deposits for
obtaining commercial housing mortgage loan.
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2021 Annual Report
2. As of June 30, 2021, long-term equity investments with a book value of RMB
102,918,559.00 (December 31, 2020: RMB 102,918,559.00) and other non-current assets of RMB
636,870,392.09 (December 31, 2020: RMB 617,511,352.00) were frozen by Shanghai Municipal
Public Security Bureau.
4. Other statements
□Applicable √Not Applicable
(iv) Analysis of business information of industry
√Applicable □Not Applicable
For details, please refer to "II. The situation of the industry of the Company" in this section
31 / 228
2021 Annual Report
(v) Analysis of investments
Overview of external equity investment
√Applicable □Not Applicable
At the end of December 2021, the external investment amount was RMB 8,014,837,600
(including trading financial assets of RMB 75,375,100, investment in other equity instruments of
RMB 642,188,000, other non-current financial assets of RMB 1,524,819,300, and long-term equity
investment of RMB 5,772,455,200) , an increase of 32.02%, or RMB 1,944,045,800, compared with
RMB 6,070,791,800 at the end of the previous year (including trading financial assets of RMB
51,712,700, investment in other equity instruments of RMB 662,256,300, other non-current financial
assets of RMB 1,523,925,300, and long-term equity investment of RMB 3,832,897,500). The main
changes are as follows:
I. Long-term equity investment during the reporting period increased by RMB 1,939,557,700
YoY, mainly due to:
1. During the reporting period, the new long-term equity investment was RMB 1,496,216,800,
including RMB 1.225 billion for Yiwu China Commodities City Property Development Co., Ltd. ,
RMB 50 million for Yiwu Huishang Redbud Phase II Investment Partnership (LLP), RMB 44.7918
million for JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO,
RMB 17.85 million for Yiwu Digital Port Technology Co., Ltd., RMB 1.075 million for Zhejiang
Yixinou Supply Chain Management Co., Ltd., and RMB 150 million for Yiwu Hongyi Equity
Investment Foundation Partnership and RMB 7.5 million for Yiwu Meipingshu Supply Chain
Management Co., Ltd.
2. Net income from long-term equity investment by equity method of RMB 599,180,300,
including recovered equity investment from Huishang Redbud of RMB 17,223,600, distributed
dividend form Binjiang Shangbo of RMB 1,372,000, equity dividend from Huishang Redbud of RMB
5,909,200 and other change in equity of Meipingshu of RMB 4,493,400.
II. During the reporting period, the investment in other equity instruments decreased by RMB
20.0683 million year-on-year, due to the change in fair value of Shenwan Hongyuan Group Co., Ltd.
during the reporting period for RMB -20.0683 million.
III. During the reporting period, the trading financial assets increased by RMB 23.6624 million
year-on-year, including, an increase of RMB 25 million for purchase of bank wealth management
products, the gains and losses for changes in fair value of Orient International Ventures Co., Ltd.
during the reporting period of RMB -1.3325 million, and an decrease of RMB 5,100 due to selling of
subscribed new stocks.
IV. During the reporting period, other non-current financial assets increased by RMB 894,000
year-on-year, including: RMB 40 million for Suzhou Xiangzhong Venture Capital Partnership (LLP),
RMB 1 million for Quanzhou Huayun Tiancheng E-commerce Co., Ltd. recovered investment of
RMB 3.1865 million from Suzhou Yiyun Venture Capital Center (LLP), recovered investment of
RMB 7.2012 million from Jiaxing Zhehua Zijin Investment Partnership (LLP), and recovered
investment of RMB 38.2822 million from Beijing Redbud Huaron Equity Investment Co.Ltd., and
increase of RMB 8.5639 million for the gains and losses for changes in fair value.
32 / 228
2021 Annual Report
The main investment is as follows:
Unit: RMB10,000
Book value
at the end
Shareholding
Target Main business Cost of investment of
ratio (%)
December
2021
Industry investment, investment
management (excluding financial
businesses such as securities and
futures), property service, design,
Yiwu Shanglv
production and agency of domestic
Investment
advertising, operation and 39,200.00 38,366.84 49.00
Development
management of parking garages,
Co., Ltd.
marketing planning, operation and
management consulting, operation and
management of shopping malls and
business management consulting
Yiwu Rongshang Real estate development and
Property Co., operation, landscape engineering and 5,000.00 21,738.75 49.00
Ltd. decoration engineering
Yiwu Real estate development and sale;
Chuangcheng lease of proprietary houses; real estate
2,000.00 8,806.33 24.00
Property Co., brokerage service; interior decoration
Ltd. service; and landscaping service
Hangzhou
Binjiang
Shangbo Real estate development and
2,450.00 3,447.62 49.00
Property operation
Development
Co., Ltd.
Micro-loans in Yiwu, and consulting
Yiwu Huishang
services in connection with the
Micro-finance 12,420.00 8,282.47 23.00
development, management and
Co., Ltd.
finance for small-sized enterprises
Financial lease service; transfer of
financial lease assets; fixed-income
securities investment; acceptance of
lessees’ lease margin; absorption of
Zhejiang
time deposit with a term no shorter
Chouzhou
than three months from non-bank 26,000.00 42,602.08 26.00
Financial Lease
shareholders; inter-financial
Co., Ltd.
institutional lending; borrowing from
financial institutions; overseas
borrowing; sale and disposal of leased
items; and economic consulting
Yiwu China
Commodities
Equity investment, investment
City Fuxing
management and investment 10,291.86 10,291.86 49.90
Investment
consulting
Center (limited
partnership)
Equity investment and related
consulting services (without approval
of the industry regulatory authorities
Yiwu Huishang such as the finance regulatory
Redbud Equity authority, the Company warrants that it
3,277.64 7,099.70 10.42
Investment Co., will not be engaged in the absorption of
Ltd. deposits, financial guarantee, agency
wealth management, fundraising
(financing) from the public and other
financial businesses)
33 / 228
2021 Annual Report
Investment management, asset
management (excluding the assets
subject to special state regulation such
as state-owned assets) (the above
business scope excludes financial
Yiwu Huishang
businesses such as securities and
Redbud Phase II
futures; and without approval of the
Investment
industry regulatory authorities such as 10,000.00 10,663.80 9.43
Partnership
the finance regulatory authority, the
(limited
Company shall not be engaged in the
partnership)
absorption of deposits, financial
guarantee, agency wealth
management, fundraising (financing)
from the public and other financial
businesses)
Yiwu Meipinshu
Supply chain management service,
Supply Chain
software development, and business 2,570.14 2,737.09 22.11
Management
management consulting
Co., Ltd.
Services: technology development,
technical consulting, technical services
Hangzhou and achievements transfer of computer
MicroAnts Co., hardware and software and network 1,275.00 520.05 49.04
Ltd. information technologies and webpage
design; wholesale and retail: computer
software
Investment management, equity
investment, asset management and
investment consulting (without
Yiwu Hongyi
approval of the industry regulatory
Equity
authorities such as the finance
Investment Fund
regulatory authority, the Company shall 84,000.00 88,787.23 49.98
Partnership
not be engaged in the absorption of
(limited
deposits, financial guarantee, agency
partnership)
wealth management, fundraising
(financing) from the public and other
financial businesses)
Shenwan Securities brokerage, securities
Hongyuan Group investment consulting and securities 55,362.54 64,218.80 0.501
Co., Ltd. underwriting & sponsorship
Beijing Yiyun
Clean
Venture capital, agency of other VC
Technology 1,891.82 288.00 15.00
institutions or individuals’ VC business
Venture Capital
Co., Ltd.
Shenzhen Tiantu
Investment PE investment management in the
11,438.62 4,788.21 1.536
Management consumer goods industry
Co., Ltd.
Beijing Redbud
Asset management, investment
Huarong Equity
management and investment 6,171.78 13,846.69 12.36
Investment
consulting
Partnership
Granting of personal consumption
loans; acceptance of deposits from
shareholders’ domestic subsidiaries
and domestic shareholders; lending to
domestic financial institutions;
Mashang
issuance of financial bonds upon
Consumer 3,000.00 4,854.75 0.75
approval; inter-financial institution
Finance Co., Ltd.
lending in China; consumption finance-
related consulting; agency sale of
insurance products related to
consumption loans; and fixed-income
securities investment
34 / 228
2021 Annual Report
Industry investment, venture capital,
investment management, business
management, social and economic
Jiaxing Zhehua consulting. (Operating activities subject
Redbud to approval in accordance with laws
Investment shall only be conducted after approval
8,152.97 11,562.84 17.51
Partnership from related authority) [it shall not be
(limited engaged in the absorption of deposits,
partnership) financial guarantee, agency wealth
management, fundraising (financing)
from the public and other financial
businesses]
Nantong Redbud
Huatong Equity
Equity investment; investment
Investment
consulting; and investment 20,000.00 25,871.01 21.05
Partnership
management
(limited
partnership)
Yiwu Shangfu
Chuangzhi Asset management, investment
Investment management, and investment 61,751.14 63,687.04 74.9982
Center (limited consulting service
partnership)
Yiwu Shanfeng
Investment Investment management, asset
Partnership management and investment 2,600.00 2,388.19 56.40
(limited consulting
partnership)
Network information technology
service; computer system integration
service; development and technical
service of computer hardware and
software; wholesale, agency purchase
and agency sale of maternal and infant
products; online operation of electronic
products and components and
Fujian Zongteng
accessories thereof, household
Network Co., 3,000.00 11,151.71 0.6863
supplies and components and
Ltd.
accessories thereof, and outdoor
goods and components and
accessories thereof; market research;
business management consulting;
enterprise marketing planning;
international freight forwarding; and
domestic trade agency service; and
foreign trade
Food business; self-operated and
agent for the import and export of
products and technologies other than
those that are uniformly organized or
approved by the state, "three forms of
OEM and compensation trades" and
processing of imported materials,
Oriental development, production, and sales of
International biological, pharmaceutical and
5,000.00 5,037.36 0.72
Entrepreneurship chemical products, international freight
Co., Ltd. forwarding agent, industrial and high-
tech industry investment, counter
trade, transit trade and service trade,
sales: clothing and apparel, shoes and
hats, knitwear, leather products,
luggage and bags, daily necessities;
the second-category medical devices
sales.
35 / 228
2021 Annual Report
Yiwu Guoshen Real estate development, sale and
Shangbo lease; real estate brokerage service,
2,000.00 2,416.65 49.00
Property Co., interior decoration service; and
Ltd. landscaping service
Communication equipment repair;
communication equipment sales;
communication equipment
manufacturing; computer and
communication equipment leasing;
information technology equipment
sales; computer software and
hardware and auxiliary equipment
wholesale; computer software and
hardware and auxiliary equipment
retail; information consulting services
(excluding licensing information
consulting services) ; socio-economic
Yiwu Digital Port consulting services; advertising design,
Technology Co., agency; advertising production; 2,550.00 2,463.91 51.00
Ltd. advertising publishing (excluding
channels such as radio, television,
newspaper publishing units); technical
services, technology development,
technology consulting, technology
exchange, technology transfer,
technology promotion; software
development; sales of chemical
product (excluding licensed chemical
products); business agent services;
general goods warehousing services
(excluding hazardous chemicals and
other items that require license
approval)
Yiwu China Real estate development, sales,
Commodities leasing (used together with valid
City Property qualification certificates), real estate 271,854.77 275,693.84 49.00
Development brokerage services, interior decoration;
Co., Ltd. landscaping
Pujiang Lvgu
Real estate development, sales,
Property Co., 37,365.79 45,928.14 49.00
leasing and property management
Ltd.
Yiwu Shanyue
Equity Equity investment; equity investment
Investment fund management, investment
2,000.00 1,689.66 39.60
Partnership consulting, and operation and
(limited management of state-owned assets
partnership)
Jebel Ali Free
Zone Trader
Lease and management of proprietary
Market
properties; and lease and management 7,350.28 6,415.00 30.00
Development
of the properties owned by others
and Operation
FZCO
Suzhou
Xiangzhong
Venture capital (limited to investment
Venture Capital
in unlisted enterprises); Equity 4,000.00 4,042.17 10.259
Partnership
investment
(Limited
Partnership)
1. Major equity investments
√Applicable □Not Applicable
36 / 228
2021 Annual Report
Percentage
Actual
in total
investment
equity in the
amount
invested
Target Main business during the Remarks
project By
reporting
the end of
period
the reporting
(RMB10,000)
period (%)
The subscribed
capital was RMB
2.45 billion, and as
Yiwu China Commodities Real estate development, sales, leasing (used together
of the end of the
City Property with valid qualification certificates), real estate 122,500.00 49.00
reporting period, the
Development Co., Ltd. brokerage services, interior decoration; landscaping
actual capital
contributed was
RMB 2.45 billion
Investment management, equity investment, asset
The subscribed
management and investment consulting (without
capital was RMB 10
Yiwu Hongyi Equity approval of the industry regulatory authorities such as
billion, and as of the
Investment Fund the finance regulatory authority, the Company shall not
15,000.00 49.98 end of the reporting
Partnership (limited be engaged in the absorption of deposits, financial
period, the actual
partnership) guarantee, agency wealth management, fundraising
capital contributed
(financing) from the public and other financial
was RMB 840 million
businesses)
Investment management, asset management (excluding
the assets subject to special state regulation such as
The subscribed
state-owned assets) (the above business scope
capital was RMB 100
Yiwu Huishang Redbud excludes financial businesses such as securities and
million, and as of the
Phase II Investment futures; and without approval of the industry regulatory
5,000.00 9.43 end of the reporting
Partnership (limited authorities such as the finance regulatory authority, the
period, the actual
partnership) Company shall not be engaged in the absorption of
capital contributed
deposits, financial guarantee, agency wealth
was RMB 100 million
management, fundraising (financing) from the public
and other financial businesses)
The subscribed
capital was AED
Jebel Ali Free Zone 50.40 million, and as
Lease and management of proprietary properties; and
Trader Market of the end of the
lease and management of the properties owned by 4,479.18 30
Development and reporting period, the
others
Operation FZCO actual capital
contributed was AED
40.50 million
The subscribed
capital was RMB 200
Suzhou Xiangzhong
million, and as of the
Venture Capital Venture capital (limited to investment in unlisted
4,000.00 8.00 end of the reporting
Partnership (Limited enterprises); Equity investment
period, the actual
Partnership)
capital contributed
was RMB 40 million
Communication equipment repair; communication
equipment sales; communication equipment
manufacturing; computer and communication
equipment leasing; information technology equipment
sales; computer software and hardware and auxiliary
equipment wholesale; computer software and hardware
The subscribed
and auxiliary equipment retail; information consulting
capital was RMB
services (excluding licensing information consulting
25.50 million, and as
services) ; socio-economic consulting services;
Yiwu Digital Port of the end of the
advertising design, agency; advertising production; 1,785.00 51.00
Technology Co., Ltd. reporting period, the
advertising publishing (excluding channels such as
actual capital
radio, television, newspaper publishing units); technical
contributed was
services, technology development, technology
RMB 25.50 million
consulting, technology exchange, technology transfer,
technology promotion; software development; sales of
chemical product (excluding licensed chemical
products); business agent services; general goods
warehousing services (excluding hazardous chemicals
and other items that require license approval)
2. Major non-equity investments
√Applicable □Not Applicable
37 / 228
2021 Annual Report
Unit: RMB10,000
Investmet
Accumulative
Project amount in
Item Progress invested
amount current
amount
period
The underground space and office building have
West Yiwu International Means of been delivered, the hotel decoration has been
133,916.00 4,625.49 100,733.97
Production Market Auxiliary Project completed, and the acception of fire fighting
equipment has not been completed
Haicheng Yiwu China Commodities
City Commerce Phase I Project— 180,000.00 The main work is under construction - 3,229.05
Hotel Project
Construction of BD warehouse and customs
seperation net has been completed, installment of
refrigeration houses of D3 and D6 was under
Phase I Project of Yiwu Integrated
624,250.00 construction, 83% of the underground space of 90,342.12 140,921.35
Free Trade Zone
south zone project of the import market has been
completed, and the contractor for the north zone
has started construction
The main work has been basically completed, 60%
of the outdoor ancillary pipelines on the south side
East Parking Building Project of Zone
60,706.00 and one the north side have been completed, and 26,875.31 35,548.60
2 of Yiwu International Trade City
90% of the decoration of the first and second floors
has been completed.
The main work for basement has been completed,
Yiwu Digital Trade Industrial Park 39,579.00 and 50% of the main work for first and second floors 6,007.08 6,007.08
has been completed
3. Financial assets measured with fair value
√Applicable □Not Applicable
Unit: RMB10,000
Gains or
Initial losses
Opening Closing Accounting Source of
Name investment during the
book value book value item funds
cost reporting
period
Jiangsu Times Knitting Held-for-trading Self-owned
0.15 - 0.15 -
Technology Co., Ltd. financial assets funds
Held-for-trading Self-owned
Wealth management products - - 2,500.00 -
financial assets funds
Oriental International Held-for-trading Self-owned
5,000.00 5,170.61 5,037.36 -75.34
Entrepreneurship Co., Ltd. financial assets funds
Other equity
Shenyin & Wanguo Securities Self-owned
55,362.54 66,225.63 64,218.80 1254.27 instruments
Co., Ltd. funds
investment
Jiaxing Zhehua Redbud Other non-
Self-owned
Investment Partnership (limited 10,000.00 12,016.76 11,562.84 561.66 current
funds
partnership) financial assets
Other non-
Beijing Redbud Huarong Equity Self-owned
10,000.00 17,557.86 13,846.69 1,774.12 current
Investment Co., Ltd. funds
financial assets
Nantong Redbud Huatong Other non-
Self-owned
Equity Investment Partnership 20,000.00 25,484.32 25,871.01 386.70 current
funds
(limited partnership) financial assets
Other non-
Beijing Wudaokou Education Self-owned
500.00 61.64 59.38 -2.25 current
Technology Co., Ltd. funds
financial assets
Other non-
Zhejiang Yiwu Tap Water Co., Self-owned
100.00 2,320.60 3,064.89 817.19 current
Ltd. funds
financial assets
Other non-
Yiwu Water Resources Self-owned
200.00 1,510.00 1,860.00 350.00 current
Development Co., Ltd. funds
financial assets
Other non-
Suzhou Yiyun Venture Capital Self-owned
4,000.00 12,351.95 2,957.37 -9,075.93 current
Center (limited partnership) funds
financial assets
Other non-
Beijing Yiyun Clean Technology Self-owned
6,091.82 360.00 288.00 -72.00 current
Venture Capital Co., Ltd. funds
financial assets
Other non-
Mashang Consumer Finance Self-owned
3,000.00 5,167.50 4,854.75 -312.75 current
Co., Ltd. funds
financial assets
38 / 228
2021 Annual Report
Other non-
Shenzhen Tiantu Investment Self-owned
11,802.00 4,812.23 4,788.21 -24.02 current
Management Co., Ltd. funds
financial assets
Other non-
Yiwu Shanfeng Investment Self-owned
2,600.00 2,600.00 2,388.19 -211.81 current
Partnership (limited partnership) funds
financial assets
Other non-
Cheng Jian Bao (Beijing) Self-owned
150.00 150.00 150.00 - current
Consulting Services Co., Ltd. funds
financial assets
Yiwu Shanyue Equity Other non-
Self-owned
Investment Partnership (limited 2,000.00 2,000.00 1,689.66 -310.34 current
funds
partnership) financial assets
Other non-
Self-owned
Yiwu Smart Transport Co., Ltd. 120.00 120.00 120.00 - current
funds
financial assets
Other non-
Fujian Zongteng Network Co., Self-owned
3,000.00 4,128.53 11,151.71 7,023.18 current
Ltd. funds
financial assets
Yiwu Shangfu Chuangzhi Other non-
Self-owned
Investment Center (limited 61,751.14 61,751.14 63,687.04 1,935.90 current
funds
partnership) financial assets
Suzhou Xiangzhong Venture Other non-
Self-owned
Capital Partnership (Limited 4,000.00 - 4,042.17 42.17 current
funds
Partnership) financial assets
Other non-
Quanzhou Huayun Tiancheng Self-owned
100.00 - 100.00 - current
E-commerce Co., Ltd. funds
financial assets
4. Specific progress of major asset restructurings during the report period
□Applicable √Not Applicable
(vi) Major sales of assets and equity
□Applicable √Not Applicable
(vii) Analysis of major subsidiaries and associates
√Applicable □Not Applicable
Unit: RMB10,000
Registere
company name Business Total assets Net assets Net profits
d capital
Yiwu Shangbo Property
Real estate development and sale 30,000.00 37,435.89 34,399.30 -463.59
Co., Ltd.
Yiwu Commodities City
Gonglian Property Co., Real estate development and sale 20,000.00 16,438.80 15,869.41 31.56
Ltd.
Yiwu China
Commodities City R&D of computer and multimedia
5,000.00 9,091.41 5,280.63 297.86
Information Technology software
Co., Ltd.
Computer software, multimedia
Zhejiang Yiwugou E-
technologies, computer network and 10,000.00 12,799.94 9,146.40 659.45
commerce Co., Ltd.
application, and wholesale & retail
Yiwu China
Commodities City R&D of computer and multimedia
15,000.00 12,150.37 12,079.28 -207.35
Payment Network software
Technology Co., Ltd.
Yiwu China
Commodities City Ordinary cargo transport and goods
10,000.00 5,757.70 4,402.28 -450.52
Logistics and warehousing
Warehousing Co., Ltd.
Yiwu China
Commodities City
Supply chain management service 10,000.00 20,518.22 5,920.57 -1,600.48
Supply Chain
Management Co., Ltd.
Yiwu China
Domestic trade and international
Commodities City Import 10,000.00 101,833.20 2,394.38 -2,708.45
trade
and Export Co., Ltd.
39 / 228
2021 Annual Report
Yiwu China Enterprise free capital investment,
Commodities City asset management, investment
400,000.00 261,215.67 248,251.50 14,068.48
Financial Holdings Co., consulting services, investment
Ltd. management services
Development of tourism resources
and tourism projects; domestic
Yiwu China
tourism business, inbound tourism
Commodities City
business; tourism information 10,000.00 13,975.64 8,673.59 -338.25
Tourism Development
consulting; and wholesale of fruits,
Co., Ltd.
vegetables, aquatic products and
primary edible agricultural products
Yiwu China
Commodities City Overseas industry investment, and
Overseas Investment construction and operation of 10,000.00 25,073.63 8,461.32 -659.79
and Development Co., overseas shopping malls
Ltd.
Industry investment, investment
management, property service,
operation and management of
Yiwu Shanglv
parking garages, business
Investment Development 80,000.00 142,761.41 81,538.15 3,543.88
marketing planning, operation and
Co., Ltd.
management consulting, and
operation and management of
shopping malls
Yiwu China
Commodities City
Real estate development and sale 500,000.00 1,535,632.15 570,679.62 14,621.40
Property Development
Co., Ltd.
Pujiang Lvgu Property
Real estate development and sale 70,000.00 123,263.12 91,806.52 16,246.73
Co., Ltd.
Industry investment, investment
Zhejiang Huajie
management, investment consulting,
Investment and 50,000.00 8,315.07 8,217.15 -337.66
business information consulting, and
Development Co., Ltd.
asset management services
Internet data services; professional
design services; intelligent control
Yiwu China system integration; computer
Commodities City Big information technology 10,000.00 27,354.40 8,610.84 2,747.00
Data Co., Ltd. development, technical consulting,
technical services, technology
transfer, etc.
Industry investment, investment
management, property service,
market development and operation,
Haicheng Yiwu China
market auxiliary service, real estate
Commodities City
development, sale and lease, 60,000.00 224,577.91 -85,986.09 -14,685.04
Investment Development
design, production and agency of
Co., Ltd.
domestic advertising, and operation
and management of parking
garages
Property management; low-
temperature storage; general goods
Yiwu Comprehensive warehousing services (excluding
Bonded Zone Operation hazardous chemicals and other
10,000.00 4,250.84 545.15 -1,097.12
and Management Co., items that require license approval);
Ltd. information consulting services;
warehousing equipment rental
services, etc.
Container handling; land transport-
BETTER SILK ROAD related services; and land transport
RF27,000 85.35 -118.98 -88.06
RWANDA Ltd supporting activities-related
business
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2021 Annual Report
Hangzhou Binjiang
Shangbo Property Real estate development and sale 5,000.00 11,071.23 7,807.93 3,566.03
Development Co., Ltd.
Yiwu Rongshang
Real estate development and sale 10,204.08 572,489.20 44,364.80 39,544.26
Property Co., Ltd.
Yiwu Huishang Micro-
Micro loans 54,000.00 36,356.87 36,010.74 1,002.29
finance Co., Ltd.
Zhejiang Chouzhou Financial lease service, and transfer
100,000.00 1,434,774.71 163,854.17 20,984.32
Financial Lease Co., Ltd. of financial lease assets
Yiwu Huishang Redbud
Equity investment and related
Equity Investment Co., 49,000.00 77,785.77 68,135.31 10,113.63
consulting services
Ltd.
Yiwu Huishang Redbud
Phase II Investment Investment management and asset
106,100.00 100,342.94 100,342.94 536.46
Partnership (limited management
partnership)
Yiwu Hongyi Equity
Investment management, equity
Investment Fund
investment, asset management and 200,100.00 177,701.00 177,663.28 9,749.03
Partnership (limited
investment consulting
partnership)
Jebel Ali Free Zone Lease and management of
Trader Market proprietary properties; and lease AED
104,546.72 20,901.34 -1,384.10
Development and and management of the properties 16,800.00
Operation FZCO owned by others
Real estate development, sale and
Yiwu Guoshen Shangbo lease; real estate brokerage service,
4,081.63 1,336,782.47 4,931.94 7,409.91
Property Co., Ltd. interior decoration service; and
landscaping service
Real estate development and sale;
lease of proprietary houses; real
Yiwu Chuangcheng
estate brokerage service; interior 8,333.33 391,010.26 36,693.05 31,495.95
Property Co., Ltd.
decoration service; and landscaping
service
(viii) Structured entities controlled by the Company
□Applicable √Not Applicable
VI. Discussion and Analysis of the Company's Future Development
(i) Industry Pattern and Trends
√Applicable □Not Applicable
1. National policies for the industry
(1) National policies
In December 2021, the General Office of the State Council issued the "Opinions on Doing a
Good Job in Cross-Cycle Adjustment and Further Stabilizing Foreign Trade". From strengthening
fiscal, taxation and financial policy support, further encouraging the development of new foreign
trade formats, alleviating the pressure on foreign trade supply chains such as international logistics,
and supporting key industries and key enterprises, 15 policy measures have been proposed in
other aspects to ensure orders, stabilize expectations, and promote the steady development of
foreign trade. In the same month, the General Office of the State Council issued the "Opinions on
Promoting the Integrated Development of Domestic and Foreign Trade", making arrangements for
promoting the integration of domestic and foreign trade, forming a strong domestic market,
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2021 Annual Report
smoothing the domestic and international dual circulation, and promoting the realization of higher-
level opening up and higher-quality development.
(2) Local policies
The 2022 Yiwu Municipal Government Work Report puts "market upgrading action" at the top
of the ten major actions implemented by the city, emphasizing that "the market is the root and soul
of Yiwu, and the prosperity of the market would make Yiwu prosperous. It should always be insisted
that the market should be put at the center, the city should be built around the market, and
industries should be nurtured around the market, so as to promote the continued prosperity of the
market. "
In January 2022, Yiwu held the 15th session of Party Congress. The report of the session
pointed out, "The overall requirement for the next five years is to focus on the overall goal of
building a high-quality and high-level world capital of small commodities, and to compete on the
three new tracks of 'digitalization, dual circulation, and common wealth'".
2. New trends of international trade
(1) New trends of international trade
The trend of "multiple varieties, multiple batches, and small batch size" in international trade
has gradually formed. This is due to the fluctuation of upstream raw material prices and the disorder
of the global supply chain. On the other hand, changes in form of downstream retail and disrtibution,
development and penetration of e-commerce and changes in consumer habits have also
contributed to the further fragmentation of international trade.
Fragmented international trade order flow requires matching fragmented contract performance
capabilities, which brings opportunities and challenges to global supply chains and corporate
fulfillment capabilities. At the same time, the rise of emerging traffic-driven business flow models
represented by independent websites, KOLs and live e-commerce has further increased the
demand for fragmented contract performance capabilities. The core of the long-term growth of
emerging traffic forms still depends on the contract performance side to reconstruct new
consumption by systematic operation, supply chain optimization, and reverse empowerment.
(2) Yiwu in the context of new trends
Yiwu is a key node of China's new foreign trade form, an international trade highland, a
demonstration area for digital dual circulation and common prosperity, and has core resources for
cross-border trade development. In the context of the new trends of international trade
fragmentation and the entry into force of RCEP, the Company promoted the upgrading of the Yiwu
market from the "collection of merchants" model to the mode of "collection of merchants and goods",
and led Yiwu market traders to seize the historic opportunity of the RCEP agreement taking effect,
and enhance the influence of Yiwu as a "world commodity land". The entry into force of the RCEP
agreement is beneficial to Yiwu, which takes the advantages of a large number of foreign buyers, a
complete range of market commodities, and a smooth internal and external logistics hub, to better
meet the small batch and multi-frequency trade needs of foreign buyers, and uses export to drive
transhipment by "consolidation and re-export of maket purchased goods + bonded imported goods ",
to further reduces the cost of enterprise logistics and customs declaration, promotes the integrated
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2021 Annual Report
development of "import, export and transhipment" of foreign trade, and help Yiwu to build a
domestic and international dual-circulation strategic node and a world commodity distribution center.
(ii) Development strategies of the Company
√Applicable □Not Applicable
At the Fifth China-Africa Entrepreneurs Conference, General Secretary Xi Jinping called Yiwu
the world "Capital of Small Commodities", pointing out the direction for the development of the
market and the Company. With the historical mission of building the world "Capital of Small
Commodities" with high quality and high level, the Company has put forward the development
strategy of "taking the market as the main business, taking the digit as the link, and taking platform
as the support to build a comprehensive service provider for international trade", to build a real
economy ecology with the market as the core and a digital economy ecology with the chinagoods
platform as the core. The Company connects the Company's market, logistics, trade, finance and
other sectors with digital links to form a full-scene, full-link, and diversified service system, to reduce
the cost of small commodity trade characterized by "multiple varieties, multiple batches, and small
batch size". and improve convenience level of trade. The Company drives the market trade system
of "online-offline integration, import-export linkage, cross-border communication, and co-prosperity
of domestic trade and foreign trade" to develop into depth, to serve dual circulation of domestic
circulation and international circulation in the historical context of common prosperity.
(iii) Business plan
√Applicable □Not Applicable
2022 is the 40th anniversary of the construction of Yiwu market and also the 44th anniversary
of China's reform and opening-up. From "exchanging chicken feather for sugar" by wandering
around streets to world "Capital of Small Commodities", in lack of own resources, Yiwu has
connected itself to a big world with small commodities, driving surrounding industries' prosperous
development, leading entrepreneurs to commom prosperity, and leaving a distinct mark on the
milestone of China's reform and opening-up. Yiwu has grown up with the support of China's reform
and opening-up and in the mode of "globalization". In continuous reform and iteration, "taste of
truth" and Yiwu's development experience, together with Yiwu' unique business gene, have
sedimented, fermented and developed.
In 2022, the Company will continue to focus on the strategic goal of building the world "Capital
of Small Commodities" with high quality to speed up the market's innovative development and the
Company's transformation and upgrading. Facing the opportunities and challenges brought by the
fragmentation trend of international trade to the contract performance side, as well as the
opportunity of the entry into force of RCEP, the Company will combine its own resources and the
characteristics of the market procurement trade mode to focus on opening up the whole link of the
supply chain for export, invest in the construction of RCEP-related links, grab the increment,
promote the market's development for domestic and foreign trades in parallel, and enhance the
Company's core competitiveness and profitability.
Business plan goals of 2022: based on 2019 performance, operating revenue growth rate is not
less than 120%; earnings per share is not less than RMB 0.22; the above two indicators are not
less than 75% of those of the Company's benchmarking enterprise or average of the industry; main
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2021 Annual Report
business income accounts for not less than 90% of operating income; GMV of chinagoods platform,
which is the innovative business of the Company, is not less than RMB 24 billion.
1. Market operation
The Company will start the construction of the market in Zone VI of the International Trade City
to create a new generation of market leading the global trade fashion. The Company will iteratively
upgrade the International Trade City in terms of market form, business space, hardware facilities,
and service value adding, and build the International Trade City into a new trading model leading
area, a new industry cultivation window, a new trade service gathering area, and a new business
social habitat. , making it a new driver for Yiwu market development and a new benchmark for
market form.
The Company will speed up the construction of the Zone II east market, focus on new digital
infrastructure such as AI assistants, smart transportation, green and low-carbon, create a new
digital market scenario integrating digital trade, service and management, and provides full life cycle
services for trade entities. The Zone II east market is scheduled to start trial operation in October
2022.
2. Chinagoods platform
In 2022, the Company will focus on "market procurement 2.0" and take digital reform as an
incision to realize data sharing and system connection between the chinagoods platform and the
networked information platform. The Company will design various digital service products, and
realize the integration of the four orders of "purchase order, delivery order, customs declaration and
foreign exchange settlement order" with "one order to the end", enhance the comprehensive
operation ability and service level of the platform, and strive to build a comprehensive application
for trade with business flow as the core, logistics as the basis, information flow as the guider, and
capital flow as the support, to empower free trade scenarios for small commodities. By the end of
2022, the Company will strive to build a full-link, full-scenario and digitalized market trade
ecosystem on the chinagoods platform.
The construction of basic functions of chinagoods platform will be enhanced. The rating of
market taders will be improved, 2000 benchmarking traders will be cultured and 10000 core traders
will be incubated. A customer service system will be built, along with an integrity guarantee system,
and online and offline resources will both be used to promote the matching of procurement
demands. The Company will create an all-media matrix, establish a value-added service system
such as advertising, publicity and promotion on the platform for for shops, and improve the market-
oriented operation capability of the platform.
The construction of digital tade platform will be sped up. The Company will open up data
channels and improve online service functions in various links such as R&D and production, display
and transaction, warehousing and logistics, customs inspection and foreign exchange tax, payment
and settlement, and supply chain finance. As of the end of the reporting period, the Company held
the licenses for factoring, credit investigation, small loans, and foreign currency exchange, and the
delivery procedures for the payment license was also in progress, which would form a closed loop
of payment flow and information flow. Relying on the real trade background and the Internet
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2021 Annual Report
technology of the chinagoods platform, the Company will build a circular and ecological multi-win
growth pole centered on factoring business, provide comprehensive Internet supply chain financial
solutions for micro, small and medium-sized enterprises in sub-sectors, and promote the intelligent
digitization of production relations and production factors in all aspects of international trade.
3. Supply chain system
The goods collection mode of "goods collection warehouse in industrial base - main logistic line
- Yiwu warehouse" will be built. The Company plans to build an international digital logistics market
and the construction of phase I project has started.
The Company will promote the construction of hub facilities for foreign trade of small
commodities. The Company will continue to invest in offshore exhibition and trade platforms such
as oversea warehouse and oversea branch market, innovate operation mode and drive the growth
of foreign trade. The Company will speed up the construction of oversea warehouses owned by
Yiwu and warehouses in regions such as Guangxi and Yunnan ajoining RCER member states,
strive to build 40 new oversea warehouses, and accumulate over 160 in 2022. In 2022, the
Company will strive to cover 15 RCEP member states with oversea warehouse digital trade hub,
improve the RECP regional trade hub network, and promote high-quality development of two-way
trade.
4. Import-export trade
The Company will build a trade ecology of "All good commodities". The Company will upgrade
the business models of ICMall and Yiwu Selection, integrate the product advantages of "Imported
good commodities+ Trendy domestic commodities", invest in offline retail stores, and launch the
"All good commodities" chain management platform to create an online-offline O2O trade ecology.
The Company will integrate into the RCEP trade ecology, integrate the full-link resources of
import trade, gather imported brands, commodities, and import trade ecological service enterprises,
and provide a free exhibition and trade platform for global commodities. In the future, Yiwu China
Imported Commodities City will set up more than 100 national pavilions and special product
exhibition halls for imported commodities including RCEP member states, and deploy more than
10,000 domestic distribution outlets for imported commodities to share and expand development
opportunities for import.
The Company will actively explore offshore trade relying on market. Through the layout of
overseas warehouses, overseas parks and other overseas station nodes, the Company will actively
explore the development of offshore trade, to organize trade service providers in Yiwu, supply or
process commodities in RCEP member states, and directly sell them to other foreign customers in
regions such as Europe and the United States, creating a "world commodity land".
5. Organization and mechanism support system
The Company will promote the improvement of enterprise management effectiveness and
efficiency, and effectively promote the modernization of the governance system and governance
capacity. The Company will promote the reform of mixed ownership, focus on key areas and key
links of market transformation, and speed up the introduction of leading enterprises in the industry
chain in logistics, warehousing, supply chain finance, cross-border settlement and other aspects as
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2021 Annual Report
strategic investors to stimulate business innovation vitality and improve the ability and level of
empowering the market. The Company will improve the authorization, assessment, and incentive
mechanism, adhere to the transformation from operational control to strategic control, revise and
improve the authorization list, implement classified and hierarchical authorizations for branches and
subsidiaries, and give subordinate companies more operational autonomy. The Company will
strengthen the assessment of operating efficiency, deeply implement the classification assessment
for operating company and management company, increase the weight of profit and revenue
indicators of operating company, and explore customized assessment of innovative businesses.
The Company will strengthen the application of assessment results, prudently implement the
excess profit sharing plan, and continue to implement medium- and long-term incentives such as
share option (or share) incentives and co-investment to further enhance the driving force for
business innovation and development. The Company will strengthen the construction of human
resources, form a benign cadre echelon, increase the market-oriented recruitment of mid-to-high-
end professional talents for innovative businesses, innovate employee training and career
development mechanisms, strengthen the construction of corporate culture, and provide strong
support in talents for market innovation and development and enterprise transformation and
improvement.
(iv) Potential risks
√Applicable □Not Applicable
1. Market operation risk
Large-sized shopping malls, hypermarkets, warehouse stores and e-commerce platforms are
strong competitors in the commodities trading market. Large-sized shopping malls offer products of
reliable quality and well-known brands; hypermarkets or warehouse stores supply diversified
products at low prices; e-commerce platforms provide new trading means and facilitate consumers.
Purchasers or consumers may also choose to make procurement or consumption via e-commerce
platforms for convenience. Therefore, the Company may compete with other forms of business. In
addition, affected by the rising specialized market, robust development of the industry market and
rapid development of the central and western regions, the Company may also face competition
from other similar specialized markets.
2. Risk of insufficient reserve of talents
With the acceleration of market transformation and the expansion of the Company’s business,
and with the expansion of experienced international trade, warehousing and logistics, supply chain,
overseas development, information data, industrial investment, and business operations, the
Company may face the risk of insufficient reserves of professional talents and compound talents.
3. The risk of increasing external uncertainty
In the context of the normalization of epidemic prevention and control, the development of
global market trade is more complicated and severer than before. The global spread of the
epidemic and reverse globalization are parallel, and the downward pressure on the world economy
has increased. New technologies have accelerated the birth of new opportunities, and new trade
models and new business formats have emerged. In the post-epidemic era, uncertainty will become
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2021 Annual Report
the greatest certainty for the development of market trade, and the global epidemic will continue for
a long time, showing a repeated see-saw state. Epidemic prevention and control, international
politics, and global economy are intertwined. Uncertainty, instability, and restructuring of
international trade will become the new normal. The Company may face the risk of increased
external uncertainty.
(v) Others
□Applicable √Not Applicable
VII. The Company failed to disclose and explain the reasons in accordance with the
standards due to special reasons such as non-applicable standards or state secrets and
trade secrets.
□Applicable √Not Applicable
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2021 Annual Report
Section IV. Corporate Governance
I. Description of corporate governance
√Applicable □Not Applicable
During the report period, in strict accordance with the Company Law, Securities Law,
Guidelines for Corporate Governance of Listed Companies and the relevant provisions of the China
Securities Regulatory Commission and other laws and regulations, the Company continuously
establishes and improves relevant systems, strives to improve the corporate governance structure,
standardize operations, and operate in compliance with laws. There is no difference between the
corporate governance structure of the Company and the regulatory documents on the governance
of listed companies issued by the China Securities Regulatory Commission.
(I) Shareholders and general meetings of shareholders
The Company convenes and holds a general meeting of shareholders in strict accordance with
the Rules of Procedure for the General Meeting of Shareholders to ensure that all shareholders of
the Company fully exercise their rights, especially those of small and medium shareholders. In
peacetime, we earnestly receive visits and calls from shareholders to ensure the shareholders’
rights to know, participate and vote on major company issues, so that shareholders can truly enjoy
equal rights.
(II) Controlling shareholder and the listed company
The controlling shareholder of the Company exercised the rights of investors through the
general meeting of shareholders in accordance with the law, and did not directly or indirectly
intervene in the Company's decision-making and business activities beyond the general meeting of
shareholders. The Company has achieved the five independences of personnel, assets, finances,
institutions and businesses. The Company's board of directors, board of supervisors and internal
institutions can operate independently. The controlling shareholder of the Company can strictly
abide by the promise made to the Company to avoid horizontal competition. When the Company
has connected transactions with its controlling shareholder, it strictly follows the Related
Transaction Decision and Implementation System to ensure that the connected transactions are fair
and just.
(III) Directors and Board of Directors
The Company selects directors in strict accordance with the procedures stipulated in the
Articles of Association; convenes and holds board meetings in strict accordance with the Rules of
Procedures for the Board of Directors. All directors of the Company can seriously attend the board
of directors and shareholders meetings, actively participate in training, and earnestly perform their
duties as directors. Directors can earnestly perform the duties and obligations entrusted by laws,
regulations and the Company's Articles of Association, and express independent opinions and
suggestions on important company matters, so as to effectively protect the legitimate rights and
interests of shareholders. Clarified the annual report review procedures of the Audit Committee of
the Board of Directors, and effectively played the role of each special committees.
(IV) Supervisors and Board of Supervisors
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During the reporting period, the Company held three meetings of Board of Supervisors, and the
convening and holding procedures of each meeting complied with the provisions of the Company
Law, the Articles of Association and the Rules of Procedure of the Board of Supervisors. Company
supervisors can earnestly perform their duties, supervise major company matters, supervise the
legality and compliance of the Company's directors and senior managers in performing their duties,
safeguarding the legitimate rights and interests of the Company and shareholders.
(V) Information disclosure and investor relationship management
According to the Information Disclosure Management System, the Company discloses relevant
information truthfully, accurately, completely and in a timely manner. Investors can learn about the
Company through media promotion, telephone consultation, and company website. In addition to
completing the mandatory periodic reports and temporary announcements disclosed by laws and
regulations, the Company also actively carry out compliance and voluntary information disclosure,
so that investors can have a continuous understanding of the operations that they care about, and
truly protect the shareholders' right to know.
Whether there are major differences between the corporate governance and the requirements of
the law, administrative laws and regulations, and relevant regulations of the China Securities
Regulatory Commission; if there are major differences, the reasons should be explained.
□Applicable √Not Applicable
II. Specific measures for ensuring the independency of the Company's controlling
shareholder and actual controller in company assets, personnel, finance, organization,
business and others, and solutions taken after they influenced the inpendency of the
Company, the progress thereof and follow-up work plan
□Applicable √Not Applicable
Cases in which the Company's controlling shareholder, actual controller and other units controlled
by them conduct business as same as or similar to that of the Company, the influence on the
Company due to major changes in horizontal competitors or horizontal competition, measures taken,
progress thereof and follow-up solution plan
□Applicable √Not Applicable
III. General meeting of shareholders
Designated
Session of website on which Date of disclosure Resolution of
Date
meeting the resolution is of the resolution the meeting
published
The first See the
provisional resolution
April 9, 2021 www.sse.com.cn April 10, 2021
shareholders notice for
meeting in 2021 details
The second See the
provisional resolution
April 19, 2021 www.sse.com.cn April 20, 2021
shareholders notice for
meeting in 2021 details
2020 Annual See the
General resolution
May 25, 2021 www.sse.com.cn May 26, 2021
Meeting of notice for
Shareholders details
The third See the
November 4, 2021 www.sse.com.cn November 5, 2021
provisional resolution
49 / 228
2021 Annual Report
shareholders notice for
meeting in 2021 details
The preferred shareholders whose voting rights had been restituted requested to an extraordinary
general meeting of shareholders
□Applicable √Not Applicable
Statement on shareholders’ meetings
√Applicable □Not Applicable
1. The 2021 First Provisional General Meeting of Shareholders deliberated and adopted the
“Proposal on By-election of Independent Directors”.
2. The 2021 Second Provisional General Meeting of Shareholders deliberated and adopted the
“Proposal on Capital Increase of Participating Companies and Related Transactions”.
3. The 2020 Annual General Meeting of Shareholders deliberated and adopted “2020 Board of
Directors Work Report”, “2020 Board of Supervisors Work Report”, “2020 Annual Report and
Summary”, “2020 Final Accounts Report”, “2021 Financial Budget Report”, and “2020 Profit
Distribution Plan”, “Proposal on Renewing the Appointment of Accounting Firm”, “Proposal on the
Proposed Issuance of Various Debt Financing Instruments in the Coming 12 Months”.
4. The 2021 Third Provisional General Meeting of Shareholders reviewed and approved the
Proposal on the Redemption of Some Directors' Remuneration in 2020 and the Proposal on the By-
election of Supervisors.
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2021 Annual Report
IV. Directors, supervisors and senior management
(i) Changes in shareholding and remuneration of current and resigned directors, supervisors and senior executives during the reporting period
√Applicable □Not Applicable
Unit: 10,000 Shares
Total pre-tax
Change
Number of Number remuneration Remuneration
in
shares held of shares Reasons received from the received from
Position Start date End date shares
Name Sex Age at the held at for Company during related parties
(Note) of tenure of tenure held
beginning the end of change the reporting of the
during
of the year the year period (RMB Company
the year
10,000)
ZHAO Board September Equity
Male 55 4 34 30 49.20 No
Wenge chairman 27, 2018 incentive
Vice Chairman
WANG March 8, Equity
and General Male 50 0 30 30 49.20 No
Dong 2019 incentive
Manager
WANG August 27,
Director Male 58 0 0 0 Yes
Chunming 2019
LI May 12,
Director Male 50 0 0 0 Yes
Chengqun 2014
Director,
December Equity
XU Hang Secretary of Male 48 0 30 30 41.82 No
12, 2017 incentive
the Board
December
GU Zhixu Director Male 34 0 0 0 No
10, 2020
MA Independent August 27,
Male 54 0 0 7.2 No
Shuzhong director 2019
HONG Independent May 22,
Male 56 0 0 7.2 No
Jianqiao director 2020
JIN Independent May 22, April 9,
Male 46 0 0 0 No
Yanghua director 2020 2021
LUO Independent April 9,
Male 54 0 0 4.8 No
Jinming director 2021
51 / 228
2021 Annual Report
December
JIN Xiaojia Supervisor Male 34 0 0 0 Yes
16, 2016
WU March 10,
Supervisor Female 31 0 0 0 Yes
Menghua 2022
WANG August 27, February
Supervisor Female 42 0 0 0 Yes
Gaiying 2019 22, 2022
WANG October
Supervisor Male 50 0 0 0 Yes
Jinjian 26, 2020
Employee December
FANG Min Male 37 0 0 20.97 No
supervisor 8, 2020
JIN Employee December
Male 44 0 0 17.01 No
Yongsheng supervisor 8, 2020
JIN Vice general September Equity
Male 52 0 30 30 79.86 No
Gengzhong manager 18, 2020 incentive
Vice general July 17, Equity
WU Xiubin Male 51 0 30 30 41.82 No
manager 2020 incentive
ZHANG Vice general July 7, Equity
Male 54 0 30 30 41.82 No
Qizhen manager 2017 incentive
GONG Vice general September Equity
Male 42 0 20 20 37.27 No
Chenghao manager 29, 2021 incentive
SHOU Vice general November
Male 48 0 0 0 No
Shengdi manager 4, 2021
Vice general November
ZHU Yi Male 42 0 0 0 No
manager 4, 2021
YANG Vice general September Equity
Male 39 0 20 20 34.74 No
Yang manager 29, 2021 incentive
ZHAO Financial May 12, Equity
Female 49 5.01 35.01 30 41.82 No
Difang Manager 2014 incentive
Septemb
Vice general September Equity
WEI Gang Male 35 er 29, 0 30 30 31.37 No
manager 19, 2016 incentive
2021
ZHOU Vice general July 3, Septemb
Male 46 0 0 151.88 No
Long manager 2020 er 29,
52 / 228
2021 Annual Report
2021
Total / / / / / 9.01 289.01 280 / 657.98 /
Name Main working experience
ZHAO He used to be Vice Chairman and General Manager of the Company, and is currently Secretary of the Party Committee and Chairman of the
Wenge Company.
WANG He used to be a member and vice director of the Party Committee of Yiwu SASAO, and vice director (concurrently) of the management
Dong committee of the State-owned Assets Operation Center, and is currently the vice secretary of the Company’s party committee, vice chairman
and general manager.
WANG He used to be Chairman of Yiwu Water Affairs Construction Group Co., Ltd., and is currently Secretary of the Party Committee and Chairman
Chunming of Yiwu Market Development Group Co., Ltd. and Director of the Company.
LI He is currently Vice Secretary of the Party Committee, Vice Chairman, General Manager and Director of Yiwu Market Development Group Co.,
Chengqun Ltd.
XU Hang He used to be general manager of the Company's securities legal affairs department, and representative of securities affairs of the Company's,
and is currently a director and the secretary of the board of the Company.
GU Zhixu He used to be the project manager of Business Division 4 of Tianjian Accounting Firm, the business manager of Investment Division I of
Zhejiang Financial Holding Investment Management Co., Ltd., the senior financial manager of the Planning and Finance Department of
Zhejiang Financial Holding Co., Ltd., and the senior financial manager of the Planning and Finance Department of Zhejiang Financial
Development Co., Ltd., and is currently assistant to the director of the Comprehensive Office of Zhejiang Finance Development Co., Ltd. and
director of the Company.
MA He's now a professor of Zhejiang University, and an independent director of the Company and Silan Microelectronics Co., Ltd.
Shuzhong
HONG He is currently the dean of the Accounting Department of the School of Management of Fudan University, and concurrently serves as an
Jianqiao independent director of the Company, Laiyifen, Jinjiang Corporation, China Tianying and Boqian New Materials.
LUO He is currently the Secretary of the Party Committee of the Accounting School of Zhejiang Gongshang University, and concurrently serves as
Jinming an independent director of the Company, Hangxiao Steel Structure, and Riyue Co., Ltd.
JIN Xiaojia He used to be the accounting director of the Finance Department of Yiwu Communications Investment and Construction Group, and is
currently a supervisor and chairman of the Board of Supervisors of the Company.
WU She used to be a supervisor of Yiwu Market Development Group Co., Ltd., concurrently a supervisor of Yiwu State-owned Capital Operation
Menghua Co., Ltd. and a supervisor of Yiwu Industrial Investment Development Group Co., Ltd., and currently serves as a supervisor of the Company.
WANG She used to be the project manager of the audit department of Zhejiang New Century Certified Public Accountants, and is currently a full-time
Gaiying supervisor of the Supervisor Service Center of the State-owned Assets Supervision and Administration Office of Yiwu City.
WANG He used to be the vice general manager of Yiwu China Commodity City Property Development Co., Ltd., and is currently the general manager
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2021 Annual Report
Jinjian and company supervisor of Yiwu China Commodity City Property Development Co., Ltd.
FANG Min He used to be a business commissioner of the Company’s human resources department (party construction office), and currently serves as
vice general manager of the Company’s human resources department (party construction office) and employee supervisor of the Company.
JIN He used to be the head of internal control of the Company's supervision and audit department, the manager of the financial department of the
Yongsheng Company's Yawu Expo Hotel, and the manager of the financial department of the Company's Ocean Hotel. He is currently the head of internal
audit of the Company's legal audit department and an employee supervisor of the Company.
JIN He used to be the Vice General Manager of the Party Leadership Group of Zhejiang Huajie Investment Development Co., Ltd., and the Vice
Gengzhong General Manager of Europe Huajie Development Co., Ltd. He is currently a member of the Company partty committee and the vice general
manager of the Company.
WU Xiubin He used to be a member of the party committee and vice general manager of Yiwu Construction Investment Group Co., Ltd., and is currently a
member of the party committee and vice general manager of the Company.
ZHANG He used to be the general manager and marketing director of the Company's marketing department, and is currently a member of the party
Qizhen committee and vice general manager of the Company.
GONG He used to be the general manager of Yiwu China Commodity City Information Technology Co., Ltd., and the general manager of Yiwu China
Chenghao Commodity City Supply Chain Management Co., Ltd., and is currently a member of the party committee and vice general manager of the
Company.
SHOU He used to be a member of the Party Committee of Zhejiang Yiwu Municipal Bureau of Foreign Trade and Economic Cooperation, a member
Shengdi of the Party Committee and Vice Director of Zhejiang Yiwu City Commerce Bureau, and is currently a member of the party committee and vice
general manager of the Company.
ZHU Yi He used to be the Vice Director of the Office of the Comprehensive Deepening Reform Committee of the Yiwu Municipal Committee of the
Communist Party of China, and is currently a member of the party committee and vice general manager of the Company.
YANG He used to be the general manager of Zhejiang Yiwu China Commodity City Imported Commodity Market Branch, the general manager of
Yang Zhejiang Yiwu China Commodity City Import and Export Co., Ltd., and is currently a vice general manager of the Company.
ZHAO He used to be the general manager of the Company's financial department and is currently the head in finance of the Company.
Difang
WEI Gang He used to be a vice general manager of the Company, and resigned from vice general manager of the Company on September 29, 2021, and
have not held other positions in the Company since then.
ZHOU He used to be a vice general manager of the Company, and resigned from vice general manager of the Company on September 29, 2021, and
Long have not held other positions in the Company since then.
Statement on other matters
√Applicable □Not Applicable
54 / 228
2021 Annual Report
1. The remuneration received by some of the Company's directors and executives is the pre-paid remuneration for 2021, and the actual remuneration will be
determined after the completion of relevant assessments and the implementation of relevant procedures.
2. Fang Min, and Jin Yongsheng are the employee representative supervisors, and the remuneration listed in the table is the total remuneration received
after the annual appraisal based on the position in the Company.
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2021 Annual Report
(ii) Appointments of current and resigned directors, supervisors and senior executives
during the reporting period
1. Position in shareholder units
√Applicable □Not Applicable
Name of Positions held in Start date of Term end
Name of shareholder unit
incumbent shareholder units tenure date
ZHAO Board Chairman,
CCCH 2019
Wenge general manager
WANG
CCCH Director 2021
Dong
WANG
MDG Board Chairman 2019
Chunming
Vice Chairman
LI
MDG and General 2014
Chengqun
Manager
Zhejiang Provincial Finance Comprehensive
GU Zhixu 2021
Development Ltd. Office
Yiwu State-owned Assets and
JIN Assigned full-time
State-owned Enterprise
Xiaojia supervisor
Development Service Center
Yiwu State-owned Assets and
WANG Assigned full-time
State-owned Enterprise
Gaiying supervisor
Development Service Center
Yiwu State-owned Assets and
WU Assigned full-time
State-owned Enterprise
Menghua supervisor
Development Service Center
Description of the position of the shareholder unit None
2. Position in other units
√Applicable □Not Applicable
Term
Name of Positions held in Start date
Names of other units end
incumbent other units of tenure
date
Yiwu China Commodities City Investment March
XU Hang Director
Management Co., Ltd. 2017
MA Independent
Hangzhou Silan Microelectronics Co., Ltd. July 2016
Shuzhong director
HONG Independent
Shanghai Laiyifen Co., Ltd.
Jianqiao director
HONG Shanghai Jinjiang International Industrial Independent
Jianqiao Investment Co., Ltd. director
HONG Independent
China Tianying Co., Ltd.
Jianqiao director
HONG Independent
Jiangsu Boqian New Material Co., Ltd.
Jianqiao director
Chairman,
WANG Yiwu China Commodities City Property January
general
Jinjian Development Co., Ltd. 2019
manager
Description of employment in other units None
(iii) Remuneration of directors, supervisors and senior management personnel
√Applicable □Not Applicable
Decision-making procedures The remuneration of the Company’s remunerated directors,
for the remuneration of supervisors and senior executives shall be reviewed by the
directors, supervisors and remuneration and appraisal committee of the Company’s board
56 / 228
2021 Annual Report
senior executives of directors and submitted to the board of directors for review and
approval. The remuneration of directors and supervisors shall
also be submitted to the general meeting of shareholders for
review and approval.
The remuneration of independent directors is determined in
accordance with the Independent Director Allowance System.
The Independent Director Allowance System is deliberated and
The basis for determining the formulated by the board of directors and approved by the general
remuneration of directors, meeting shareholders. The remuneration of the Company’s
supervisors and senior directors, supervisors and senior management shall be reviewed
managers and determined by the Board of Directors’ Compensation and
Appraisal Committee in conjunction with the assessment opinions
and results of the state-owned regulatory authority, and
submitted to the board of directors for deliberation.
Actual payment of
The relevant assessment for 2021 has not yet been completed,
remuneration for directors,
and the actual payment will be determined after the assessment
supervisors and senior
is completed and the relevant procedures are performed.
management
The total remuneration actually
The actual payment of remuneration will be determined after
received by all directors,
completing the assessment and performing the relevant
supervisors and senior
procedures. The salary currently paid is the pre-paid salary for
management at the end of the
2021, totaling RMB 6,579,800 before tax.
reporting period
(iv) Changes in directors, supervisors and senior officers of the Company
√Applicable □Not Applicable
Name Title Change Reasons for change
LUO Jinming Independent director Election Election
Due to job adjustments, he
JIN Yanghua Independent director Leaving office
resigned from independent director.
GONG
Vice general manager Hiring Hired by the Board of Directors
Chenghao
SHOU
Vice general manager Hiring Hired by the Board of Directors
Shengdi
ZHU Yi Vice general manager Hiring Hired by the Board of Directors
YANG Yang Vice general manager Hiring Hired by the Board of Directors
Due to job adjustments, he
WEI Gang Vice general manager Dismissed resigned from vice general
manager.
Due to job adjustments, he
ZHOU Long Vice general manager Dismissed resigned from vice general
manager.
(v) Explanation of punishments by securities regulatory agencies in the past three years
√Applicable □Not Applicable
On January 29, 2019, the Company received the China Securities Regulatory Commission
Zhejiang Regulatory Bureau's Decision on Measures to Issue Warning Letters to Zhejiang China
Commodity City Group Co., Ltd. and related personnel (Administrative Regulatory Measures
57 / 228
2021 Annual Report
Decision [2019 ] No. 8). For the specific content of the relevant decision, please refer to the
Announcement of the YIWU CCC on Receiving the Warning Letter from Zhejiang Securities
Regulatory Bureau issued by the Company on January 30, 2019 (Announcement No.: L2019-007).
(vi) Others
□Applicable √Not Applicable
V. Description of the meetings of the Board of Directors held during the reporting period
Session of meeting Date Resolution of the meeting
28th meeting of 8th January 20, 9 directors should be present, 9 directors actually presented,
Board of Directors 2021 and all the resolutions of the meeting were passed
29th meeting of 8th March 24, See the Company's announcement on March 25, 2021 for
Board of Directors 2021 details
30th meeting of 8th March 30, 9 directors should be present, 9 directors actually presented,
Board of Directors 2021 and all the resolutions of the meeting were passed
31st meeting of 8th April 1, 2021 See the Company's announcement on April 2, 2021 for
Board of Directors details
32nd meeting of April 28, See the Company's announcement on April 30, 2021 for
8th Board of 2021 details
Directors
33rd meeting of 8th May 20, 9 directors should be present, 9 directors actually presented,
Board of Directors 2021 and all the resolutions of the meeting were passed
34th meeting of 8th June 15, 9 directors should be present, 9 directors actually presented,
Board of Directors 2021 and all the resolutions of the meeting were passed
35th meeting of 8th August 9, See the Company's announcement on August 11, 2021 for
Board of Directors 2021 details
36th meeting of 8th September See the Company's notice on September 30, 2021 for details
Board of Directors 29, 2021
37th meeting of 8th October 18, See the Company's announcement on October 19, 2021 for
Board of Directors 2021 details
38th meeting of 8th October 27, 9 directors should be present, 9 directors actually presented,
Board of Directors 2021 and all the resolutions of the meeting were passed
39th meeting of 8th Oct 29, 2021 9 directors should be present, 9 directors actually presented,
Board of Directors and all the resolutions of the meeting were passed
40th meeting of 8th November 4, 9 directors should be present, 9 directors actually presented,
Board of Directors 2021 and all the resolutions of the meeting were passed
41st meeting of 8th November See the Company's announcement on November 20, 2021
Board of Directors 19, 2021 for details
42nd meeting of November 9 directors should be present, 9 directors actually presented,
8th Board of 29, 2021 and all the resolutions of the meeting were passed
Directors
43rd meeting of 8th November 9 directors should be present, 9 directors actually presented,
Board of Directors 30, 2021 and all the resolutions of the meeting were passed
VI. Duties performed by directors
(i) Board of Directors and Shareholders Meetings attended by Directors
Participati
on in
General
Participation in Board of Directors meeting
Indepen
of
Director dent
sharehold
Name director
ers
or not
Number Number Number of Numbe Abs Failure to The
of board of participatio r of enc attend the number of
meeting attendan ns by delegat e meeting in sharehold
s this ces in communica es Fre person ers
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2021 Annual Report
year person tion attende que twice in a attending
d ncy row or not the
general
meeting
ZHAO
No 16 16 14 0 0 No 0
Wenge
WANG
No 16 16 14 0 0 No 4
Dong
WANG
Chunmi No 16 16 14 0 0 No 0
ng
LI
Chengq No 16 16 14 0 0 No 1
un
XU
No 16 16 14 0 0 No 4
Hang
GU
No 16 15 14 1 0 No 0
Zhixu
MA
Shuzho Yes 16 16 14 0 0 No 3
ng
HONG
Jianqia Yes 16 15 14 1 0 No 4
o
JIN
Yanghu Yes 4 4 4 0 0 No 0
a
LUO
Yes 12 12 10 0 0 No 3
Jinming
Explanation of not attending the board meeting in person for two consecutive times
□Applicable √Not Applicable
Number of meetings of the Board of Directors
16
held during the year
Including: the number of on-site meetings 2
Number of meetings held by communication 14
Number of meetings held on site combined with
0
communication methods
(ii) Objections raised by directors on company-related matters
□Applicable √Not Applicable
(iii) Others
□Applicable √Not Applicable
VII. Committees under the Board of Directors
√Applicable □Not Applicable
(1). Members of Committees under the Board of Directors
Category of committees Member name
Audit committee HONG Jianqiao, MA Shuzhong, XU Hang
Nomination Committee MA Shuzhong, LUO Jinming, WANG Chunming
Compensation and
LUO Jinming, HONG Jianqiao, LI Chengqun
Appraisal Committee
59 / 228
2021 Annual Report
Strategy Committee ZAHO Wenge, WANG Dong, MA Shuzhong
(2). 11 meetings held by these committees during the report period
Other
Important comments and things on
Date Contents of the meeting
suggestions duty
fulfillment
February Agreed with 2020 Integrated Audit
2020 Integrated Audit Plan
8, 2021 Plan
Proposal for nominating
March 22, Agreed to nominate LUO Jinming as
candidates for independent
2021 candidate for independent director
directors
Proposal on capital increase and
April 1, Agree to increase capital of RMB
related party transactions of
2021 1.225 billion for CCCP
shareholding companies
Agreed with the preliminary
April 12, Preliminary communication on the
communication on the results of
2021 results of 2020 integrated audit
2020 integrated audit
1. 2020 Financial Reort
2. 2020 Internal Control Evaluation Agreed with the 2020 Financial
Report Report, the 2020 Internal Control
3. 2020 Internal Control Audit Evaluation Report, the 2020 Internal
April 28,
Report Control Audit Report, the 2020 Audit
2021
4. The Audit Committee's 2020 Committee Performance Report and
Performance Report the Proposal on Re-appointing the
5. Proposal on re-appointing Accounting Firm
accounting firm
August 9, 2021 Semi-annual Internal Control Agree with the 2021 Semi-annual
2021 Audit Work Report Internal Control Audit Work Report
Agreed to nominate GONG
September Proposal on Nomination of Vice
Chenghao and YANG Yang as vice
27, 2021 General Manager
general managers of the Company
1. The proposal on the
remuneration of some directors of
Agreed to honor the 2020 annual
September the Company in 2020
remuneration of some directors and
27, 2021 2. The proposal on the
executives
remuneration of some directors of
the Company in 2020
Proposal on capital increase and
October Agreed to increase capital of RMB
related party transactions of
14, 2021 2.45 billion for CCCP
shareholding companies
Agreed to nominate SHOU Shengdi
November Proposal on Nomination of Vice
and ZHU Yi as vice general
2, 2021 General Manager
managers of the Company
December Agreed with the 2021 Integrated
2021 Annual Integrated Audit Plan
23, 2021 Audit Plan
(3). The specifics of objection
□Applicable √Not Applicable
VIII. Explanation of the Company risk that the board of supervisors founds
□Applicable √Not Applicable
The Board of Supervisors has no objection to the supervision matters during the reporting period.
60 / 228
2021 Annual Report
IX. Employees of the parent company and major subsidiaries
(i) Employees
Number of employees in the parent company 2,282
Number of employees in major subsidiaries 1,941
Total number of employees 4,223
Professional composition
Professional composition category Professional composition
Production staff 108
Salesperson 86
Technical staff 2,706
Financial officer 138
Administration staff 301
Security personnel 551
Vehicle management staff 333
Total 4,223
Education level
Education level category Quantity (person)
Postgraduate 106
Bachelor's degree 1,564
College graduates and below 2,553
Total 4,223
(ii) Salary policy
√Applicable □Not Applicable
I. Principles of remuneration system
(1) Combination of duties, powers, responsibilities, and benefits;
(2) It shall be fair internally and competitive externally;
(3) Distribution according to work, priority to efficiency, fairness and sustainable development;
(4) Adoption of the distribution form of "salary determined by post, grade determined by ability,
and award determined by performance" to reasonably widen the income gap.
2. Basis of salary system
Position importance, performance contribution, ability, work attitude and spirit of cooperation.
(1) As far as the overall level is concerned, the Company determines the remuneration based
on the current economic benefits and sustainable development.
(2) The Company's salary system includes two different types.
a. The annual salary system is applicable to managers and vice managers of the Company's
headquarters, as well as members of the management team of branches and subsidiaries;
b. The structured wage system is applicable to employees who have signed labor contracts for
two years and above. Including grassroots management personnel, functional department
personnel, engineering management personnel, logistics management personnel and equipment
maintenance personnel.
(3) The remuneration of specially hired staff, staff waiting for duty, retired staff and timing
piecework staff shall be stipulated separately.
(4) The Company's employee income generally includes four parts: job skill wages, bonuses,
benefits, and allowances.
(iii) Training program
√Applicable □Not Applicable
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2021 Annual Report
According to the different training organizations, the Company's employee training can be
divided into: OJT training, company internal training, expatriate training and online training.
1. OJT (On the Job Training) The training of ordinary employees and new employees by
leaders of various departments, experienced or skilled employees belongs to OJT training,
including the Company's administrative management series training, business management series
training, engineering technology series training, and security logistics series training.
2. Enterprise internal training. According to the Company's training needs, the Company
organizes internal trainers or invites external training institutions to tailor training courses for the
Company, allowing employees to receive systematic training, including corporate culture, company
organizational structure and rules and regulations, industry status and prospects, and professional
ethics, etiquette, code of conduct, language, computer skills, etc.
3. Expatriate training In accordance with the needs of the Company's business development
and job skills, the Company organizes personnel in specific positions to go out to participate in the
training of training institutions, including financial securities series training, human resource
management training, and enterprise management series training.
4. Network training It is an online training for employees through the application of information
technology and Internet technology, and different training content is set for different positions, so
that training and learning are independent and personalized, and the use of resources is maximized.
(iv) Labor outsourcing
√Applicable □Not Applicable
Total number of working hours of labor 31,678.57 months
outsourcing
Total remuneration paid for labor outsourcing RMB 69.8461 million
X. Plan for profit distribution or capital reserve into stock capital
(i) Formulation, implementation or adjustment of cash dividend policy
√Applicable □Not Applicable
According to the China Securities Regulatory Commission's Notice on Further Implementation
of Cash Dividends by Listed Companies (ZJF [2012] 37) and Zhejiang Securities Regulatory
Bureau’s Notice on Forwarding the Notice on Further Implementation of Listed Companies' Cash
Dividends (ZZJSSZ [2012] 138), the Company held the 24th meeting of the sixth board of directors
on August 15, 2012, and reviewed and approved the Proposal on Amending the Articles of
Association, which revised the Company’s profit distribution policy and adjustment decision-making
mechanism. The second extraordinary general meeting of shareholders held on September 3, 2012
was deliberated and approved. In order to further implement the new requirements of the China
Securities Regulatory Commission's Guidelines for the Supervision of Listed Companies No. 3-
Cash Dividend Distribution of Listed Companies (November 30, 2013) and the Guidelines for Cash
Dividend Distribution of Listed Companies of the Shanghai Stock Exchange, the forty-fourth
meeting of the sixth board of directors of the Company held on April 17, 2014 reviewed and
approved the Proposal on Amending the Profit Distribution Clauses in the Articles of Association of
the Company. The Company further clarified the basic principles, distribution forms, specific policies,
decision-making mechanisms and procedures of the Company's profit distribution, which were
62 / 228
2021 Annual Report
reviewed and approved by the 2013 Annual General Meeting of Shareholders held on May 12,
2014. The nineteenth meeting of the seventh board of directors of the Company held on December
25, 2015 reviewed and approved the Plan of Zhejiang China Commodity City Group Co., Ltd. on
Shareholder Dividend Return Plan.
The Company's 2020 annual general meeting of shareholders held on May 25, 2021 reviewed
and approved the Company's profit distribution plan for 2020. In 2020, based on the total share
capital of 5,443,214,176 shares, a cash dividend of RMB 0.55 (including tax) will be distributed for
every 10 shares. A total of RMB 301,945,279.68 was allocated. The Company's Board of Directors
published the Announcement on the Implementation of the Distribution of Rights and Interests in
2021 on the website of the Shanghai Stock Exchange and the China Securities Journal, Shanghai
Securities News and Securities Times on June 10, 2021. The profits have been distributed before
June 18, 2021. The decision-making procedures related to the Company's profit distribution comply
with the provisions of the Articles of Association. The Company listens to the opinions and demands
of small and medium shareholders, and the profit distribution is based on factors such as the
Company's industry characteristics, development stage and profitability level, and capital needs. It
takes into account the requirements for investors to share the results of the Company's
development and growth and obtain reasonable investment returns.
(ii) Special explanation of cash dividend policy
√Applicable □Not Applicable
Whether it complies with the provisions of the Company's Articles of Association
√Y □N
or the requirements of the resolution of the general meeting of shareholders
Whether the dividend standard and ratio are clear and clear √Y □N
Whether the relevant decision-making procedures and mechanisms are complete √Y □N
Whether the independent directors performed their duties and played their due
√Y □N
role
Whether minority shareholders have the opportunity to fully express their opinions
and demands, and whether their legitimate rights and interests have been fully √Y □N
protected
(iii) During the reporting period, if the parent company is profitable and the profit available
for distribution to shareholders is positive, but does not propose a plan for the
distribution of cash profits, the Company shall disclose in details the reason, the
application and using plan of the undistributed profits.
□Applicable √Not Applicable
XI. Incentive stock option plans, employee stock ownership plans and other employee
incentives granted by the Company and the impact thereof
(i) Relevant incentive matters have been disclosed in the temporary announcement and
there is no progress or change in subsequent implementation.
√Applicable □Not Applicable
Overview of the matter Query website
On October 23, 2020, the twenty-third meeting of the eighth Board For details, please
of Directors of the Company passed the Proposal on the Company's refer to the Company's
2020 Restricted Equity incentive Plan (Draft) and Its Summary, Proposal announcement on the
on the Measures for the Evaluation and Management of the website of the
Implementation of the Company's 2020 Restricted Equity incentive Plan, Shanghai Stock
63 / 228
2021 Annual Report
Proposal on Requesting the General Meeting of Shareholders to Exchange
Authorize the Board of Directors to Handle Issues Related to Equity (www.sse.com.cn) on
Incentives. The independent directors of the Company issued relevant October 24, 2020.
independent opinions.
On October 23, 2020, the sixth meeting of the eighth Board of
Supervisors of the Company deliberated and approved the Proposal on
the Company's 2020 Restricted Equity incentive Plan (Draft) and its
Summary, The Proposal on the Implementation Evaluation and
Management Measures for the Company's 2020 Restricted Equity
incentive Plan, Proposal on Verification of the List of Incentive Objects
of the Company's 2020 Restricted Equity incentive Plan. The board of
supervisors issued relevant verification opinions.
Independent financial consultants, lawyers and other intermediary
agencies issued corresponding opinions.
For details, please
On November 18, 2020, it received the Approval for Approving refer to the Company's
Zhejiang China Commodity City Group Co., Ltd. to implement the 2020 announcement on the
restricted equity incentive plan issued by the State-owned Assets website of the
Supervision and Administration Office of the People's Government of Shanghai Stock
Yiwu City, forwarded by Yiwu China Commodity City Holdings Ltd. (Yiwu Exchange
SASAOF〔2020〕51). (www.sse.com.cn) on
November 20, 2020.
From November 20, 2020 to November 29, 2020, the list of
For details, please
incentive objects and positions of the 2020 restricted equity incentive
refer to the Company's
plan were internally publicized. Within the time limit of the publicity, the
announcement on the
board of supervisors of the Company did not receive any objection from
website of the
any organization or individual or bad feedback, without feedback record.
Shanghai Stock
On November 30, 2020, the Board of Supervisors of the Company
Exchange
issued the Examination Opinions and Public Statement of the Board of
(www.sse.com.cn) on
Supervisors on the List of Incentive Objects of the Company's 2020
December 1, 2020.
Restricted Equity incentive Plan.
On December 10, 2020, the Company's 2020 Fifth Provisional For details, please
General Meeting of Shareholders deliberated and approved the refer to the Company's
“Proposal on the ‘Company's 2020 Restricted Equity incentive Plan announcement on the
(Draft)’ and Summary”, the “Proposal on the “Measures of Assessment website of the
and Management of Implementation of ‘Company’s 2020 Restricted Shanghai Stock
Equity incentive Plan’”, and the “Proposal on Requesting the General Exchange
Meeting of Shareholders to Authorize the Board of Directors to Deal with (www.sse.com.cn) on
Equity Incentive Related Matters”, and disclosed the “Self-examination December 11, 2020.
64 / 228
2021 Annual Report
Report on the Trades of Company’s Stocks by Insiders of Company’s
2020 Restricted Equity incentive Plan”.
On December 11, 2020, the twenty-sixth meeting of the eighth
session of the Company's board of directors passed the Proposal on
Granting Restricted Shares to Incentive Objects for the First Time. The
For details, please
independent directors of the Company issued relevant independent
refer to the Company's
opinions.
announcement on the
On December 11, 2020, the seventh meeting of the Company's
website of the
eighth board of supervisors passed the Proposal on Granting Restricted
Shanghai Stock
Stocks to Incentive Objects for the First Time. The Board of Supervisors
Exchange
issued the Verification Opinions of the Board of Supervisors on Matters
(www.sse.com.cn) on
Related to the First Grant of the Company's 2020 Restricted Equity
December 12, 2020.
incentive Plan.
Independent financial consultants, lawyers and other intermediary
agencies issued corresponding opinions.
For details, please
refer to the Company's
On January 15, 2021, the Company received the Securities Change
announcement on the
Registration Certificate issued by the Shanghai Branch of China
website of the
Securities Depository and Clearing Co., Ltd., and the Company
Shanghai Stock
completed the registration of the first grant of restricted stocks to
Exchange
incentive objects.
(www.sse.com.cn) on
January 19, 2021.
On August 9, 2021, the 35th meeting of the eighth Board of
Directors of the Company passed the "Proposal on Reserved Granting
Restricted Stocks to Incentive Objects", "On Adjusting the Repurchase
Price of Restricted Stocks and Repurchasing and Cancelling Some For details, please
Restricted Stocks" 's proposal". The independent directors of the refer to the Company's
Company issued relevant independent opinions. announcement on the
On August 9, 2021, the ninth meeting of the eighth Boarder of website of the
Supervisors of the Company passed the "Proposal on Reserved Shanghai Stock
Granting Restricted Stocks to Incentive Objects", "Proposal on Adjusting Exchange
the Repurchase Price of Restricted Stocks and Repurchasing and (www.sse.com.cn) on
Cancelling Some Restricted Stocks" ". The Board of Supervisors issued August 11, 2021.
the Verification Opinions of the Board of Supervisors on Matters Related
to the Company's Reserved Grant of the Restricted Equity incentive
Plan in 2020.
On November 4, 2021, the Company received the Securities For details, see the
Change Registration Certificate issued by the Shanghai Branch of China Company's
65 / 228
2021 Annual Report
Securities Depository and Clearing Co., Ltd., and the Company announcement on the
completed the registration of the reserved grant of restricted stocks to website of the
incentive objects. Shanghai Stock
Exchange
(www.sse.com.cn) on
November 6, 2021.
On November 17, 2021, the Company applied to China Securities For details, see the
Depository and Clearing Co., Ltd. Shanghai Branch for repurchase and Company's
cancellation of restricted stocks that have been granted but not yet lifted announcement on the
by some resigned employees. On November 30, 2021, the Company website of the
received the "Securities Change Registration Certificate" issued by Shanghai Stock
China Securities Depository and Clearing Co., Ltd. Shanghai Branch, Exchange
and the Company has completed the registration of the restricted stock (www.sse.com.cn) on
repurchase and cancellation. November 26, 2021.
(ii) Incentives that have not been disclosed in the temporary announcements or had further
progresses
Incentive stock option
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
Employee stock ownership plans
□Applicable √Not Applicable
Other incentives
□Applicable √Not Applicable
(iii) Equity incentives granted to directors and senior executives during the reporting period
□Applicable √Not Applicable
√Applicable □Not Applicable
Unit: Ten Thousand Shares
Number
of Number of Number
Market
restricted restricted Unrel of
Grant price Rele price at the
stocks stocks ease restricted
of restricted ased end of the
Name Title held at granted d stocks
stock shar reporting
the during the shar held at
(RMB) es period
beginning reporting e the end of
(RMB)
of the period the period
year
ZHAO Board
0 30 2.94 0 30 30 1,455,000
Wenge chairman
Vice
WANG Chairman
0 30 2.94 0 30 30 1,455,000
Dong and
General
66 / 228
2021 Annual Report
Manager
JIN Vice
Gengz general 0 30 2.94 0 30 30 1,455,000
hong manager
Vice
WU
general 0 30 2.94 0 30 30 1,455,000
Xiubin
manager
ZHAN Vice
G general 0 30 2.94 0 30 30 1,455,000
Qizhen manager
GONG Vice
Cheng general 0 20 2.94 0 20 20 970,000
hao manager
Vice
YANG
general 0 20 2.94 0 20 20 970,000
Yang
manager
Director
XU
Board 0 30 2.94 0 30 30 1,455,000
Hang
Secretary
ZHAO Financial
0 30 2.94 0 30 30 1,455,000
Difang Manager
Vice
WEI
general 0 30 2.94 0 30 30 1,455,000
Gang
manager
Total / 0 280 / 0 280 280 /
(iv) The evaluation mechanism for senior managers during the reporting period, as well as
the establishment and implementation of incentive mechanisms
√Applicable □Not Applicable
The salary appraisal of the senior management personnel is completed and determined
according to the performance appraisal method of the head of the enterprise and the Company's
operation and related appraisal indicators, then the salary determination is completed.
XII. Construction and implementation of internal control system during the reporting period
√Applicable □Not Applicable
For details, please refer to the "2021 Internal Control Evaluation Report" disclosed by the Company
on the website of the Shanghai Stock Exchange.
Explanation of major deficiencies in internal control during the reporting period
□Applicable √Not Applicable
XIII. Management and control of subsidiaries during the reporting period
√Applicable □Not Applicable
For details, please refer to the "2021 Internal Control Evaluation Report" disclosed by the Company
on the website of the Shanghai Stock Exchange.
XIV. Explanation of the internal control audit report
√Applicable □Not Applicable
The Company hired Ernst & Young Hua Ming Certified Public Accountants (special general
partnership) to audit the effectiveness of the Company's internal control in its 2021 financial report.
The accounting firm has issued a standard unqualified internal control audit report. It is believed
that the Company maintained effective internal control of financial reporting in all major aspects in
67 / 228
2021 Annual Report
accordance with the Basic Standards for Corporate Internal Control and related regulations on
December 31, 2021. For details of the internal control audit report, please refer to the Shanghai
Stock Exchange website (www.sse.com.cn).
Disclosure of internal control audit report: Yes
Opinion type of internal control audit report: standard unqualified opinion
XV. Self-examination and rectification of the Listed Company's governance special actions
In the Listed Company's governance special actions, after self-examination, the Company
found that the Company's Articles of Association did not specify that when the shareholders'
general meeting elects directors and supervisors, it "should" implement the cumulative voting
system. The Company held the third provisional general meeting of shareholders in 2021 on
November 4, 2021. With the special resolution of the general meeting of shareholders, the relevant
content of Article 84 of the Company's Articles of Association, i.e., "When the general meeting of
shareholders votes on the election of directors and supervisors, the cumulative voting system may
be implemented in accordance with the provisions of the Articles of Association or the resolutions of
the shareholders' general meeting" was revised to "When the general meeting of shareholders
votes on the election of two or more directors and supervisors, the cumulative voting system shall
be implemented in accordance with the provisions of the Articles of Association or the resolutions of
the general meeting of shareholders.” For details, please refer to the "Announcement on Amending
the Articles of Association" (L 2021-048) disclosed on October 19, 2021 and the "Announcement on
Resolutions of the Third Provisional General Meeting in 2021" disclosed on November 5, 2021 ( L
2021-054).
XVI. Others
□Applicable √Not Applicable
68 / 228
2021 Annual Report
Section V. Environmental and Social Responsibilities
I. Environmental issues
(i) Description of the environmental protection status of the Company and its main
subsidiaries that are key pollutant discharging units announced by the environmental
protection authorities
□Applicable √Not Applicable
(ii) Description of the environmental protection status of the companies other than the key
pollutant discharging units
□Applicable √Not Applicable
(iii) Relevant information that is conducive to protecting ecology, preventing pollution, and
fulfilling environmental responsibilities
□Applicable √Not Applicable
(iv) Measures taken to reduce their carbon emissions during the reporting period and the
effect
□Applicable √Not Applicable
II. Social responsibility
√Applicable □Not Applicable
For details, please refer to the "2021 Sustainability Report" disclosed by the Company on the
website of the Shanghai Stock Exchange.
III. Status of consolidation and expansion of the results of poverty alleviation, rural
revitalization and other specific work
□Applicable √Not Applicable
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2021 Annual Report
Section VI. Significant Matters
I. Fulfillment of commitments
(i) Commitments made by the actual controller, shareholders, affiliates and acquirer of the
Company, the Company itself and other related parties during the reporting period or as
of the reporting period
□Applicable √Not Applicable
(ii) If there is a profit forecast for the Company’s assets or projects, and the reporting period
is still in the profit forecast period, the Company will explain whether the assets or
projects have reached the original profit forecast and the reason
.
□Reached □Not Reached √Not Applicable
(iii) Completion of performance commitments and its impact on the impairment test of
goodwill
□Applicable √Not Applicable
II. Non-operating capital occupation by controlling shareholder and other related parties
during the reporting period
□Applicable √Not Applicable
III. Illegal guarantees
□Applicable √Not Applicable
IV. The Company's explanation on the ‘non-standard opinion audit report’ of the accounting
firm
□Applicable √Not Applicable
V. The Company's analysis and explanation on the reasons and effects of changes in
accounting policies, accounting estimates or corrections of major accounting errors
(i) The Company's analysis and explanation on the reasons and effects of changes in
accounting policies and accounting estimates
√Applicable □Not Applicable
For details, please refer to “44. Changes in Significant Accounting Policies and Accounting
Estimates” in “V. Significant Accounting Policies and Accounting Estimates” in “Chapter X Financial
Reprot” of this report.
(ii) The Company's analysis and explanation on the reasons and effects of major
accounting errors correction
□Applicable √Not Applicable
(iii) Communication with the former accounting firm
□Applicable √Not Applicable
(iv) Other statements
□Applicable √Not Applicable
70 / 228
2021 Annual Report
VI. Engagement and termination of engagement of accounting firm
Unit: RMB10,000
Now engaging
Ernst & Young Hua Ming Certified Public
Name of the engaged domestic accounting firm
Accountants (special general partnership)
Remuneration of the engaged domestic
200
accounting firm
Audit period of the engaged domestic
14
accounting firm
Name Remuneration
Internal control auditing Ernst & Young Hua Ming Certified Public
55
accounting firm Accountants (special general partnership)
Statement on the engagement or termination of engagement of accounting firm
√Applicable □Not Applicable
After deliberation at the 32th meeting of the eighth Board of Directors of the Company held on
April 28, 2021, and the Company’s 2020 annual general meeting of shareholders held on May 25,
2021, the Proposal on Renewing the Appointment of the Accounting Firm was passed, and agreed
to continue Appoint Ernst & Young Hua Ming Certified Public Accountants (Special General
Partnership) as the Company's 2021 financial and internal control audit agency. For details, please
refer to the Announcement on Renewing the Appointment of Accounting Firms (L2021-022) issued
by the Company on the Shanghai Stock Exchange website www.sse.com.cn on April 30, 2021, and
the Announcement on Resolutions of the 2020 Annual General Meeting of Shareholders (L2021-
030) issued by the Company on the Shanghai Stock Exchange website www.sse.com.cn on May
26, 2021.
Statement on replacing the accounting firm during the audit
□Applicable √Not Applicable
VII. Situations at risk of delisting
(i) Reasons for the delisting risk warning
□Applicable √Not Applicable
(ii) The Company's proposed response measures
□Applicable √Not Applicable
(iii) Termination of listing and reasons
□Applicable √Not Applicable
VIII. Matters relating to bankruptcy and reorganization
□Applicable √Not Applicable
IX. Material litigations and arbitrations
√There are material litigations or arbitrations in current reporting period □No material litigations or
arbitrations in current reporting period
(i) Litigations and arbitrations have been disclosed in the temporary announcements and
have had no further progresses
□Applicable √Not Applicable
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2021 Annual Report
(ii) Litigations and arbitrations that have not been disclosed in the temporary announcements or have had further progresses
√Applicable □Not Applicable
Unit: RMB10,000
During the reporting period:
Does the
litigation
(arbitration)
Party Value
Litigation cause Status of Results of litigation Enforcement
Plaintiff Bearing Basic information of involved in
Defendant (respondent) or estimated litigation (arbitration) and of judgment
(claimant) Joint litigation (arbitration) litigation
arbitration liabilities (arbitration) effect thereof (award)
Liabilities (arbitration)
and the
amount
thereof
Unfair Competition and
Xi'an Honghua Instrument Factory, The defendant shall
Trademark Infringement Judgment
The Shaanxi Yiwu Shangcheng Property pay the plaintiff RMB
None Litigation Dispute Case [(2021) 812 No has been
Company Management Co., Ltd., Xi'an Caixin 3 million in
Shaan 01 Zhi Min Chu No. made
Real Estate Development Company compensation
604]
The defendant shall
Jiangxi Anlong Investment Co., Ltd., Unfair Competition and
Judgment pay the plaintiff a
The Pingxiang Yiwu Small Commodity Trademark Infringement
None Litigation 812 No has been joint and several
Company Wholesale City Property Service Dispute Case [(2021) Gan
made compensation of
Management Co., Ltd. 03 Min Chu No. 29]
RMB 2.1037 million
Jiangsu Zhonghaojiayuan Holding
Group Co., Ltd., Suqian Yiwu Dispute over unfair Judgment
The The plaintiff's claims
International Trade City Market None Litigation competitions [(2021) Su 01 512 No has been
Company were dismissed
Management Co., Ltd., Suqian Maike Min Chu No. 497] made
Information Technology Co., Ltd.
The defendant shall
Unfair competition dispute Judgment jointly compensate
The Yingde Yiwu Small Commodity
None Litigation case [(2021) Yu 18 Min Chu 812 No has been the plaintiff for
Company Business Development Co., Ltd.
No. 20] made economic losses of
RMB 3 million.
Puyang Lidu Real Estate Development Unfair Competition and The defendant shall
Co., Ltd., Puyang Yiwu International Infringement of Trademark Judgment jointly compensate
The
Trade City Commercial Management None Litigation Exclusive Rights Dispute 512 No has been the plaintiff for
Company
Co., Ltd., Puyang Yanbin Building Case [(2021) Yu 09 Zhi Min made economic losses of
Catering Culture Co., Ltd. Chu No. 37] RMB 3.1038 million.
Unfair Competition and The defendant shall
Pingdingshan Yuhong Jiaye Real
Infringement of Trademark Judgment jointly compensate
The Estate Development Co., Ltd.,
None Litigation Exclusive Rights Dispute 512 No has been the plaintiff for
Company Pingdingshan Wanshang Yiwu Small
Case [(2021) Yu 04 Zhi Min made economic losses of
Commodity Market Operation Co., Ltd.
Chu No. 82] RMB 1.5 million.
72 / 228
2021 Annual Report
The defendant
Qingzhou Yifeng
Hanjin Real Estate
Qingzhou Yifeng Hanjin Real Estate Co., Ltd. shall
Unfair Competition and
Co., Ltd., Qingzhou Yifeng Commercial Judgment compensate the
The Trademark Infringement
Property Management Co., Ltd., None Litigation 812 No has been plaintiff for economic
Company Dispute Case [(2021) Lu 07
Shandong Yifeng Industrial Group Real made losses of RMB 2
Min Chu No. 38]
Estate Co., Ltd. million and
reasonable
expenses of RMB
101,100
The defendant shall
jointly and severally
compensate the
Nanjing Yiwu Small Commodity City
Dispute over unfair Judgment plaintiff for economic
The Co., Ltd., Nanjing Zheshang Investment
None Litigation competitions [(2021) Su 01 812 No has been losses of RMB 6
Company Co., Ltd., Nanjing Xiezhong Group Real
Min Chu No. 630] made million and
Estate Development Co., Ltd.
reasonable
expenses of RMB
103,600
The defendant shall
compensate the
Unfair Competition and plaintiff for economic
Judgment
The Shanxi Yuheng Shengshi Real Estate Trademark Infringement losses of RMB 1
None Litigation 812 No has been
Company Development Co., Ltd. Dispute Case [(2021) Jin 01 million and
made
Min Chu No. 394] reasonable
expenses of RMB
101,200
The defendant shall
jointly and severally
Zhenjiang Hongda Real Estate Co., compensate the
Dispute over unfair Judgment
The Ltd., Zhenjiang Hongda Yiwu Small plaintiff RMB 6
None Litigation competitions [(2021) Su 01 812 No has been
Company Commodity Market Management Co., million and
Min Chu No. 1336] made
Ltd. reasonable
expenses of RMB
101,100
The defendant shall
jointly and severally
compensate RMB 6
Dongguan Xingying Yiwu Small Unfair competition dispute Judgment
The million for economic
Commodity City Co., Ltd., Dongguan None Litigation case [(2021) Yu 19 Min Chu 812 No has been
Company losses and RMB
Hongyu Industrial Investment Co., Ltd. No. 76] made
101,100 for
reasonable
expenses
Zhejiang Yiwu Chuanglian Market Unfair Competition Dispute Judgment The defendant shall
The
Investment Management Co., Ltd., None Litigation Case [(2021) Xiang 07 Zhi 792 No has been jointly and severally
Company
Hunan Zotye Real Estate Development Min Chu No. 167] made compensate the
73 / 228
2021 Annual Report
Co., Ltd., Deng Shenping, Wang plaintiff RMB
Zhiyong 200,000 and
reasonable
expenses of RMB
103,700
Unfair Competition Disputes The defendant shall
Chongqing Jingtou Investment Group and Infringement of Judgment jointly compensate
The
Co., Ltd., Chongqing Jingtou Wanyu None Litigation Trademark Exclusive Rights 512 No has been the plaintiff for
Company
Real Estate Co., Ltd. [(2021) Yu 01 Min Chu No. made economic losses of
663] RMB 3 million.
Zhejiang
Dispute over unfair Judgment
Yiwugou E- The plaintiff's claims
commerce
The Company None Litigation competitions [(2020) Z 01 M 1,000 No has been
were dismissed
C No. 2202] made
Co., Ltd.
The defendant shall
pay the plaintiff RMB
6,000,600 in rent,
Leasing Contract Dispute Judgment
Supply Chain Zhejiang Jielian Network Technology RMB 261,300 in
None Litigation Case [(2021) Zhe 0782 Min 1,328.67 No has been
Company Co., Ltd. public energy
Chu No. 19808] made
consumption, and
pay liquidated
damages
Shenzhen Maojun Investment Co., Ltd., Trial has
Shenzhen Yiwu Small Commodity Second instance of started, but
The Wholesale City Co., Ltd., Shenzhen trademark infringement no
None Litigation 1,212 No
Company Longgang District Weifa Enterprise dispute [(2021) Yu Min judgment
Development Co., Ltd., Zhejiang Yiwu Zhong No. 1431] has been
Shangdu Market Development Co., Ltd. made
Trial has
Yiwu Wankexing Market Development
started, but
Co., Ltd., Xinyang Wanjia Denghuo Dispute over unfair
The no
Industry Co., Ltd., Henan Zhongda None Litigation competitions [(2021) Zhe 07 792 No
Company judgment
Commercial Operation Management Min Chu No. 58]
has been
Co., Ltd.
made
Trial has
Guangxi Huading Century Investment
started, but
Group Co., Ltd., Yulin Huading Dispute over unfair
The no
Investment Co., Ltd., Yulin None Litigation competitions [(2021) Gui 01 812 No
Company judgment
Wanshanghui Commercial Operation Min Chu No. 817]
has been
Co., Ltd.
made
74 / 228
2021 Annual Report
(iii) Other statements
√Applicable □Not Applicable
In March 2018, the Company and Yiwu China Commodities City (the Company’s former
holding subsidiary, present participating company, in which the Company holds 35.8% of shares)
was sued by Bank of China Co., Ltd. Yiwu Branch (hereinafter referred to as “Bank of China Yiwu
Branch”) due to a letter of credit dispute” to the Jinhua Intermediate People’s Court of Zhejiang
Province (hereinafter referred to as “Jinhua Intermediate Court”). For details, see the
“Announcement on Litigation Involved in the Company and Its Holding Subsidiaries" (Lin 2018-008)
disclosed by the Company on March 2, 2018. Later, the lawsuit was dismissed by Jinhua
Intermediate Court.
On May 18, 2018, Bank of China Yiwu Branch transferred all the rights of the principal and
interest, compound interest, liquidated damages, compensation and other claims under the letter of
credit involved to China Cinda Asset Management Co., Ltd. Zhejiang Branch (hereinafter referred to
as "Cinda Assets").
On June 25, 2021, Cinda Assets again filed a civil lawsuit with the Jinhua Intermediate
People's Court on the dispute over the letter of credit. For details, see the “Announcement on the
Progress of Litigation Involved in the Company and its Subsidiaries” (Lin 2021-036) disclosed by
the Company on July 21, 2021.
No hearings have been held as of the end of the reporting period.
X. Information of the listed company and its directors, supervisors, senior management,
controlling shareholder, and actual controller suspected of violations of laws and
regulations, penalties and rectification
□Applicable √Not Applicable
XI. Credit standing of the Company and its controlling shareholder and actual controller
√Applicable □Not Applicable
There was no outstanding court judgment or overdue debt of a large amount involving the
Company or its controlling shareholder or actual controller during the reporting period.
XII. Material related-party transactions
(i) Related-party transactions relating to regular corporate operation
1. Matters that have been disclosed in the temporary announcements and had no further
progresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had further
progresses or changes
□Applicable √Not Applicable
3. Matters that have not been disclosed in the temporary announcements
√Applicable □Not Applicable
Unit: RMB
Percentage Reasons
Type of
Contents of Amount of in the for the
Related related- Pricing Price of related- Settlement Market
Relationship related-party related-party amount of large
counterparty party principle party transaction method M/Price
transaction transaction similar difference
transaction
transactions between
75 / 228
2021 Annual Report
(%) the price of
the
transaction
and
reference
market
price
Epidemic
Subsidiaries
prevention
of
Yiwu Security Acceptance and control
controlling Market Account
Service Co., of labor and 23,927,708.38 23,927,708.38 47.51
shareholder price transfer
Ltd. service exhibition
parent
security
company
service fee
Property
Yiwu China Controlling
service fee
Commodities subsidiaries Acceptance
and Market Account
City Property of of labor 13,721,576.38 13,721,576.38 27.24
greening price transfer
Service Co., controlling service
maintenance
Ltd. shareholder
fee
Controlling Warehouse Market Account
CCCH Rent 3,947,798.16 3,947,798.16 7.84
shareholder space rental price transfer
Controlling
subsidiaries
Office space Market Account
CCCP of Lease out 3,767,104.11 3,767,104.11 7.48
rental price transfer
controlling
shareholder
Yiwu China
Commodities
City Creative Acceptance
Market Account
Design and Associates of labor Design fee 1,953,465.33 1,953,465.33 3.88
price transfer
Development service
Services Co.,
Ltd.
Yourworld
International
Branches of
Conference
the
Center, Acceptance
controlling Laundering Market Account
subordinated of labor 1,594,054.55 1,594,054.55 3.17
shareholder fees price transfer
to Yiwu service
parent
Market
company
Development
Group
Yourworld
International
Branches of
Conference
the Entrusted
Center,
controlling Other management Negotiated Account
subordinated 1,453,314.18 1,453,314.18 2.88
shareholder inflow fees and price transfer
to Yiwu
parent license fees
Market
company
Development
Group
Total / / 50,365,021.09 100 / / /
Return of large-value goods sales
Illustration on related-party transactions
(ii) Related transactions in the acquisition or sale of assets or equity
1. Matters that have been disclosed in the temporary announcements and had no further
progresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had further
progresses or changes
□Applicable √Not Applicable
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not Applicable
76 / 228
2021 Annual Report
4. If any agreement on the operating results is involved, the achievement of operating
results during the reporting period shall be disclosed
□Applicable √Not Applicable
(iii) Related-party transactions arising from joint external investment
1. Matters that have been disclosed in the temporary announcements and had no further
progresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had further
progresses or changes
√Applicable □Not Applicable
(1) The Company and the controlling shareholder CCCH increased the capital of CCCP in
monetary form according to the shareholding ratio. CCCH increased the capital by RMB 1.275
billion, the Company increased the capital by RMB 1.225 billion. After the capital increase, the
registered capital of CCCP was RMB 5 billion, and the shareholding ratio of both parties maintained
unchanged. For details, see the “Announcement on Capital Increase to Participating Companies
and Related Transactions” (Announcement No.: Lin 2021-014).
By the end of the reporting period, the Company and CCCH have completed capital
contributions, and CCCP has completed its industrial and commercial alteration registration.
(2) The Company and the controlling shareholder CCCH proposed to increase the capital of
CCCP in monetary form according to the shareholding ratio. CCCH increased the capital by RMB
2.55 billion, the Company increased the capital by RMB 2.45 billion. After the capital increase, the
registered capital of CCCP was RMB 10 billion, and the shareholding ratio of both parties
maintained unchanged. For details, see the “Announcement on Capital Increase to Participating
Companies and Related Transactions” (Announcement No.: L 2021-049).
The Company held the thirty-ninth meeting of the eighth Board of Directors of the Company on
October 29, 2021, at which it reviewed and approved the "Proposal on Revocation of the "Proposal
on the Capital Increase and Related Party Transactions of the Equity Participating Company" and
submitted to the General Meeting of Shareholders for deliberation, agreeing to cancel the above-
mentioned capital increase. For details, see the “Announcement on Capital Increase to Participating
Companies and Related Transactions” (Announcement No.: L 2021-052).
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not Applicable
(iv) Related-party credits and debts
1. Matters that have been disclosed in the temporary announcements and had no further
progresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had further
progresses or changes
√Applicable □Not Applicable
In order to meet the development needs of Handing Shangbo, a wholly-owned subsidiary of the
Company's subsidiary CCCP for the development of real estate project on the east side of the
intersection of Fotang Avenue and Shuangfeng Road, Fotang Town, Yiwu, the Company provided
Handing Shangbo with a financial aid of no more than RMB 490 million. CCCH, the Company’s
77 / 228
2021 Annual Report
controlling shareholder, will provide Handing Shangbo with the financial aid in the same proportion
of its indirect shareholding in Handing Shangbo. For details, please refer to the Announcement on
Providing External Financial Assistance and Related Party Transactions (Announcement Number:
L2020-098).
As of the end of the reporting period, the Company provided financial aid of RMB 220 million,
and CCCH has provided financial aid of RMB 231 million.
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not Applicable
(v) Financial business between the Company and the associated financial companies, the
Company's holding financial company and the related parties
□Applicable √Not Applicable
(vi) Others
□Applicable √Not Applicable
XIII. Material contracts and performance thereof
(i) Trusteeship, contracting and leases
1. Trusteeship
□Applicable √Not Applicable
2. Contracting
□Applicable √Not Applicable
3. Lease
□Applicable √Not Applicable
78 / 228
2021 Annual Report
(ii) Guarantees
√Applicable □Not Applicable
Unit: RMB10,000
External guarantees provided by the Company (excluding those provided for the subsidiaries)
Relationship
Date of
between the Is the Overdue Is it a
guarantee Guarantee Guarantee Is the
guarantor The Amount of Type of Collateral guarantee amount of Counter related- Related
Guarantor (signing Starting Maturity guarantee
and the guaranteed guarantee guarantee (if any) fulfilled in the guarantees party Relationship
date of the date date overdue
Listed full guarantee guarantee
agreement)
Company
The The Yiwu 14,528.77 December July 1, December Joint and No No SCO Yes Joint
Company Company Shanglv 16, 2015 2015 15, 2026 several provided a venture
itself liability counter-
guarantee guarantee
The The Yiwu 828.31 August 13, December December Joint and No No CCCH Yes Joint
Company Company Shanglv 2020 25, 2020 24, 2023 several provided a venture
itself liability counter-
guarantee guarantee
Hangzhou Wholly- House Joint and No No No
Shangbo owned purchaser several
506.33
Nanxing subsidiary liability
guarantee
Amount of guarantees made during the reporting period (excluding the -81,535.84
guarantees provided for subsidiaries)
Balance of guarantees at the end of the reporting period (A) (excluding the 15,863.41
guarantees provided for subsidiaries)
The guarantee of the Company and its subsidiaries to the subsidiaries
Amount of guarantees provided for subsidiaries during the reporting period -
Balance of guarantees provided for subsidiaries at the end of the reporting -
period (B)
Total guarantees provided by the Company (including those provided for the subsidiaries)
Total amount of guarantees (A+B) 15,863.41
Ratio of the total amount of guarantees to the Company’s net assets (%) 1.08
Among which:
Amount of guarantees provided for shareholders, actual controller and their -
79 / 228
2021 Annual Report
related parties (C)
Amount of guarantees provided directly or indirectly for the debtors whose -
debt-to-asset ratio exceed 70% (D)
Portion of total amount of guarantees in excess of 50% of net assets (E) -
Total (C+D+E) -
Statement on the joint and several liability that may be assumed due to
outstanding guarantees
Statement on guarantees 1. According to the resolution of the 15th Meeting of the 7th Board of Directors on July 1, 2015,
the Group applied for a RMB 750 million loan with Agricultural Bank of China Yiwu Branch for
Yiwu Shanglv and provided guarantees in accordance with the shareholding ratio. The guarantee
method was joint liability guarantee, the highest guarantee amount was RMB 367.5 million and
the guarantee term was11 years. As of December 31, 2021, Yiwu Shanglv actually borrowed
RMB 296,505,577.63 (December 31, 2020: RMB 477,659,739.88) from the banks in total.
According to the agreement of the guarantee contract, it assumed the guarantee liability of RMB
145,287,733.04 (December 31, 2020: RMB 234,053,272.54) for the Agricultural Bank of China
Yiwu Branch. Yiwu State-owned Capital Operation Co., Ltd. provided a counter guarantee for this
guarantee.
2. According to the resolution of the 19th Meeting of the 8th Board of Directors on August 13,
2020, the Group applied for a loan with a total amount of not more than RMB 100 million for Yiwu
Shanglv with the Bank of Communications Co., Ltd. Yiwu Branch and provided a guarantee in
proportion to the shareholding ratio. The guarantee method was under joint liability, the
maximum amount of the guarantee was RMB 49 million, and the guarantee period was two
years, from the date of the expiry of the debt performance period agreed in the independent
contract until the date of the expiration of the debt performance period of all last due main debt
under the master contract. As of December 31, 2021, Yiwu Shanglv actually borrowed RMB
28,404,291.89 (December 31, 2020: RMB 11,500,000.00) from banks in total. According to the
agreement of the guarantee contract, it assumed the guarantee liability of RMB 8,283,103.03
(December 31, 2020: RMB 5,635,000.00) for the Agricultural Bank of China Yiwu Branch. CCCH
provided a counter-guarantee
3. According to relevant regulations, before the purchaser of the commercial housing sold by the
Group has obtained the property certificate, the Group shall provide the purchaser with a bank
mortgage guarantee. As of December 31, 2021, the unsettled guarantee amount was RMB
5,063,333.60 (December 31, 2020: RMB 16,170,141.08). Those guarantees would be released
after the issuance of the property ownership certificates and are thus little likely to incur losses.
Therefore, the management believed that it was not necessary to make provision for the
guarantees.
80 / 228
2021 Annual Report
(iii) Entrust the management of the cash assets of others
1. Entrusted financial management
(1). The totality of entrusted financial management
√Applicable □Not Applicable
Unit: RMB10,000
Overdue
Unexpired
Type Source of funds Amount unrecovered
balance
amount
Non-guaranteed Self-owned 1,850 1,000 -
floating income funds
Principal Guaranteed Self-owned 1,500 1,500 -
Fixed Income funds
Other information
□Applicable √Not Applicable
(2). Individual entrusted financial management
□Applicable √Not Applicable
Other information
□Applicable √Not Applicable
(3). Entrusted financial management impairment provision
□Applicable √Not Applicable
2. Entrusted Loan
(1). Total entrusted loan
□Applicable √Not Applicable
Other information
√Applicable □Not Applicable
1. After review and approval at the 44th meeting of the sixth Board of Directors of the Company
in April 2014 and the 22nd meeting of the seventh Board of Directors of the Company in March
2016, the Company applied to the Export-Import Bank of China for a total loan of RMB 700 million.
Special entrusted loans to market merchants are valid within 2 years from the date of approval by
the Board of Directors. The Company's loans to the Export-Import Bank of China are guaranteed by
MDG, and Shanghai Pudong Development Bank Yiwu Branch acts as an entrusted loan processing
81 / 228
2021 Annual Report
bank. Market traders who entrust loans are pledged with the right to use shops in China Commodity
City.
There are no new entrusted loans in this period, and all entrusted loans issued in the previous
period have expired.
As of December 31, 2021, there were 13 overdue loans with an amount of RMB 2.9173 million
(if there is any loss outside the quota after the auction of the right to use the shop, it will be
compensated).
(2). Single Entrusted Loan
□Applicable √Not Applicable
Other information
□Applicable √Not Applicable
(3). Entrusted loan impairment provision
□Applicable √Not Applicable
3. Other information
□Applicable √Not Applicable
(iv) Other material contracts
√Applicable □Not Applicable
Contract price
No. Name of contract Contracting party
(RMB10,000)
Yiwu International Trade City Zone II East Parking Yiwu Haoyang Construction Co.,
1 28,450.06
Building Project Construction Contract 1 Ltd.
Haier Group (Qingdao) Financial
2 Equity Transfer Agreement 44,930.00
Holdings Co., Ltd.
Yiwu Comprehensive Bonded Zone New Import Zhejiang Construction
3 63,710.82
Market - South Zone Engineering Contract Engineering Group Co., Ltd.
Yiwu Comprehensive Bonded Zone New Import China Construction Seventh 72,323.68
4
Market - North Zone Engineering Contract Engineering Bureau Co., Ltd.
Yiwu Digital Trade Industrial Park Engineering Zhongtian Construction Group 23,752.62
5
Construction Project Construction Contract Co., Ltd.
XIV. Explanation on other major events that have a significant impact on investors' value
judgments and investment decisions
□Applicable √Not Applicable
82 / 228
2021 Annual Report
Section VII. Changes in Shares and Shareholders
I. Changes in equity
(i) Exhibition of changes in shares
1. Exhibition of changes in shares
Unit: Ten Thousand Shares
Increase or decrease in the current
Before this change After this change
period (+, -)
Shar
es
conv
Bo
Prop New erted Propor
nus Oth Sub-
Quantity ortio shares from Quantity tion
sha ers total
n (%) issued capit (%)
res
al
reser
ve
I. Restricted
0 0 4,904 0 0 -98 4,806 4,806 0.88
shares
1. Shares held by
other domestic 0 0 4,904 0 0 -98 4,806 4,806 0.88
capitals
In which: shares
held by domestic
0 0 4,904 0 0 -98 4,806 4,806 0.88
non-state-owned
natural persons
II. Unrestricted
544,321.4176 100 0 0 0 0 0 544,321.4176 99.12
shares
1. RMB-
denominated 544,321.4176 100 0 0 0 0 0 544,321.4176 99.12
common shares
III. Total number
544,321.4176 100 4,904 0 0 -98 4,806 549,127.4176 100
of shares
2. Description of changes in shares
√Applicable □Not Applicable
On January 15, 2021, due to the first grant of the 2020 restricted equity incentive plan, an
additional 46.7 million shares of restricted shares were issued.
On November 4, 2021, due to the reserved grant of the 2020 Restricted Equity incentive Plan,
an additional 2.34 million shares of restricted tradable shares were added.
On November 30, 2021, because some incentive objects no longer met the incentive
conditions, the Company repurchased and cancelled 980,000 shares of restricted shares.
3. The impact of changes in shares on financial indicators such as earnings per share and
net assets per share in the most recent year and the most recent period (if any)
√Applicable □Not Applicable
83 / 228
2021 Annual Report
During the reporting period, the Company's share capital changed due to the implementation of
the restricted equity incentive plan. For details, please refer to "Section II, VII. Major accounting
data and financial indicators in the past three years."
4. Other matters the Company deems it necessary to disclose or required by the securities
regulatory authority to be disclosed
□Applicable √Not Applicable
(ii) Changes in non-tradable shares
√Applicable □Not Applicable
Unit: 10,000 shares
Number
Number Number
of Number of
of of
restricted increased Reasons
restricted restricted
shares at restricted for
Shareholder shares shares at Release date
the shares restriction
released the end
beginning during the on trade
during of the
of the year
the year year
year
The lock-up
period is 24
386 incentive
months, 36
objects for first-
Restricted months and 48
time grand of the
0 0 4,572 4,572 equity months from the
restricted equity
incentives date when the
incentive plan in
registration of the
2020
reserved grant is
completed.
The lock-up
period is 24
31 incentive
months, 36
objects for
Restricted months and 48
reserved grant
0 0 234 234 equity months from the
of restricted
incentives date when the
equity incentive
registration of the
plan in 2020
reserved grant is
completed.
Total 0 0 4,806 4,806 / /
Note: The Company granted 46.7 million shares to 395 incentive objects for the first time. Because
9 incentive objects no longer met the incentive conditions, the Company repurchased and cancelled
980,000 shares of restricted shares. As of the end of the reporting period, there were 386 surviving
first-time incentive objects, holding a total of 45.72 million restricted shares.
II. Securities issuance and listing
(i) Securities issuance as of the reporting period
√Applicable □Not Applicable
Currency: 10,000 shares Currency: RMB
Stocks and Issuing Number of Transaction
Issuing
derivatives Issue date price (or Listing date approved termination
number
Types of interest listing date
84 / 228
2021 Annual Report
securities rate) transactions
Common stock class
January RMB 2.94 January
A share 4,670 4,670
15, 2021 /share 15, 2021
November RMB 2.39 / November
A share 234 234
4, 2021 share 4, 2021
Bonds (including corporate bonds, corporate bonds, and non-financial corporate debt financing
instruments)
19 YIWU CCC June 3, June 18, June 5,
4.30% 800 800
01 2019 2019 2022
19 YIWU CCC September October September
3.99% 700 700
02 26, 2019 15, 2019 27, 2022
Notes on the issuance of securities as of the reporting period (for bonds with different interest rates
during the duration, please specify separately):
√Applicable □Not Applicable
In accordance with the CSRC License [2019] 380 document issued by the China Securities
Regulatory Commission on March 14, 2019, the Company publicly issued RMB 800,000,000 of
corporate bonds on June 3, 2019. The face value of the current bonds is RMB 100 and the coupon
rate is 4.30 %. It was listed and traded on the Shanghai Stock Exchange on June 18, 2019. The
abbreviation of the bond is 19XS01 and the bond code is 155450.
In accordance with the document Zheng Jian Li [2019] No. 380 issued by the China Securities
Regulatory Commission on March 14, 2019, the Company publicly issued RMB 700,000,000 of
corporate bonds on September 26, 2019. The face value of the current bonds is RMB 100, and the
coupon rate is 3.99%. It was listed and traded on the Shanghai Stock Exchange on October 15,
2019. The abbreviation of the bond is 19XS02 and the bond code is 155750.
(ii) Changes in the total number of shares of the Company, the shareholder structure, and
changes in the Company's assets and liabilities structure
□Applicable √Not Applicable
(iii) Existing internal employee shares
□Applicable √Not Applicable
III. Shareholders and actual controllers
(i) Total number of shareholders
The total number of common shareholders as of the end of 178,184
the reporting period
The total number of common shareholders (households) at 174,429
the end of the previous month before the disclosure of the
annual report
85 / 228
2021 Annual Report
(ii) Shareholdings of the top 10 shareholders and top 10 holders of tradable shares (or
shareholders not subject to trading restrictions)
Unit: share
Shares held by top 10 shareholders
Number of Number Pledge, mark or
Change
shares held at of non- freezing Ownership
Shareholder during the Proportion
the end of the tradable of
(full name) reporting (%) Status of
reporting shares Quantity shareholder
period shares
period held
Yiwu China State-
Commodities owned
0 3,038,179,392 55.33 0 None 0
City Holdings legal
Limited person
Zhejiang
State-
Provincial
owned
Finance 0 147,466,528 2.69 0 None 0
legal
Development
person
Ltd.
Hong Kong
Securities
Clearing 50,437,703 63,910,325 1.16 0 Unknown 0 Others
Company
Ltd.(HKSCC)
Domestic
LI Guoping 41,954,500 41,954,500 0.76 0 Unknown 0 natural
person
Domestic
LIU Jiaxuan 30,401,500 30,401,500 0.55 0 Unknown 0 natural
person
Bosera Funds
－Agricultural
Bank of China
－Bosera
China 0 27,672,800 0.50 0 Unknown 0 Unknown
Securities
Financial
Assets
Management
Scheme
E Fund－
Agricultural
Bank of China
－E Fund
China 0 27,672,800 0.50 0 Unknown 0 Unknown
Securities
Financial
Assets
Management
Scheme
86 / 228
2021 Annual Report
Dacheng Fund
－Agricultural
Bank of China
－Dacheng
China 0 27,672,800 0.50 0 Unknown 0 Unknown
Securities
Financial
Assets
Management
Scheme
GF Fund－
Agricultural
Bank of China
－GF China
Securities 0 27,672,800 0.50 0 Unknown 0 Unknown
Financial
Assets
Management
Scheme
Zhong Ou
AMC－
Agricultural
Bank of China
－Zhong Ou
China 0 27,672,800 0.50 0 Unknown 0 Unknown
Securities
Financial
Assets
Management
Scheme
Southern
Asset
Management
－Agricultural
Bank of China
－Southern
0 27,672,800 0.50 0 Unknown 0 Unknown
China
Securities
Financial
Assets
Management
Scheme
ICBC Credit
Suisse Asset
Management
－Agricultural
Bank of China
－ICBC Credit
0 27,672,800 0.50 0 Unknown 0 Unknown
Suisse China
Securities
Financial
Assets
Management
Scheme
Shares held by top 10 holders of tradable shares
Number of tradable shares Type and quantity of shares
Shareholder
held Type Quantity
87 / 228
2021 Annual Report
Yiwu China Commodities City RMB-denominated
3,038,179,392 3,038,179,392
Holdings Limited common share
Zhejiang Provincial Finance RMB-denominated
147,466,528 147,466,528
Development Ltd. common share
Hong Kong Central Clearing RMB-denominated
63,910,325 63,910,325
Company Limited common share
RMB-denominated
LI Guoping 41,954,500 41,954,500
common share
RMB-denominated
LIU Jiaxuan 30,401,500 30,401,500
common share
Bosera Funds－Agricultural
Bank of China－Bosera China RMB-denominated
27,672,800 27,672,800
Securities Financial Assets common share
Management Scheme
E Fund－Agricultural Bank of
China－E Fund China RMB-denominated
27,672,800 27,672,800
Securities Financial Assets common share
Management Scheme
Dacheng Fund－Agricultural
Bank of China－Dacheng China RMB-denominated
27,672,800 27,672,800
Securities Financial Assets common share
Management Scheme
GF Fund－Agricultural Bank of
China－GF China Securities RMB-denominated
27,672,800 27,672,800
Financial Assets Management common share
Scheme
Zhong Ou AMC－Agricultural
Bank of China－Zhong Ou RMB-denominated
27,672,800 27,672,800
China Securities Financial common share
Assets Management Scheme
Southern Asset Management－
Agricultural Bank of China－
RMB-denominated
Southern China Securities 27,672,800 27,672,800
common share
Financial Assets Management
Scheme
ICBC Credit Suisse Asset
Management－Agricultural
Bank of China－ICBC Credit RMB-denominated
27,672,800 27,672,800
Suisse China Securities common share
Financial Assets Management
Scheme
Zhejiang Finance Development Co., Ltd. holds 9.44% of the shares of
Explanation on the relationship
Yiwu State-owned Capital Operation Co., Ltd., the controlling shareholder
or concerted action between the
of Yiwu China Commodity City Holding Limited, the controlling shareholder
above shareholders
of Yiwu Market Development Group Co., Ltd.
Explanation on the preferred
shareholders whose voting
rights had been restituted and None
the quantity of shares held
thereby
Number of shares held by the top 10 shareholders subject to trading restrictions and the trading
restriction conditions
□Applicable √Not Applicable
88 / 228
2021 Annual Report
(iii) Strategic investors or general legal persons became the top 10 shareholders due to the
placement of new shares.
□Applicable √Not Applicable
IV. Controlling shareholder and actual controller
(i) Controlling shareholder
1. Legal person
√Applicable □Not Applicable
Yiwu China Commodities City Holdings
Name
Limited
The person in charge or legal representative of the unit ZHAO Wenge
Date of establishment October 29, 2019
Main business State-owned shareholding platform
Shareholdings of other domestic and overseas listed
companies that hold or participate in shares during the None
reporting period
Other statements None
2. Natural person
□Applicable √Not Applicable
3. Special statement that the Company does not have a controlling shareholder
□Applicable √Not Applicable
4. Explanation on Changes in Controlling shareholder During the Reporting Period
□Applicable √Not Applicable
5. Block diagram of the property rights and control relationship between the Company and
the controlling shareholder
√Applicable □Not Applicable
55.33%
(ii) The actual controller
1. Legal person
√Applicable □Not Applicable
State-owned Assets Supervision and
Name Administration Office of the People’s
Government of Yiwu
89 / 228
2021 Annual Report
The person in charge or legal representative of the unit YU Huazhong
Date of establishment March 26, 2009
State-owned capital management and
Main business
state-owned equity management
Shareholdings of other domestic and overseas listed
companies that hold or participate in shares during the None
reporting period
Other statements None
2. Natural person
□Applicable √Not Applicable
3. Special explanation that the Company does not have an actual controller
□Applicable √Not Applicable
4. Explanation on changes in the Company's control during the reporting period
□Applicable √Not Applicable
5. Block diagram of the property rights and control relationship between the Company and
the actual controller
√Applicable □Not Applicable
55.33%
90 / 228
2021 Annual Report
6. The actual controller controls the Company through trust or other asset management
methods.
□Applicable √Not Applicable
(iii) Other introductions of controlling shareholder and actual controllers
□Applicable √Not Applicable
V. The controlling shareholder or the largest shareholder of the Company and its persons
acting in concert have accumulatively pledged shares that account for more than 80%
of the Company's shares held by them
□Applicable √Not Applicable
VI. Other corporate shareholders holding more than 10% of the shares
□Applicable √Not Applicable
VII. Description of share restriction reduction
□Applicable √Not Applicable
VIII. The specifics of implementation of share repurchase during the reporting period
□Applicable √Not Applicable
91 / 228
2021 Annual Report
Section VIII. Preferred Shares
□Applicable √Not Applicable
92 / 228
2021 Annual Report
Section IX. Bonds
I. Corporate bonds, corporate bonds and non-financial corporate debt financing
instruments
√Applicable □Not Applicable
(i) Corporate bonds
□Applicable √Not Applicable
(ii) Corporate bonds
√Applicable □Not Applicable
1. Basic information on corporate bonds
Unit: RMB 100 million Currency: RMB
Wheth
er
Method there is
of a risk
Inter principal of
Outstan
Name of Abbrevi Cod Issue Value Maturit est repaym Marketp termina
ding
bond ation e date date y date rate ent and lace ting the
amount
(%) interest transac
paymen tion in
t the
stock
market
For the
principal
repaym
ent and
interest
paymen
t of the
bond,
the list
of
bondhol
Publicly ders
offered would
corporat be
e bond made
2019 of accordi
Zhejiang ng to Shangh
19
China 1554 June 3, June 5, June 5, the ai Stock
YIWU 8 4.3 No
Commo 50 2019 2019 2022 relevant Exchan
CCC 01
dities provisio ge
City ns of
Group the
Co., Ltd bond
(Phase registrat
I) ion
authorit
y. The
specific
matters
shall be
handled
accordi
ng to
the
relevant
provisio
93 / 228
2021 Annual Report
ns of
the
bond
registrat
ion
authorit
y.
For the
principal
repaym
ent and
interest
paymen
t of the
bond,
the list
of
bondhol
ders
would
be
made
Publicly
accordi
offered
ng to
corporat
the
e bond
relevant
2019 of
provisio
Zhejiang Septe Septe Shangh
19 Septem ns of
China 1557 mber mber ai Stock
YIWU ber, 7 3.99 the No
Commo 50 26, 27, Exchan
CCC 02 2019 bond
dities 2019 2022 ge
registrat
City
ion
Group
authorit
Co., Ltd
y. The
(Phase
specific
II)
matters
shall be
handled
accordi
ng to
the
relevant
provisio
ns of
the
bond
registrat
ion
authorit
y.
The Company's measures to deal with the risk of bond termination
□Applicable √Not Applicable
Bonds overdue
□Applicable √Not Applicable
Bond interest payment during the reporting period
√Applicable □Not Applicable
Name of bond Description of interest payment
Publicly offered corporate bond 2019 On June 7, 2021, the Company paid interest to all "19XS01"
of Zhejiang China Commodities City holders on time from June 5, 2020 to June 4, 2021.
Group Co., Ltd (Phase I)
94 / 228
2021 Annual Report
Publicly offered corporate bond 2019 On September 27, 2021, the Company paid interest to all
of Zhejiang China Commodities City "19XS02" holders on time from September 27, 2020 to
Group Co., Ltd (Phase II) September 26, 2021.
2. Issuer or investor option clause, investor protection clause trigger and enforcement
□Applicable √Not Applicable
3. Intermediaries providing services for bond issuance and duration business
Name of the
Intermediary Signing Certified Contact Contact
Office address
name Public person number
Accountants
15/F Yuanxiangtai Building,
Haitong Securities XU Kangwei, YE HU
No.5 Anding Road, 17701835535
Co., Ltd. Shaokuan Chenghao
Chaoyang District, Beijing
Changes to the above intermediaries
□Applicable √Not Applicable
4. Use of raised funds at the end of the reporting period
√Applicable □Not Applicable
Unit: RMB 100 million Currency: RMB
Whether it is
Total Operation of consistent with the
Rectification
amount the special purpose, using plan
Amount Amount of illegal use
Name of bond of account for and other
used unused of raised
funds raised funds agreements
funds (if any)
raised (if any) promised in the
prospectus
Publicly offered
corporate bond
2019 of Zhejiang
8 8 0 None None Yes
China Commodities
City Group Co., Ltd
(Phase I)
Publicly offered
corporate bond
2019 of Zhejiang
7 7 0 None None Yes
China Commodities
City Group Co., Ltd
(Phase II)
The progress and operational benefits of raised funds used for construction projects
□Applicable √Not Applicable
Explanation on changing the use of the above-mentioned bonds raised during the reporting period
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
5. Adjustment in credit rating results
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. issued the Credit Rating
Surveillance Report on Zhejiang China Commodities City Group Co., Ltd. and Bonds Publicly
95 / 228
2021 Annual Report
Issued by It [Brilliance Surveillance (2021) 100719] on Jun 28, 2021. The Company had an issuer
rating of AAA with stable outlook, and the bonds had a rating of AAA.
6. The implementation, changes and impacts of guarantees, debt repayment plans and
other debt repayment protection measures during the reporting period and their
impacts
□Applicable √Not Applicable
7. Other statement on corporate bonds
□Applicable √Not Applicable
(iii) Non-financial corporate debt financing instruments in the inter-bank bond market
√Applicable □Not Applicable
1. Non-financial corporate debt financing instruments
Unit: RMB 100 million Currency: RMB
Whe
ther
there
Tr is a
Inve
a risk
stor
Out Method d of
M appr
sta of e termi
Inter ar opria
ndi principal m natin
Name of Abbrev Co Maturity est ke te
Issue date Value date ng repayme ec g the
bond iation de date rate tpl arra
am nt and h trans
(%) ac nge
oun interest a actio
e ment
t payment ni n in
s (if
s the
any)
m stoc
k
mark
et
Zhejiang In
One-time
China 19 te
repayme
Commodit Zhejia rb
July 11, nt of
ies City ng 101 a
2019 to July 15, July 15, principal Non
Group Yiwu 900 10 3.99 nk No
July 12, 2019 2022 and e
Co., Ltd.’s CCC 921 m
2019 interest
2019 MTN0 ar
at
MTN 01 ke
maturity.
(Issue 1) t
Zhejiang In
One-time
China 19 te
repayme
Commodit Zhejia rb
October 17, nt of
ies City ng 101 a
2019 to October 21, October 21, principal Non
Group Yiwu 901 10 3.97 nk No
October 18, 2019 2022 and e
Co., Ltd.'s CCC 396 m
2019 interest
2019 MTN0 ar
at
MTN 02 ke
maturity.
(Issue 2) t
Zhejiang One-time In
21
China repayme te
Zhejia
Commodit October 25, nt of rb
ng 012
ies City 2021 to October 27, July 22, principal a Non
Yiwu 103 10 2.98 No
Group October 26, 2021 2022 and nk e
CCC 893
Co., Ltd.’s 2021 interest m
SCP00
2021 at ar
8
Super maturity. ke
96 / 228
2021 Annual Report
Short- t
term
Financing
Bonds
(Issue 8)
Zhejiang
China
Commodit In
One-time
ies City 21 te
repayme
Group Zhejia rb
November nt of
Co., Ltd.’s ng 012 a
11, 2021 to November August 12, principal Non
2021 Yiwu 104 10 2.87 nk No
November 15, 2021 2022 and e
Super CCC 113 m
12, 2021 interest
Short- SCP00 ar
at
term 9 ke
maturity.
Financing t
Bonds
(Issue 9)
Zhejiang
China
Commodit In
One-time
ies City 21 te
repayme
Group Zhejia rb
November nt of
Co., Ltd.’s ng 012 a
26, 2021 to November August 26, principal Non
2021 Yiwu 105 10 2.84 nk No
November 30, 2021 2022 and e
Super CCC 209 m
29, 2021 interest
Short- SCP01 ar
at
term 0 ke
maturity.
Financing t
Bonds
(Issue 10)
The Company's measures to deal with the risk of bond termination
□Applicable √Not Applicable
Bonds overdue
□Applicable √Not Applicable
Bond interest payment during the reporting period
√Applicable □Not Applicable
Name of bond Description of interest payment
Zhejiang China Commodities City On September 6, 2021, the Company paid the interest to the holders
Group Co., Ltd.’s 2018 MTN (Issue of "18 Zhejiang Yiwu CCC MTN001" for the period from September 6,
1) 2020 to September 5, 2021 on time.
Zhejiang China Commodities City On July 15, 2021, the Company paid the interest to the holders of "19
Group Co., Ltd.’s 2019 MTN (Issue Zhejiang Yiwu CCC MTN001" for the period from July 15, 2020 to
1) July 14, 2021 on time.
Zhejiang China Commodities City On October 21, 2021, the Company paid the interest to the holders of
Group Co., Ltd.’s 2019 MTN (Issue "19 Zhejiang Yiwu CCC MTN002" for the period from October 21,
2) 2020 to October 20, 2021 on time.
Zhejiang China Commodities City On March 9, 2021, the Company paid the interest for the period from
Group Co., Ltd.’s 2020 Super December 9, 2020 to March 8, 2021 and principal to the holders of
Short-term Financing Bonds (Issue "20 Zhejiang Yiwu CCC SCP007" on time.
97 / 228
2021 Annual Report
7)
Zhejiang China Commodities City
On January 22, 2021, the Company paid the interest for the period
Group Co., Ltd.’s 2020 Super
from December 25, 2020 to January 21, 2021 and principal to the
Short-term Financing Bonds (Issue
holders of "20 Zhejiang Yiwu CCC SCP008" on time.
8)
Zhejiang China Commodities City
On April 16, 2021, the Company paid the interest for the period from
Group Co., Ltd.’s 2021 Super
January 18, 2021 to April 15, 2021 and principal to the holders of "21
Short-term Financing Bonds (Issue
Zhejiang Yiwu CCC SCP001" on time.
1)
Zhejiang China Commodities City
On August 24, 2021, the Company paid the interest for the period
Group Co., Ltd.’s 2021 Super
from February 23, 2021 to August 23, 2021 and principal to the
Short-term Financing Bonds (Issue
holders of "21 Zhejiang Yiwu CCC SCP002" on time.
2)
Zhejiang China Commodities City
On June 4, 2021, the Company paid the interest for the period from
Group Co., Ltd.’s 2021 Super
March 8, 2021 to June 3, 2021 and principal to the holders of "21
Short-term Financing Bonds (Issue
Zhejiang Yiwu CCC SCP003" on time.
3)
Zhejiang China Commodities City
On July 13, 2021, the Company paid the interest for the period from
Group Co., Ltd.’s 2021 Super
April 14, 2021 to July 12, 2021 and principal to the holders of "21
Short-term Financing Bonds (Issue
Zhejiang Yiwu CCC SCP004" on time.
4)
Zhejiang China Commodities City
On October 29, 2021, the Company paid the interest for the period
Group Co., Ltd.’s 2021 Super
from June 2, 2021 to October 28, 2021 and principal to the holders of
Short-term Financing Bonds (Issue
"21 Zhejiang Yiwu CCC SCP005" on time.
5)
Zhejiang China Commodities City
On October 7, 2021, the Company paid the interest for the period
Group Co., Ltd.’s 2021 Super
from July 8, 2021 to December 6, 2021 and principal to the holders of
Short-term Financing Bonds (Issue
"21 Zhejiang Yiwu CCC SCP006" on time.
6)
Zhejiang China Commodities City
On November 18, 2021, the Company paid the interest for the period
Group Co., Ltd.’s 2021 Super
from August 20, 2021 to November 17, 2021 and principal to the
Short-term Financing Bonds (Issue
holders of "21 Zhejiang Yiwu CCC SCP007" on time.
7)
2. Issuer or investor option clause, investor protection clause trigger and enforcement
□Applicable √Not Applicable
3. Intermediaries providing services for bond issuance and duration business
Name of the
Contact Contact
Intermediary name Office address Signing Certified
person number
Public Accountants
China Merchants No. 7088 Shennan ZHU Wei, ZENG BAO 18257915891
98 / 228
2021 Annual Report
Bank Co., Ltd. Avenue, Futian District, Hao Chentao
Shenzhen, Guangdong,
China
No. 69, Jianguomen Inner
Agricultural Bank of Han Dan, Zhang CHEN
Street, Dongcheng 15215859317
China Limited Honglei Jie
District, Beijing, China
Shanghai Pudong
No. 12, Zhongshan East SHI Haiyun, DOU XU
Development Bank 13732437619
1st Road, Shanghai Youming Haokang
Co., Ltd.
Industrial and No. 55, Fuxingmen Inner
WANG
Commercial Bank of Street, Xicheng District, Li Li, He Qi 18857980520
Ziqiang
China Limited Beijing, China
Wang Pengcheng,
China Construction No. 25 Jinron Street, WU
Tian Zhiyong, Feng 15067057702
Bank Corporation Xicheng District, Beijing Yanting
Suoteng
Changes to the above intermediaries
□Applicable √Not Applicable
4. Use of raised funds at the end of the reporting period
√Applicable □Not Applicable
Unit: RMB 100 million Currency: RMB
Whether it is
consistent
Operation
with the
Total of the Rectification
purpose,
amount special of illegal
Amount Amount using plan and
Name of bond of account use of
used unused other
funds for raised raised funds
agreements
raised funds (if (if any)
promised in
any)
the
prospectus
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 1)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 2)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 3)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 4)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 5)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 6)
Zhejiang China Commodities City
10 10 0 None None Yes
Group Co., Ltd.’s 2021 Super
99 / 228
2021 Annual Report
Short-term Financing Bonds
(Issue 7)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 8)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 9)
Zhejiang China Commodities City
Group Co., Ltd.’s 2021 Super
10 10 0 None None Yes
Short-term Financing Bonds
(Issue 10)
The progress and operational benefits of raised funds used for construction projects
□Applicable √Not Applicable
Explanation on changing the use of the above-mentioned bonds raised during the reporting period
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
5. Adjustment in credit rating results
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. issued the Credit Rating
Surveillance Report on Zhejiang China Commodities City Group Co., Ltd. and Bonds Publicly
Issued by It [Brilliance Surveillance (2021) 100719] on Jun 28, 2021. The Company had an issuer
rating of AAA with stable outlook, and the bonds had a rating of AAA.
6. The implementation, changes and impacts of guarantees, debt repayment plans and
other debt repayment protection measures during the reporting period and their
impacts
□Applicable √Not Applicable
7. Explanation on other situations relevant to non-financial corporate debt financing
instruments
□Applicable √Not Applicable
(iv) During the reporting period, the Company's loss in the scope of consolidated
statements exceeded 10% of its net assets as of the the end of the previous year.
□Applicable √Not Applicable
(v) Interest-bearing debts other than bonds overdue at the end of the reporting period
□Applicable √Not Applicable
(vi) Influence of violations of laws and regulations, the Company's Articles of Association,
information disclosure affairs management system and the stipulations or commitments in
the bond prospectus during the reporting period on the rights and interests of bond
investors
□Applicable √Not Applicable
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2021 Annual Report
(vii) The Company's accounting data and financial indicators for the past 2 years as of
the end of the reporting period
√Applicable □Not Applicable
Unit: RMB
Increase/decrease
in the current
period as Reasons
Major indicator 2021 2020 compared to the for
prior change
corresponding
period (%)
Net profit after deduction of 1,221,808,001.15 517,246,267.88 136.21
non-recurring gains and
losses
Current ratio 58.91% 91.44% -35.57
Quick ratio 50.12% 79.45% -36.91
Debt-to-asset ratio (%) 52.83 52.78 0.08
EBITDA to total debt ratio 0.32 0.27 20.94
Interest coverage ratio 5.85 4.42 32.55
Cash interest protection 7.19 3.13 129.75
multiple
EBITDA-to-interest coverage 7.99 6.04 32.26
ratio
Loan repayment rate (%) 100 100
Interest payment rate (%) 100 100
II. Convertible corporate bonds
□Applicable √Not Applicable
101 / 228
2021 Annual Report
Section X. Financial Report
I. Auditor’s report
√Applicable □Not Applicable
All the shareholders of Zhejiang China Commodities City Group Co., Ltd.
1. Audit opinion
We have audited the financial statements of Zhejiang China Commodities City Group Co.,
Ltd., including Consolidated & Corporate Balance Sheets as of December 31, 2021,
Consolidated & Corporate Income Statements, Consolidated & Corporate Cash Flow
Statements, Consolidated & Corporate Statements of Changes in Owner’s Equity for 2021 and
Notes to the Financial Statements.
We believe that the attached financial statements were prepared according to Accounting
Standards for Zhejiang China Commodities City Group Co., Ltd. in all material aspects as a fair
reflection of the consolidated and parent company’s financial status of Zhejiang China
Commodities City Group Co., Ltd. on the December 31, 2021 and the operation outcomes and
cash flows of the Company for 2021.
2. Basis of audit opinion
We conducted our audit in accordance with the Auditing Standards for Chinese Certified
Public Accountants. The section “CPAs’ Responsibility for Audit of Financial Statements” in the
audit report further describes on our responsibilities under these standards. In accordance with
the CPA Code of Ethics in China, we are independent of Zhejiang China Commodities City
Group Co., Ltd. and have performed other responsibilities in respect of professional ethics.
We believe that the audit evidence we have acquired is sufficient and effective, providing a rea
sonable basis for our opinion.
3. Key audit matters
Key audit matters are matters that we believe are the most important matters for the audit
of the financial statements for 2018 based on professional judgment. The response to such
matters is based on the background of auditing the financial statements as a whole and
forming an audit opinion. We do not express independent opinions on such matters. This was
also the background for our description for how every matter below was responded in the
audit.
We have fulfilled the responsibilities described in the "Certified Accountants'
Responsibilities for the Audit of Financial Statements" section of this report, including those
related to these key audit matters. Correspondingly, our audit work included the
implementation of audit procedures designed to deal with the assessed risk of material
misstatement in the financial statements. The results of our audit procedures, including the
procedures performed in response to the following key audit matters, provide a basis for the
expression of the audit opinion in the financial statements as a whole.
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2021 Annual Report
Key audit matters: Audit response to the matter:
Impairment of non-goodwill long-term assets with certain useful life
As of December 31, 2021, the book value of We reviewed the judgment of the
the non-goodwill assets with certain useful management on the indications of impairment
life in the Group’s market and supporting of long-term assets during the audit:
hotels, exhibition halls and commercial 1. For long-term assets that involve
buildings, such as the corresponding impairment testing for indications of
property, plant and equipment, investment impairment, we have assessed the
real estate, land use rights, construction in reasonableness of the asset Groups identified
progress, right-of-use assets and long-term by the management;
deferred expenses(hereinafter collectively 2. With the assistance of internal valuation
referred to as "long-term assets") totaled experts, we assessed the reasonableness of
RMB 13.60020 billion, accounting for 44% of the major assumptions and evaluation
the total book value of the consolidated methods used by the Group management, like
assets of the Group. When identifying discount rates;
whether the above-mentioned long-term 3. We assessed the reasonableness of key
assets have any indications of impairment, assumptions such as estimated sales income,
and when carrying out impairment tests on gross profit, operating costs, and disposal
the long-term assets with indications of value predictions at the end of the useful life
impairment, the Group needs to review the of related assets in the future years, and
recoverable amount of the asset or asset checked basic data on the present value of
Group. This requires the management to use expected future cash flows with relevant
major judgments and estimates to determine supporting evidence.
the estimated future sales income, gross 4. We compared and analyzed the actual
profit, operating costs, the disposal value performance of the current year with the
forecast and discount rate at the end of the predicted performance of the previous year;
useful life of the relevant assets and other 5. We checked the adequacy and
key assumptions when predicting the completeness of the relevant disclosures of
present value of future cash flows.The the Group in the notes to the financial
evaluation process is complicated, so we statements.
identify them as key audit matters.
Relevant information has been disclosed in
Note V. 43 and Notes VII. 20, 21, 22, 25, 26
and 29 to the financial statements.
4. Other information
Zhejiang China Commodities City Group Co., Ltd.’s management is responsible for other
information. Such information includes the information covered by the annual report, but the
financial statements and the audit report provided by us are excluded.
Our audit opinion released in the financial statements does not cover other information and
we do not release any form of assurance conclusion on other information.
Our responsibility is to read other information in conjunction with our audit of the financial
statements. During the process, we consider whether there is a material inconsistency or other
material misstatement in the financial statements with the knowledge acquired by us during the
audit process.
Based on the work we have performed, if we determine that there is a material
misstatement of other information, we should report the fact. We have nothing to report in this
aspect.
5. Responsibility of management and governance for financial statements
The management is responsible for preparing financial statements in accordance with the
provisions of the Accounting Standards for Business Enterprises to achieve fair reflection, and
designing, implementing and maintaining necessary internal controls
to prevent these financial statements from material misstatement arising from fraud or error.
103 / 228
2021 Annual Report
During preparing the financial statements, the management is responsible for assessing
the sustainable operation capabilities of Zhejiang China Commodities City Group Co., Ltd.,
disclosing, as applicable, going-concern-related matters and applying the going-concern
assumption unless the management plans to liquidate Zhejiang China Commodities City Group
Co., Ltd. and discontinue operations or has no other realistic choices.
The governance is responsible for supervising the financial reporting process of Zhejiang
China Commodities City Group Co., Ltd.
6. Certified Public Accountants’ responsibility for audit of financial statements
Our goal is to obtain reasonable assurance about whether the financial statements are
free from material misstatement caused by fraud or error and express an opinion on these
financial statements based on our audits. The reasonable assurance is a guarantee at a high
level, but there is no guarantee that an audit performed in accordance with the auditing
standards will always identify existing material misstatement. Misstatements may be caused by
fraud or error. Misstatement is generally considered to be material if it is reasonably expected
that the misstatement, alone or aggregated, may affect the financial decision made by the
users of the financial statements based on the financial statements.
We applied professional judgment and professional skepticism during conducting audit
work in accordance with the Auditing Standards for CPA while performing following works:
(1) Identifying and evaluating the risk of material misstatements of financial statements for
fraud or error designing and implementing audit procedures to deal with these risks and
obtaining adequate and appropriate audit evidence as a basis for release of our audit
opinion. As fraud may involve collusion, forgery, willful omission, misrepresentation or
override of internal control, the risk of not discovering a material misstatement due to
fraud is higher than the risk of not discovering a material misstatement resulting from an
error.
(2) Understanding the internal control related to the audit in order to design the appropriate
audit procedures.
(3) Evaluating the appropriateness of the accounting policies selected by management level
and the reasonableness of accounting estimates and related disclosures.
(4) Concluding the appropriateness of management level’s use of the going concern
assumption while drawing a conclusion as to whether there is any material uncertainty
about the issues or circumstances that may cause major doubts about the ability of the
Zhejiang China Commodities City Group Co., Ltd. to continue as a going concern on
basis of the audit evidence acquired. If we conclude that there is a significant
uncertainty, the auditing standards require us to remind user of the statements of the
relevant disclosures in the financial statements in the audit report. If the disclosures are
inadequate, we should release an unqualified opinion. Our conclusion is based on the
information available by the date of the audit report. However, future events or
circumstances may result in Zhejiang China Commodities City Group Co., Ltd. being
unable to continue as a going concern.
(5) Evaluating the overall presentation, structure and content (including disclosure) of the
financial statements as well as whether the financial statements are a fair reflection of
the related transactions and matters.
(6) Obtaining adequate and appropriate audit evidence on the financial information of the
entities or business activities in Zhejiang China Commodities City Group Co., Ltd. to
express an opinion on the financial statements. We are responsible for directing,
supervising and implementing the Group’s audit and assume full responsibility for the
audit opinion.
We have communicated with the governance on the matters such as the scope and timing
of audit and major audit findings, including the notable defects of internal control identified in
our audit.
We also provided a statement to the governance that we had complied with the
professional ethics requirements related to independence, and communicated with the
governance all relationships and other matters that may be reasonably believed to affect our
independence, and related preventive measures (if applicable) .
In the matters communicated with the governance, we determined which matters should
be the most important to the audit of the financial statements of the current period, and should
104 / 228
2021 Annual Report
constitute the key audit matters accordingly. We described such matters in the audit report,
unless laws and regulations had prohibited public disclosure of these matters, or in rare cases,
we determined that such matters should not be communicated in the audit report if the
negative consequences of communicating a matter in the audit report are reasonably expected
to outweigh the public interests.
Ernst & Young Hua Ming Certified Public Accountants (special general partnership) Chinese
CPA: YIN Guowei
(Project Partner)
Chinese CPA: Huang Zhigang
Beijing, China Mar 22, 2022
105 / 228
2021 Annual Report
II. Financial statements
Consolidated Balance Sheet
December 31, 2021
Prepared by: Zhejiang China Commodities City Group Co., Ltd.
Unit: RMB
Item Note December 31, 2021 December 31, 2020
Current assets:
Monetary capital 4,831,468,386.25 5,612,642,932.21
Held-for-trading financial assets 75,375,083.20 51,712,734.31
Accounts receivable 185,237,530.89 153,573,476.86
Prepayments 875,167,709.48 105,187,528.26
Other receivables 1,355,924,282.96 2,708,478,136.25
In which: interest receivable 92,249,275.44 121,401,210.48
Inventory 1,327,402,567.99 1,329,467,728.17
Other current assets 248,662,219.40 179,724,694.17
Total current assets 8,899,237,780.17 10,140,787,230.23
Non-current assets:
Long-term receivables 222,307,363.40 126,756,573.81
Long-term equity investment 5,772,455,242.84 3,832,897,502.71
Other equity instruments investment 642,187,968.77 662,256,342.79
Other non-current financial assets 1,524,819,255.41 1,523,925,249.81
Property investment 2,973,936,400.46 1,960,426,291.73
Fixed assets 5,078,590,929.75 5,234,293,786.87
Construction in progress 1,090,577,963.27 982,891,877.14
Right-of-use assets 225,347,077.14 -
Intangible assets 4,043,564,662.35 3,900,780,981.92
Development expenses 6,359,814.02 22,223,061.09
Long-term prepaid expenses 188,184,376.43 110,728,723.36
Deferred income tax assets 135,737,028.89 99,664,328.84
Other non-current assets 211,329,650.45 152,495,196.56
Total non-current assets 22,115,397,733.18 18,609,339,916.63
Total assets 31,014,635,513.35 28,750,127,146.86
Current liabilities:
Short-term borrowings 942,736,046.04 1,257,179,389.40
Accounts payable 493,360,429.02 636,463,802.23
Advances from customers 153,566,311.13 112,752,897.25
Contract liabilities 4,058,419,224.84 2,442,211,788.88
Payroll payable 243,964,755.38 161,498,997.53
Tax payable 559,496,547.34 495,400,499.73
Other payables 1,908,742,835.15 1,646,345,561.62
Non-current liabilities due within one year 3,664,241,923.08 1,315,026,574.43
Other current liabilities 3,081,384,800.50 3,023,608,041.68
Total current liabilities 15,105,912,872.48 11,090,487,552.75
Non-current liabilities:
Long-term borrowings 771,250,000.00 282,000,000.00
Bonds payable - 3,552,161,709.68
Lease liabilities 205,942,673.93 -
Estimated liabilities 110,620,306.10 110,620,306.10
Deferred income 78,170,103.62 26,545,277.30
Deferred income tax liabilities 111,897,463.42 113,602,923.79
Total non-current liabilities 1,277,880,547.07 4,084,930,216.87
Total liabilities 16,383,793,419.55 15,175,417,769.62
Owners’ equity (or shareholders’ equity)
Paid-in capital (share capital) 5,491,274,176.00 5,489,914,176.00
Capital reserve 1,631,509,114.96 1,594,906,524.67
Less: treasury stocks 137,494,800.00 137,298,000.00
Other comprehensive income 60,850,735.02 78,149,661.33
Surplus reserve 1,505,209,795.50 1,364,257,808.58
Undistributed profits 6,059,496,846.85 5,168,298,206.50
Total equity attributable to owners (shareholders)
14,610,845,868.33 13,558,228,377.08
of the parent company
Minority interest 19,996,225.47 16,481,000.16
Total owners’ equity (or shareholders’ equity) 14,630,842,093.80 13,574,709,377.24
Total liabilities and owners’ equity (or
31,014,635,513.35 28,750,127,146.86
shareholders’ equity)
106 / 228
2021 Annual Report
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of Finance
Department: Zhao Difang
Balance Sheet of Parent Company
December 31, 2021
Prepared by: Zhejiang China Commodities City Group Co., Ltd.
Unit: RMB
Item Note December 31, 2021 December 31, 2020
Current assets:
Monetary capital 4,327,117,133.34 5,435,867,497.50
Held-for-trading financial assets 1,484.70 6,632.72
Accounts receivable 23,629,682.69 14,671,577.47
Prepayments 11,213,809.02 29,452,445.04
Other receivables 1,207,086,885.99 2,651,640,610.06
In which: interest receivable 92,249,275.44 121,401,210.48
Inventory 7,308,939.20 10,144,965.06
Other current assets 3,282,706,248.36 3,082,340,716.76
Total current assets 8,859,064,183.30 11,224,124,444.61
Non-current assets:
Long-term receivables 41,668,837.64 61,250,000.00
Long-term equity investment 8,246,000,020.80 6,083,135,428.02
Other equity instruments investment 642,187,968.77 662,256,342.79
Other non-current financial assets 179,632,207.32 266,722,811.41
Property investment 2,533,374,736.14 1,501,734,504.79
Fixed assets 4,333,691,395.01 4,444,239,239.28
Construction in progress 936,297,029.41 856,248,099.10
Right-of-use assets 118,591,035.63 -
Intangible assets 3,878,208,204.47 3,777,092,772.41
Long-term prepaid expenses 165,720,500.56 58,705,952.97
Deferred income tax assets 122,565,730.38 85,739,381.21
Other non-current assets 65,607,343.55 -
Total non-current assets 21,263,545,009.68 17,797,124,531.98
Total assets 30,122,609,192.98 29,021,248,976.59
Current liabilities:
Short-term borrowings 942,736,046.04 1,257,179,389.40
Accounts payable 349,268,967.90 444,254,309.61
Advances from customers 104,805,243.57 97,380,931.49
Contract liabilities 3,029,673,931.75 2,283,994,068.70
Payroll payable 203,724,767.47 131,469,702.81
Tax payable 527,641,861.33 546,100,633.28
Other payables 1,596,947,195.91 1,333,312,494.36
Non-current liabilities due within one year 3,656,595,072.25 1,315,026,574.43
Other current liabilities 3,452,451,678.36 3,556,664,822.79
Total current liabilities 13,863,844,764.58 10,965,382,926.87
Non-current liabilities:
Long-term borrowings 771,250,000.00 282,000,000.00
Bonds payable - 3,552,161,709.68
Lease liabilities 113,367,062.05 -
Estimated liabilities 110,620,306.10 110,620,306.10
Deferred income 78,170,103.62 26,545,277.30
Deferred income tax liabilities 43,870,176.87 69,623,249.14
Total non-current liabilities 1,117,277,648.64 4,040,950,542.22
Total liabilities 14,981,122,413.22 15,006,333,469.09
Owners’ equity (or shareholders’ equity)
Paid-in capital (share capital) 5,491,274,176.00 5,489,914,176.00
Capital reserve 1,866,141,278.50 1,833,256,515.22
Less: treasury stocks 137,494,800.00 137,298,000.00
Other comprehensive income 66,421,903.33 81,473,183.84
Surplus reserve 1,505,156,319.67 1,364,204,332.75
Undistributed profits 6,349,987,902.26 5,383,365,299.69
Total owners’ equity (or shareholders’ equity) 15,141,486,779.76 14,014,915,507.50
Total liabilities and owners’ equity (or
30,122,609,192.98 29,021,248,976.59
shareholders’ equity)
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of Finance
Department: Zhao Difang
107 / 228
2021 Annual Report
Consolidated Income Statement
January-December 2021
Unit: RMB
Item Note 2021 2020
I. Gross revenue 6,033,842,972.95 3,725,686,100.39
In which: operating revenue 6,033,842,972.95 3,725,686,100.39
II. Gross cost 5,037,812,165.29 2,797,025,785.03
In which: Operating cost 4,027,543,138.56 1,811,136,443.99
Taxes and surcharges 161,759,208.82 165,885,982.83
Sales expenses 204,745,974.57 241,889,186.44
Administrative expenses 453,543,427.80 377,516,845.45
R&D expenses 10,308,801.84 18,507,626.99
Financial expenses 179,911,613.70 182,089,699.33
In which: interest expenses 341,313,765.39 416,095,890.57
Interest income 177,964,682.68 230,212,773.93
Plus: other income 23,556,948.01 17,986,332.14
Investment income (loss is indicated by “-”) 634,227,991.02 524,214,123.84
In which: income from investment in associates and joint
599,180,325.58 34,968,640.68
ventures
Changes in fair value (loss is indicated by “-”) 7,231,321.84 -32,955,861.63
Credit impairment loss (loss is indicated by “-”) -7,299,694.67 -2,282,683.90
Income from disposal of assets (loss is indicated by “-”) 76,006.41 8,180,591.72
III. Operating profit (loss is indicated by “-”) 1,653,823,380.27 1,443,802,817.53
Plus: income from non-operating activities 5,766,372.46 4,425,072.97
Less: expenses from non-operating activities 2,895,928.76 26,636,816.07
IV. Profits before tax (loss is indicated by “-”) 1,656,693,823.97 1,421,591,074.43
Less: income tax 327,525,237.95 499,755,019.22
V. Net profits (net loss is indicated by “-”) 1,329,168,586.02 921,836,055.21
(I) Categorized by continuity of operation
Net profits from continuing operation (net loss is indicated by
1,329,168,586.02 921,836,055.21
“-”)
(II) Categorized by ownership
Net profits attributable to shareholders of the parent company
1,334,095,906.95 926,626,706.42
(net loss is indicated by “-”)
Minority interest(net loss is indicated by “-”) -4,927,320.93 -4,790,651.21
VI. Other comprehensive income, net of tax -17,256,380.07 11,916,631.45
(I) Other comprehensive income attributable to owners of the
-17,298,926.31 11,882,468.59
parent company, net of tax
1. Other comprehensive income that cannot be reclassified as
-15,051,280.51 15,051,280.51
profits or loss
(3) Changes in fair value of investments in other equity
-15,051,280.51 15,051,280.51
instruments
2 . Other comprehensive income that will be reclassified as
-2,247,645.80 -3,168,811.92
profits or loss
(6) Difference arising from the translation of foreign currency
-2,247,645.80 -3,168,811.92
financial statements
(2) After -tax net of other comprehensive income attributable to
42,546.24 34,162.86
minority shareholders
VII. Total comprehensive income 1,311,912,205.95 933,752,686.66
(I) Total comprehensive income attributable to owners of the
1,316,796,980.64 938,509,175.01
parent company
(II) Total comprehensive income attributable to minority
-4,884,774.69 -4,756,488.35
shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.25 0.17
(II) Diluted earnings per share 0.25 0.17
For merger of the enterprises under common control during the current period, net profits of the
merged party prior to the merger were RMB 0, and net profits of the merged party during the
previous period were RMB 0.
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of Finance
Department: Zhao Difang
108 / 228
2021 Annual Report
Income Statement of Parent Company
January-December 2021
Unit: RMB
Item Note 2021 2020
I. Operating revenue 2,922,125,402.93 3,004,461,701.48
Less: Operating cost 1,062,881,897.31 1,057,141,636.22
Taxes and surcharges 132,198,523.20 132,358,447.92
Sales expenses 158,004,638.76 239,654,404.97
Administrative expenses 239,151,835.56 214,977,084.50
Financial expenses 175,493,659.20 187,866,954.47
In which: interest expenses 341,313,765.39 416,572,917.39
Interest income 177,964,682.68 230,214,546.47
Plus: other income 13,716,900.72 8,780,068.91
Investment income (loss is indicated by “-”) 598,320,996.73 658,729,792.04
In which: income from investment in
544,982,046.87 64,824,176.63
associates and joint ventures
Changes in fair value (loss is indicated by “-”) -83,904,126.09 -103,343,955.11
Credit impairment loss (loss is indicated by “-
-989,960.58 205,158.05
”)
Income from disposal of assets (loss is
-32,610.97 7,092,990.67
indicated by “-”)
II. Operating profits (loss is indicated by “-”) 1,681,506,048.71 1,743,927,227.96
Plus: income from non-operating activities 5,508,893.78 2,350,534.71
Less: expenses from non-operating activities 3,187,712.27 20,162,609.18
III. Profits before tax (loss is indicated by “-”) 1,683,827,230.22 1,726,115,153.49
Less: income tax 274,307,361.05 445,206,185.75
IV. Net profits (net loss is indicated by “-”) 1,409,519,869.17 1,280,908,967.74
(I) Categorized by continuity of operation(net loss
1,409,519,869.17 1,280,908,967.74
is indicated by “-”)
V. Other comprehensive income, net of tax -15,051,280.51 15,051,280.51
(I) Other comprehensive income that cannot be
-15,051,280.51 15,051,280.51
reclassified as profit or loss
3. Changes in fair value of investments in other
-15,051,280.51 15,051,280.51
equity instruments
VI. Total comprehensive income 1,394,468,588.66 1,295,960,248.25
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong
Head of Finance Department: Zhao Difang
109 / 228
2021 Annual Report
Consolidated Cash Flow Statement
January-December 2021
Unit: RMB
Item Note 2021 2020
I. Cash flow from operating activities:
Cash received from sale of goods and rendering
8,099,404,766.59 4,448,611,152.91
of services
Cash received for taxes and surcharges refunded - 4,456,323.70
Other cash receipts relating to operating activities 525,408,330.58 408,789,146.30
Sub-total of cash inflow from operating
8,624,813,097.17 4,861,856,622.91
activities
Cash paid for goods and services 4,655,490,266.98 2,379,428,567.25
Cash paid to and on behalf of employees 551,082,829.16 585,624,913.63
Payments of taxes 786,973,453.98 473,925,483.80
Other cash payments relating to operating
598,184,039.29 594,089,396.28
activities
Sub-total of cash outflow from operating
6,591,730,589.41 4,033,068,360.96
activities
Net cash flow from operating activities 2,033,082,507.76 828,788,261.95
II. Cash flow from investing activities:
Cash received from recovery of investment 6,124,327,288.57 13,116,015,960.26
Cash received from investment income 325,898,607.79 297,606,559.61
Net cash received from disposal of property,
plant and equipment, intangible assets and other 44,446,864.25 10,313,579.94
long-term assets
Net cash received from disposal of subsidiaries
- 192,466,418.65
and other business units
Other cash receipts relating to investing activities 3,746,899,831.00 4,450,486,259.27
Sub-total of cash inflow from investing
10,241,572,591.61 18,066,888,777.73
activities
Cash paid to acquire and construct fixed assets,
2,042,626,824.44 1,212,154,493.64
intangible assets and other long-term assets
Cash paid to acquire investments 4,915,716,783.24 13,865,803,003.64
Other cash paid related to investing activities 1,632,462,005.00 2,352,817,932.28
Sub-total of cash outflow from investing
8,590,805,612.68 17,430,775,429.56
activities
Net cash flow from investing activities 1,650,766,978.93 636,113,348.17
III. Cash flow from financing activities:
Cash received for investment taking 13,992,600.00 156,298,000.00
Including: cash received by subsidiaries from
8,400,000.00 19,000,000.00
absorbing minority shareholders' investment
Cash received from borrowings 12,319,250,000.00 13,142,000,000.00
Sub-total of cash inflow from financing
12,333,242,600.00 13,298,298,000.00
activities
Cash paid for debts repayment 13,344,000,000.00 15,552,228,773.17
Cash paid for distribution of dividends or profits
650,819,017.71 537,445,865.52
or payment of interest
In which: dividends or profits paid by subsidiaries
- 114,400.00
to minority shareholders
Other cash paid related to financing activities 40,358,783.07 64,460,000.00
Sub-total of cash outflow from financing
14,035,177,800.78 16,154,134,638.69
activities
Net cash flow from financing activities -1,701,935,200.78 -2,855,836,638.69
IV. Effect of foreign exchange rate changes on
-8,088,832.07 -3,134,649.06
cash and cash equivalents
V. Net increase in cash and cash equivalents 1,973,825,453.84 -1,394,069,677.63
Plus: opening balance of cash and cash
2,032,642,871.63 3,426,712,549.26
equivalents
VI. Closing balance of cash and cash
4,006,468,325.47 2,032,642,871.63
equivalents
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong
Head of Finance Department: Zhao Difang
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2021 Annual Report
Cash Flow Statement of Parent Company
January-December 2021
Unit: RMB
Item Note 2021 2020
I. Cash flow from operating activities:
Cash received from sale of goods and
3,748,589,385.84 2,446,781,848.92
rendering of services
Cash received for taxes and surcharges
- 1,149,176.75
refunded
Other cash receipts relating to operating
349,377,861.57 241,467,188.43
activities
Sub-total of cash inflow from operating
4,097,967,247.41 2,689,398,214.10
activities
Cash paid for goods and services 571,281,536.76 556,362,710.98
Cash paid to and on behalf of employees 353,270,873.06 401,702,437.14
Payments of taxes 691,067,319.78 258,399,863.90
Other cash payments relating to operating
674,684,402.42 450,114,859.64
activities
Sub-total of cash outflow from operating
2,290,304,132.02 1,666,579,871.66
activities
Net cash flow from operating activities 1,807,663,115.39 1,022,818,342.44
II. Cash flow from investing activities:
Cash received from recovery of investment 6,200,000,000.00 13,081,060,305.96
Cash received from investment income 327,497,449.71 225,062,189.56
Net cash received from disposal of property,
plant and equipment, intangible assets and other 42,475,671.66 474,396.78
long-term assets
Net cash received from disposal of subsidiaries
- 2,232,000,000.00
and other business units
Other cash receipts relating to investing
3,746,899,831.00 2,775,280,817.96
activities
Sub-total of cash inflow from investing
10,316,872,952.37 18,313,877,710.26
activities
Cash paid to acquire and construct fixed
assets, intangible assets and other long-term 1,973,252,137.98 1,192,740,121.04
assets
Cash paid to acquire investments 5,193,070,000.00 14,745,855,008.73
Other cash paid related to investing activities 1,632,462,005.00 2,007,512,948.00
Sub-total of cash outflow from investing
8,798,784,142.98 17,946,108,077.77
activities
Net cash flow from investing activities 1,518,088,809.39 367,769,632.49
III. Cash flow from financing activities:
Cash received for investment taking 5,592,600.00 137,298,000.00
Cash received from borrowings 12,319,250,000.00 13,142,000,000.00
Sub-total of cash inflow from financing
12,324,842,600.00 13,279,298,000.00
activities
Cash paid for debts repayment 13,344,000,000.00 15,552,228,773.17
Cash paid for distribution of dividends or profits
650,819,017.71 537,331,465.52
or payment of interest
Other cash paid related to financing activities 14,525,871.43 -
Sub-total of cash outflow from financing
14,009,344,889.14 16,089,560,238.69
activities
Net cash flow from financing activities -1,684,502,289.14 -2,810,262,238.69
IV. Effect of foreign exchange rate changes on
-
cash and cash equivalents
V. Net increase in cash and cash equivalents 1,641,249,635.64 -1,419,674,263.76
Plus: opening balance of cash and cash
1,885,867,436.92 3,305,541,700.68
equivalents
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2021 Annual Report
VI. Closing balance of cash and cash
3,527,117,072.56 1,885,867,436.92
equivalents
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head
of Finance Department: Zhao Difang
112 / 228
2021 Annual Report
Statement of Changes in Consolidated Owners’ Equity
January-December 2021
Unit: RMB
2021
Equity attributable to owners of the parent company
Item Other
Paid-in capital Less: treasury Minority interest Total owners’ equity
Capital reserve comprehensive Surplus reserve Undistributed profits Sub-total
(share capital) stocks
income
1. Balance at the
end of previous 5,489,914,176.00 1,594,906,524.67 137,298,000.00 78,149,661.33 1,364,257,808.58 5,168,298,206.50 13,558,228,377.08 16,481,000.16 13,574,709,377.24
year
II. Opening balance
5,489,914,176.00 1,594,906,524.67 137,298,000.00 78,149,661.33 1,364,257,808.58 5,168,298,206.50 13,558,228,377.08 16,481,000.16 13,574,709,377.24
of the current year
III. Change in the
period (decrease is 1,360,000.00 36,602,590.29 196,800.00 -17,298,926.31 140,951,986.92 891,198,640.35 1,052,617,491.25 3,515,225.31 1,056,132,716.56
indicated by “-”)
(I) Total
comprehensive - - - -17,298,926.31 - 1,334,095,906.95 1,316,796,980.64 -4,884,774.69 1,311,912,205.95
income
(II)Owners’
contribution to and 1,360,000.00 32,884,763.28 196,800.00 - - - 34,047,963.28 8,400,000.00 42,447,963.28
reduction in capital
1. Common shares
contributed by 1,360,000.00 1,351,400.00 196,800.00 - - - 2,514,600.00 8,400,000.00 10,914,600.00
owners
3. Amount of
share-based
- 31,533,363.28 - - - - 31,533,363.28 - 31,533,363.28
payment into
owner’s equity
(III) Profits
- - - - 140,951,986.92 -442,897,266.60 -301,945,279.68 - -301,945,279.68
distribution
1. Withdrawal of
- - - - 140,951,986.92 -140,951,986.92 - - -
surplus reserve
3. Distribution to
owners (or - - - - - -301,945,279.68 -301,945,279.68 - -301,945,279.68
shareholders)
(VI) Others - 3,717,827.01 - - - - 3,717,827.01 - 3,717,827.01
IV. Closing balance
of the current 5,491,274,176.00 1,631,509,114.96 137,494,800.00 60,850,735.02 1,505,209,795.50 6,059,496,846.85 14,610,845,868.33 19,996,225.47 14,630,842,093.80
period
2020
Item
Equity attributable to owners of the parent company Minority interest Total owners’ equity
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2021 Annual Report
Other
Paid-in capital Less: treasury
Capital reserve comprehensive Surplus reserve Undistributed profits Sub-total
(share capital) stocks
income
1. Balance at the end
5,443,214,176.00 1,524,183,779.64 - 66,267,192.74 1,236,166,911.81 4,750,787,389.17 13,020,619,449.36 63,679,633.85 13,084,299,083.21
of previous year
II. Opening balance
5,443,214,176.00 1,524,183,779.64 - 66,267,192.74 1,236,166,911.81 4,750,787,389.17 13,020,619,449.36 63,679,633.85 13,084,299,083.21
of the current year
III. YoY change
(decrease is 46,700,000.00 70,722,745.03 137,298,000.00 11,882,468.59 128,090,896.77 417,510,817.33 537,608,927.72 -47,198,633.69 490,410,294.03
indicated by “-”)
(I) Total
comprehensive - - - 11,882,468.59 - 926,626,706.42 938,509,175.01 -4,756,488.35 933,752,686.66
income
(II)Owners’
contribution to and 46,700,000.00 70,905,533.03 137,298,000.00 - - - -19,692,466.97 -42,327,745.34 -62,020,212.31
reduction in capital
1. Common shares
contributed by 46,700,000.00 90,598,000.00 137,298,000.00 - - - - 19,000,000.00 19,000,000.00
owners
3. Amount of share-
based payment into - 1,880,981.38 - - - - 1,880,981.38 17,483.68 1,898,465.06
owner’s equity
4．Others -21,573,448.35 -21,573,448.35 -61,345,229.02 -82,918,677.37
(III) Profits
- - - - 128,090,896.77 -509,115,889.09 -381,024,992.32 -114,400.00 -381,139,392.32
distribution
1. Withdrawal of
- - - - 128,090,896.77 -128,090,896.77 - - -
surplus reserve
3. Distribution to
owners (or - - - - - -381,024,992.32 -381,024,992.32 -114,400.00 -381,139,392.32
shareholders)
(VI) Others - -182,788.00 - - - - -182,788.00 - -182,788.00
IV. Closing balance
5,489,914,176.00 1,594,906,524.67 137,298,000.00 78,149,661.33 1,364,257,808.58 5,168,298,206.50 13,558,228,377.08 16,481,000.16 13,574,709,377.24
of the current period
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of Finance Department: Zhao Difang
Statement of Changes in Owners’ Equity of Parent Company
January-December 2021
Unit: RMB
2021
Item Other
Paid-in capital (share Less: treasury
Capital reserve comprehensive Surplus reserve Undistributed profits Total owners’ equity
capital) stocks
income
I. Balance at the end of previous year 5,489,914,176.00 1,833,256,515.22 137,298,000.00 81,473,183.84 1,364,204,332.75 5,383,365,299.69 14,014,915,507.50
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2021 Annual Report
II. Opening balance of the current year 5,489,914,176.00 1,833,256,515.22 137,298,000.00 81,473,183.84 1,364,204,332.75 5,383,365,299.69 14,014,915,507.50
III. Change in the period (decrease is indicated by “-”) 1,360,000.00 32,884,763.28 196,800.00 -15,051,280.51 140,951,986.92 966,622,602.57 1,126,571,272.26
(I) Total comprehensive income - - - -15,051,280.51 - 1,409,519,869.17 1,394,468,588.66
(II)Owners’ contribution to and reduction in capital 1,360,000.00 32,884,763.28 196,800.00 - - - 34,047,963.28
1.Common shares contributed by owners 1,360,000.00 1,351,400.00 196,800.00 - - - 2,514,600.00
3. Amount of share-based payment into owner’s
- 31,533,363.28 - - - - 31,533,363.28
equity
(III) Profits distribution - - - - 140,951,986.92 -442,897,266.60 -301,945,279.68
1. Withdrawal of surplus reserve - - - - 140,951,986.92 -140,951,986.92 -
2. Distribution to owner (or shareholders) - - - - - -301,945,279.68 -301,945,279.68
IV. Closing balance of the current period 5,491,274,176.00 1,866,141,278.50 137,494,800.00 66,421,903.33 1,505,156,319.67 6,349,987,902.26 15,141,486,779.76
2020
Other
Item Paid-in capital (share Less: treasury
Capital reserve comprehensive Surplus reserve Undistributed profits Total owners’ equity
capital) stocks
income
I. Balance at the end of previous year 5,443,214,176.00 1,489,516,614.19 - 66,421,903.33 1,236,113,435.98 4,363,644,248.36 12,598,910,377.86
II. Opening balance of the current year 5,443,214,176.00 1,489,516,614.19 - 66,421,903.33 1,236,113,435.98 4,363,644,248.36 12,598,910,377.86
III. Change in the period (decrease is indicated by “-”) 46,700,000.00 343,739,901.03 137,298,000.00 15,051,280.51 128,090,896.77 1,019,721,051.33 1,416,005,129.64
(I) Total comprehensive income - - - 15,051,280.51 - 1,280,908,967.74 1,295,960,248.25
(II)Owners’ contribution to and reduction in capital 46,700,000.00 343,739,901.03 137,298,000.00 - - - 253,141,901.03
1. Common shares contributed by owners 46,700,000.00 90,598,000.00 137,298,000.00 - - - -
3. Amount of share-based payment into owner’s
- 1,880,981.38 - - - - 1,880,981.38
equity
4. Others 251,260,919.65 251,260,919.65
(III) Profits distribution - - - - 128,090,896.77 -509,115,889.09 -381,024,992.32
1. Withdrawal of surplus reserve - - - - 128,090,896.77 -128,090,896.77 -
2. Distribution to owner (or shareholders) - - - - - -381,024,992.32 -381,024,992.32
(VI) Others - - - - - 247,927,972.68 247,927,972.68
IV. Closing balance of the current period 5,489,914,176.00 1,833,256,515.22 137,298,000.00 81,473,183.84 1,364,204,332.75 5,383,365,299.69 14,014,915,507.50
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of Finance Department: Zhao Difang
115 / 228
2021 Annual Report
III. Basic information of the Company
1. Company profile
√Applicable □Not Applicable
Zhejiang China Commodities City Group Co., Ltd. (the “Company”) is a company limited by
share and was incorporated on Dec 28, 1993 in Zhejiang province of the People’s Republic of
China. The RMB-denominated common A shares issued by the Company got listed on Shanghai
Stock Exchange on May 9, 2002. The Company is headquartered at No.105 Futian Road, Yiwu,
Zhejiang.
The Group’s main business activities: market development and operation and supporting
services, sales of commodities, provision of online trading platforms and services, development and
management of online trading market, etc., in the category of comprehensive services.
The parent company of the Group is Yiwu China Commodities City Holdings Limited
(hereinafter referred to as “CCCH”) and the final controller of the Group is the State-owned Assets
Supervision and Administration Office of the People’s Government of Yiwu.
The Financial Statements were approved by the Company's Board of Directors on March 22,
2022. According to the Company's articles of association, these financial statements are to be
submitted to the general meeting of shareholders for deliberation.
2. Consolidation scope of financial statements
√Applicable □Not Applicable
The consolidation of financial statements is determined on the basis of control. For the
changes in the current year, please refer to Note VIII. Changes in consolidation scope.
IV. Basis of preparation of financial statements
1. Basis of preparation
The financial statements of the Company were prepared on a going-concern basis.
The financial statements were prepared in accordance with the Accounting Standards for
Enterprises-Basic Standards and the specific accounting standards, application guidelines,
interpretations and other related regulations promulgated and amended thereafter (collectively
referred to as “Accounting Standards”).
The financial statements were all prepared based on the valuation principle of historical cost,
except for certain financial instruments. In case of assets impairment, corresponding impairment
provision was made in accordance with relevant provisions.
2. Going concern
√Applicable □Not Applicable
The Company prepared its financial statements on a going-concern basis. The management of
the Company expected that the Group would generate adequate cash inflow from the future day-to-
day operation, which in combination with the Group’s adequate lines of credit from banks could be
sufficient to repay its due debts.
V. Important Accounting Policies and Accounting Estimates
Reminders on specific accounting policies and accounting estimates:
√Applicable □Not Applicable
The Group has formulated specific accounting policies and accounting estimates based on the
characteristics of actual production and operation, which are mainly reflected in the bad debt
provisions for receivables, inventory valuation methods, depreciation of fixed assets, amortization of
intangible assets, income recognition and measurement, recognition of property investments and
fixed assets, and service life and residual value of fixed assets.
1. Statement of compliance with the Accounting Standards
The financial statements prepared by the Company comply with the requirements of the
Accounting Standards, and truly and completely reflect the Company’s financial conditions,
operating results, changes in shareholders’ equity, cash flows and other related information.
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2021 Annual Report
2. Accounting period
The Company’s accounting year is from Jan 1 to Dec 31 of each calendar year.
3. Operating cycle
√Applicable □Not Applicable
The business cycle of the Company is relatively short, and 12 months are used as the standard
for defining the liquidity of assets and liabilities.
4. Functional currency
The Company’s functional currency is RMB. The Group uses RMB as its functional currency
and in the preparation of financial statements. Unless specifically stated, all amounts are expressed
in RMB.
5. Accounting methods for merger of the enterprises under common control and merger of
the enterprises not under common control
√Applicable □Not Applicable
The mergers of enterprises are divided into the mergers of the enterprises under common
control and mergers of the enterprises not under common control.
Mergers of the enterprises under common control
Merger of the enterprises under common control refers to the merger of the enterprises that are
under ultimate control of the same party or parties before and after the merger and the control is not
temporary. For a merger of the enterprises under common control, the party obtaining control over
the other(s) involved in the merger on the date of merger is the merging party and the other(s)
is(are) the merged party. The date of merger refers to the date when the merging party actually
obtains control over the merged party.
The assets and liabilities acquired by the merging party in a merger of the enterprises under
common control (including the goodwill formed through the acquisition of the merged party by the
ultimate controller) are accounted according to the book value thereof in the ultimate controller’s
financial statements on the date of merger. For the difference between the book value of the net
assets obtained by the merging party and the book value of the consideration paid for the merger
(or the total nominal value of the shares issued), the share capital premium in the capital reserve
shall be adjusted; if the share capital premium is not sufficient to absorb the difference, the retained
earnings shall be adjusted.
Mergers of the enterprises not under common control
Merger of the enterprises not under common control refers to the merger of the enterprises that
are not under ultimate control of the same party or parties before and after the merger. For a
merger of the enterprises not under common control, the party obtaining control over the other(s)
involved in the merger on the date of acquisition is the acquirer and the other(s) is(are) the acquiree.
The date of acquisition refers to the date when the acquirer actually obtains control over the
acquiree.
The acquiree’s identifiable assets, liabilities and contingent liabilities obtained from the merger
of the enterprises not under common control are measured at their fair values on the date of
acquisition.
If the sum of the fair value of the consideration paid for the merger (or fair value of the equity
securities issued) and the fair value of the acquiree’s equity held before the date of acquisition is
higher than the share in the fair value of the acquiree’s identifiable net assets acquired from the
merger, the difference between them is recognized as goodwill, which will be subsequently
measured by the cost less accumulated impairment loss. If the sum of the fair value of the
consideration paid for the merger (or fair value of the equity securities issued) and the fair value of
the acquiree’s equity held before the date of acquisition is lower than the share in the fair value of
the acquiree’s identifiable net assets acquired from the merger, the measurement of the fair value
of the acquiree’s identifiable assets, liabilities and contingent liabilities, the fair value of the
consideration paid for the merger (or fair value of the equity securities issued) and the fair value of
the acquiree’s equity held before the date of acquisition will be reviewed, and if the sum of the fair
value of the consideration paid for the merger (or fair value of the equity securities issued) and the
fair value of the acquiree’s equity held before the date of acquisition is still lower than the share in
the fair value of the acquiree’s identifiable net assets acquired from the merger after such review,
the difference will be recognized in the profit or loss for the current period.
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2021 Annual Report
For mergers of the enterprises not under common control that are executed through multiple
transactions, the long-term equity investment of the acquiree before the date of acquisition shall be
re-measured based on the fair value thereof on the date of acquisition and any difference between
the fair value and book value thereof shall be recognized in the profit or loss for the current period;
other comprehensive income from the long-term equity investment of the acquiree before the date
of acquisition under the equity method shall be accounted on the same basis as that for the direct
disposal of related assets or liabilities by the investee, and other changes in shareholders’ equity
than net gains or losses, other comprehensive income and profit distribution shall be recognized in
the profit or loss for the period where the date of acquisition falls.
6. Preparation method of consolidated financial statements
√Applicable □Not Applicable
The financial statements to be consolidated is determined on the basis of control, including
those of the Company and all of its subsidiaries. Subsidiaries refer to the entities controlled by the
Company (including the severable parts of enterprises and invested entities, and the structured
entities controlled by the Company).
In the preparation of consolidated financial statements, the subsidiaries adopt the same
accounting year and accounting policies as those adopted by the Company. Assets, liabilities,
equity, income, expenses and cash flows generated from all deals between companies within the
Group are fully offset at the time of merger.
If the amount of loss for the current period attributable to the minority shareholders of a
subsidiary exceeds the minority shareholders’ share in the opening balance of shareholders’ equity
in the subsidiary, the excess will still be recognized against minority interest.
For a subsidiary acquired through a business merger not under the same control, the operating
results and cash flows of the acquiree will be included in the consolidated financial statements from
the day when the Group acquires control, until the control of the Group ceases. In the preparation of
consolidated financial statements, adjustments will be made to the financial statements of the
subsidiary based on the fair value of its identifiable assets, liabilities or contingent liabilities
determined on the date of acquisition.
For a subsidiary acquired through a business merger under the same control, the operating
results and cash flows of merged party will be included in the consolidated financial statements
since the beginning of the current period of the merger. In the preparation of consolidated financial
statements, adjustments will be made to the related items in its previous financial statements as if
the reporting entity formed after the merger has been existing as from the ultimate controller starts
to exercise control.
In case of any change to one or more elements of the control due to the changes in related
facts and circumstances, the Group will re-evaluate whether to control the investee.
7. Classification of joint arrangements and accounting treatment of joint operations
√Applicable □Not Applicable
Joint arrangements are divided into joint operations and joint ventures. Joint operation refers to
a joint arrangement in which the parties thereto enjoy the assets relating to such arrangement and
assume the liabilities relating to such arrangement. Joint venture refers to a joint arrangement in
which the parties thereto only enjoy rights to the net assets in this arrangement.
Each party to a joint arrangement recognizes the following items relating to its share in the joint
operation: assets held individually by it and assets held jointly based on its share; liabilities
assumed individually by it and liabilities assumed jointly based on its share; revenue from the sale
of its share in the output of the joint operation; revenue from the sale of the output of the joint
operation based on its share; expenses incurred individually by it and expenses incurred by the joint
operation based on its share.
8. Criteria for the identification of cash and cash equivalents
Cash refers to the Group’s cash on hand and deposits that can be used for payment at any
time; cash equivalent refers to the investment held by the Group with a short term, strong liquidity,
easy to convert into cash with a known amount, and with low risk of value changes.
9. Foreign currency transactions and translation of foreign currency financial statements
√Applicable □Not Applicable
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For foreign currency transactions, the Group will translate the foreign currency amounts into its
functional currency amounts.
In the initial recognition of a foreign currency transaction, the foreign currency amount is
translated to a functional currency amount according to the spot exchange rate on the date of
transaction. On the balance sheet date, the foreign currency monetary items are translated
according to the spot exchange rate on the balance sheet date. The translation difference between
settlement and monetary items is recognized in the profit or loss for the current period, except for
the difference arising from the special foreign currency borrowing relating to the acquisition and
construction of the assets qualified for capitalization, which will be treated based on the principles
for the capitalization of borrowing expenses. The foreign currency non-monetary items measured by
historical cost are also translated according to the spot exchange rate on the date of transaction,
without changing the functional currency amounts thereof. The foreign currency non-monetary
items measured by fair value are translated according to the spot exchange rate on the fair value
determination date and the difference arising therefrom is recognized in the profit or loss or other
comprehensive income for the current period based on the nature of the items.
The Group translates the functional currency of its foreign business into RMB while preparing
the financial statements. The assets and liabilities items in the balance sheet are translated
according to the spot exchange rate on the balance sheet date, the shareholders’ equity items are
translated according to the spot exchange rate at the occurrence of the items except for
“undistributed profits”; revenue and expenses items in the income statement are translated
according to the average exchange rate during the period in which the transaction happens. The
translation differences of foreign currency statements arising from the above translations are
recognized as other comprehensive income. For the disposal of foreign business, other
comprehensive income relating to the foreign business is recognized in the profit or loss of the
disposal for the current period and is calculated pro rata for partial disposal.
The foreign currency cash flow and cash flow of foreign subsidiaries are translated according to
the spot exchange rate on the occurrence date of cash flow/average exchange rate during the
period in which the cash flow occurs. The amount of impact of the changes in exchange rate on
cash is separately stated in the cash flow statement as an adjustment item.
10. Financial instruments
√Applicable □Not Applicable
Financial instruments refer to the contracts which form financial assets of an enterprise and
form financial liabilities or equity instruments of other entities.
Recognition and de-recognition of financial instruments
The Group recognizes a financial asset or financial liability at the time of becoming a party to a
financial instrument contract.
The Group will derecognize a financial asset (or a part of the financial asset or a part of a
Group of similar financial assets), i.e. writing off the asset from its account and balance sheet, if:
(1) the right to collect cash flow from the financial asset has expired;
(2) The right to collect cash flows of financial assets has been transferred, or the obligation to
pay the collected cash flows in full and in time to a third party under the “handover agreement” has
been undertaken; and (a) all risks and rewards in the ownership of the financial assets have been
substantially transferred, or (b) almost all risks and rewards in the ownership of the financial asset
have been neither transferred nor retained, but control of the financial asset has been waived.
If a financial liability has been fulfilled, revoked or expired, it will be derecognized. If an existing
financial liability is replaced by the same creditor with another financial liability under substantially
different terms or the terms of the existing liability are substantially modified in whole, the existing
liability will be derecognized and the new liability will be recognized, and the difference will be
recognized in the profit or loss for the current period.
For the transactions of financial assets in regular ways, the recognition and de-recognition
thereof will be conducted based on the accounting on the transaction date. Transactions of financial
assets in regular ways refer to the collection or delivery of financial assets within the time limit
prescribed by laws and regulation or prevailing practices in accordance with the contract terms. The
transaction date refers to the date when the Group promises to buy or sell the financial assets.
Classification and measurement of financial assets
Based on the Group’s business model for the management of financial assets and the features
of the contractual cash flow of financial assets, the Group’s financial assets are classified at initial
recognition into the financial assets that are measured by fair value and of which the changes in fair
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value are recognized in the profit or loss for the current period, the financial assets measured by
amortized cost and the financial assets that are measured by fair value and of which the changes in
fair value are recognized in other comprehensive income.
If a financial asset is measured by fair value at initial recognition, but the accounts receivable or
notes receivable from the sale of goods or rendering of service do not include significant financing
components or the financing components with a term no longer than one year are not considered,
the initial measurement will be made based on the transaction price.
For the financial assets that are measured by fair value and of which the changes in fair value
are recognized in the profit or loss for the current period, the related transaction fees will be directly
recognized in the profit or loss for the current period; the related transaction fees of other financial
assets will be recognized in the initially recognized amounts thereof.
The subsequent measurement of financial assets depends on the classification thereof:
Investment in debt instruments measured by amortized cost
A financial asset is classified into those measured by amortized cost, if the business model for
the management of the asset is for the purpose of collecting contractual cash flow; and the terms of
the contract of the asset stipulate that the cash flow generated on the specific date is only the
repayment of principal and the payment of interest on the outstanding principal. The interest income
of such financial assets is recognized with the effective interest method, and the gains or losses
from the de-recognition, modification or impairment thereof are all recognized in the profit or loss for
the current period.
Investment in the equity instruments that are measured by fair value and of which the
changes in fair value are recognized in other comprehensive income
The Group has irrevocably chosen to designate some non-trading equity instrument
investments as the financial assets that are measured by fair value and of which the changes in fair
value are recognized in other comprehensive income. Only the related dividend income (except for
the dividend income expressly acting as a recovery of investment cost) is recognized in the profit or
loss for the current period, while the subsequent changes in fair value are recognized in other
comprehensive income, and no provision is required for impairment. When the financial assets are
derecognized, the accumulated gains or losses previously recognized in other comprehensive
income will be moved out of other comprehensive income and recognized in retained earnings.
Financial assets that are measured by fair value and of which the changes in fair value
are recognized in the profit or loss for the current period
The financial assets other than the above financial assets measured by amortized cost and the
above financial assets that are measured by fair value and of which the changes in fair value are
recognized in other comprehensive income are classified as the financial assets that are measured
by fair value and of which the changes in fair value are recognized in the profit or loss for the
current period. Those financial assets are subsequently measured by fair value and all changes in
the fair value thereof are recognized in the profit or loss for the current period.
Classification and measurement of financial liabilities
The Group’s financial liabilities are classified at initial recognition into the financial liabilities that
are measured by fair value and of which the changes in fair value are recognized in the profit or
loss for the current period and other financial assets. For the financial liabilities that are measured
by fair value and of which the changes in fair value are recognized in the profit or loss for the
current period, the related transaction fees are recognized directly in the profit or loss for the current
period, while the related transaction fees of other financial liabilities are recognized in the initially
recognized amounts thereof.
The subsequent measurement of financial liabilities depends on the classification thereof:
Financial liabilities that are measured by fair value and of which the changes in fair
value are recognized in the profit or loss for the current period
The financial liabilities that are measured by fair value and of which the changes in fair value
are recognized in the profit or loss for the current period include financial liabilities held for trading
(including the derivative instruments as financial liabilities) and the liabilities that are designated at
initial recognition as the financial liabilities that are measured by fair value and of which the changes
in fair value are recognized in the profit or loss for the current period. The financial liabilities held for
trading (including the derivative instruments as financial liabilities) are subsequently measured by
fair value and all changes in the fair value are recognized in the profit or loss for the current period.
Other financial liabilities
Those financial liabilities are subsequently measured by amortized cost with the effective
interest method.
Impairment of financial instruments
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The Group has treated and recognized the impairment of the financial assets measured by
amortized cost based on the expected credit loss.
For receivables that do not contain significant financing components, the Group measures the
loss provision based on the amount of expected credit loss equivalent to the entire duration under a
simplified measurement method,
For the financial assets not measured with the simplified method, the Group evaluates on each
balance sheet date whether their credit risks have increased significantly since the initial recognition.
If the credit risk of a financial asset has not increased significantly since the initial recognition, the
asset is in the first stage and the Group will make provision for loss based on the amount of
expected credit loss within the coming 12 months and calculate interest income based on the book
balance and effective interest rate; if the credit risk has increased significantly since the initial
recognition, but credit has not been impaired, the asset is in the second stage and the Group will
make provision for loss equivalent to the amount of expected credit loss during the entire term and
calculate interest income based on the book balance and effective interest rate; if credit has been
impaired after the initial recognition, the asset is in the third stage and the Group will make provision
for loss equivalent to the amount of expected credit loss during the entire term and calculate
interest income based on the amortized cost and effective interest rate.
The Group evaluates the expected credit losses of financial instruments on the individual and
Group bases. It evaluates the expected credit loss of accounts receivable by taking into account the
credit risk characteristics of different clients and based on the account aging-based asset Groups.
For the disclosure of the Group’s criteria for a significant increase in credit risk, definition of the
assets whose credit has been impaired and assumptions for the measurement of expected credit
loss, please refer to Notes X. 2.
When the Group no longer reasonably expects that it can recover the contractual cash flow of a
financial asset in whole or in part, it will directly write down the book balance of the asset.
11. Notes receivable
Determination and accounting treatment of the expected credit loss of notes receivable
□Applicable √Not Applicable
12. Accounts receivable
Determination and accounting treatment of the expected credit loss of accounts receivable
√Applicable □Not Applicable
Please refer to Notes X. Risks Associated with Financial Instruments
13. Accounts receivable financing
□Applicable √Not Applicable
14. Other receivables
Determination and accounting treatment of the expected credit loss of other receivables
√Applicable □Not Applicable
Please refer to Notes X. Risks Associated with Financial Instruments
15. Inventory
√Applicable □Not Applicable
Inventory includes raw materials, work-in-progress materials, finished goods, real estate
development costs and real estate development products.
Inventory is initially measured by cost. The costs of inventory except development costs and
development products include the procurement cost, processing cost and other costs. The actual
costs of items out of inventory are determined with the weighted average method. Work-in-progress
materials include low-value consumables and packages, which are amortized with the one-off
amortization method.
Development costs refer to the properties that have not been completed and are developed for
the purpose of being sold. Development products refer to the properties that have been completed
and are ready for sale. The actual costs of real estate development costs and development
products include the land acquisition cost, expenditures on construction and installation works,
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capitalized interest and other direct and indirect development expenses. The use right of the land
for development purpose at the development of a project is amortized and recognized as the
development cost of the project based on the site area of the development product, and the
development cost will be changed over to development product after being completed.
If the public auxiliary facilities are completed earlier than the related development product, the
facilities will be allocated to and recognized in the development cost of related development project
based on the floor space of the project after final accounting of the facilities upon completion; if the
public auxiliary facilities are completed later than the related development product, they will be
recognized in the development cost of related development project based on the predicted cost of
the public auxiliary facilities.
Hotel, catering and fresh goods inventories are subject to onsite inventory, while other
inventories are subject to perpetual inventory.
On the balance sheet date, inventory is measured by cost and net realizable value, whichever
is lower. If the cost is higher than the net realizable value, provision will be made for inventory
depreciation, which will be recognized in the profit or loss for the current period. If the impact of the
previous provision for inventory depreciation has disappeared and the net realizable value of the
inventory becomes higher than the book value thereof, the amounts written down previously in the
original provision for inventory depreciation will be restituted and recognized in the profit or loss for
the current period.
Net realizable value is the estimated selling price of inventory less the cost estimated to occur
as of completion, estimated sales expenses and related taxes. In principle, provisions for inventory
depreciation shall be made for inventory items individually. For the inventory with a large quantity
and a low unit price, inventory depreciation provision will be made based on the Groups of items.
16. Contract assets
(1). Determination and criteria for contract assets
□Applicable √Not Applicable
(2). Determination and accounting treatment of the expected credit loss of contract assets
□Applicable √Not Applicable
17. Held-for-sale assets
□Applicable √Not Applicable
18. Debt investments
(1). Determination and accounting treatment of the expected credit loss of debt investments
□Applicable √Not Applicable
19. Other debt investments
(1). Determination and accounting treatment of the expected credit loss of other debt
investments
□Applicable √Not Applicable
20. Long-term receivables
(1). Determination and accounting treatment of the expected credit loss of long-term
receivables
√Applicable □Not Applicable
Please refer to Notes X. Risks Associated with Financial Instruments
21. Long-term equity investment
√Applicable □Not Applicable
Long-term equity investment includes equity investment in subsidiaries, joint ventures and
associates.
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Long-term equity investment is initially measured by the initial investment cost at the time of
being acquired. For a long-term equity investment acquired through a business merger under the
same control, the initial investment cost is the share of the book value of the merged party’s
owner’s equity acquired on the merger date in the ultimate controlling party’s consolidated financial
statements; The difference between the initial investment cost and the book value of the merger
consideration is adjusted to the capital reserve (if it is insufficient to offset, the retained earnings will
be offset); other comprehensive income before the merger date is accounted for on the same basis
as that for the investee’s direct disposal of related assets or liabilities when disposing of the
investment. The shareholders’ equity recognized by the investee due to the changes in
shareholders’ equity other than net profit and loss, other comprehensive income, and profit
distribution is transferred to the current profit and loss when the investment is disposed of; those
that are still long-term equity investments after disposal are carried forward in proportion, and those
that are converted into financial instruments after disposal are carried forward in full. For a long-
term equity investment acquired through a business merger not under the same control, the merger
cost shall be used as the initial investment cost (for the business merger not under the same control
realized step by step in a package deal, the sum of the book value and the new investment cost on
the acquisition date is used as the initial investment cost). The merger cost includes the sum of fair
values of the assets paid, the liabilities incurred or assumed, and the equity securities issued by the
acquirer; the other comprehensive income held prior to the acquisition date that is recognized for
accounting under the equity method is accounted for on the same basis as that for the investee’s
direct disposal of related assets or liabilities when disposing of the investment. The shareholders’
equity recognized by the investee due to the changes in shareholders’ equity other than net profit
and loss, other comprehensive income, and profit distribution is transferred to the current profit and
loss when the investment is disposed of; those that are still long-term equity investments after
disposal are carried forward in proportion, and those that are converted into financial instruments
after disposal are carried forward in full. The initial investment costs of the long-term equity
investment acquired other than through merger are determined with the following methods: if an
investment is acquired through the payment of cash, its initial investment cost consists of the
purchase price actually paid and the expenses, taxes and other necessary expenses directly
relating to the acquisition of the investment; and if an investment is acquired through the offering of
equity securities, its initial investment cost is the fair value of the equity securities offered.
For the accounting of the long-term equity investment through which the Company can
exercise control over the investees, the Company adopts the cost method in individual financial
statements. Control refers to the power over an investee, with which the investor enjoys variable
return by participating in the investee’s related activities and is able to exercise its power over the
investee to affect the amount of return.
In the cost method, the long-term equity investment is measured by initial investment cost. If
the investment is added or recovered, the cost of long-term equity investment will be adjusted. The
cash dividend or profit declared by the investees to be distributed is recognized as the investment
income for the current period.
If the Group has joint control over or significant influence on the investee, the long-term equity
investment will be measured with the equity method. Joint control refers to joint control over an
arrangement in accordance with related agreements, and decisions on the activities relating to the
arrangement shall be made only after the parties sharing the control reach an agreement.
Significant influence refers to the power over the decision-making on the financial affairs and
business policies of the investee, but the investor does not have control or joint control with others
over the formulation of those policies.
In the equity method, if the initial investment cost of long-term equity investment is higher than
the share enjoyed by the Group in the fair value of the investee’s identifiable net assets at
investment, the excess will be recognized in the initial investment cost of the long-term equity
investment; if the initial investment cost of long-term equity investment is lower than the share
enjoyed by the Group in the fair value of the investee’s identifiable net assets at investment, the
difference will be recognized in the profit or loss for the current period and the cost of the long-term
equity investment will be adjusted simultaneously.
In the equity method, after long-term equity investment is acquired, the investment gains or
losses and other comprehensive income shall be recognized and the book value of the long-term
equity investment shall be adjusted based on the share in the net gains or losses and other
comprehensive income realized by the investees to be enjoyed or assumed. The share in the
investee’s net gains or losses to be enjoyed shall be determined based on the fair value of the
investee’ s identifiable assets at the acquisition of investment, according to the Group’s accounting
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policies and accounting periods and after net profits of the investee are adjusted with the portion of
gains or losses from the internal transactions with its associates and joint ventures that is
attributable to the investor based on the share to be enjoyed by it (but if the loss from internal
transactions falls in the assets impairment loss, it shall be recognized in full) offset, except for the
invested and sold assets that constitute businesses. The book value of long-term equity investment
shall be reduced according to the share to be enjoyed by it in the profits or cash dividend declared
by the investees to be distributed. For an investee’s net losses recognized by the Group, the book
value of the long-term equity investment and other long-term equity that substantially constitute net
investment in the investee shall be written down to zero at maximum, except for the extra losses for
which the Group is liable. For the investee’s other changes in shareholders’ equity other than net
gains or losses, other comprehensive income and profit distribution, the book value of the long-term
equity investment will be adjusted and the changes will be recognized in the shareholders’ equity.
For the disposal of long-term equity investment, the difference between the book value of long-
term equity investment and the proceeds actually received from the disposal thereof is recognized
in the profits or loss for the current period. For the long-term equity investment measured with the
equity method, if the equity method is terminated due to the disposal, the original related other
comprehensive income measured with the equity method will be accounted on the same basis as
that for the direct disposal of related assets or liabilities by the investees, and the shareholders’
equity recognized due to the investees’ other changes in shareholders’ equity than net gains or
losses, other comprehensive income and profit distribution will be recognized in the profits or loss
for the current period in full; if the equity method is still adopted, the original related other
comprehensive income measured with the equity method will be accounted on the same basis as
that for the direct disposal of related assets or liabilities by the investees and recognized in the
profits or loss for the current period pro rata, and the shareholders’ equity recognized due to the
investees’ other changes in shareholders’ equity than net gains or losses, other comprehensive
income and profit distribution will be recognized in the profit or loss for the current period pro rata.
Where the Company loses control over a subsidiary due to step-by-step disposal of its equity
investment in the subsidiary through multiple transactions, if the transactions constitute a package
of deals, each transaction will be accounted as a transaction that disposes of the subsidiary and
causes the loss of control over the subsidiary; however, the difference between the proceeds from
each disposal and the book value of the corresponding long-term equity investment disposed of is
recognized as other comprehensive income in individual financial statements before the Company
loses control and is recognized in the profits or loss for the period in which the control is lost at the
loss of control. If the transactions do not constitute a package of deals, each transaction will be
accounted separately. In the event that the Company loses control, if the residual equity after the
disposal enables the Company to have joint control over or significant influence on the subsidiary, it
will be recognized as long-term equity investment in individual financial statements and be
accounted in accordance with the relevant rules for changing the cost method to the equity method;
otherwise, it will be recognized as a financial instrument and the difference between its fair value on
the date of the loss of control and its book value will be recognized in the profit or loss for the
current period.
22. Property investment
(1). In cost measurement model:
Depreciation or amortization methods
A property investment is a real estate property held with the intention of earning rents or of
capital appreciation or both, including land use rights that have been leased, land use rights that are
held and ready to be transferred after appreciation, and buildings that have been leased.
Property investments are initially measured by cost. The subsequent expenses relating to an
property investment will be recognized in the cost of the property investment if the economic
benefits relating to the asset are very likely to flow in and the cost thereof can be measured reliably.
Otherwise, they will be recognized in the profit or loss for the current period at the time of being
incurred.
The Group subsequently measures its property investments with the cost model. The
depreciation/amortization of investment property is calculated on a straight line basis. The service
life, estimated net residual value and annual depreciation rate of property investments are as
follows:
Category Service life Estimated net residual Annual depreciation
value rate
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Buildings and 20-30 years 4% 3.2%-4.8%
structures
Land use right 40-70 years - 1.4%-2.5%
23. Fixed assets
(1). Recognition requirements
√Applicable □Not Applicable
A fixed asset will be recognized only if the economic benefits relating thereto are very likely to
flow into the Group and its cost can be measured reliably. If meeting the above recognition
requirement, the subsequent expenses relating to a fixed asset will be recognized in the cost of the
fixed asset, and the book value of the replaced part will be deleted; otherwise, the subsequent
expenses will be recognized in the profit or loss for the current period at the time of being incurred.
Fixed assets are initially measured by cost. The costs of purchasing a fixed asset include the
purchase price, related taxes and other expenses that are incurred before the fixed asset is made
to the predetermined ready-for-use status and are directly attributable to the asset.
(2). Depreciation methods
√Applicable □Not Applicable
Depreciation
Depreciation Residual value Annual
Category period (number of
methods rate depreciation rate
years)
Buildings and Straight-line 4% 2.4%-9.6%
10-40
structures method
General Straight-line 4% 9.6%-19.2%
5-10
equipment method
Transportation Straight-line 4% 16.0%
6
equipment method
(3). Identification basis, pricing and depreciation method of the fixed assets under financial
lease
√Applicable □Not Applicable
The depreciation method for the fixed assets under financial lease is the same as that for
proprietary fixed assets. If it can be reasonably determined that the ownership of a leased asset will
be acquired upon expiry of the lease term, the depreciation will be based on its service life; if it
cannot be reasonably determined that the ownership of a leased asset can be acquired upon expiry
of the lease term, the depreciation will be based on the lease term or the service life of the asset,
whichever is shorter.
24. Construction in progress
√Applicable □Not Applicable
The cost of construction in progress is determined based on the actual expenses, including the
necessary expenses on the works incurred during the construction, the borrowing costs incurred
before the works reach the predetermined ready-for-use status that shall be capitalized and other
related expenses.
The construction in progress will be recognized as fixed assets, property investment and long-
term prepaid expenses when reaching the predetermined ready-for-use status.
25. Borrowing costs
√Applicable □Not Applicable
Borrowing costs refer to the interests incurred by the Group for its borrowings and other related
costs, including interest, amortization of discounts or premiums, ancillary costs and exchange
difference arising from foreign currency borrowings.
Borrowing costs that are directly attributable to the acquisition, construction or production of the
assets qualified for capitalization shall be capitalized, and other borrowing costs shall be recognized
in the profit or loss for the current period. The assets qualified for capitalization refer to the fixed
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assets, property investment, inventory and other assets that can reach the predetermined ready-for-
use or sale status only after a quite long time of acquisition, construction or production.
Borrowing costs can start to be capitalized only if they meet the following requirements
simultaneously:
(1) the expenses on assets have been incurred;
(2) the borrowing costs have been incurred;
(3) The purchase, construction or production activities necessary to make the asset reach the
intended usable or saleable status have started.
The borrowing costs for the assets qualified for capitalization shall cease being capitalized
when the assets reach the predetermined ready-for-use or sale status after the acquisition,
construction or production. The borrowing costs incurred subsequently will be recognized in the
profit or loss for the current period.
During capitalization, the amount of interest to be capitalized during each accounting period is
determined as follows:
For special borrowings, the amount of interest to be capitalized is the interest expenses
actually incurred during the current period less the temporary deposits interest income or
investment income.
(2) For occupied general borrowings, it is calculated and determined based on the weighted
average of asset expenditures of the accumulated asset expenditure exceeding the portion of
special borrowings multiplied by the weighted average interest rate of the occupied general
borrowings.
If an asset qualified for capitalization is interrupted abnormally for more than three months
during its acquisition, construction or production except due to the necessary procedures for it to
reach the predetermined ready-for-use or sale status, the capitalization of its borrowing costs will be
suspended. The borrowing costs incurred during the interruption will be recognized as expenses
and in the profit or loss for the current period until the acquisition, construction or production of the
asset is resumed.
26. Biological assets
□Applicable √Not Applicable
27. Oil and gas assets
□Applicable √Not Applicable
28. Right-of-use assets
√Applicable □Not Applicable
The Group's right-of-use asset classes mainly include buildings.
On the commencement date of the lease term, the Group recognizes its right to use the leased
assets during the lease term as the right to use them, including: the initial measurement amount of
the liabilities of the lease; The amount of the lease payment paid on or before the commencement
date of the lease term, where there is a lease incentive, shall be deducted from the amount of the
lease incentive already enjoyed; Initial direct costs incurred by lessee; Costs expected to be
incurred by the Lessee to disassemble and remove the leased asset, restore the leased asset to
the site, or restore the leased asset to the state agreed upon in the lease terms. The Group
subsequently shall adopt the straight-line method for the depreciation of the usufruct assets. Where
the ownership of the leased asset can be reasonably determined at the end of the lease term, the
Group shall take depreciation during the remaining useful life of the leased asset. Where it is not
reasonably certain that ownership of the leased asset will be acquired at the end of the lease term,
the Group shall make depreciation within the shorter period of the lease term or the remaining
useful life of the leased asset.
When the Group measures the lease liabilities again according to the present value of the
changed lease payment amount and adjusts the book value of the right to use assets accordingly, if
the book value of the right to use assets has been reduced to zero, but the lease liabilities still need
to be further reduced, the Group shall record the remaining amount into the current profit and loss.
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29. Intangible assets
(1). Measurement method, service life and impairment test
√Applicable □Not Applicable
Intangible assets will be recognized only if the economic benefits relating thereto are very likely
to flow into the Group and the costs thereof can be measured reliably, and will be initially measured
by cost. However, the intangible assets acquired from the merger of the enterprises not under
common control will be individually recognized so long as the fair values thereof can be measured
reliably, and will be measured by fair value.
The service life of an intangible asset is determined based on the term during which it can bring
economic benefits to the Group. If the term during which an intangible asset can bring economic
benefits to the Group is unforeseeable, it will be deemed as an intangible asset with uncertain
service life.
The service life of intangible assets is as follows:
Category Service life
Land use right 40-50 years
Software 10 years
The land use rights acquired by the Group are generally accounted as intangible assets. The
buildings constructed by the Group itself, the related land use rights and buildings are accounted as
intangible assets and fixed assets respectively. The price paid for the land and buildings purchased
externally shall be allocated between the land use rights and buildings. If it is hard to reasonably
allocate the price, the price in full will be treated as fixed assets.
The intangible assets with finite service life shall be amortized with the straight-line method
during their service life. The Group reviews and makes adjustment to, if necessary, the service life
and amortization method of its intangible assets with finite service life at least at the end of each
year.
(2). Accounting policies for internal R&D expenses
√Applicable □Not Applicable
The Group divides expenditures for internal R & D projects into research expenditures and
development expenditures. Research expenses are recognized in the profit or loss for the current
period at the time of being incurred. Development expenditures can be capitalized only when all of
the following conditions are met at the same time, that is, it is technically feasible to complete the
intangible asset to make them usable or saleable; there is an intention to complete the intangible
asset and use or sell it; the way for intangible assets to generate economic benefits, including the
ability to prove that there are markets for the products generated by the intangible assetsor the
intangible assets themselves. Intangible assets that will be used internally can prove their
usefulness; there are sufficient technology, financial resources and other resource supports to
complete the development of the intangible asset and ability to use or sell the intangible asset; the
expenditure attributable to the development of such intangible asset can be reliably measured.
Development expenditures that do not satisfy the above conditions are included in the current
profits and losses when incurred.
30. Impairment of long-term assets
√Applicable □Not Applicable
The Group determines the impairment of the assets other than inventory, deferred income tax
and financial assets with the following methods.
The Group decides on the balance sheet date whether an asset has a sign of impairment. If it
has a sign of impairment, the Group will estimate its recoverable value and carry out an impairment
test. For the goodwill formed due to the merger of enterprises and the intangible assets with
uncertain service life, the Group carries out impairment tests at least at the end of each year,
regardless of the impairment signs. For the intangible assets that have not been ready for use, the
Group also carries out impairment tests every year.
The recoverable value of an asset is determined based on the fair value of the asset less the
disposal expenses or the present value of the expected future cash flows of the asset, whichever is
higher. The Group estimates the recoverable value of each asset. For an asset whose recoverable
value is hard to be estimated, the Group estimates the recoverable value of the assets Group which
the asset belongs to. An assets Group is identified based on whether the main cash inflows from
the Group are independent from the cash inflows from other assets or assets Groups.
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When the recoverable value of an asset or assets Group is lower than its book value, the
Group will write down its book value to the recoverable value and the amount written down will be
recognized in the profit or loss for the current period; meanwhile, it will make provision for the
impairment thereof.
The above assets impairment loss will not be reversed during the subsequent accounting
periods.
31. Long-term prepaid expenses
√Applicable □Not Applicable
Long-term prepaid expenses are amortized with the straight-line method and the amortization
periods are as follows:
Category Amortization period
Architectural ornaments of buildings 3-5 years
Advertising facilities 3-5 years
32. Contract liabilities
(1). Recognition of contract liabilities
√Applicable □Not Applicable
The Group presents contractual assets or contractual liabilities in the balance sheet based on
the relationship between performance obligations and customers’ payments. The Group offsets the
contractual assets and contractual liabilities under the same contract as a net amount.
A contractual liability refers to an obligation to transfer goods or services to a customer for the
consideration received or receivable from the customer, such as the amount received by the
enterprise before the transfer of committed goods or services.
33. Employee salary
(1). Accounting treatment of short-term salary
√Applicable □Not Applicable
The short-term salary actually incurred during the accounting period when the employees
provide service for the Group are recognized as liabilities and are recognized in the profit or loss for
the current period or costs of related assets.
(2). Accounting treatment of post-employment benefits
√Applicable □Not Applicable
The employees of the Group participate in the endowment insurance and unemployment
insurance managed by the local government, as well as the enterprise annuity, and the
corresponding expenditures are included in the relevant asset cost or current profit and loss when
incurred.
(3). Accounting treatment of severance benefits
√Applicable □Not Applicable
When the Group provides severance benefits to its employees, the employee compensation
liabilities arising from the severance benefits will be recognized, and the amount will be recognized
in the profit or loss for the current period on the earlier date below: the date when the Group cannot
unilaterally withdraw the severance benefits provided as a result of the employment termination
plan or downsizing proposal; or the date when the Group recognizes the costs or expenses relating
to the reorganization involving the payment of severance benefits.
(4). Accounting treatment of other long-term employee benefits
□Applicable √Not Applicable
34. Lease liabilities
√Applicable □Not Applicable
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At the commencement date of the lease period, the Group recognizes the present value of the
outstanding lease payments as a lease liability, except for short term and low value leases. In
calculating the present value of the lease payments, the Group uses the lease embedded interest
rate as the discount rate; If the inherent interest rate of the lease cannot be determined, the lessee's
incremental borrowing rate shall be used as the discount rate. The Group calculates the interest
expense of the lease liability in each period of the lease term in accordance with the fixed cyclical
interest rate and records it into the current profit and loss, except as otherwise stipulated in the cost
of the relevant assets. The variable lease payment not included in the measurement of lease
liabilities shall be recorded into the profit and loss of the current period when it actually occurs,
except for those included in the cost of related assets as otherwise stipulated.
After the lease term begins, in the future when substantial changes occurred in the fixed payment,
the guaranteed residual value is expected to cope with the amount of change, is used to determine
the lease payment ratio index or change, call options, renewal options or terminate the option
evaluation results or the actual exercise changes, after the Group according to the change of the
present value of the lease payments to measure lease liability.
35. Estimated liabilities
√Applicable □Not Applicable
Except for the contingent considerations and contingent liabilities assumed in the mergers of
enterprises not under common control, an obligation relating to contingent matters will be
recognized by the Group as estimated liabilities if meeting the following requirements
simultaneously:
(1) The obligation is a current obligation assumed by the Group;
(2) The performance of the obligation may result in the outflow of economic benefits from the
Group;
(3) The amount of the obligation can be measured reliably.
Estimated liabilities are initially measured based on the best estimate of the expenses required
for the performance of related current obligations, and the risks, uncertainties and time value of
money relating to the contingent matters are also factored in. The book value of estimated liabilities
is reviewed on each balance sheet date. If any conclusive evidence indicates that the book value
cannot reflect the current best estimate, the book value will be adjusted based on the current best
estimate.
36. Share-based payment
√Applicable □Not Applicable
Share-based payment is divided into equity-settled share-based payment and cash-settled
share-based payment. An equity-settled share-based payment refers to a deal in which the Group
uses shares or other equity instruments as the consideration for settlement to obtain services.
The equity-settled share-based payment in exchange for services provided by employees shall
be measured at the fair value of the equity instruments granted to employees. If it can be exercised
immediately after the grant, it shall be included in the relevant costs or expenses at fair value on the
grant date, and the capital reserve shall be increased accordingly; if it cannot be exercised until the
service within the waiting period has been completed or the specified performance conditions have
been satisfied on each balance sheet date during the waiting period, the Group will, based on the
best estimate of the number of exercisable equity instruments, include the services acquired in the
current period, as relevant costs or expenses based on the fair value on the grant date, and
increase the capital reserve accordingly .
None of cost or expense shall be recognized for a share payment that cannot be exercised due
to failure to meet non-market conditions and/or service period conditions. Where market conditions
or non-exercising conditions are stipulated in the share-based payment agreement, regardless of
whether the market conditions or non-exercising conditions are satisfied, it shall be deemed as
exercisable as long as all other performance conditions and/or service period conditions have been
satisfied.
If the equity-settled share payment is canceled, it will be treated as an accelerated exercise on
the cancellation day, and the unrecognized amount shall be recognized immediately. If an
employee or other party has option to satisfy the non-exercising conditions but fails to satisfy within
the waiting period, it shall be treated as cancellation of equity-settled share-based payment.
However, if a new equity instrument is granted and if it is determined that the new equity instrument
granted is used to replace the canceled equity instrument on the grant date of the new equity
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instrument, the replacement equity instruments granted in the same way shall be treated in the
same way as that for the modification of the terms and conditions for the original equity instrument.
37. Preferred shares, perpetual bonds and other financial instruments
□Applicable √Not Applicable
38. Revenue
(1). Accounting policies for the recognition and measurement of revenue
√Applicable □Not Applicable
The Group recognizes incomes when it has fulfilled its performance obligations in the contract,
that is, the customer has acquired the control over the relevant goods or services. The acquisition
of the control over related goods or services means the ability to control the use of the goods or the
provision of the service and obtain almost all of the economic benefits from them.
Commodity sales contracts
Commodity sales contracts between the Group and customers usually only include
performance obligations for the transferred commodities. The Group generally recognizes incomes
on the basis of comprehensive consideration of the following factors, at the time when the customer
obtains control of the relevant products: the acquisition of the current right to receive payment for
the commodities, the transfer of the major risks and rewards in the ownership of the commodities,
the transfer of the legal ownership of the commodities, the transfer of the physical assets of the
commodities, and the acceptance of the commodities by the customer.
Service contracts
The service contracts between the Group and its customers usually include performance
obligations such as the provision of the use of shops in the Commodity City and its operating
supporting services, the provision of hotel accommodation services and hotel catering services, and
the provision of fixed-term paid funding services to related parties outside the Group.
The use of shops in the Commodity City and its supporting services
Since customers obtain and consume the economic benefits brought about by the Group’s
performance at the time of the performance by the Group, the Group regards them as a
performance obligation to be fulfilled within a certain period of time and recognizes an income
based on the performance progress, except that the performance progress cannot be reasonably
determined. Under the output method, the Group determines the performance progress of the
provision of the use of shops in the Commodity City and the supporting services for its operation
based on the number of using days of the shops When the performance progress cannot be
reasonably determined, if the cost incurred by the Group is expected to be compensated, the
income shall be recognized according to the amount of the cost incurred until the performance
progress can be reasonably determined.
Hotel accommodation business
Since customers obtain and consume the economic benefits brought about by the Group’s
performance at the time of the performance by the Group, the Group regards them as a
performance obligation to be fulfilled within a certain period of time and recognizes an income
based on the performance progress, except that the performance progress cannot be reasonably
determined. In accordance with the output method, the Group determines the performance
progress of hotel accommodation services based on the number of staying days. When the
performance progress cannot be reasonably determined, if the cost incurred by the Group is
expected to be compensated, the income shall be recognized according to the amount of the cost
incurred until the performance progress can be reasonably determined.
Hotel catering business
For individual performance obligations in the provision of hotel catering services, the Group
prices hotel catering services separately, and uses the completion of hotel catering services as the
point of income recognition.
Fixed -time paid funding services
Since customers obtain and consume the economic benefits brought about by the Group’s
performance at the time of the performance by the Group, the Group regards them as a
performance obligation to be fulfilled within a certain period of time and recognizes an income
based on the performance progress, except that the performance progress cannot be reasonably
determined. Under the output method, the Group determines the performance progress of the
services for the fixed-term paid funding services based on the number of using days of funds. When
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the performance progress cannot be reasonably determined, if the cost incurred by the Group is
expected to be compensated, the income shall be recognized according to the amount of the cost
incurred until the performance progress can be reasonably determined.
(2). Differences in the revenue recognition policies for the same business under different
business models
□Applicable √Not Applicable
39. Contract cost
□Applicable √Not Applicable
40. Government grants
√Applicable □Not Applicable
A government grant is recognized when it can meet the requirements and can be received. If a
government grant falls in monetary assets, it will be measured by the amount received or receivable.
If a government grant does not fall in monetary assets, it will be measured by fair value. If the fair
value of a grant cannot be determined reliably, it will be measured by its nominal amount.
A government grant prescribed by government documents to be used to acquire or construct or
otherwise form long-term assets will be deemed as an asset-related government grant; if no
government documents have express provisions, the grants that are used to acquire or construct or
otherwise form long-term assets will be deemed as asset-related government grants and others as
income-related government grants.
The income-related government grants that are used to compensate for the related costs,
expenses or losses during the subsequent periods are recognized as deferred income and will be
recognized in the profit or loss or against the related costs for the period when the related costs,
expenses or losses are recognized. The income-related government grants used to compensate for
the related costs, expenses or losses that have been incurred are directly recognized in the profit or
loss or against the related costs for the current period.
The asset-related government grants shall be used to offset the book value of related assets;
orrecognized as deferred income, and included in profit and loss in stages under a reasonable and
systematic method during the useful life of the related assets (but government grants measured at a
nominal amount shall be directly included in the current profit and loss); if the relevant asset is sold,
transferred, scrapped or damaged before the end of its useful life, the balance of the undistributed
deferred income shall be transferred to the current profit and loss when the asset is disposal.
If the finance allocates the discounted funds to the loan bank, and the loan bank provides the
Group with a loan at a policy-oriented preferential interest rate, the Group takes the actual loan
amount received as the book value of the loan, and the loan principal and the policy The
preferential interest rate calculates the relevant borrowing costs.
41. Deferred income tax assets and deferred income tax liabilities
√Applicable □Not Applicable
Income tax consists of current income tax and deferred income tax. Except for the income tax
arising from the adjustment of goodwill caused by the mergers of enterprises or the income tax that
is related to the transactions or matters directly recognized in shareholders’ equity, which are
recognized in the shareholders’ equity, income tax will be recognized in the profit or loss for the
current period as income tax expenses or income.
The Group measures the current income tax liabilities or assets formed during the current
period and the previous periods by the estimated amount of income tax to be paid or refunded as
calculated in accordance with the tax law.
The Group recognizes deferred income tax with the balance sheet liability method based on
the temporary difference between the book value of assets and liabilities on the balance sheet date
and the tax base and that between the book value of the items that have not been recognized as
assets and liabilities but whose tax base can be determined according to the tax law and the tax
base thereof.
All taxable temporary differences will be recognized as deferred income tax liabilities, unless:
(1) The taxable temporary difference is generated in the following types of transactions: the
initial recognition of goodwill, or the initial recognition of assets or liabilities generated in a
transaction with the following characteristics: the transaction is not a business merger, and neither
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affecting accounting profits, nor impacting taxable incomes or deductible losses when transaction
occurs.
(2) For taxable temporary differences related to investments in subsidiaries, joint ventures and
associated enterprises, the time for the reversal of the temporary differences can be controlled and
the temporary differences may not be reversed in the foreseeable future.
For the deductible temporary differences and the deductible losses and tax deductions that can
be carried forward to the subsequent years, the Group recognizes the deferred income tax assets
arising therefrom within the limit of the future taxable income that is very likely to be obtained and
used to be offset against the deductible temporary differences, deductible losses and tax
deductions, unless:
(1) The deductible temporary differences are generated in the following transactions: The
transaction is not a business combination, and when the occurrence of the transaction affects
neither accounting profits nor taxable income or deductible losses.
(2) For deductible temporary differences related to investments in subsidiaries, joint ventures
and associates, if all of the following conditions are satisfied simultaneously, the corresponding
deferred income tax assets are recognized: the temporary differences are likely to be reversed in
the foreseeable future, and it is likely to obtain taxable income that can be used to offset the
deductible temporary differences in the future.
The Group measures, on the balance sheet date, the deferred income tax assets and liabilities
based on the applicable tax rate for the period when the assets are expected to be recovered or the
liabilities are expected to be paid off, in accordance with the tax law, which will also reflect the
impact of the way of the expected recovery of assets or repayment of liabilities on the income tax
on the balance sheet date.
The Group reviews the book value of deferred income tax assets on the balance sheet date. If
it is very likely to be unable to acquire adequate taxable income to be offset against the benefits of
deferred income tax assets in the future, the book value of deferred income tax assets will be
written down. On the balance sheet date, the Group re-evaluates the unrecognized deferred income
tax assets and recognizes the same to the extent that it is very likely to acquire adequate taxable
income to reverse all or part of the deferred income tax assets.
If all the following requirements are met, deferred income tax assets and liabilities will be
presented in net amount after offsetting: the Group has the legal right to settle the current income
tax assets and liabilities in net amount; the deferred income tax assets and liabilities are related to
the income tax levied by an identical tax authority on an identical taxpayer, or are related to the
income tax levied by an identical tax authority on different taxpayers, but during each important
period when the deferred income tax assets and liabilities are reversed, the involved taxpayers
intend to settle the current income tax assets and liabilities in net amount or acquire assets or pay
off debts simultaneously.
42. Lease
(1). Accounting treatment of operating lease
□Applicable √Not Applicable
(2). Accounting treatment of financial lease
□Applicable √Not Applicable
(3). Determination and accounting treatment of leases under the new lease standards
√Applicable □Not Applicable
Identification of the lease
On the commencement date of the contract, the Group evaluates whether the contract is a
lease or an inclusive lease if a party in the contract cedes the right to control the use of one or more
identified assets for a certain period in exchange for consideration. To determine whether the
contract cedes the right to control the use of the identified assets for a certain period, the Group
assesses whether the client in the contract is entitled to receive almost all the economic benefits
arising from the use of the identified assets during the use period and to dominate the use of the
identified assets during the use period.
Identification of separate leases
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If the contract contains multiple separate leases at the same time, the Group will split the
contract and account for each separate lease separately. The right to use the identified asset
constitutes a separate lease in the contract if both of the following conditions are met:
(1) The lessee can profit from the use of the asset alone or in combination with other readily
available resources;
(2) The asset is not highly dependent or highly related to other assets in the contract.
Separation of lease and non-lease components
If the contract contains both lease and non-lease parts, when the Group acts as the lessor and
lessee, the lease and non-lease parts are separated for accounting treatment.
Evaluation of the lease term
The lease term is the irrevocable period during which the Group has the right to use the leased
asset. The Group has the option to renew the lease, that is, it has the right to choose to renew the
lease of the asset, and if it is reasonably certain that the option will be exercised, the lease term
also includes the period covered by the renewal option. The Group has the option to terminate the
lease, that is, it has the right to choose to terminate the lease of the asset, but if it is reasonably
certain that the option will not be exercised, the lease term includes the period covered by the
option to terminate the lease. In the event of a major event or change within the control of the
Group and affecting whether the Group is reasonably certain to exercise the corresponding option,
whether the Group is reasonably certain to exercise the option to renew the lease, purchase the
option or not exercise the option to terminate the lease right to be reassessed.
As a tenant
See Note V. 28 and Note V. 34 for the general accounting treatment of the Group as a lessee.
Change in lease
Change in lease is the change in lease scope, lease consideration and lease term beyond the
original contract terms, including increasing or terminating the right to use one or more leased
assets, extending or shortening the lease term specified in the contract, etc.
If the lease changes and the following conditions are met at the same time, the Group will
account for the change in lease as a separate lease:
(1) The change in lease expands the scope of the lease by increasing the right to use one or
more leased assets;
(2) The increased consideration is equivalent to the amount adjusted by the individual price of
the expanded part of the lease scope according to the contract.
If the lease modification is not accounted for as a separate lease, on the effective date of the
lease modification, the Group re-determines the lease term and discounts the modified lease
payments using the revised discount rate to remeasure the lease liability . When calculating the
present value of the lease payment after the change, the Group uses the lease embedded interest
rate of the remaining lease period as the discount rate; If it is impossible to determine the
embedded interest rate of the remaining lease period, the Group's incremental loan interest rate on
the effective date of the lease change shall be used as the discount rate.
Regarding the impact of the above lease liability adjustment, the Group conducts accounting
treatment according to the following situations:
(1) If the change in lease results in the narrowing of the lease scope or the shortening of the
lease term, the Group reduces the book value of the right-of-use assets to reflect the partial or
complete termination of the lease, and the relevant gains or losses from the partial or complete
termination of the lease are included in profit and loss for the current period;
(2) For other changes in lease, the Group adjusts the book value of the right-of-use asset
accordingly.
Short-term leases and leases of low-value assets
The Group regards leases with a lease term shorter than 12 months and excluding purchase
options as short-term leases on the commencement date of the lease term; leases with a value not
exceeding RMB 40,000 when a single leased asset is a brand-new asset is identified as a low-value
asset lease. If the Group subleases or expects to sublease the leased assets, the original lease is
not recognized as a low-value asset lease. The Group chooses not to recognize right-of-use assets
and lease liabilities for short-term leases and leases of low-value assets. In each period of the lease
term, it is included in the relevant asset cost or current profit and loss on a straight-line basis.
As a lessor
The lease that transfers virtually all the risks and rewards related to the ownership of the
leased asset on the lease commencement date is a finance lease, and other leases are operating
leases.
The Group as the lessor to operating leases
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Rental income from operating leases is recognised in profit or loss on a straight-line basis over
each period of the lease term, and variable lease payments not included in lease receipts are
included in profit or loss for the current period when actually incurred.
If an operating lease is changed, the Group will account for it as a new lease from the effective
date of the change, and the advance receipts or lease receivables related to the lease before the
change will regarded as the receipts of the new lease.
43. Other important accounting policies and accounting estimates
√Applicable □Not Applicable
Distribution of profits
The Company’s cash dividend is recognized as liabilities after approval by the shareholders’
meeting.
Measurement of fair value
The Group measures the fair values of equity instruments investments on each balance sheet
date. Fair value refers to the price received from the sale of an asset or paid for the transfer of a
liability by a market player in the orderly transactions on the measurement date. The Group
measures the related asset or liability by fair value, assuming that the orderly transaction of selling
the asset or transferring the liability is executed in the principal market of related asset or liability, or
if there is no principal market, assuming that the transaction is executed in the most advantageous
market of related asset or liability. The principal market (or most advantageous market) is the
marketplace which the Group can enter on the measurement date. The Group adopts the
assumptions used by market players to maximize economic benefits in the pricing of the assets or
liabilities.
When measuring non-financial assets at fair value, consider the ability of market participants to
use the asset for the best use to generate economic benefits, or to sell the asset to other market
participants who can use the asset for the best use to generate economic benefits.
The Group adopts the valuation technique that is applicable under the current conditions and is
supported with sufficient available data and other information and uses the related observable
inputs with priority. The unobservable inputs will be used only if the observable inputs are
unavailable or it is unfeasible to acquire the observable inputs.
For the assets and liabilities which are measured or disclosed by fair value in the financial
statements, the levels of fair value are determined based on the lowest-level input of important
significance for the overall measurement of fair values: Level 1 input is the unadjusted offer price for
an identical asset or liability that can be obtained in an active market on the measurement date;
Level 2 inputs are the inputs that are directly or indirectly observable for related assets or liabilities
other than Level 1 inputs; Level 3 inputs are the inputs that are observable for related assets or
liabilities.
On each balance date, the Group re-evaluates the assets and liabilities that are recognized in
the financial statements and keep being measured by fair value so as to determine whether to
change the measurement levels of fair value.
Significant accounting judgments and estimates
In the preparation of financial statements, the management need to make judgments,
estimates and assumptions, which will affect the presented amounts and disclosure of revenue,
expenses, assets and liabilities and the disclosure of contingent liabilities on the balance sheet date.
However, the uncertainties of these assumptions and estimates may cause material adjustment to
the book value of the assets or liabilities that will be affected in the future.
Judgments
When applying the Group’s accounting policies, the management have made the following
judgments which have had significant influence on the amounts recognized in the financial
statements:
Operating lease—as the lessor
The Group has signed lease contracts for the property investments. The Group thinks that
according to the terms of the lease contracts, the Group retains all major risks and compensations
on the titles of those real estate properties and thus handles them as operating leases.
Partition between property investments and fixed assets
The Group classifies the buildings and structures leased out other than for the main businesses
such as market and hotel services as well as the auxiliary land use rights thereof as property
investments, including but not limited to the auxiliary banking and catering outlets for market
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operation and the auxiliary service outlets for hotels. Other buildings and structures leased out are
classified as fixed assets.
Judgments on assets acquisition and mergers of enterprises
When determining whether an acquisition transaction constitutes a merger, the Group
assesses various factors, including whether the acquiree constitutes a business, in accordance with
the Accounting Standards for Enterprises No. 20 – Merger of Enterprises. A business refers to a
Group of some production and operation activities or assets and liabilities within an enterprise,
which has the input, processing and output abilities and whose costs and expenses or revenue can
be calculated independently, but an asset or a Group of assets or liabilities can be deemed as a
business so long as it has the input and processing processes. The Group makes comprehensive
judgments by combining the asset acquired and the processing process.
Business model
The classification of financial assets at initial recognition depends on the Group’s business
model for the management of financial assets. When judging the business model, the Group factors
in the enterprise evaluation, the way of reporting financial assets performance to key management
personnel, the risks affecting the performance of financial assets, the way of managing financial
assets and the way of related business management personnel obtaining remunerations. When
assessing whether to aim at the collection of contractual cash flow, the Group needs to analyze the
reasons, time, frequency and value for sale of the financial assets to be sold before the expiry dates
thereof.
Characteristics of contractual cash flow
The classification of financial assets at initial recognition depends on the characteristics of the
contractual cash flow of the financial assets. For the judgment on whether the contractual cash flow
is the repayment of principal and the payment of interest on outstanding principal, including the
evaluation of the adjustment to the time value of money, it should be judged whether it is
significantly different from the benchmark cash flow; for the financial assets with the early
repayment characteristic, it should be judged whether the fair value of the early repayment
characteristic is extremely low.
Uncertainties of estimates
The key assumptions on the balance sheet date for the future and other key sources of the
uncertainties of estimates are shown below, which may cause significant adjustments to the book
values of assets and liabilities during the future accounting periods.
Impairment of financial instruments
The Group evaluates the impairment of financial instruments with the expected credit loss
model. To apply the model, the Group needs to make significant judgments and estimates and take
into account all reasonable and evidenced information, including forward-looking information. When
making these judgments and estimates, the Group infers the expected changes in the debtors’
credit risks based on their historical repayment data, in combination with the economic policies,
macroeconomic indicators and industry risks. Different estimates may affect the provisions for
impairment and the provision that has been made for impairment may not necessarily be equal to
the actual amount of impairment loss in the future.
Net realizable value of property inventory
The Group’s property inventory is measured by cost or net realizable value, whichever is lower.
For the calculation of net realizable value, assumptions and estimates should be used. If the
management adjust the estimated price and the costs and expenses to be incurred until the
completion, it will affect the estimate of the net realizable value of the inventory and the difference
will affect the provision for inventory depreciation.
Impairment of non-current assets other than financial assets (excluding goodwill)
The Group determines, on the balance sheet date, whether the non-current assets other than
financial assets have a sign of being impaired. For a non-current asset other than financial asset, if
it is indicated that its book value cannot be recovered, an impairment test will be made. When the
book value of an asset or a Group of assets is higher than its recoverable value, i.e. fair value less
the disposal expenses or the present value of expected future cash flow, whichever is higher, the
asset or Group has been impaired. For the fair value less the disposal expenses, the Group refers
to the agreed selling price or observable market price of the similar asset in a fair transaction, less
the cost increase directly attributable to the disposal of the asset. When predicting the present value
of future cash flows, the management must estimate the expected future cash flows of the asset or
Group of assets and select an appropriate discount rate. When identifying a Group of assets, the
management consider whether the smallest identifiable Group of assets can generate income and
cash flows independently from other departments or units, or the income and cash inflows
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generated thereby are mostly independent from other departments or units, and also take into
account the way of managing or monitoring production and operating activities and the way of
making decisions on the continued use or disposal of the asset.
Fair value of unlisted equity investment
Valuation of the unlisted equity investment is the expected future cash flows discounted at the
current discount rate of other financial instruments with similar contract terms and risk
characteristics. This requires the Group to estimate the expected future cash flows, credit risk,
volatility and discount rate, which brings uncertainties.
Development expenses
When determining the amount of capitalization, management must make assumptions on the
expected future cash flow, the applicable discount rate, and the expected benefit period of the asset.
Deferred income tax assets
To the extent that it is very likely for the Group to have enough taxable income to be offset
against the deductible losses, the Group shall recognize deferred income tax assets in connection
with the outstanding deductible losses. This requires the management to use lots of judgments to
estimate the acquisition time and amount of the taxable income to be acquired in the future to
determine the amount of deferred income tax assets to be recognized, in consideration of the tax
payment planning strategy.
Service life and residual value of fixed assets
The Group makes provisions for the depreciation of its fixed assets during the expected service
life thereof after considering their residual value. The Group reviews the expected service life and
residual value of related assets on a regular basis to determine the amount of depreciation
expenses to be recognized for each reporting period. The Group determines the service life and
residual value of assets based on its experience in similar assets and in combination with the
expected technology changes. If the previous estimates have material changes, the depreciation
expenses will be adjusted for the future periods.
44. Changes in important accounting policies and accounting estimates
(1). Changes in important accounting policies
√Applicable □Not Applicable
Remarks
Approving (substantially
Contents and reason for changes in accounting policies
procedure affected items and
amounts)
In 2018, the Ministry of Finance promulgated the revised Changes in See other notes
Accounting Standards for Business Enterprises No. 21 – statutory for details
Leases (“New Lease Standards”), which adopts a single accounting policies
model similar to the current accounting treatment of
financial leases, requiring lessees to All leases other
than leases and leases of low-value assets recognize a
right-of-use asset and a lease liability, with depreciation
and interest expense, respectively. The Group will start
accounting in accordance with the newly revised lease
standards from January 1, 2021.
Other statements
According to the linking regulations, the information of the comparable period will not be
adjusted, and the retained earnings at the beginning of 2021 will be retrospectively adjusted for the
difference between the new lease standard on the first implementation date and the current lease
standard:
(1) For financial leases before the date of initial implementation, the Group measures the right-
of-use assets and lease liabilities according to the original book values of the finance leased assets
and finance lease payments payable;
(2) For operating leases prior to the date of initial application, the Group measures lease
liabilities based on the present value of the remaining lease payments discounted at the
incremental borrowing rate on the date of initial application, and according to the prepaid rent,
makes necessary adjustments to an amount euqal to the lease liability for each lease to measure
the right-of-use asset;
(3) The Group conducts impairment test on right-of-use assets in accordance with Note V. 30
and performs corresponding accounting treatment.
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2021 Annual Report
The Group adopts simplified treatment for operating leases whose leased assets are low-value
assets before the date of initial application or operating leases that will be completed within 12
months, and no right-of-use assets and lease liabilities are recognized for them. In addition, the
Group adopts the following simplified treatment for operating leases prior to the date of initial
application:
(1) When measuring lease liabilities, the same discount rate may be used for leases with
similar characteristics; the measurement of right-of-use assets may not include initial direct costs;
(2) If there is an option to renew the lease or to terminate the lease, the Group determines the
lease term according to the actual exercise of the option before the date of initial execution and
other latest information;
(3) As an alternative to the right-of-use asset impairment test, the Group assesses whether a
contract including a lease is a onerous contract before the date of initial application according to
Note V. 28, and adjusts the right-of-use assets according to the amount of the loss provision
recorded in the balance sheet before the date of initial implementation;
(4) For lease modification prior to the date of initial implementation, the Group conducts
accounting treatment according to the final arrangement of lease modification.
For the minimum lease payments outstanding for significant operating leases disclosed in the
financial statements for 2020, the Group's adjustment process for the difference between the
discounted present value of the incremental borrowing rate of the Japan Group as the lessee on 1
January 2021 and the lease liabilities recorded on the balance sheet on 1 January 2021 is as
follows:
Major Operating Lease Minimum Lease Payments as of December 31, -
2020
Weighted Average Incremental Borrowing Interest Rate 2.78%-8.01%
Present value of operating lease payments as of 1 January 2021 236,505,193.35
Plus: Finance lease payments payable as of December 31, 2020 -
Lease liability as of January 1, 2021 236,505,193.35
The impact of the implementation of the new lease standard on balance sheet items on
January 1, 2021 is as follows:
Consolidated Balance Sheet
Number of Assuming that the Affected
statements original standard is amount
implemented
Advance from customers 98,855,083.89 105,187,528.26 -6,332,444.37
Other receivables 2,700,742,786.35 2,708,478,136.25 -7,735,349.90
Right-of-use assets 249,646,048.55 - 249,646,048.55
Long-term receivables 133,058,661.88 126,756,573.81 6,302,088.07
Long-term prepaid expenses 105,353,574.36 110,728,723.36 -5,375,149.00
Non-current liabilities due 1,321,957,116.90 1,315,026,574.43 6,930,542.47
within one year
Lease liabilities 229,574,650.88 - 229,574,650.88
4,839,187,922.81 4,366,177,536.11 473,010,386.70
Corporate balance sheet
Number of Assuming that the Affected amount
statements original standard is
implemented
Prepayments 26,853,922.86 29,452,445.04 -2,598,522.18
Other receivables 2,651,620,610.06 2,651,640,610.06 -20,000.00
Right-of-use assets 121,203,075.53 - 121,203,075.53
Long-term receivables 61,267,392.22 61,250,000.00 17,392.22
Non-current liabilities due 1,317,545,829.95 1,315,026,574.43 2,519,255.52
within one year
Lease liabilities 116,082,690.05 - 116,082,690.05
4,294,573,520.67 4,057,369,629.53 237,203,891.14
The impact of the implementation of the new lease standard on the 2021 Financial Statements
is as follows:
Consolidated Balance Sheet
Number of Assuming that the Affected
137 / 228
2021 Annual Report
statements original standard is amount
implemented
Advance from customers 875,167,709.48 878,159,599.98 -2,991,890.50
Other receivables 1,355,924,282.96 1,364,246,050.50 -8,321,767.54
Right-of-use assets 225,347,077.14 - 225,347,077.14
Long-term receivables 222,307,363.40 214,752,001.51 7,555,361.89
Long-term prepaid expenses 188,184,376.43 191,220,571.95 -3,036,195.52
Deferred income tax assets 135,737,028.89 134,914,219.91 822,808.98
Non-current liabilities due 3,664,241,923.08 3,653,879,444.25 10,362,478.83
within one year
Lease liabilities 205,942,673.93 - 205,942,673.93
6,872,852,435.31 6,437,171,888.10 435,680,547.21
Consolidated Income Statement
Number of Assuming that the Affected amount
statements original standard is
implemented
Operating cost 4,027,543,138.56 4,033,717,402.64 -6,174,264.08
Sales expenses 204,745,974.57 204,817,321.94 -71,347.37
Administrative expenses 463,852,229.64 463,888,003.77 -35,774.13
Financial expenses 179,911,613.70 167,047,055.27 12,864,558.43
4,876,052,956.47 4,869,469,783.62 6,583,172.85
Corporate balance sheet
Number of Assuming that the Affected amount
statements original standard is
implemented
Prepayments 11,213,809.02 13,767,136.95 -2,553,327.93
Other receivables 1,207,086,885.99 1,207,106,885.99 -20,000.00
Right-of-use assets 118,591,035.63 - 118,591,035.63
Long-term receivables 41,668,837.64 41,650,000.00 18,837.64
Deferred income tax assets 122,565,730.38 121,772,869.30 792,861.08
Non-current liabilities due 3,656,595,072.25 3,653,879,444.25 2,715,628.00
within one year
Lease liabilities 113,367,062.05 - 113,367,062.05
5,271,088,432.96 5,038,176,336.49 232,912,096.47
Company Income Statement
Number of Assuming that the Affected amount
statements original standard is
implemented
Operating cost 1,062,881,897.31 1,068,758,634.31 -5,876,737.00
Financial expenses 175,493,659.20 166,314,343.29 9,179,315.91
1,238,375,556.51 1,235,072,977.60 3,302,578.91
In addition, starting from the date of initial application, the Company will include the cash
paid for the repayment of the principal and interest of the lease liability in the cash flow
statement in the cash outflow of financing activities, and the short-term lease payments and
low-value assets lease payments made with simplified treatment and variable lease payments
that are not included in the measurement of the lease liability are still included in operating
cash outflows.
The main effects of retrospective adjustments caused by the above changes in accounting
policies on the Financial Statements are as follows:
Changes in accounting policies of the Group
December 31, 2020 1. Changes in January 1, 2021
accounting policies
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2021 Annual Report
Prepayments 105,187,528.26 （6,332,444.37） 98,855,083.89
Other receivables 2,708,478,136.25 （7,735,349.90） 2,700,742,786.35
Right-of-use assets - 249,646,048.55 249,646,048.55
Long-term prepaid （5,375,149.00）
110,728,723.36 105,353,574.36
expenses
Long-term prepaid
126,756,573.81 6,302,088.07 133,058,661.88
expenses
Non-current liabilities
1,315,026,574.43 6,930,542.47 1,321,957,116.90
due within one year
Lease liabilities - 229,574,650.88 229,574,650.88
The Company
December 31, 2020 1. Changes in January 1, 2021
accounting policies
Prepayments 29,452,445.04 （2,598,522.18） 26,853,922.86
Other receivables 2,651,640,610.06 （20,000.00） 2,651,620,610.06
Right-of-use assets - 121,203,075.53 121,203,075.53
Long-term receivables 61,250,000.00 17,392.22 61,267,392.22
Non-current liabilities
1,315,026,574.43 2,519,255.52 1,317,545,829.95
due within one year
Lease liabilities - 116,082,690.05 116,082,690.05
(2). Changes in important accounting estimates
□Applicable √Not Applicable
(3). The adjustment of the current opening financial statements for the first implementation
of the New Standard for Lease from 2021
√Applicable □Not Applicable
Consolidated Balance Sheet
Unit: RMB
December 31,
Item January 1, 2021 Adjustment
2020
Current assets:
Monetary capital 5,612,642,932.21 5,612,642,932.21
Held-for-trading financial
51,712,734.31 51,712,734.31
assets
Accounts receivable 153,573,476.86 153,573,476.86
Prepayments 105,187,528.26 98,855,083.89 -6,332,444.37
Other receivables 2,708,478,136.25 2,700,742,786.35 -7,735,349.90
In which: interest receivable 121,401,210.48 121,401,210.48
Inventory 1,329,467,728.17 1,329,467,728.17
Other current assets 179,724,694.17 179,724,694.17
Total current assets 10,140,787,230.23 10,126,719,435.96 -14,067,794.27
Non-current assets:
Long-term receivables 126,756,573.81 133,058,661.88 6,302,088.07
Long-term equity investment 3,832,897,502.71 3,832,897,502.71
Other equity instruments
662,256,342.79 662,256,342.79
investment
Other non-current financial
1,523,925,249.81 1,523,925,249.81
assets
Property investment 1,960,426,291.73 1,960,426,291.73
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2021 Annual Report
Fixed assets 5,234,293,786.87 5,234,293,786.87
Construction in progress 982,891,877.14 982,891,877.14
Right-of-use assets - 249,646,048.55 249,646,048.55
Intangible assets 3,900,780,981.92 3,900,780,981.92
Development expenses 22,223,061.09 22,223,061.09
Long-term prepaid expenses 110,728,723.36 105,353,574.36 -5,375,149.00
Deferred income tax assets 99,664,328.84 99,664,328.84
Other non-current assets 152,495,196.56 152,495,196.56
Total non-current assets 18,609,339,916.63 18,859,912,904.25 250,572,987.62
Total assets 28,750,127,146.86 28,986,632,340.21 236,505,193.35
Current liabilities:
Short-term borrowings 1,257,179,389.40 1,257,179,389.40
Accounts payable 636,463,802.23 636,463,802.23
Advances from customers 112,752,897.25 112,752,897.25
Contract liabilities 2,442,211,788.88 2,442,211,788.88
Payroll payable 161,498,997.53 161,498,997.53
Tax payable 495,400,499.73 495,400,499.73
Other payables 1,646,345,561.62 1,646,345,561.62
Non-current liabilities due 6,930,542.47
1,315,026,574.43 1,321,957,116.90
within one year
Other current liabilities 3,023,608,041.68 3,023,608,041.68
Total current liabilities 11,090,487,552.75 11,097,418,095.22 6,930,542.47
Non-current liabilities:
Long-term borrowings 282,000,000.00 282,000,000.00
Bonds payable 3,552,161,709.68 3,552,161,709.68
Lease liabilities - 229,574,650.88 229,574,650.88
Estimated liabilities 110,620,306.10 110,620,306.10
Deferred income 26,545,277.30 26,545,277.30
Deferred income tax liabilities 113,602,923.79 113,602,923.79
Total non-current liabilities 4,084,930,216.87 4,314,504,867.75 229,574,650.88
Total liabilities 15,175,417,769.62 15,411,922,962.97 236,505,193.35
Owners’ equity (or shareholders’ equity)
Paid-in capital (share capital) 5,489,914,176.00 5,489,914,176.00
Capital reserve 1,594,906,524.67 1,594,906,524.67
Less: treasury stocks 137,298,000.00 137,298,000.00
Other comprehensive income 78,149,661.33 78,149,661.33
Surplus reserve 1,364,257,808.58 1,364,257,808.58
Undistributed profits 5,168,298,206.50 5,168,298,206.50
Total equity attributable to
owners (shareholders) of the 13,558,228,377.08 13,558,228,377.08
parent company
Minority interest 16,481,000.16 16,481,000.16
Total owners’ equity (or
13,574,709,377.24 13,574,709,377.24
shareholders’ equity)
Total liabilities and
owners’ equity (or shareholders’ 28,750,127,146.86 28,986,632,340.21 236,505,193.35
equity)
Statements on item adjustment:
√Applicable □Not Applicable
In 2018, the Ministry of Finance revised and issued the “Accounting Standards for Business
Enterprises No. 21-Leases” (Cai Kuai [2018] No. 35) (hereinafter collectively referred to as the
“New Standard for Lease”). The Company will disclose the accounting statements according to the
requirements of the New Standard for Lease. In accordance with the standard transmit regulations,
the Company retrospectively adjusted the figures for the beginning of 2021. The right to use assets
and lease liabilities shall be confirmed in accordance with the lease contract, and the leases
originally included in the prepayments shall be transferred to the right to use assets. The
quantitative impact of the above changes on specific financial statement items is: on January 1,
140 / 228
2021 Annual Report
2021,in the consolidated balance sheet, prepayments were reduced by RMB 6,332,444.37, other
receivables were reduced by RMB 7,735,349.90, long-term prepaid expenses were reduced by
RMB 5,375,149.00, and long-term prepaid receivables, right-of-use assets, non-current liabilities
due wthin one year and lease liabililities were inreased by RMB 6,302,088.07, RMB 249,646,048.55,
RMB 6,930,542.47 and RMB 229,574,650.88, respectively.
Balance Sheet of Parent Company
Unit: RMB
Item December 31, 2020 January 1, 2021 Adjustment
Current assets:
Monetary capital 5,435,867,497.50 5,435,867,497.50
Held-for-trading financial
6,632.72 6,632.72
assets
Accounts receivable 14,671,577.47 14,671,577.47
Prepayments 29,452,445.04 26,853,922.86 -2,598,522.18
Other receivables 2,651,640,610.06 2,651,620,610.06 -20,000.00
In which: interest receivable 121,401,210.48 121,401,210.48
Inventory 10,144,965.06 10,144,965.06
Other current assets 3,082,340,716.76 3,082,340,716.76
Total current assets 11,224,124,444.61 11,221,505,922.43 -2,618,522.18
Non-current assets:
Long-term receivables 61,250,000.00 61,267,392.22 17,392.22
Long-term equity investment 6,083,135,428.02 6,083,135,428.02
Other equity instruments
662,256,342.79 662,256,342.79
investment
Other non-current financial
266,722,811.41 266,722,811.41
assets
Property investment 1,501,734,504.79 1,501,734,504.79
Fixed assets 4,444,239,239.28 4,444,239,239.28
Construction in progress 856,248,099.10 856,248,099.10
Right-of-use assets 121,203,075.53 121,203,075.53
Intangible assets 3,777,092,772.41 3,777,092,772.41
Long-term prepaid expenses 58,705,952.97 58,705,952.97
Deferred income tax assets 85,739,381.21 85,739,381.21
Total non-current assets 17,797,124,531.98 17,918,344,999.73 121,220,467.75
Total assets 29,021,248,976.59 29,139,850,922.16 118,601,945.57
Current liabilities:
Short-term borrowings 1,257,179,389.40 1,257,179,389.40
Accounts payable 444,254,309.61 444,254,309.61
Advances from customers 97,380,931.49 97,380,931.49
Contract liabilities 2,283,994,068.70 2,283,994,068.70
Payroll payable 131,469,702.81 131,469,702.81
Tax payable 546,100,633.28 546,100,633.28
Other payables 1,333,312,494.36 1,333,312,494.36
Non-current liabilities due 2,519,255.52
1,315,026,574.43 1,317,545,829.95
within one year
Other current liabilities 3,556,664,822.79 3,556,664,822.79
Total current liabilities 10,965,382,926.87 10,967,902,182.39 2,519,255.52
Non-current liabilities:
Long-term borrowings 282,000,000.00 282,000,000.00
Bonds payable 3,552,161,709.68 3,552,161,709.68
Lease liabilities - 116,082,690.05 116,082,690.05
Estimated liabilities 110,620,306.10 110,620,306.10
Deferred income 26,545,277.30 26,545,277.30
Deferred income tax liabilities 69,623,249.14 69,623,249.14
Total non-current liabilities 4,040,950,542.22 4,157,033,232.27 116,082,690.05
Total liabilities 15,006,333,469.09 15,124,935,414.66 118,601,945.57
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2021 Annual Report
Owners’ equity (or shareholders’ equity)
Paid-in capital (share capital) 5,489,914,176.00 5,489,914,176.00
Capital reserve 1,833,256,515.22 1,833,256,515.22
Less: treasury stocks 137,298,000.00 137,298,000.00
Other comprehensive income 81,473,183.84 81,473,183.84
Surplus reserve 1,364,204,332.75 1,364,204,332.75
Undistributed profits 5,383,365,299.69 5,383,365,299.69
Total owners’ equity (or
14,014,915,507.50 14,014,915,507.50
shareholders’ equity)
Total liabilities and
owners’ equity (or 29,021,248,976.59 29,139,850,922.16 118,601,945.57
shareholders’ equity)
Statements on item adjustment:
√Applicable □Not Applicable
In 2018, the Ministry of Finance revised and issued the “Accounting Standards for Business
Enterprises No. 21-Leases” (Cai Kuai [2018] No. 35) (hereinafter collectively referred to as the
“New Standard for Lease”). The Company will disclose the accounting statements according to the
requirements of the New Standard for Lease from Jan 1st, 2021. In accordance with the standard
transmit regulations, the Company retrospectively adjusted the figures for the beginning of 2021.
The right to use assets and lease liabilities shall be confirmed in accordance with the lease contract,
and the leases originally included in the prepayments shall be transferred to the right to use assets.
The quantitative impact of the above changes on specific financial statement items is: On January 1,
2021, in the parent company's balance sheet, prepayments were reduced by RMB 2,598,522.18,
other receivables were reduced by RMB 20,000.00, and long-term receivables, right-of-use assets,
non-current liabilities due wthin one year and lease liabililities were increased by by RMB 17,392.22,
RMB 121,203,075.53, RMB 2,519,255.52 and RMB 116,082,690.05, respectively.
(4). Explanation of the retrospective adjustment of the previous comparative data for the
first implementation of the New Standard for Lease from 2021.
□Applicable √Not Applicable
45. Others
□Applicable √Not Applicable
VI. Taxes
1. Major taxes and tax rates
Major taxes and tax rates
√Applicable □Not Applicable
Tax Base of taxation Tax rate
VAT Sale of goods or rendering of The Company is a general taxpayer. The taxable
taxable service income is calculated at 13%, 9% and 6% tax rates
as output tax, and the value-added tax is
calculated and paid on the basis of the difference
after deduction of the input tax allowed to be
deducted in the current period. In addition, for the
sale of the self-developed old real estate projects
(the contract start date indicated in the
“Construction Project Construction Permit” is
before April 30, 2016) and the lease of the real
estate acquired before April 30, 2016, the
simplified tax calculation method shall apply at the
rate of 5%.
Urban maintenance
Indirect tax actually paid 5% or 7%
and construction tax
Corporate income Domestic enterprises should pay 25% of the
tax taxable income of corporate income tax; Yiwu
China Commodities City (Hong Kong)
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2021 Annual Report
International Trade Co., Ltd. was registered in
Hong Kong Special Administrative Region, so it is
subject to the Hong Kong income tax rate,
16.50%;
BETTER SILK ROAD FZE was registered in
Dubai and no corporate income tax is levied.
Land appreciation Ratio of appreciation value to Four-bracket progressive tax rate (30%～60%)
tax deductible items
Real estate tax If the tax is levied according 1.2% or 12%
to price, the amount is 1.2%
of the balance of the original
value of the property after a
30% deduction; if the tax is
levied according to rental, the
amount is 12% of the rental
income.
Education surcharge Indirect tax actually paid 3%
Local education Indirect tax actually paid 2%
surcharge
Cultural undertaking Advertising turnover 3%
development fee
Disclosure of taxpayers subject to different income tax rates
√Applicable □Not Applicable
Taxpayer Income tax rate (%)
Yiwu China Commodities City (Hong Kong) 16.50
International Trade Co., Ltd.
BETTER SILK ROAD FZE 0
2. Tax preference
√Applicable □Not Applicable
According to the notice “Measures of Yiwu for Implementation of Adjustment of Urban Land
Use Tax Policies to Promote the Intensive and Economical Utilization of Land” (Y D S H [2017] No.
56), the Company enjoys tax incentive of exemption from 90% of land use tax according to the
statistical caliber of taxation on acres .
3. Others
□Applicable √Not Applicable
VII. Notes to items in consolidated financial statements
1. Monetary capital
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Cash on hand 154,264.94 292,999.29
Bank deposits 4,831,258,722.95 4,812,189,759.31
Other cash and cash equivalents 55,398.36 800,160,173.61
Total 4,831,468,386.25 5,612,642,932.21
In which: amount deposited
38,554,320.18 25,679,209.72
abroad
Other statements
For the cash and cash equivalents which are restricted in use, please refer to Notes VII.81
Assets with Restricted Title or Right of Use.
Interest income of demand deposits is accrued based on the demand deposit rates of banks.
The term of short-term time deposits ranges from three months to half a year and depends on the
Group’s cash demand, and the interest income thereof is accrued based on the corresponding time
deposit rates of banks.
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2021 Annual Report
2. Held-for-trading financial assets
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Financial assets that are measured by fair value and
of which the changes in fair value are recognized in 75,375,083.20 51,712,734.31
the profit or loss for the current period
Among which:
Bank financing products 25,000,000.00 -
Equity instrument investment 50,375,083.20 51,712,734.31
Total 75,375,083.20 51,712,734.31
Other notes:
□Applicable √Not Applicable
3. Derivative financial assets
□Applicable √Not Applicable
4. Notes receivable
(1). Categorized presentation of notes receivable
□Applicable √Not Applicable
(2). Notes receivable having been pledged by the Company as of the close of the reporting
period
□Applicable √Not Applicable
(3). Notes receivable having been endorsed or discounted by the Company as of the close
of the reporting period and having not been due as of the balance sheet date
□Applicable √Not Applicable
(4). Notes turned into accounts receivable due to the drawers’ non-performance at the
close of the reporting period
□Applicable √Not Applicable
(5). Categorized disclosure based on the bad debt provision method
□Applicable √Not Applicable
Accounts receivable for which bad debt provision is made individually:
□Applicable √Not Applicable
Explanation for making bad debt provision for accounts receivable by Group:
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, please
refer to the disclosure of other receivables:
□Applicable √Not Applicable
(6). Provisions for bad debts
□Applicable √Not Applicable
(7). Notes receivable actually written off during the current period
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
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2021 Annual Report
5. Accounts receivable
(1). Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
Account age Closing book balance
Within 1 year 191,258,380.84
1 to 2 years 100,234.00
2 to 3 years 352,588.44
Total 191,711,203.28
(2). Categorized disclosure based on the bad debt provision method
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Book Book
Provisi Provisi
Proporti value Proporti value
Amount Amount on ratio Amount Amount on ratio
on (%) on (%)
(%) (%)
Accounts
receivable for
which bad debt
97,219,393.59 50.71 6,261,907.10 0.22 90,957,486.49 90,795,847.76 59.07 - - 90,795,847.76
provision is
made
individually
Accounts
receivable for
which bad debt 94,491,809.69 49.29 211,765.29 6.44 94,280,044.40 62,907,905.93 40.93 130,276.83 0.21 62,777,629.10
provision is
made by Group
Total 191,711,203.28 / 6,473,672.39 / 185,237,530.89 153,703,753.69 / 130,276.83 / 153,573,476.86
Accounts receivable for which bad debt provision is made individually:
√Applicable □Not Applicable
Unit: RMB
Closing balance
Name Bad debt
Book balance Provision ratio (%) Reason for provision
provision
Trade
90,957,486.49 - -
receivables
Due to deterioration of
Lease operating conditions,
6,261,907.10 6,261,907.10 100.00
receivables expected not to be
recovered
Total 97,219,393.59 6,261,907.10 0.22 /
Explanation for making bad debt provision for accounts receivable individually:
□Applicable √Not Applicable
Explanation for making bad debt provision for accounts receivable by Group:
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, please
refer to the disclosure of other receivables:
√Applicable □Not Applicable
End of June 2021
Account age Estimated book balance Expected credit loss Expected credit loss for
in default rate (%) the duration
Within 1 year 94,038,987.25 0.01 152,655.56
1 - 2 years 100,234.00 5.66 5,674.25
2 -3 years 352,588.44 15.16 53,435.48
145 / 228
2021 Annual Report
Total 94,491,809.69 211,765.29
(3). Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
Amount of change during the current
period
Category Opening balance Closing balance
Recovery or
Provision
reversal
Bad debt provision
for accounts 130,276.83 6,990,264.17 646,868.61 6,473,672.39
receivable
Total 130,276.83 6,990,264.17 646,868.61 6,473,672.39
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(4). Accounts receivable actually written off during the current period
□Applicable √Not Applicable
(5). Accounts receivable from the five debtors with the highest closing balance
√Applicable □Not Applicable
Unit: RMB
Proportion in the total
closing balance of Closing balance of
Debtor Closing balance
accounts receivable bad debt provision
(%)
Total balance of the accounts
receivable with the top five 8,508,287.04 4.44 82,077.26
entities
Total 8,508,287.04 4.44 82,077.26
Other statements
The Group is mainly engaged in market operation, hotel services and commodity sales, and
the balance of receivables is mainly based on the market operation of commercial rate receivables,
hotel consumption, trade receivables and advertising publishing fees.
(6). Accounts receivable derecognized due to transfer of financial assets
□Applicable √Not Applicable
(7). Amounts of assets and liabilities formed by the transfer of accounts receivable and
continuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
6. Accounts receivable financing
□Applicable √Not Applicable
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2021 Annual Report
7. Prepayments
(1). Presentation of prepayment by account age
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Account age
Amount Proportion (%) Amount Proportion (%)
Within 1 868,252,359.56 99.21
102,657,415.19 97.59
year
1 to 2 years 6,212,572.92 0.71 2,329,113.07 2.22
2 to 3 years 602,777.00 0.07 - -
Over 3 years 100,000.00 0.01 201,000.00 0.19
Total 875,167,709.48 100 105,187,528.26 100
Explanation for failure to settle the prepayments with an account age longer than one year and in
important amounts:
None
(2). Prepayments to the five suppliers with the highest closing balance
√Applicable □Not Applicable
Proportion in total
Debtor Closing balance closing balance of
prepayments (%)
PACIFIC SEAFOOD TRADER SA 84,334,516.52 9.64
Sociedad Nacional de Galapagos C.A. SONGA 40,474,343.32 4.62
Yiwu Zuqing Commodity Co., Ltd. 42,928,301.09 4.91
PROCESADORA DE MARISCOS DE EL ORO
36,062,941.54 4.12
PROMARO S.A.
FALCON MARINE EXPORTS LTD., 24,255,029.78 2.77
Total 228,055,132.25 26.06
Other statements
None
Other statements
□Applicable √Not Applicable
8. Other receivables
Presentation of items
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Interest receivable 92,249,275.44 121,401,210.48
Other receivables 1,263,675,007.52 2,579,341,575.87
Total 1,355,924,282.96 2,700,742,786.35
Other notes:
□Applicable √Not Applicable
Interest receivable
(1). Classification of interest receivable
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Cash occupation fee for 92,249,275.44 121,401,210.48
receivables
Total 92,249,275.44 121,401,210.48
147 / 228
2021 Annual Report
(2). Significant overdue interest
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Dividend receivable
(1). Dividend receivable
□Applicable √Not Applicable
(2). Important dividend receivable with an account age longer than 1 year
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Other receivables
(1). Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
Account age Closing book balance
Within 1 year 133,457,994.19
1 to 2 years 1,113,635,528.49
2 to 3 years 732,296.38
Over 3 years 20,204,272.92
Bad debt provision for other receivables -4,355,084.46
Total 1,263,675,007.52
(2). Classification based on the nature of accounts
√Applicable □Not Applicable
Unit: RMB
Nature of receivable Closing book balance Opening book balance
Financial grants receivables 1,103,178,748.00 2,480,172,779.00
from joint ventures and
associated enterprises
Withholdings, deposit and 125,377,518.60 59,045,233.81
margin
Receivables from export tax 34,759,474.84 4,841,801.31
rebate
Reserve 359,266.08 523,397.65
Receivables from self-operated - 42,493,714.00
land
Total 1,263,675,007.52 2,587,076,925.77
(3). Bad debt provision
√Applicable □Not Applicable
Unit: RMB
148 / 228
2021 Annual Report
Phase I Phase 2 Phase 3
Expected credit Expected credit
Expected credit loss loss in the entire loss in the entire
Bad debt provision Total
in the coming 12 duration (credit duration (credit
months has not been has been
impaired) impaired)
Balance as of January 1,
2021
3,768,512.43 3,768,512.43
Balance as of January 1,
2021 in the current period
Provision made in the 1,309,763.41 1,309,763.40
current period
Current reversal 353,464.30 353,464.30
Current write-off 369,727.08 369,727.07
Balance as at 31 4,355,084.46 4,355,084.46
December 2021
Significant changes in the book balance of other receivables with changes in loss provisions:
□Applicable √Not Applicable
Basis for the bad debt provision made in the current period and for assessing whether the credit risk
of financial instruments has increased significantly:
□Applicable √Not Applicable
(4). Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
Amount of change during the current period
Opening Closing
Category Recovery or Charge-off or
balance Provision balance
reversal write-off
Bad debt
provision for 3,768,512.43 1,309,763.41 353,464.30 369,727.08 4,355,084.46
other receivables
Total 3,768,512.43 1,309,763.41 353,464.30 369,727.08 4,355,084.46
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(5). Other receivables actually written off during the current period
□Applicable √Not Applicable
(6). Other receivables from the five debtors with highest closing balance
√Applicable □Not Applicable
Unit: RMB
Weight in the
total closing Bad debt
Nature of Account balance of provision
Debtor Closing balance
receivable age other Closing
receivables balance
(%)
Yiwu Tonghui
Financial 1-2
Shangbo Real 880,728,548.00 69.46 -
assistance years
Estate Co., Ltd.
Yiwu Handing
Financial 1-2
Shangbo Real 222,450,200.00 17.54 -
assistance years
Estate Co., Ltd.
Yisha Chengdu
International Temporary Within 1
40,000,000.00 3.15 -
Trade City Co., loan year
Ltd.
149 / 228
2021 Annual Report
Yiwu Taxation
Bureau, State Export tax Within 1
34,759,474.84 2.74 -
Administration of rebate year
Taxation
Logistis Quelfor Guarantee 1-2
4,985,493.99 0.39
s.r.o. deposit years
Total / 1,182,923,716.83 / 93.28 -
(7). Receivables involving government grants
√Applicable □Not Applicable
Unit: RMB
Government Estimated time,
Debtor subsidy project Closing balance Closing Aging amount and basis
name for collection
Yiwu Taxation Export tax 34,759,474.84 Within one year April 2022,
Bureau, State rebate 34,759,474.84,
Administration of "Interim
Taxation Regulations of the
People's Republic
of China on Value
Added Tax"
.
Other statements
None
(8). Other receivables derecognized due to transfer of financial assets
□Applicable √Not Applicable
(9). Amounts of assets and liabilities formed by the transfer of accounts receivable and
continuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
9. Inventory
(1). Classification of inventory
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Provision for Provision for
inventory inventory
Item depreciation/provision depreciation/provision
Book balance Book value Book balance Book value
for impairment of for impairment of
contract performance contract performance
cost cost
Raw
723,775.34 - 723,775.34 402,020.27 - 402,020.27
materials
Finished
75,079,555.38 - 75,079,555.38 75,506,826.35 - 75,506,826.35
goods
Development
347,123,927.41 28,303,338.06 318,820,589.35 341,654,440.82 28,303,338.06 313,351,102.76
cost
Development
928,561,037.31 - 928,561,037.31 932,153,659.76 - 932,153,659.76
products
150 / 228
2021 Annual Report
Work-in-
progress 4,217,610.61 - 4,217,610.61 8,054,119.03 - 8,054,119.03
materials
Total 1,355,705,906.05 28,303,338.06 1,327,402,567.99 1,357,771,066.23 28,303,338.06 1,329,467,728.17
(2). Provision for inventory depreciation/provision for impairment of contract performance
cost
√Applicable □Not Applicable
Unit: RMB
Increase in the current Decrease in the
Opening period current period
Item Closing balance
balance Charge-off
Provision Others Others
or write-off
Developm 28,303,338.06 - - - -
28,303,338.06
ent cost
Total 28,303,338.06 - - - - 28,303,338.06
(3). Closing balance of inventory containing capitalized borrowing costs
√Applicable □Not Applicable
On December 31, 2021, the inventory with a book value of RMB 35,797,443.87 (December 31,
2020: RMB 35,797,443.87) was formed by capitalization of borrowing costs.
(4). Amortization of contract performance cost during the current period
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Inventory-Development Cost Unit: RMB-yuan Currency: RMB
Item Opening balance Increase in the Decrease in the Closing balance
current period current period
Haicheng Phase I 67,907,950.27 - - 67,907,950.27
Business Street
Haicheng Phase II 273,746,490.55 5,469,486.59 - 279,215,977.14
Business Street
Total 341,654,440.82 5,469,486.59 - 347,123,927.41
Inventory-Developed Products Unit: RMB-yuan Currency: RMB
Item Opening balance Increase in Delivered Other transfer- Closing balance
the current during current out
period reporting
period
Haicheng
Phase I 918,976,130.79 - - 3,360,000.00 915,616,130.79
Business Street
Qiantang
Yinxiang 238,807.22 - 238,807.22 - -
Shuangchuang
Building 12,938,721.75 6,184.77 - - 12,944,906.52
Total 932,153,659.76 6,184.77 238,807.22 3,360,000.00 928,561,037.31
10. Contract assets
(1). Overview of contract assets
□Applicable √Not Applicable
(2). Amount of and reasons for material changes to book value during the reporting period
□Applicable √Not Applicable
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2021 Annual Report
(3). Provision for impairment of contract assets in the current period
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, please
refer to the disclosure of other receivables:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
11. Held-for-sale assets
□Applicable √Not Applicable
12. Non-current assets due within one year
□Applicable √Not Applicable
Important debt investments and other debt investments at the end of the period:
□Applicable √Not Applicable
Other statements
None
13. Other current assets
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
To-be-deducted input tax 234,080,141.55 162,435,010.24
Prepaid land transfer fees 7,629,349.00 -
To-be-certified input tax 4,357,934.03 14,195,996.43
Entrusted loans to the market 2,780,294.82 3,279,187.50
traders
Less: bad debt provision for -185,500.00 -185,500.00
entrusted loans
Total 248,662,219.40 179,724,694.17
Other statements
None
14. Debt investments
(1). Overview of debt investment
□Applicable √Not Applicable
(2). Important debt investment as of the close of the reporting period
□Applicable √Not Applicable
(3). Provision for impairment
□Applicable √Not Applicable
Amount of impairment provision for the current period and the basis for assessing whether there is
significant increase in the credit risk of financial instruments
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
15. Other debt investments
(1). Overview of other debt investment
□Applicable √Not Applicable
152 / 228
2021 Annual Report
(2). Important other debt investment as of the close of the reporting period
□Applicable √Not Applicable
(3). Provision for impairment
□Applicable √Not Applicable
Amount of impairment provision for the current period and the basis for assessing whether there is
significant increase in the credit risk of financial instruments
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
16. Long-term receivables
(1). Overview of long-term receivables
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance Range
of
Item Bad debt Bad debt
Book balance Book value Book balance Book value discount
provision provision
rate
Guarantee
7,555,361.89 7,555,361.89 6,302,088.07 6,302,088.07
deposit
Financial
assistance
receivable 214,752,001.51 214,752,001.51 126,756,573.81 - 126,756,573.81
from joint
ventures
Total 222,307,363.40 222,307,363.40 133,058,661.88 - 133,058,661.88 /
(2). Bad debt provision
□Applicable √Not Applicable
Amount of bad debt provision for the current period and the basis for assessing whether there is
significant increase in the credit risk of financial instruments
□Applicable √Not Applicable
(3). Long-term receivables derecognized due to transfer of financial assets
□Applicable √Not Applicable
(4). Amounts of assets and liabilities formed by the transfer of long-term receivables and
continuing involvement
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
17. Long-term equity investment
√Applicable □Not Applicable
Unit: RMB
Change in the current period
Closing
Investment gains or
Closing balance
Opening amount
Investee
Balance Additional investment
Decrease in losses recognized Change in other Declared a cash amount of
investment with the equity benefits dividend or profit
method Balance impairme
nt
153 / 228
2021 Annual Report
provision
1. Joint ventures
Yiwu Shanglv 365,830,756.91 17,837,597.30 383,668,354.21
Yiwu
Rongshang
22,319,075.64 195,068,462.30 217,387,537.94
Property Co.,
Ltd.
Yiwu
Chuangcheng
11,444,786.74 76,618,539.06 88,063,325.80
Property Co.,
Ltd.
Others 15,284,720.18 17,850,000.00 23,678,584.58 56,813,304.76 3,327,216.16
Sub-total 414,879,339.47 17,850,000.00 313,203,183.24 745,932,522.71 3,327,216.16
2. Associates
Binjiang
154,152,267.42 17,523,961.66 137,200,000.00 34,476,229.08
Shangbo
Huishang
71,396,566.07 11,428,130.57 82,824,696.64
Micro-finance
Yiwu
Huishang
Redbud
78,072,569.23 17,223,611.38 16,057,218.98 5,909,184.62 70,996,992.21
Equity
Investment
Co., Ltd.
Chouzhou
Financial 371,320,662.02 54,700,187.22 426,020,849.24
Lease
Yiwu China
Commodities
City
- - 9,508,049.22
Investment
Management
Co., Ltd.
Yiwu China
Commodities
City Fuxing
Investment 102,918,559.00 102,918,559.00
Center
(limited
partnership)
Pujiang Lvgu
Property Co., 379,672,466.65 79,608,970.60 459,281,437.25
Ltd.
CCCP 1,471,572,953.91 1,225,000,000.00 60,365,490.42 2,756,938,444.33
Yiwu Hongyi
Equity
Investment
Fund 689,756,805.12 150,000,000.00 48,115,457.34 887,872,262.46
Partnership
(limited
partnership)
Others 99,155,313.82 103,366,783.24 -1,822,274.45 4,493,427.31 205,193,249.92
Sub-total 3,418,018,163.24 1,478,366,783.24 17,223,611.38 285,977,142.34 4,493,427.31 143,109,184.62 5,026,522,720.13 9,508,049.22
Total 3,832,897,502.71 1,496,216,783.24 17,223,611.38 599,180,325.58 4,493,427.31 143,109,184.62 5,772,455,242.84 12,835,265.38
Other statements
Provision for impairment of long-term equity investment：
Unit: RMB
Investee Opening Increase in Decrease Closing
balance the current in the balance
period current
period
Yiwu China Commodities City Investment
9,508,049.22 - - 9,508,049.22
Management Co., Ltd. (Note 1)
Others 3,327,216.16 - - 3,327,216.16
Total 12,835,265.38 - - 12,835,265.38
Note 1: In 2017, Yiwu China Commodities City Financial Holdings Co., Ltd. (hereinafter
referred to as "CCCF"), a wholly-owned subsidiary of the Group, and Shanghai Fuxing Industrial
Group Co., Ltd. (hereinafter referred to as "Fuxing") jointly established Industrial Fund Yiwu China
Commodities City Fuxing Investment Center (LLP) (hereinafter referred to as the "Funds of Funds"),
the Fund of Funds has invested in 12 sub-funds including Yiwu Shangfu Chuangzhi Investment
Center (LLP) (hereinafter referred to as "Shangfu Chuangzhi Fund"). CCCF, as a limited partner,
subscribed RMB 998 million in the FOF, accounting for 49.9% of the subscribed capital. The paid-in
capital was RMB 102.92 million, and there is no deadline for the payment for the unpaid capital
contribution. The other limited partner of the FOF is Fuxing. CCCF also contributed RMB 9.8 million,
49% of total shares, to jointly establish Yiwu China Commodity City Investment Management Co.,
Ltd. (hereinafter referred to as “CCCIM”) with Fuxing as the general partner of the above-mentioned
FOF and sub-funds. The FoF and CCCIM are both under the control of Fuxing and are associates
of CCCF. The above paid-in capital contribution made by CCCF to the FoF has been contributed to
154 / 228
2021 Annual Report
Shangfu Chuangzhi Fund together with the capital contribution of Fuxing to the FoF through the
FoF as a limited partner. With the capital contribution from the FoF as a limited partner and CCCF’s
capital contribution to Shangfu Chuangzhi Fund as a limited partner, Shangfu Chuangzhi Fund
made capital contribution of RMB820.54million to subscribe for the increase in the registered capital
of Hubei Provincial Asset Management Co., Ltd. to acquire 22.667% equity therein.
In 2018, CCCF learned during its after-investment follow-up management that Fuxing and its
actual controller ZHU Yidong were suspected of having committed a criminal offense and the
22.667% equity held by Shangfu Chuangzhi Fund in Hubei Provincial Asset Management Co., Ltd.
was frozen by the Public Security Bureau of Shanghai due to Fuxing’s contribution to the sources of
the capital contribution. The Group believes that, on December 31, 2021, the Group’s investment in
the Fund of Funds and Shangfu Chuangzhi Fund was non-related to Fuxing’s investment, and there
was no indication of impairment of the underlying assets. Although they were still frozen, but without
affecting the Group’s equity. Therefore, there was no impairment. However, for the equity
investment managed for the Yiwu CCC, a full impairment provision has been made since 2018. See
Notes VII.81 and Notes XIV. 1 for details.
18. Other equity instruments investment
(1). Overview of other equity instruments investment
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Shenwan Hongyuan Group Co., Ltd. 642,187,968.77 662,256,342.79
Total 642,187,968.77 662,256,342.79
(2). Non-trading equity instruments investment
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
19. Other non-current financial assets
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Unlisted equity investment 213,607,388.98 134,582,725.75
PE investment 1,263,329,797.13 1,341,220,243.72
NEEQ equity investment 47,882,069.30 48,122,280.34
Total 1,524,819,255.41 1,523,925,249.81
Other notes:
□Applicable √Not Applicable
20. Property investment
Measurement models
(1). Property investment measured by cost
Unit: RMB
Buildings and
Item Land use right Total
structures
I. Original book value
1. Opening balance 1,952,906,526.61 428,095,086.44 2,381,001,613.05
2. Increase in the current 1,109,483,031.70 10,665,898.19 1,120,148,929.89
period
(1) Outsourcing - 10,665,898.19 10,665,898.19
155 / 228
2021 Annual Report
(2) Inventory\fixed
assets\construction in progress 1,109,483,031.70 - 1,109,483,031.70
changed into property investment
4. Closing balance 3,062,389,558.31 438,760,984.63 3,501,150,542.94
II. Accumulated depreciation and accumulated amortization
1. Opening balance 352,149,349.88 68,425,971.44 420,575,321.32
2. Increase in the current
93,669,647.35 12,969,173.81 106,638,821.16
period
(1) Provision or amortization 93,669,647.35 12,969,173.81 106,638,821.16
4. Closing balance 445,818,997.23 81,395,145.25 527,214,142.48
III. Depreciation provision
1. Opening balance - - -
4. Closing balance - - -
IV. Book value
1. Opening book value 2,616,570,561.08 357,365,839.38 2,973,936,400.46
2. Closing book value 1,600,757,176.73 359,669,115.00 1,960,426,291.73
(2). Information of investment real estate without property right certificates
√Applicable □Not Applicable
Unit: RMB
Reasons for having not
Item Book value obtained the ownership
certificate
Office building of the auxiliary 103,736,942.74 Completion settlement not
project in western Yiwu completed
Total 103,736,942.74
Other statements
√Applicable □Not Applicable
As of December 31, 2021, the total amount of investment real estate for which the property
right certificates had not been received due to the final settlement was still in progress was RMB
103,736,942.74.
21. Fixed assets
Presentation of items
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Fixed assets 5,078,590,929.75 5,234,293,786.87
Total 5,078,590,929.75 5,234,293,786.87
Other notes:
□Applicable √Not Applicable
Fixed assets
(1). Overview of fixed assets
√Applicable □Not Applicable
Unit: RMB
Buildings and Machinery Transportation
Item Total
structures equipment equipment
I. Original book value:
1. Opening balance 7,419,947,051.90 3,785,579,073.90 17,844,183.85 11,223,370,309.65
2. Increase in the current
142,043,463.99 95,500,592.38 985,758.82 238,529,815.19
period
156 / 228
2021 Annual Report
(1) Purchase 1,742,482.55 50,062,006.86 985,758.82 52,790,248.23
(2) Changeover from
140,300,981.44 45,159,824.47 - 185,460,805.91
construction in progress
(4) Other transfer-in - 278,761.05 - 278,761.05
3. Decrease in the current
3,366.44 13,881,195.30 5,504,327.05 19,388,888.79
period
(1) Disposal or retirement 3,366.44 13,881,195.30 5,504,327.05 19,388,888.79
(2) Other changeover - - -
4. Closing balance 7,561,987,149.45 3,867,198,470.98 13,325,615.62 11,442,511,236.05
II. Accumulated depreciation
1. Opening balance 2,443,460,695.43 3,061,676,908.45 12,775,451.05 5,517,913,054.93
2. Increase in the current
286,194,882.11 104,750,015.62 982,547.28 391,927,445.01
period
(1) Provision 286,194,882.11 104,750,015.62 982,547.28 391,927,445.01
3. Decrease in the current
- 11,793,932.72 5,289,728.77 17,083,661.49
period
(1) Disposal or retirement - 11,793,932.72 5,289,728.77 17,083,661.49
4. Closing balance 2,729,655,577.54 3,154,632,991.35 8,468,269.56 5,892,756,838.45
III. Depreciation provision
1. Opening balance 471,163,467.85 - - 471,163,467.85
4. Closing balance 471,163,467.85 - - 471,163,467.85
IV. Book value
1. Closing book value 4,361,168,104.06 712,565,479.63 4,857,346.06 5,078,590,929.75
2. Opening book value 4,505,322,888.62 723,902,165.45 5,068,732.80 5,234,293,786.87
(2). Temporarily idle fixed assets
□Applicable √Not Applicable
(3). Fixed assets leased in through financial lease
√Applicable □Not Applicable
Unit: RMB
Original book Accumulated Impairment
Item Book value
value depreciation provision
General 6,084,431.99 5,841,054.71 - 243,377.28
equipment
(4). Fixed assets leased out through operating lease
□Applicable √Not Applicable
(5). Fixed assets for which the ownership certificates have not been obtained
√Applicable □Not Applicable
Unit: RMB
Reasons for having not
Item Book value obtained the ownership
certificate
Huangyuan Clothing Market 259,100,829.23 Completion settlement not
completed
CCC Hotel 53,939,512.13 Completion settlement not
completed
Liaoning Xiliu Yiwu China 392,075,717.75 Completion settlement not
Commodity City completed
Underground space of Yixi 497,104,194.34 Completion settlement not
supporting project completed
Total 1,202,220,253.45
157 / 228
2021 Annual Report
Other notes:
√Applicable □Not Applicable
The impairment of fixed assets was RMB 471,163,467.85, which was the impairment of fixed
assets of Haicheng Yiwu China Commodities City.
As of December 31, 2021, the total amount of property, plant and equipmentfor which the
property right certificates had not been received due to the final settlement was still in progress was
RMB 1,202,220,253.45.
Disposal of fixed assets
□Applicable √Not Applicable
22. Construction in progress
Presentation of items
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Construction in progress 1,090,577,963.27 982,891,877.14
Total 1,090,577,963.27 982,891,877.14
Other notes:
□Applicable √Not Applicable
Construction in progress
(1). Overview of construction in progress
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
West Yiwu International
Means of Production 212,637,292.78 - 212,637,292.78 166,382,416.70 - 166,382,416.70
Market Auxiliary Project
Liaoning Xiliu Yiwu China
Commodities City
32,290,506.33 -4,635,059.96 27,655,446.37 32,290,506.33 -4,635,059.96 27,655,446.37
Commerce Phase I
Project—Hotel Project
The Zhimei Dachen
58,285,106.90 - 58,285,106.90 43,194,369.48 - 43,194,369.48
Tourism Project
The Chian West Sea
68,040,671.22 - 68,040,671.22 54,552,839.23 - 54,552,839.23
Tourism Project
The renovation project of
Yindu Hotel and Office - - - 55,553,736.33 - 55,553,736.33
Building
The Yiwu Comprehensive
357,114,238.02 - 357,114,238.02 505,797,275.02 - 505,797,275.02
Bonded Zone Project
The business station
project of the warehouse - - - 89,894,127.82 - 89,894,127.82
park of the Yiwu CCC
The lighting project in
- - - 29,724,101.17 - 29,724,101.17
Zone IV
Zone II East Parking Lot
276,099,117.75 - 276,099,117.75 7,346,035.44 - 7,346,035.44
Project
Yiwu Digital Trade
60,070,777.68 - 60,070,777.68 - - -
Industrial Park
Other projects 30,675,312.55 - 30,675,312.55 2,791,529.58 - 2,791,529.58
Total 1,095,213,023.23 -4,635,059.96 1,090,577,963.27 987,526,937.10 -4,635,059.96 982,891,877.14
(2). Changes to important construction in progress during the current period
√Applicable □Not Applicable
Unit: RMB10,000
158 / 228
2021 Annual Report
In which:
Ratio of Interest
capitalized
Opening Increase in Amount Closing accumulated Accumulated capitalization
Progress of interest in
Item Budget amount the current changed into amount investment capitalized ratio for the Source of funds
project the
Balance period fixed assets Balance to budget interest current
current
(%) period (%)
period
West Yiwu
International
Means of Under Self-
133,916.00 16,638.24 4,625.49 - 21,263.73 83.76 9,938.28 1,024.58 3.53
Production construction owned/financing
Market Auxiliary
Project
Liaoning Xiliu
Yiwu China
Commodities
Self-
City Commerce 180,000.00 3,229.05 - - 3,229.05 96.32 Shutdown 154.61 -
owned/financing
Phase I
Project—Hotel
Project
The Zhimei
Dachen 6,000.00 4,319.44 1,509.07 - 5,828.51 97.14 Self-owned
Tourism Project
The Chian West
Sea Tourism 8,000.00 5,455.28 1,348.78 - 6,804.06 85.05 Self-owned
Project
The renovation
project of Yindu
25,000.00 5,555.37 17,577.42 23,132.79 - 92.53 Self-owned
Hotel and Office
Building
The Yiwu
Comprehensive Under
624,250.00 50,579.73 90,342.12 105,210.43 35,711.42 67.97 Self-owned
Bonded Zone construction
Project
The business
station project
of the
19,000.00 8,989.41 1,378.56 10,367.97 - 54.57 Self-owned
warehouse park
of the Yiwu
CCC
The lighting
project in Zone 4,000.00 2,972.41 -3.24 2,969.17 - 74.23 Self-owned
IV
Zone II East
Parking Lot 60,706.00 734.60 26,875.31 - 27,609.91 46.37 Self-owned
Project
Yiwu Digital
Trade Industrial 39,579.00 - 6,007.08 - 6,007.08 1.52 Self-owned
Park
Other projects 279.16 4,426.65 1,638.27 3,067.54 Self-owned
Total 1,100,451.00 98,752.69 154,087.24 143,318.63 109,521.30 / / 10,092.89 1,024.58 / /
(3). Provision made for the impairment of construction in progress in the current period
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
The impairment value of the project under construction is RMB 4,635,059.96, which is the
provision impairment of Liaoning Xiliu Yiwu China Commodities City Commerce Phase I Project—
Hotel Project.
Construction materials
(1). Engineering materials
□Applicable √Not Applicable
23. Productive biological asset
(1). Productive biological asset measured by cost
□Applicable √Not Applicable
(2). Productive biological asset measured by fair value
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
24. Oil and gas assets
□Applicable √Not Applicable
159 / 228
2021 Annual Report
25. Right-of-use assets
√Applicable □Not Applicable
Unit: RMB
Item Buildings and structures Total
I. Original book value
1. Opening balance 249,646,048.55 249,646,048.55
2. Increase in the current 4,981,462.16 4,981,462.16
period
(1) Lease in 4,981,462.16 4,981,462.16
4. Closing balance 254,627,510.71 254,627,510.71
II. Accumulated depreciation
1. Opening balance - -
2. Increase in the current 29,280,433.57 29,280,433.57
period
(1) Provision 29,280,433.57 29,280,433.57
4. Closing balance 29,280,433.57 29,280,433.57
III. Depreciation provision
1. Opening balance - -
4. Closing balance - -
IV. Book value
1. Opening book value 225,347,077.14 225,347,077.14
2. Closing book value 249,644,048.55 249,646,048.55
Other notes:
None
26. Intangible assets
(1). Overview of intangible assets
√Applicable □Not Applicable
Unit: RMB
Item Land use right Software Total
I. Original book value
1. Opening balance 5,390,387,256.44 19,279,040.17 5,409,666,296.61
2. Increase in the
230,390,400.00 53,125,410.15 283,515,810.15
current period
(1) Purchase 230,390,400.00 53,125,410.15 283,515,810.15
3. Decrease in the current
- 314,178.16 314,178.16
period
(1) Disposal - 314,178.16 314,178.16
4. Closing balance 5,620,777,656.44 72,090,272.16 5,692,867,928.60
II. Accumulated amortization
1. Opening balance 1,504,667,791.47 4,217,523.22 1,508,885,314.69
2. Increase in the
137,398,312.25 3,124,477.63 140,522,789.88
current period
(1) Provision 137,398,312.25 3,124,477.63 140,522,789.88
3. Decrease in the
- 104,838.32 104,838.32
current period
160 / 228
2021 Annual Report
(1) Disposal - 104,838.32 104,838.32
4. Closing balance 1,642,066,103.72 7,237,162.53 1,649,303,266.25
III. Depreciation provision
1. Opening balance - - -
4. Closing balance - - -
IV. Book value
1. Opening book value 3,978,711,552.72 64,853,109.63 4,043,564,662.35
2. Closing book value 3,885,719,464.97 15,061,516.95 3,900,780,981.92
At the end of the period, the percentage of the intangible assets formed through the Company's
internal research and development in the balance of intangible assets was 0.71%
(2). Land use right for which the ownership certificate has not been obtained
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
27. Development expenses
√Applicable □Not Applicable
Unit: RMB
Increase in the Decrease in the
Opening current period current period Closing
Item amount Internal Recognized as amount
Balance development intangible Balance
expenditure assets
The development project
22,223,061.09 28,600,354.03 44,463,601.10 6,359,814.02
for platform “chinagoods”
Total 22,223,061.09 28,600,354.03 44,463,601.10 6,359,814.02
Other statements
None
28. Goodwill
(1). Original book value of goodwill
□Applicable √Not Applicable
(2). Provision for goodwill impairment
□Applicable √Not Applicable
(3).Information on the assets Group or combination of assets Groups to which the goodwill
belongs
□Applicable √Not Applicable
(4).Goodwill impairment test process, key parameters (e.g. growth rate in the forecast
period, growth rate in the stable period, profit margin, discount rate, forecast period for
the estimate of present value of future cash flows, if applicable) and recognition of
goodwill impairment loss
□Applicable √Not Applicable
(5). Impact of goodwill impairment test
□Applicable √Not Applicable
161 / 228
2021 Annual Report
Other statements
□Applicable √Not Applicable
29. Long-term prepaid expenses
√Applicable □Not Applicable
Unit: RMB
Item Opening balance Increase in the Amortized Closing balance
current period amount in the
current period
Decoration of
buildings and 101,767,311.81 133,097,867.38 59,993,339.89 174,871,839.30
structures
Advertising
3,586,262.55 12,130,450.31 2,404,175.73 13,312,537.13
facilities
Total 105,353,574.36 145,228,317.69 62,397,515.62 188,184,376.43
Other notes:
None
30. Deferred income tax assets/deferred income tax liabilities
(1). Deferred income tax assets having not been offset
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Provision for impairment
18,766,810.88 4,691,702.72 18,551,468.79 4,637,867.20
of assets
Unrealized profits of
1,094,793.10 273,698.28 1,094,793.10 273,698.27
internal transactions
Deductible losses 10,635,059.71 2,658,764.93 19,006,883.14 4,751,720.78
Recognized but unpaid
359,852,941.25 89,963,235.31 268,732,373.15 67,183,093.30
liabilities
Overspent advertising
8,497,106.53 2,124,276.63 9,689,617.59 2,422,404.41
cost
Changes in the fair value
of other non-current 87,763,868.16 21,940,967.04 81,582,179.51 20,395,544.88
financial assets
Right-of-use assets and
3,291,235.93 822,808.98 - -
lease liabilities
Asset-related government
53,046,300.00 13,261,575.00 - -
grants
Total 542,948,115.56 135,737,028.89 398,657,315.28 99,664,328.84
(2). Deferred income tax liabilities having not been offset
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Item Taxable Deferred Taxable Deferred
temporary income tax temporary income tax
difference Debt difference Debt
Asset evaluation
appreciation for merger
879,727.84 219,931.94 1,068,720.92 267,180.23
of the enterprises not
under common control
162 / 228
2021 Annual Report
Change in fair value of
other equity instruments 88,562,537.79 22,140,634.45 108,630,911.81 27,157,727.95
investment
Changes in fair value of
other non-current 357,773,989.10 89,443,497.28 343,005,960.28 85,751,490.08
financial assets
Changes in fair value of
373,599.00 93,399.75 1,706,102.10 426,525.53
trading financial assets
Total 447,589,853.73 111,897,463.42 454,411,695.11 113,602,923.79
(3). Deferred income tax assets or liabilities presented in net amount after offsetting
□Applicable √Not Applicable
(4). Breakdown of unrecognized deferred income tax assets
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Deductible temporary 485,392,932.16
466,278,633.25
difference
Deductible losses 1,090,714,817.48 908,844,380.05
Total 1,576,107,749.64 1,375,123,013.30
(5). The deductible loss in unrecognized deferred income tax assets will be due in the
following years
√Applicable □Not Applicable
Unit: RMB
Year Closing amount Opening amount Remarks
2021 - 34,738,115.44
2022 245,346,275.18 245,346,275.18
2023 145,652,609.01 145,652,609.01
2024 219,603,443.50 226,329,502.26
2025 236,606,485.47 256,777,878.16
2026 243,506,004.32 -
Total 1,090,714,817.48 908,844,380.05 /
Other notes:
√Applicable □Not Applicable
The Group believes that, the deductible temporary differences including the aforementioned
provision for asset impairment and the deductible losses of some subsidiaries can be deducted in
the foreseeable future, and it is expected that the Group will have sufficient pre-tax profit for
deduction during the reversing period. Therefore, the Group deemed it necessary to recognize the
above deferred income tax assets.
31. Other non-current assets
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Item Book balance Impairment Book balance Impairment
Book value Book value
provision provision
Prepaid land
138,253,316.00 - 138,253,316.00 138,253,316.00 - 138,253,316.00
transfer fees
Prepayment
for renovation
works and
5,681,334.45 - 5,681,334.45 14,241,880.56 - 14,241,880.56
prepaid
decoration
rent
163 / 228
2021 Annual Report
Prepaid equity
transfer 67,395,000.00 - 67,395,000.00 - - -
consideration
Total 211,329,650.45 - 211,329,650.45 152,495,196.56 - 152,495,196.56
Other notes:
None
32. Short-term borrowings
(1). Classification of short-term borrowings
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Credit loans 942,736,046.04 1,257,179,389.40
Total 942,736,046.04 1,257,179,389.40
Note to the classification of short-term borrowings:
None
(2). Overdue short-term borrowings
□Applicable √Not Applicable
The important overdue and unpaid short-term loans are as follows:
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
As of December 31, 2021, the annual interest rate of the above-mentioned borrowing is 1.20%-
3.915% (December 31, 2020: 1.20%-4.35%).
33. Held-for-trading financial liabilities
□Applicable √Not Applicable
34. Derivative financial liabilities
□Applicable √Not Applicable
35. Notes payable
(1). Presentation of notes payable
□Applicable √Not Applicable
36. Accounts payable
(1). Presentation of accounts payable
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Accounts payable for market 301,995,294.63 511,789,572.40
and auxiliary works projects
Trade payables 72,330,560.78 14,267,029.02
Accounts payable for 58,722,226.25 26,767,337.63
procurement for the hotel
project
Accounts payable for real 33,317,557.65 57,763,664.12
estate projects
Others 26,994,789.71 25,876,199.06
164 / 228
2021 Annual Report
Total 493,360,429.02 636,463,802.23
(2). Important accounts payable with age over 1 year
√Applicable □Not Applicable
Unit: RMB
Reasons for not being paid or
Item Closing balance
carried forward
Accounts payable for real 6,484,732.17 Settlement has not been
estate projects completed or the projects are
within the warranty periods
Total 6,484,732.17 /
Other statements
√Applicable □Not Applicable
The accounts payable are free of interest and are generally paid within two months after receipt
of the payment notice or based on the project contracts and progress of projects. The balance
payments for the projects are made after completion of settlement.
37. Advances from customers
(1). Presentation of advances from customers
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Rental advances 142,605,296.83 105,773,195.96
Others 10,961,014.30 6,979,701.29
Total 153,566,311.13 112,752,897.25
(2). Important advances with the age over 1 year
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Since the advances from customers are mainly derived from the advance rentals of auxiliary
housing businesses and investment real estate with small individual amounts, as of December 31,
2021, there were no single large advances from customers with an age of more than 1 year.
38. Contract liabilities
(1). Overview of contract liabilities
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Advances from customers for 2,996,965,006.91 2,243,528,509.65
use fee of shops
Advances from customers for 762,448,893.76 100,786,067.26
goods
Advances from customers for 178,756,399.38 3,856,621.50
housing purchase
Advances from customers for 66,129,057.15 57,095,601.13
advertising fee
Advances from customers for 17,997,985.07 3,270,729.29
loyalty ofbrands
Advances from customers for 14,150,457.59 10,534,354.07
use fee of networking cables
Others 21,971,424.98 23,139,905.98
165 / 228
2021 Annual Report
Total 4,058,419,224.84 2,442,211,788.88
(2). Amount of and reasons for material changes to book value during the reporting period
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
39. Payroll payable
(1). Presentation of payroll payable
√Applicable □Not Applicable
Unit: RMB
Opening Increase in the Decrease in the
Item Closing balance
balance current period current period
I. Short-term
159,703,155.55 613,854,934.39 532,105,325.85 241,452,764.09
compensation
II. Post employment
benefits – defined 1,795,841.98 29,714,756.98 28,998,607.67 2,511,991.29
contribution plan
III. Severance benefits - 4,592,993.70 4,592,993.70 -
Total 161,498,997.53 648,162,685.07 565,696,927.22 243,964,755.38
(2). Presentation of short-term compensation
√Applicable □Not Applicable
Unit: RMB
Opening Increase in the Decrease in the
Item Closing balance
balance current period current period
1. Salary, bonus,
158,575,947.86 508,355,599.60 426,809,517.47 240,122,029.99
allowance and subsidy
2. Employee benefits - 45,147,496.52 45,147,496.52 -
3. Social security
965,231.59 21,411,511.78 21,137,796.52 1,238,946.85
contribution
In which: contribution
to medical insurance 887,294.94 19,546,488.20 19,331,895.41 1,101,887.73
scheme
Contribution to
work-related injury 48,011.60 770,986.78 790,071.51 28,926.87
insurance scheme
Contribution to
maternity insurance 29,925.05 1,094,036.80 1,015,829.60 108,132.25
scheme
4. Housing provident
110,017.00 28,521,846.04 28,552,103.04 79,760.00
fund
5. Contribution to
trade union fund and
51,959.10 10,418,480.45 10,458,412.30 12,027.25
employee education
fund
Total 159,703,155.55 613,854,934.39 532,105,325.85 241,452,764.09
(3). Presentation of defined contribution plan
√Applicable □Not Applicable
Unit: RMB
Opening Increase in the Decrease in the Closing
Item
balance current period current period balance
1. Contribution to the 28,708,041.18 28,031,295.88 2,342,403.40
1,665,658.10
basic endowment
166 / 228
2021 Annual Report
insurance scheme
2. Contribution to the 1,006,715.80 967,311.79 169,587.89
unemployment insurance 130,183.88
scheme
Total 1,795,841.98 29,714,756.98 28,998,607.67 2,511,991.29
Other notes:
□Applicable √Not Applicable
40. Tax payable
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
VAT 83,766,540.18 90,094,604.12
Business tax -240,013.55 -431,783.32
Corporate income tax 279,485,623.04 341,382,542.08
Individual income tax 1,260,803.19 1,008,552.21
Urban maintenance and 4,687,093.90
5,176,906.98
construction tax
Land appreciation tax 2,780,327.20 -47,134,688.35
Real estate tax 171,138,711.99 93,881,697.54
Land use tax 10,612,069.24 5,357,865.24
Others 6,005,392.15 6,064,803.23
Total 559,496,547.34 495,400,499.73
Other notes:
As of December 31, 2021, the details of the main taxes prepaid by the Group were as follows:
Unit: RMB
Item Qiantang Impression Occident Center Total amount of
Real Estate Project Real Estate prepaid tax
Project
Business tax 240,013.55 - 240,013.55
Urban maintenance and - 731,793.32 731,793.32
construction tax
Education surcharge and local - 522,709.51 522,709.51
education surcharge
Total 240,013.55 1,254,502.83 1,494,516.38
41. Other payables
Presentation of items
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Other payables 1,908,742,835.15 1,646,345,561.62
Total 1,908,742,835.15 1,646,345,561.62
Other notes:
□Applicable √Not Applicable
Interest payable
(1). Presentation by category
□Applicable √Not Applicable
167 / 228
2021 Annual Report
Dividend payable
(1). Presentation by category
□Applicable √Not Applicable
Other payables
(1). Presentation of other payables by nature
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Withholdings, deposit and
598,819,336.72 584,880,967.08
margin
Operating expenses payable 268,576,640.89 234,420,448.09
Bank reserve of Zhejiang
Yiwugou E-commerce Co., 25,823,767.03 23,223,609.46
Ltd.
Restricted equity incentive
137,440,900.00 137,298,000.00
plan
Pending investment refunds 877,464,692.76 666,512,070.29
Others 617,497.75 10,466.70
Total 1,908,742,835.15 1,646,345,561.62
(2). Important other payables with account age over 1 year
□Applicable √Not Applicable
Other notes:
√Applicable □Not Applicable
Other payables mainly come from deposits for commercial spaces and bid deposits for
engineering projects, with small individual amounts, so there were no important other payables with
an age of more than 1 year on December 31, 2021.
42. Held-for-sale liabilities
□Applicable √Not Applicable
43. Non-current liabilities due within one year
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Long-term borrowings within 100,918,614.59
300,634,822.21
one year
Bonds payable due within 1 3,552,960,829.66
1,014,391,752.22
year
Lease liabilities due within 1 10,362,478.83 6,930,542.47
year
Total 3,664,241,923.08 1,321,957,116.90
Other notes:
None
44. Other current liabilities
Other current liabilities
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Short-term financing notes 3,009,756,921.11 3,004,009,789.85
payable
To-be-reported output tax 67,323,844.72 15,466,581.46
168 / 228
2021 Annual Report
Dividend announced but not 2,083,112.65 2,083,112.65
collected before listing
Dividend payable to to-be- 2,220,922.02 2,048,557.72
recognized accounts
Total 3,081,384,800.50 3,023,608,041.68
Changes in short-term bonds payable:
√Applicable □Not Applicable
Unit: RMB
Interest
Bond Face Issuing Bond Issuing Opening amount Current period accrued Premium/discount Current period Closing amount
Name value Date Term Amount Balance Issuing based on face amortization Repayment Balance
value
Super-short-term October 27, 268
100 1,000,000,000 - 1,000,000,000 5,388,493.15 180,821.92 - 1,004,835,068.48
commercial paper 2021 days
Super-short-term November 279
100 1,000,000,000 - 1,000,000,000 3,695,616.44 130,555.56 - 1,003,076,172.00
commercial paper 15, 2021 days
Super-short-term November 269
100 1,000,000,000 - 1,000,000,000 2,489,863.01 88,888.89 - 1,001,845,680.63
commercial paper 30, 2021 days
Super-short-term November 90
100 1,000,000,000 1,002,227,312.68 - 3,767,123.29 152,777.78 1,006,147,213.75 -
commercial paper 27, 2020 days
Super-short-term December 9, 90
100 1,000,000,000 1,000,238,641.55 - 4,497,260.27 279,166.67 1,005,015,068.49 -
commercial paper 2020 days
Super-short-term December 28
100 1,000,000,000 1,001,543,835.62 - 1,553,424.66 - 1,003,097,260.28 -
commercial paper 25, 2020 days
Total / / / 6,000,000,000 3,004,009,789.85 3,000,000,000 21,391,780.82 832,210.82 3,014,259,542.52 3,009,756,921.11
Other notes:
√Applicable □Not Applicable
As of December 31, 2021, the annual interest rate of the above-mentioned short-term financing
bonds was 2.48%-2.98% (December 31, 2020: 2.45%-2.70%).
45. Long-term borrowings
(1). Classification of long-term borrowings
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Credit loans 771,250,000.00 282,000,000.00
Total 771,250,000.00 282,000,000.00
Notes on the classification of long-term borrowings:
None
Other notes, including the interest rate range:
√Applicable □Not Applicable
As of December 31, 2021, the annual interest rate of the above borrowing was 2.70%-3.92%
(December 31, 2020: 2.70%-3.92%).
46. Bonds payable
(1). Bonds payable
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
MTN - 2,024,870,915.16
Bonds payable - 1,527,290,794.52
Total - 3,552,161,709.68
169 / 228
2021 Annual Report
(2). Changes in bonds payable: (excluding preferred stocks, perpetual bonds and other
financial instruments classified as financial liabilities)
√Applicable □Not Applicable
Unit: RMB
Curr Closi
Interest Curren Transferre
Fa Bo ent Premium/d ng
Issuin Opening accrued t d in this
Bond ce nd Issuing peri iscount amo
g amount based on period year and
Name val Te Amount od amortizatio unt
Date Balance face Repay due within
ue rm Issui n Bala
value ment one year
ng nce
July
10 1,000,00 1,017,879, 39,900,0 1,018,263,
MTN 15, 3Y - 384,201.20 - -
0 0,000 350.82 00.00 552.02
2019
Octob
10 1,000,00 1,006,991, 39,700,0 1,007,406,
MTN er 21, 3Y - 414,918.78 - -
0 0,000 564.34 00.00 483.12
2019
Corpo June
10 800,000, 819,791,7 34,400,0 819,791,7
rate 5, 3Y - - - -
0 000 80.82 00.00 80.82
bonds 2019
Septe
Corpo
10 mber 700,000, 707,499,0 27,930,0 707,499,0
rate 3Y - - - -
0 25, 000 13.70 00.00 13.70
bonds
2019
3,500,00 3,552,161, 141,930, 3,552,960,
Total / / / - 799,119.98 - -
0,000 709.68 000.00 829.66
(3). Conditions and time for the conversion of convertible corporate bonds
□Applicable √Not Applicable
(4). Notes on other financial instruments classified as financial liabilities
Basic information of other financial instruments such as preferred shares and perpetual bonds
outstanding at the end of the reporting period
□Applicable √Not Applicable
Changes in other financial instruments such as preferred shares and perpetual bonds outstanding
at the end of the reporting period
□Applicable √Not Applicable
The basis for classifying other financial instruments as financial liabilities:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
47. Lease liabilities
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Undiscounted amount of finance 334,659,632.28 229,574,650.88
lease payables
Unrecognized financing charges -118,354,479.52 -
Lease liabilities due within 1 year -10,362,478.83 -
Total 205,942,673.93 229,574,650.88
Other notes:
Note: The Group uses the incremental borrowing rate of 2.78%-8.01% as the discount rate to
calculate book value to determine the lease liability and measure right-of-use assets.
170 / 228
2021 Annual Report
48. Long-term accounts payable
Presentation of items
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Long-term accounts payable
(1). Long-term payables by nature
□Applicable √Not Applicable
Special accounts payable
(1). Special payables by nature
□Applicable √Not Applicable
49. Long-term payroll payable
□Applicable √Not Applicable
50. Estimated liabilities
√Applicable □Not Applicable
Unit: RMB
Item Opening balance Closing balance Cause of formation
Pending L/C losses 110,620,306.10 110,620,306.10
Total 110,620,306.10 110,620,306.10 /
Other notes, including the notes on related important assumptions and estimates of important
estimated liabilities:
In 2017, the letters of credit issued by the Group’s subsidiary based on international trade
agency business became overdue successively due to the principals’ failure to make payments as
agreed. Based on the principle of prudence, the Group recognized estimated liabilities for the
estimated potential losses. On Apr 30, 2018, the Group lost control over the subsidiary due to its
disposal of some equity in the subsidiary. As of December 31, 2021, the matter is currently under
processing.
51. Deferred income
Overview of deferred income
√Applicable □Not Applicable
Unit: RMB
Increase in Decrease in
Opening Closing Cause of
Item the current the current
balance balance formation
period period
Asset-related
government 26,545,277.30 53,046,300.00 1,421,473.68 78,170,103.62
grants
Total 26,545,277.30 53,046,300.00 1,421,473.68 78,170,103.62 /
Items involving government grants:
√Applicable □Not Applicable
Unit: RMB
Increase in Amount Asset-related
Opening Closing
Liability item grant amount recognized in or income-
balance balance
in the current other income related
171 / 228
2021 Annual Report
period in the current
period
Subsidy for service
industry cluster 5,510,112.59 - 266,666.64 5,243,445.95 Asset-related
project
Interest subsidy for
the international
21,035,164.71 - 1,154,807.04 19,880,357.67 Asset-related
exhibition center
construction fund
Subsidy for Yiwu
Comprehensive
- 53,046,300.00 - 53,046,300.00 Asset-related
Bonded Zone
Project
Other notes:
□Applicable √Not Applicable
52. Other non-current liabilities
□Applicable √Not Applicable
53. Capital stock
√Applicable □Not Applicable
Unit: RMB
Increase or decrease in the current period (+, -)
Provident
Opening balance Issuing Bonus funds Closing balance
Others Sub-total
New shares shares Conversion
into shares
Total
number 5,489,914,176.00 1,360,000.00 - - - 1,360,000.00 5,491,274,176.00
of shares
Other notes:
On August 9, 2021, the Group implemented a restricted equity incentive plan, granting
2,550,000 restricted stocks to incentive objects. On September 6, 2021, the Group received the
restricted stock subscription payment of RMB 5,592,600.00 from the incentive objects, and the
actual number of shares subscribed was 2,340,000 shares, which was verified by Zhejiang
Zhicheng Certified Public Accountants (special general partnership), with a capital verification report
(Zhe Zhi Kuai Yi Zi [2021] No. 17) issued for that.
After consideration and approval at the thirty-fifth meeting of the eighth the Board of Directors
and the ninth meeting of the eighth Board of Supervisors of the Group held on August 9, 2021, in
view of the fact that among the original incentive objects granted for the first time, 6 incentive
objects including ZHAO Qitong no longer worked in the Company due to their position adjustments,
and three incentive objects including HOU Wenbin had resigned due to personal reasons,
according to the relevant regulations of the "Incentive Plan" and the authorization of the Fifth
Provisional General Meeting of Shareholders in 2020, the Board of Directors of the Company
decided to repurchase and canceled a total of 980,000 restricted shares granted to the above nine
persons but yet to be released. The Company would repurchase and cancel the restricted shares
held by the above-mentioned 9 persons that had been granted but not yet been released at the
sum of interest calculated at RMB 2.885 per share and the fixed deposit interest rate announced by
the People's Bank of China for the same period. The total amount of restricted stock repurchase
funds this time was RMB 2.852 million. The above-mentioned repurchase funds would all be paid
with the Company's own funds, and the cancellation would be completed on November 30, 2021.
After the reserved grant of restricted stocks and the first partial repurchase of restricted stocks,
the share capital increased by RMB 1,360,000 this year.
172 / 228
2021 Annual Report
54. Other equity instruments
(1). Basic information of other financial instruments such as preferred shares and perpetual
bonds outstanding at the end of the reporting period
□Applicable √Not Applicable
(2). Changes in other financial instruments such as preferred shares and perpetual bonds
outstanding at the end of the reporting period
□Applicable √Not Applicable
Changes in other equity instruments in the current period, the reasons therefor and the basis for
relevant accounting treatment:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
55. Capital reserve
√Applicable □Not Applicable
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Capital surplus
1,558,612,797.11 3,252,600.00 1,901,200.00 1,559,964,197.11
(share premium)
Equity incentive 1,880,981.38 31,533,363.28 - 33,414,344.66
Others 34,412,746.18 3,717,827.01 - 38,130,573.19
Total 1,594,906,524.67 38,503,790.29 1,901,200.00 1,631,509,114.96
Other notes including those on the changes in the current period and the reasons therefor:
The increase in capital reserve-other capital reserve during the reporting period was due to the
Company's recognition on the share payment fee for RMB 31,533,363.28 during the waiting period,
which was included in this item accordingly.
56. Treasury shares
√Applicable □Not Applicable
Unit: RMB
Opening Increase in the Decrease in the
Item Closing balance
balance current period current period
Restricted equity
137,298,000.00 5,592,600.00 5,395,800.00 137,494,800.00
incentive plan
Total 137,298,000.00 5,592,600.00 5,395,800.00 137,494,800.00
Other notes including those on the changes in the current period and the reasons therefor:
On August 9, 2021, the Group implemented the restricted equity incentive plan, granting
2,340,000 restricted shares to the incentive objects and confirming treasury shares of RMB
5,592,600. At the same time, because some incentive objects resigned during the waiting period
and no longer had the incentive qualification, the Company repurchased the restricted shares for
cancellation and offset the corresponding treasury shares. For details, please refer to Note VII. 53
Share capital.
57. Other comprehensive income
√Applicable □Not Applicable
Unit: RMB
Amount in the current period
Opening Amount before Closing
Amount after tax
Item amount tax incurred in Less: income amount
attributable to
Balance the current tax Balance
parent company
period
173 / 228
2021 Annual Report
I. Other comprehensive
income that cannot be 81,473,183.84 -20,068,374.01 -5,017,093.50 -15,051,280.51 66,421,903.33
reclassified into profit or loss
Change in fair value of
other equity instruments 81,473,183.84 -20,068,374.01 -5,017,093.50 -15,051,280.51 66,421,903.33
investment
II. Other comprehensive
income to be reclassified into -3,323,522.51 -2,247,645.80 - -2,247,645.80 -5,571,168.31
profit or loss
Difference arising from the
translation of foreign -3,323,522.51 -2,247,645.80 - -2,247,645.80 -5,571,168.31
currency financial statements
Total other comprehensive
78,149,661.33 -22,316,019.81 -5,017,093.50 -17,298,926.31 60,850,735.02
income
Other notes, including those on the adjustment of the initially recognized amount of hedged items
converted from the effective part of gains or losses from cash flow hedging:
None
58. Special reserve
□Applicable √Not Applicable
59. Surplus reserve
√Applicable □Not Applicable
Unit: RMB
Item Opening balance Increase in the Decrease in Closing balance
current period the current
period
Statutory surplus 140,951,986.92 - 1,453,325,098.91
1,312,373,111.99
reserve
Discretionary - -
40,195,855.68 40,195,855.68
surplus reserve
Others 11,688,840.91 - - 11,688,840.91
Total 1,364,257,808.58 140,951,986.92 - 1,505,209,795.50
Notes on surplus reserves, including those on the changes in the current period and the reasons
therefor:
According to the “Company Law” and the Company’s articles of association, the Company
accrued a statutory surplus reserve in terms of 10% of its net profit. If the amount of statutory
surplus reserve accrued reaches more than 50% of the Company's registered capital, the accrual
may cease.
The Company can accrue free surplus reserve after accruing the statutory surplus reserve.
With the approval, the free surplus reserve can be used to make up for previous losses or to
increase share capital.
60. Undistributed profits
√Applicable □Not Applicable
Unit: RMB
Item Current period Previous period
Undistributed profits at the end of the
previous reporting period before 5,168,298,206.50 4,750,787,389.17
adjustment
Opening undistributed profits after
5,168,298,206.50 4,750,787,389.17
adjustment
174 / 228
2021 Annual Report
Plus: net profits attributable to
shareholders of the parent company in the 1,334,095,906.95 926,626,706.42
current period
Less: withdrawal of statutory surplus
140,951,986.92 128,090,896.77
reserve
Common share dividend payable 301,945,279.68 381,024,992.32
Closing undistributed profits 6,059,496,846.85 5,168,298,206.50
Details of the adjustment of opening undistributed profits:
1. The opening undistributed profits affected by the retroactive adjustment made in accordance with
the Accounting Standards for Enterprises and related new provisions amounted to RMB0.
2.The opening undistributed profits affected by the changes in accounting policies amounted to
RMB0.
3. The opening undistributed profits affected by the correction of major accounting errors amounted
to RMB0.
4. The opening undistributed profits affected by changes in the scope of mergers caused by
common control amounted to RMB0.
5. The opening undistributed profits affected by other adjustments together amounted to RMB0.
61. Operating revenue and operating cost
(1). Overview of operating revenue and operating cost
√Applicable □Not Applicable
Unit: RMB
Amount in the current period Amount in the previous period
Item
Revenue Cost of sales Revenue Cost of sales
Main 5,586,058,113.32 3,870,814,652.77 3,059,365,345.58 1,695,958,420.47
business
Other 447,784,859.63 156,728,485.79 666,320,754.81 115,178,023.52
businesses
Total 6,033,842,972.95 4,027,543,138.56 3,725,686,100.39 1,811,136,443.99
(2). Revenue generated from contracts
√Applicable □Not Applicable
Unit: RMB
Classified by type of contract Total
Types of goods
Sales of goods 2,596,259,373.98
The use of shops in the Commodity City and its 2,429,854,974.22
supporting services
Hotel accommodation and catering services 150,853,037.93
Revenue from use fees 107,299,598.45
Other services 534,842,468.16
Classified by business area
Chinese mainland 5,819,109,472.74
Classified by contract period
Revenue confirmed at certain time point
Sales of goods 2,596,259,393.98
Hotel catering services 99,876,232.85
Other services 430,842,121.05
Revenue confirmed during certain time period
The use of shops in the Commodity City and its 2,429,854,974.22
supporting services
Hotel accommodation service 50,976,805.08
Revenue from use fees 107,299,598.45
Other services 104,000,347.11
Total 5,819,109,472.74
175 / 228
2021 Annual Report
Description of the income from contracts:
√Applicable □Not Applicable
The income recognized in the current year and included in the opening book value of
contractual liabilities is as follows:
Unit: RMB
Type of contract Current period
Sales of goods 100,786,067.26
The use of shops in the Commodity City and its 2,252,863,622.76
supporting services
Hotel accommodation service 13,367,212.91
Other services 59,472,570.40
Total 2,426,489,473.33
(3). Contract performance obligations
√Applicable □Not Applicable
Sales of goods
The performance obligation is fulfilled when the goods are delivered to the customer, and the
contract price is collected in advance before the goods are delivered to the customer or received
upon the delivery of the goods.
The use of shops in the Commodity City and its supporting services
The contractual performance obligation is fulfilled when providing the use of shops in the
Commodity City and the supporting services for business. For the use of shops in the Commodity
City and the supporting services for business, the progress of contract performance is determined
based on the number of using days of the shops. Customers usually need to pay in advance before
the use of shops in the Commodity City and the supporting services for business are provided.
Hotel accommodation business
The performance obligation is fulfilled when providing hotel accommodation services. For the
hotel accommodation business, the progress of contractual performance is determined based on
the number of days of stay. For hotel accommodation services, a partial deposit is collected from
the customer first, and the remaining contract price is usually collected upon the completion of the
hotel accommodation services.
Hotel catering business
The performance obligation is fulfilled when the hotel catering services are provided. The
contract price for hotel catering services is usually charged when the hotel catering services are
performed.
Fixed -time paid funding services
The performance obligation is fulfilled when the fixed-time paid funding service is provided. For
the fixed-time paid funding service, the progress of contractual performance is determined based on
the number of using days the fund. For the fixed-time paid funding service, the contract price is
usually charged regularly as agreed in the contract.
(4). Amortization to remaining contract performance obligations
√Applicable □Not Applicable
At the end of the reporting period, the amount of income corresponding to the performance
obligations that have been signed but not yet performed or not yet completed was RMB
4,058,419,224.84, of which:
RMB 4,058,419,224.84 is expected to be recognized as an income in 2026
Other notes:
None
62. Taxes and surcharges
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current period Amount in the previous period
Real estate tax 118,182,369.56 111,702,852.72
Urban maintenance and 12,672,573.75 8,757,433.19
176 / 228
2021 Annual Report
construction tax
Land use tax 11,029,363.42 9,601,436.31
Stamp duty 7,188,521.64 4,789,431.36
Education surcharge 5,476,928.89 3,759,495.94
Local education surcharge 3,651,285.86 2,495,683.67
Land appreciation tax 3,349,307.04 10,586,314.21
Business tax 206,842.50 14,077,088.53
Vehicle and vessel use tax 3,456.16 32.90
Cultural undertaking -1,440.00 116,214.00
development fee
Total 161,759,208.82 165,885,982.83
Other notes:
None
63. Sales expenses
√Applicable □Not Applicable
Unit: RMB
Amount in the previous
Item Amount in the current period
period
Marketing expenses 115,754,997.02 104,738,904.24
Advertising expenses 45,648,963.60 94,410,960.56
Security and insurance expenses 38,306,012.40 27,115,364.49
Water, electricity and fuel
1,351,892.26 3,651,395.20
expenses
Depreciation and amortization 950,256.30 1,345,275.41
Employee expenses - 7,379.32
Others 2,733,852.99 10,619,907.22
Total 204,745,974.57 241,889,186.44
Other notes:
None
64. Administrative expenses
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current Amount in the previous
period period
Employee and uniform expenses 326,368,947.18 245,021,737.66
Depreciation and amortization 37,743,155.62 37,337,018.02
Intermediary expenses 23,480,815.21 38,529,410.46
Office expenses 17,616,097.42 14,680,708.68
Travel expenses 4,761,152.09 5,353,751.01
Lease and property management 3,071,515.25 3,071,515.25
expenses
Promotion and market traders introduction 728,448.70 937,941.53
expenses
Others 39,773,296.33 32,584,762.84
Total 453,543,427.80 377,516,845.45
Other notes:
None
65. R&D expenses
√Applicable □Not Applicable
177 / 228
2021 Annual Report
Unit: RMB
Item Amount in the current Amount in the previous
period period
Employee expenses 6,076,406.11 6,293,791.55
Technology development fee 650,354.19 7,050,178.63
Depreciation and amortization 122,541.44 343,037.80
Others 3,459,500.10 4,820,619.01
Total 10,308,801.84 18,507,626.99
Other notes:
None
66. Financial expenses
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current Amount in the previous
period period
Interest expenses 341,313,765.39 416,095,890.57
Amortization of commercial paper discount 4,735,876.54 3,269,879.47
Amortization of discounted bonds payable - 2,060,361.37
Less: interest income -177,964,682.68 -230,212,773.93
Less:capitalized amount of interest -10,245,795.84 -29,273,761.94
Foreign exchange gains or losses 5,841,186.27 13,574,395.11
Amortization of unrecognized financing 12,864,558.43 -
expenses
Others 3,366,705.59 6,575,708.68
Total 179,911,613.70 182,089,699.33
Other notes:
The capitalized amount of borrowing costs has been included in the construction in progress.
67. Other income
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current Amount in the
period previous period
Additional deduction of input tax 6,244,434.23 1,376,744.49
Subsidies for energy saving and consumption
4,863,474.00 -
reduction
Special incentive funds for modern supply chain
2,682,704.00 -
system innovation
Industrial Cluster Cross-border E-commerce
1,879,093.83 -
Development Pilot Subsidy
Interest subsidy for the international exhibition
1,154,807.04 1,154,807.04
center construction fund
Reward for "three collections and three rebates" 1,084,878.00 -
Government subsidy for service industry cluster
266,666.64 266,666.64
for 2011
Refund of social security contribution 14,595.20 4,870,959.47
Grant for the construction and operation of Yiwu
- 3,000,000.00
credit data center
R&D investment prize from Yiwu Science and
- 2,104,180.00
Technology Bureau
Exhibition and conference subsidies - 1,309,000.00
Employment stabilization subsidy - 1,091,612.71
Others 5,366,295.07 2,812,361.79
Total 23,556,948.01 17,986,332.14
178 / 228
2021 Annual Report
Other notes:
None
68. Investment income
√Applicable □Not Applicable
Unit: RMB
Amount in the Amount in the
Item
current period previous period
Income from long-term equity investment calculated
599,180,325.58 34,968,640.68
with the equity method
Dividend income from other equity instruments
12,542,733.80 10,034,187.04
investment during holding period
Interest income from debt investment during holding
- 11,786,857.07
period
Investment income from disposal of held-for-trading
67,265.72 377,061.15
financial assets
Income acquired from other non-current financial
20,833,465.43 41,242,844.09
assets during the holding period
Gains from re-measurement of the remaining equity at
- 30,456,963.96
fair value after the loss of control
Investment income from disposal of subsidiaries and
- 394,658,616.42
related claims
Investment income from disposal of wealth
1,604,200.49 688,953.43
management products
Total 634,227,991.02 524,214,123.84
Other notes:
None
69. Income from net exposure hedging
□Applicable √Not Applicable
70. Income from changes in fair value
√Applicable □Not Applicable
Unit: RMB
Sources of income from changes in Amount in the previous
Amount in the current period
fair value period
Held-for-trading financial assets -1,332,503.10 1,706,102.10
Other non-current financial assets 8,563,824.94 -34,661,963.73
Total 7,231,321.84 -32,955,861.63
Other notes:
None
71. Loss of impairment of credit
√Applicable □Not Applicable
Unit: RMB
Amount in the current Amount in the previous
Item
period period
Bad debt loss of accounts receivable 6,343,395.56 23,224.87
Loss for bad debts of other 956,299.11 2,259,459.03
receivables
Total 7,299,694.67 2,282,683.90
Other notes:
179 / 228
2021 Annual Report
None
72. Loss of impairment of assets
□Applicable √Not Applicable
73. Income from disposal of assets
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current period Amount in the previous period
Income from disposal of 76,006.41 6,819,021.38
intangible assets
Income from disposal of - 1,361,570.34
property, plant and equipment
Total 76,006.41 8,180,591.72
Other notes:
None
74. Revenue from non-operating activities
Information of non-operating incomes
√Applicable □Not Applicable
Unit: RMB
Amount recognized in
Amount in the Amount in the profit or loss of
Item
current period previous period nonrecurring items for
the current period
Government grants not related to 2,950.00 669,648.00 2,950.00
the daily activities of the Company
Incomes from liquidated damages 5,552,161.47 1,402,173.09 5,552,161.47
Others 211,260.99 2,353,251.88 211,260.99
Total 5,766,372.46 4,425,072.97 5,766,372.46
Government grants recognized in the profit or loss for the current period
√Applicable □Not Applicable
Unit: RMB
Asset-related
Amount in the Previous
Grant items or income-
current period amount
related
Income-
Tourism development special award - 50,000.00
related
Relief fund for small and micro enterprises and
Income-
individual business households in Shangcheng - 10,000.00
related
District
Subsidy for booth fee of 2020 Shanghai Gifts Income-
- 56,448.00
Exhibition related
Special fund reward for 2019 overseas
Income-
investment from Yiwu Municipal Bureau of - 550,000.00
related
Commerce
Subsidy from Yiwu Market Development Income-
- 3,200.00
Committee related
Subsidy for enterprise monitoring from Income-
1,200.00 -
Choucheng Subdistrict related
Yiwu Comprehensive Bonded Zone Enterprise Income-
1,750.00 -
Development Support Policy related
Total 2,950.00 669,648.00
180 / 228
2021 Annual Report
Other notes:
□Applicable √Not Applicable
75. Non-operating expenses
√Applicable □Not Applicable
Unit: RMB
Amount recognized
in profit or loss of
Amount in the Amount in the
Item nonrecurring items
current period previous period
for the current
period
Total loss for disposal of non-
637,423.30 19,632,275.93 637,423.30
current assets
Including: loss for disposal of
637,423.30 19,632,275.93 637,423.30
property, plant and equipment
Loss for disposal of
intangible assets
External donation 1,107,540.00 6,540,313.91 1,107,540.00
Water conservancy construction
6.76 249,883.92 -
fund
Others 1,150,958.70 214,342.31 1,150,958.70
Total 2,895,928.76 26,636,816.07 2,895,922.00
Other notes:
None
76. Income tax expenses
(1). Overview of income tax expenses
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current period Amount in the previous period
Current income tax expenses 360,286,304.87 510,006,312.87
Deferred income tax expenses -32,761,066.92 -10,251,293.65
Total 327,525,237.95 499,755,019.22
(2). Adjustment process of accounting profits and income tax expenses
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current
period
Profits before tax 1,656,693,823.97
Income tax expenses calculated at the statutory/applicable tax rate 414,173,455.99
Impact of different tax rates applied by subsidiaries -2,092,001.08
Effect of adjusting income tax of previous period 9,258,148.22
Effect of non-taxable income -567,975.32
Effect of non-deductible costs, expenses and losses 5,498,793.94
Effect of using deductible losses of unrecognized deferred income tax -5,950,758.23
assets in previous period
Effect of deductible temporary differences or deductible losses of 64,881,959.24
unrecognized deferred income tax assets in the current period
Profits or losses attributable to joint ventures and associates -157,676,384.80
Income tax expenses 327,525,237.95
181 / 228
2021 Annual Report
Other notes:
□Applicable √Not Applicable
77. Other comprehensive income
√Applicable □Not Applicable
For details, please refer to Note 57. Other comprehensive income
78. Items of cash flow statement
(1). Other cash receipts relating to operating activities
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current period Amount in the previous
period
Deposit and margin received 212,256,986.10 164,887,997.67
Government grants received 63,576,554.04 3,573,983.14
Bank deposit interest income 230,212,493.06
received 177,964,682.68
Liquidated damages received from 1,402,173.09
market traders 5,766,372.46
Yiwugo’s Bank Reserve Fund 1,842,251.21
received 2,600,157.57
Received overpaid input tax 62,799,958.77 -
Others 443,618.96 6,870,248.13
Total 525,408,330.58 408,789,146.30
Notes on other cash receipts relating to operating activities:
None
(2). Other cash payments relating to operating activities
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current period Amount in the previous
period
Major expenses paid 319,328,171.57 365,010,313.02
Repair costs and expenses paid 120,690,572.43 132,298,446.26
Deposit and security paid 157,057,755.29 95,090,779.43
Others 1,107,540.00 1,689,857.57
Total 598,184,039.29 594,089,396.28
Notes on other cash payments relating to operating activities:
None
(3). Other cash receipts relating to investing activities
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current Amount in the previous
period period
Recovered-pending investment refunds 822,300,000.00 43,027,285.60
Advance subsidy for joint venture’s subsidiaries
- 1,608,852,069.00
that was recovered from the joint venture party
Received funding from from the joint ventures
2,924,599,831.00 2,775,280,817.96
and their subsidiaries
Receipt of redeemed financing products - 6,000,000.00
Cash balance on acquisition date of subsidiary - 17,326,086.71
182 / 228
2021 Annual Report
Total 3,746,899,831.00 4,450,486,259.27
Notes on other cash receipts relating to investing activities:
None
(4). Other cash payments relating to investing activities
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current period Amount in the previous
period
Advance for land for proposed joint 281,839,499.86
venture -
Financial subsidy paid to Tonghui 1,486,368,548.00
Shangbo 138,160,000.00
Financial subsidy paid to Handing 472,144,400.00
Shangbo 17,845,800.00
Financial subsidy paid to the joint 63,465,484.42
venture in Dubai 104,456,205.00
Financial subsidy paid to Gongchen 49,000,000.00
Shangbo -
Paid the financial assistance for -
Guoshen Shangbo 1,372,000,000.00
Total 1,632,462,005.00 2,352,817,932.28
Other cash paid related to investment activities:
None
(5). Other cash receipts relating to financing activities
□Applicable √Not Applicable
(6). Other cash payments relating to financing activities
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current period Amount in the previous
period
Acquisition of minority 64,460,000.00
shareholders' equity in subsidiaries -
Restricted stock cancellation -
payment 2,827,300.00
Minimum lease payment 37,531,483.07 -
Total 40,358,783.07 64,460,000.00
Other cash paid related to financing activities:
None
79. Supplements to cash flow statement
(1). Supplements to cash flow statement
√Applicable □Not Applicable
Unit: RMB
Amount in the previous
Supplements Amount in the current period
period
1．Adjust net profits to cash flow from operating activities:
Net profits 1,329,168,586.02 921,836,055.21
Plus: provision for impairment of
- -
assets
Loss of impairment of credit 7,299,694.67 2,282,683.90
183 / 228
2021 Annual Report
Depreciation of fixed assets,
depletion of oil and gas assets and
391,927,445.01 391,308,329.57
depreciation of bearer biological
assets
Amortization of right-of-use assets 29,280,433.57 -
Amortization of intangible assets 140,522,789.88 129,979,055.25
Depreciation and amortization of
106,638,821.16 91,509,152.33
investment real estate
Amortization of long-term prepaid
62,397,515.62 64,667,911.54
expenses
Loss from disposal of fixed assets,
intangible assets and other long- -76,006.41 11,451,684.21
term assets (gains indicated by “-”)
Loss from fixed assets retirement
637,423.30 -
(gains indicated by “-”)
Loss from changes in fair value
-7,231,321.84 32,955,861.63
(gains indicated by “-”)
Financial expenses (gains indicated
336,909,155.82 392,152,088.59
by “-”)
Investment loss (gains indicated by
-769,582,290.36 -648,958,950.22
“-”)
Decrease in deferred income tax
-36,072,700.05 -7,112,433.29
assets (increase indicated by “－”)
Increase in deferred income tax
liabilities (decrease indicated by -1,705,460.37 -3,988,508.40
“－”)
Decrease in inventory (increase
-8,180,635.66 -1,156,397,502.91
indicated by “－”)
Decrease in operating receivables
-912,160,213.18 -538,592,969.66
(increase indicated by “－”)
Increase in operating payables
1,363,309,270.58 1,145,695,804.20
(decrease indicated by “－”)
Net cash flow from operating
2,033,082,507.76 828,788,261.95
activities
2．Significant investing and financing activities not involving cash receipt and payment:
When the joint venture company
was established based on the equity
of the subsidiary, the original
financial subsidy for subsidiary’s - 1,545,759,831.00
prepayment for land was converted
to other receivables from the
subsidiary of the joint venture
3．Net changes in cash and cash equivalents:
Closing balance of cash 4,006,468,325.47 2,032,642,871.63
Less: opening balance of cash 2,032,642,871.63 3,426,712,549.26
Add: closing balance of cash
equivalents
Less: opening balance of cash
equivalents
Net increase in cash and cash 1,973,825,453.84 -1,394,069,677.63
equivalents
(2). Net cash paid for acquisition of subsidiaries in the current period
□Applicable √Not Applicable
184 / 228
2021 Annual Report
(3). Net cash received from disposal of subsidiaries in the current period
□Applicable √Not Applicable
(4). Composition of cash and cash equivalents
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
I. Cash 4,006,468,325.47 2,032,642,871.63
In which: cash on hand 154,264.94 292,999.29
Bank deposit that can be used for payment
4,006,258,722.95 2,032,189,759.31
at any time
Other monetary capital that can be used for
55,337.58 160,113.03
payment at any time
II. Cash equivalents
Including: bond investments due within three
months
III. Closing balance of cash and cash
4,006,468,325.47 2,032,642,871.63
equivalents
Including:cash and cash equivalents with
restricted use by the parent company or its 60.78 60.58
subsidiaries
Other notes:
√Applicable □Not Applicable
Monetary funds with a deposit period of more than three months: Currency: RMB
Item Closing balance Opening balance
Negotiated deposits 825,000,000.00 3,580,000,000.00
80. Notes to items in statement of changes in owners’ equity
Names of “others” items whose closing balances in the previous year are adjusted and the amounts
of adjustments:
□Applicable √Not Applicable
81. Assets with restricted title or right of use
√Applicable □Not Applicable
Unit: RMB
Item Closing book value Reasons for restriction
Monetary capital 60.78 [Note 1]
Long-term equity investment 102,918,559.00 [Note 2]
Other non-current financial 636,870,392.09 [Note 2]
assets
Total 739,789,011.87 /
Other notes:
Note 1. As of December 31, 2021, bank deposits with a book value of RMB 60.78 (December
31, 2020: RMB 60.58) were restricted for ownership or use rights due to being as security deposits
for obtaining commercial housing mortgage loan.
Note 2: As of December 31, 2021, long-term equity investments with a book value of RMB
102,918,559.00 (December 31, 2020: RMB 102,918,559.00) and other non-current assets of RMB
636,870,392.09 (December 31, 2020: RMB 617,511,352.00) were frozen by Shanghai Municipal
Public Security Bureau. See Note XIV.1 Important commitments for details.
185 / 228
2021 Annual Report
82. Foreign currency monetary items
(1). Foreign currency monetary items
√Applicable □Not Applicable
Unit: RMB Yuan
Closing amount after
Closing balance in
Item Exchange rate conversation: RMB
foreign currency
Balance
Monetary capital - -
In which: USD 5,485,690.70 6.3757 34,975,118.20
EURO 285,450.21 7.2197 2,060,864.88
Rwandan Franc 10,849,325.00 0.0063 68,350.75
Dirham 891,319.05 1.7361 1,547,419.00
Koruna 7,967,992.08 0.2899 2,309,920.90
Accounts receivable - -
In which: USD 14,360,439.00 6.3757 91,557,850.93
EURO 1,455,026.65 7.2197 10,504,855.91
Koruna 5,076,307.71 0.2899 1,471,621.61
Other receivables - - -
Including: EURO 5,100.00 7.2197 36,820.47
Koruna 31,936,127.00 0.2899 9,258,283.22
Accounts payable - - -
In which: USD 1,267,239.54 6.3757 8,079,539.14
Other payables - - -
In which: USD 1,793,978.13 6.3757 11,437,866.36
EURO 62,397.91 7.2197 450,494.19
Koruna 3,775,500.35 0.2899 1,094,517.55
Other notes:
None
(2). Description of overseas operations, for important overseas operations, also includes
the disclosure of principal overseas place of business, bookkeeping currency and the
basis for selection, and the reason for the change in bookkeeping currency.
□Applicable √Not Applicable
83. Hedging
□Applicable √Not Applicable
84. Government grants
(1). Overview of government grants
√Applicable □Not Applicable
Unit: RMB
Amount recognized in
Type Amount Presentation profit or loss for the
current period
Yiwu Comprehensive Bonded Zone 1,750.00 Revenue 1,750.00
Enterprise Development Support Policy from non-
operating
activities
Subsidy for enterprise monitoring from 1,200.00 Revenue 1,200.00
Choucheng Subdistrict from non-
operating
activities
Additional deduction of input tax 6,244,434.23 Other 6,244,434.23
income
186 / 228
2021 Annual Report
Subsidies for energy saving and 4,863,474.00 Other 4,863,474.00
consumption reduction income
Special incentive funds for modern supply 2,682,704.00 Other 2,682,704.00
chain system innovation income
Industrial Cluster Cross-border E- 1,879,093.83 Other 1,879,093.83
commerce Development Pilot Subsidy income
Interest subsidy for the international 1,154,807.04 Other 1,154,807.04
exhibition center construction fund income
"3 refunds and 3 rewards" 1,084,878.00 Other 1,084,878.00
income
Government subsidy for service industry 266,666.64 Other 266,666.64
cluster for 2011 income
Refund of social security contribution 14,595.20 Other 14,595.20
income
Others 5,366,295.07 Other 5,366,295.07
income
Total 23,559,898.01 23,559,898.01
(2). Refund of government grants
□Applicable √Not Applicable
Other notes:
None
85. Others
□Applicable √Not Applicable
VIII. Changes in consolidation scope
1. Mergers of enterprises not under common control
□Applicable √Not Applicable
2. Mergers of the enterprises under common control
□Applicable √Not Applicable
3. Reverse acquisition
□Applicable √Not Applicable
187 / 228
2021 Annual Report
4. Disposal of subsidiaries
Has the Group lost control upon a single disposal of investment in a subsidiary?
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
5. Changes in consolidation scope for other reasons
Changes in the consolidation scope for other reasons (e.g. new establishment of subsidiaries,
liquidation of subsidiaries, etc.) and the related information:
√Applicable □Not Applicable
The Company established a subsidiary, Zhejiang China Commodities City Group Commercial
Factoring Co., Ltd. in the current period.
6. Others
□Applicable √Not Applicable
188 / 228
2021 Annual Report
IX. Equity in Other Entities
1. Equity in subsidiaries
(1).Composition of the enterprise Group
√Applicable □Not Applicable
Shareholding
Subsidiary Main place Place of ratio (%) Acquisition
Business
Name of business registration Method
Direct Indirect
Yiwu China
Commodities City Yiwu, Yiwu,
Service 100 Establishment
Logistics and Zhejiang Zhejiang
Warehousing Co., Ltd.
Yiwu Commodities City
Yiwu, Yiwu,
Gonglian Property Co., Real estate 100 Establishment
Zhejiang Zhejiang
Ltd.
Yiwu China
Yiwu, Yiwu,
Commodities City Service 100 Establishment
Zhejiang Zhejiang
Exhibition Co., Ltd.
Yiwu China
Yiwu, Yiwu,
Commodities City Advertising 100 Establishment
Zhejiang Zhejiang
Advertising Co., Ld.
Yiwu China
Commodities City Yiwu, Yiwu,
IT 100 Establishment
Information Technology Zhejiang Zhejiang
Co., Ltd.
Yiwu China Commodity
City RMB and Foreign Yiwu, Yiwu,
Service 100 Establishment
Currency Exchange Zhejiang Zhejiang
Co., Ltd.
Hangzhou Shangbo
Hangzhou, Hangzhou,
Nanxing Property Co., Real estate 100 Establishment
Zhejiang Zhejiang
Ltd.
Yiwu China
Commodities City Yiwu, Yiwu,
IT 100 Establishment
Payment Network Zhejiang Zhejiang
Technology Co., Ltd.
Yiwu China
Commodities City Yiwu, Yiwu,
Service 85 Establishment
Credit Investigation Co., Zhejiang Zhejiang
Ltd.
Haicheng Yiwu China
Commodities City Haicheng, Haicheng,
Real estate 95 Establishment
Investment Liaoning Liaoning
Development Co., Ltd.
Zhejiang Yiwugou E- Yiwu, Yiwu,
E-commerce 51 Establishment
commerce Co., Ltd. Zhejiang Zhejiang
Yiwu Shangbo Property Hangzhou, Hangzhou,
Real estate 100 Establishment
Co., Ltd. Zhejiang Zhejiang
Yiwu China
Commodities City Yiwu, Yiwu,
Wholesale 100 Establishment
Import and Export Co., Zhejiang Zhejiang
Ltd.
Yiwu China
Commodities City Yiwu, Yiwu,
Service 100 Establishment
Supply Chain Zhejiang Zhejiang
Management Co., Ltd.
Yiwu China Lease and
Yiwu, Yiwu,
Commodities City business 100 Establishment
Zhejiang Zhejiang
Tourism Development service
189 / 228
2021 Annual Report
Co., Ltd.
Yiwu China
Commodities City Yiwu, Yiwu,
Service 100 Establishment
Financial Holdings Co., Zhejiang Zhejiang
Ltd.
Yiwu China Commodity
Frankfurt, Frankfurt,
City (Germany) Co., Service 100 Establishment
Germany Germany
Ltd.
Yiwu International
Yiwu, Yiwu,
Trade Comprehensive Wholesale 60 Establishment
Zhejiang Zhejiang
Service Co., Ltd.
Yiwu Aiximao Supply
Yiwu, Yiwu,
Chain Management Service 100 Establishment
Zhejiang Zhejiang
Co., Ltd.
Yiwu China
Commodities City Hong Hong
(Hong Kong) Kong, Kong, Wholesale 100 Establishment
International Trade Co., China China
Ltd.
Ningxia Yiwu China
Commodity City Supply Shizuishan, Shizuishan,
Service 100 Establishment
Chain Management Ningxia Ningxia
Co., Ltd.
Yiwu China
Commodities City
Yiwu, Yiwu,
Overseas Investment Wholesale 100 Establishment
Zhejiang Zhejiang
and Development Co.,
Ltd.
Yiwu China
Commodities City
Yiwu, Yiwu,
Commerce and Trade Education 100 Establishment
Zhejiang Zhejiang
Service Training Center
Co., Ltd.
Yiwu China
Lease and
Commodities City Yiwu, Yiwu,
business 100 Establishment
Assets Operation and Zhejiang Zhejiang
service
Management Co., Ltd.
Lease and
Zhejiang Yindu Hotel Yiwu, Yiwu,
business 100 Establishment
Management Co., Ltd. Zhejiang Zhejiang
service
Hong Hong
Hong Kong Better Silk
Kong, Kong, Service 100 Establishment
Road Co., Ltd.
China China
BETTER SILK ROAD Dubai, Dubai,
Service 100 Establishment
FZE UAE UAE
BETTER SILK ROAD Kigali, Kigali,
Service 100 Establishment
RWANDA Ltd Rwanda Rwanda
Yiwu China
Commodities City Yiwu, Yiwu, Business
100 Establishment
Research Institute Co., Zhejiang Zhejiang service
Ltd.
Yiwu Comprehensive
Bonded Zone Operation Yiwu, Yiwu, Business
100 Establishment
and Management Co., Zhejiang Zhejiang service
Ltd.
Software and
Yiwu China
Yiwu, Yiwu, Information
Commodities City Big 100 Establishment
Zhejiang Zhejiang Technology
Data Co., Ltd.
Service
190 / 228
2021 Annual Report
Industry
Multimodal
Yiwu Huanqiuyida Yiwu, Yiwu, transport and
60 Establishment
Logistics Co., Ltd. Zhejiang Zhejiang transportation
agency
Yiwu China
Commodities City
Yiwu, Yiwu,
Internet Financial Service 100 Incorporation+acquisition
Zhejiang Zhejiang
Information Service
Co., Ltd.
Zhejiang Huajie
Yiwu, Yiwu, Commercial
Investment and 96.4 Incorporation+acquisition
Zhejiang Zhejiang services
Development Co., Ltd.
European Huajie Prague, Prague,
Commercial
Investment Czech Czech 96.4 Incorporation+acquisition
services
Development Co., Ltd. Republic Republic
Zhejiang China
Commodities City Yiwu, Yiwu,
Service 60 40 Establishment
Group Commercial Zhejiang Zhejiang
Factoring Co., Ltd.
Explanation for the difference between the shareholding ratio and voting right ratio in a subsidiary:
None
Basis for holding half or less voting rights in but still controlling an investee, and holding more than
half of the voting rights in but not controlling an investee:
None
Basis for controlling important structured entities included in the consolidation scope:
None
Basis for determining whether a company is an agent or a principal:
None
Other notes:
None
(2).Important non-wholly-owned subsidiaries
√Applicable □Not Applicable
Unit: RMB
Shareholding Profits or losses Dividends declared
ratio of attributable to to be distributed to Closing balance
Name of subsidiary minority minority minority of minority
shareholders shareholders in shareholders for interest
. the current period the current period
Zhejiang Yiwugou E-commerce Co., 49% 3,231,306.40 - 44,817,381.94
Ltd.
Haicheng Company 5% -7,342,519.03 - -42,993,044.00
Explanation for the difference between the shareholding ratio and voting right ratio of minority
shareholders in a subsidiary:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
(3).Major financial information of important non-wholly-owned subsidiaries
√Applicable □Not Applicable
191 / 228
2021 Annual Report
Unit: RMB10,000
Closing balance Opening balance
Name of Non- Non-
subsidiary Current Non-current Total Current Total Current Non-current Total Current Total
current current
assets assets assets liabilities liabilities assets assets assets liabilities liabilities
liabilities liabilities
Zhejiang
Yiwugou E-
11,899.73 900.21 12,799.94 3,653.53 - 3,653.53 10,131.63 1,035.94 11,167.57 2,680.61 - 2,680.61
commerce Co.,
Ltd.
Haicheng
126,423.87 98,154.04 224,577.91 310,564 - 310,564 124,510.56 105,804.70 230,315.26 301,683.12 0.26 301,683.38
Company
Amount in the current period Amount in the previous period
Total Cash Total Cash flow
Name of Operatin
Operating comprehe flow from comprehen from
subsidiary Net profits g Net profits
revenue nsive operating sive operating
revenue
income activities income activities
Zhejiang
Yiwugou E-
4,747.83 659.45 659.45 -2,891.61 4,620.58 668.86 668.86 6,298.22
commerce Co.,
Ltd.
Haicheng
898.01 -14,685.04 -14,685.04 11,694.15 546.63 -13,339.37 -13,339.37 -5,460.25
Company
Other notes:
None
(4).Significant restrictions on the use of enterprise Group’s assets and the settlement of
enterprise Group’s debts
□Applicable √Not Applicable
(5).Financial or other supports provided to structured entities included in the scope of
consolidated financial statements
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
2. Transactions in which the Group’s share of owners’ equity in a subsidiary changes and
the Group still controls the subsidiary
□Applicable √Not Applicable
3. Equity in joint ventures or associated enterprises
√Applicable □Not Applicable
(1).Important joint ventures or associated enterprises
√Applicable □Not Applicable
Unit: RMB
Shareholding Accounting
ratio (%) treatment
method of
Name of joint venture or associated Main place Place of
Business investment
enterprise of business registration
Direct Indirect in the joint
venture or
associate
Joint venture
192 / 228
2021 Annual Report
Yiwu Shanglv Investment Yiwu, Yiwu, Equity
Real estate 49
Development Co., Ltd. Zhejiang Zhejiang method
Yiwu Huishang Redbud Capital Yiwu, Yiwu, Equity
Service 20
Management Co., Ltd. Zhejiang Zhejiang method
Yiwu, Yiwu, Equity
Yiwu Rongshang Property Co., Ltd. Real estate 49
Zhejiang Zhejiang method
Yiwu Chuangcheng Property Co., Yiwu, Yiwu, Equity
Real estate 24
Ltd. Zhejiang Zhejiang method
Yiwu Guoshen Shangbo Property Yiwu, Yiwu, Equity
Real estate 49
Co., Ltd. Zhejiang Zhejiang method
Associated enterprise
Hangzhou Binjiang Shangbo Hangzhou, Hangzhou, Equity
Real estate 49
Property Development Co., Ltd. Zhejiang Zhejiang method
Yiwu Huishang Redbud Equity Yiwu, Yiwu, Commercial Equity
10.42
Investment Co., Ltd. (Note 4) Zhejiang Zhejiang services method
Zhejiang Chouzhou Financial Yiwu, Yiwu, Equity
Service 26
Lease Co., Ltd. Zhejiang Zhejiang method
Yiwu Huishang Redbud Phase II Lease and
Yiwu, Yiwu, Equity
Investment Partnership (LLP) (Note business 9.43
Zhejiang Zhejiang method
5) service
Yiwu Hongyi Equity Investment Yiwu, Yiwu, Equity
Service 49.98
Fund Partnership Zhejiang Zhejiang method
Pujiang, Pujiang, Equity
Pujiang Lvgu Property Co., Ltd. Real estate 49
Zhejiang Zhejiang method
Yiwu China Commodities City Yiwu, Yiwu, Equity
Real estate 49
Property Development Co., Ltd. Zhejiang Zhejiang method
Explanation for the difference between the shareholding ratio and voting right ratio in a joint venture
or associate:
None
Bases for holding less than 20% of the voting rights but having significant influence, or holding 20%
or more of the voting rights but not having significant influence:
Note 4: The Company holds 10.42% (2020: 10.42%) of equity of Yiwu Huishang Redbud
Equity Investment Co., Ltd. (hereinafter referred to as "Redbud Equity Investment"), but regards it
as a joint venture of the Company. According to Redbud Investment’s articles of association, it is
engaged in investing and its important financial and operating decision-making activities are to pick
and manage investment projects, which have been fully entrusted to the Company’s joint venture
Yiwu Huishang Redbud Capital Management Co., Ltd. (“Redbud Capital”). Redbud Capital picks
and manages investment projects via its investment decision-making committee. Except for special
investment matters, which are subject to the resolution of Redbud Investment’s board of directors,
other important financial and operating decision-making activities are conducted by Redbud Capital
on the behalf of Redbud Investment. Therefore, the Company was able to exercise significant
influence on Redbud Investment in which the Company held 10.42% of total equity.
Note 5: The Company holds 9.43% (9.43% in 2020) equity in Yiwu Huishang Redbud Phase II
Investment Partnership (limited partnership) (“Redbud Phase II”), but regards it as an associated
company of the Company. According to Redbud Phase II’s articles of association, it is engaged in
investing and its important financial and operating decision-making activities are to pick and
manage investment projects, which have been fully entrusted to the Company’s joint venture
Redbud Capital. Redbud Capital picks and manages investment projects via its investment
decision-making committee. Except for special investment matters, which are subject to the
resolution of Redbud Phase II’s board of directors, other important financial and operating decision-
making activities are conducted by Redbud Capital on the behalf of Redbud Phase II. Therefore,
the Company can exert significant influence on Redbud Phase II in which it holds 9.43% equity.
(2).Main financial information of important joint ventures
√Applicable □Not Applicable
Unit: RMB
193 / 228
2021 Annual Report
Closing balance/amount Opening balance/amount
in the current period in the previous period
Yiwu Shanglv Yiwu Shanglv
Current assets 94,995,453.50 187,602,175.56
In which: cash and cash equivalents 17,204,162.54 24,893,904.53
Non-current assets 1,332,618,603.76 1,369,948,370.68
Total assets 1,427,614,057.26 1,557,550,546.24
Current liabilities 375,275,386.49 420,643,904.92
Non-current liabilities 236,957,211.08 356,957,211.08
Total liabilities 612,232,597.57 777,601,116.00
Minority interest
Shareholders’ equity attributable to parent 815,381,459.69 779,949,430.24
company
Share of net assets calculated based 399,536,915.25 382,175,220.82
shareholding ratio
Adjustments -15,868,561.04 -16,344,463.91
--Goodwill - -
--unrealized profits of internal transactions -15,868,561.04 -16,344,463.91
--Others - -
Book value of equity investment in joint 383,668,354.21 365,830,756.91
ventures
Operating revenue 235,111,114.62 209,478,335.98
Financial expenses 24,364,607.11 25,646,329.54
Net profits 35,438,822.77 35,139,746.38
Total comprehensive income 35,438,822.77 35,139,746.38
Dividends received from joint ventures - -
this year
Other statements
None
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2021 Annual Report
(3).Main financial information of important associates
√Applicable □Not Applicable
Unit: RMB10,000
Closing balance/amount in the current period Opening balance/amount in the previous period
Binjiang Chouzhou Hongyi Fund CCCP Pujiang Lvgu Yiwu Yiwu Binjiang Chouzhou Hongyi Fund CCCP Pujiang Lvgu Yiwu Rongshang Yiwu
Shangbo Financial Lease Rongshang Chuangcheng Shangbo Financial Lease Property Chuangcheng
Property Property Property
Current assets 11,002.00 77,805.80 21,730.37 1,492,712.71 122,804.10 564,093.80 385,685.30 44,924.53 72,933.41 18,713.03 755,070.00 169,861.53 754,838.27 487,362.79
Non-current
69.23 1,356,968.91 155,970.63 42,919.44 459.02 8,395.40 5,324.96 104.99 1,139,961.66 119,447.65 40,293.49 1,300.59 10,377.57 7,101.31
assets
Total assets 11,071.23 1,434,774.71 177,701.00 1,535,632.15 123,263.12 572,489.20 391,010.26 45,029.52 1,212,895.07 138,160.68 795,363.49 171,162.12 765,215.84 494,464.10
Current liabilities 3,263.30 1,020,585.17 37.71 915,862.90 31,456.60 528,124.40 354,317.21 12,787.62 945,311.98 140.31 467,243.03 88,160.96 760,395.30 453,367.00
Non-current
- 250,335.36 - 49,089.63 - - - - 124,403.19 - 20,902.58 7,441.37 - 35,900.00
liabilities
Total liabilities 3,263.30 1,270,920.53 37.71 964,952.53 31,456.60 528,124.40 354,317.21 12,787.62 1,069,715.17 140.31 488,145.61 95,602.33 760,395.30 489,267.00
Shareholders’
equity
7,807.93 163,854.17 177,663.28 570,679.62 91,806.52 44,364.80 36,693.05 32,241.90 143,179.91 138,020.37 307,217.88 75,559.79 4,820.55 5,197.10
attributable to
parent company
Share of net
assets
calculated based 3,825.88 42,602.08 88,796.11 279,633.01 44,985.19 21,738.75 8,806.33 15,798.53 37,226.78 68,975.68 150,536.76 37,024.30 2,362.07 1,247.31
shareholding
ratio
Adjustments -378.26 - -8.88 -3,939.17 942.95 - - -383.31 -94.71 - -3,379.46 942.95 -130.16 -102.83
--unrealized
profits of internal -378.26 - -8.88 -3,939.17 942.95 - - -383.31 -94.71 - -3,379.46 942.95 -130.16 -102.83
transactions
Book value of
equity
3,447.62 42,602.08 88,787.23 275,693.84 45,928.14 21,738.75 8,806.33 15,415.23 37,132.07 68,975.68 147,157.30 37,964.25 2,231.91 1,144.48
investment in
joint ventures
Operating
3,673.67 43,115.27 177.83 138,101.44 90,893.54 272,636.85 199,877.07 9,770.28 45,121.82 944.83 19,133.91 19,704.98 384.12 101.10
revenue
Net profits 3,566.03 20,984.32 9,749.03 14,621.40 16,246.73 39,544.26 31,495.95 3,463.97 15,636.61 1,872.25 -1,853.66 3,561.41 -973.50 -2,330.19
Total
comprehensive 3,566.03 20,984.32 9,749.03 14,621.40 16,246.73 39,544.26 31,495.95 3,463.97 15,636.61 1,872.25 -1,853.66 3,561.41 -973.50 -2,330.19
income
Dividend on
associates
13,720
received in the
current year
Other statements
None
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2021 Annual Report
(4).Summary financial information of unimportant joint ventures and associates
√Applicable □Not Applicable
Unit: RMB
Closing balance/amount in the Opening balance/amount in the
current period previous period
Joint ventures:
Total book value of 56,813,304.76 15,284,720.18
investments
Total amounts of the following items calculated based on shareholding ratio
--Net profits 23,678,584.58 -19,726,695.26
--Other comprehensive
income
--Total comprehensive
income
Associates:
Total book value of 461,933,497.77 351,543,008.12
investments
Total amounts of the following items calculated based on shareholding ratio
--Net profits 25,663,075.10 -6,084,558.45
--Other comprehensive
income
--Total comprehensive
income
Other statements
None
(5).Restrictions on the ability of joint ventures or associates to transfer money to the
Company
□Applicable √Not Applicable
(6).Excess losses of joint ventures or associates
□Applicable √Not Applicable
(7).Unrecognized commitments relating to investment in joint ventures
□Applicable √Not Applicable
(8).Contingent liabilities relating to investment in joint ventures or associates
□Applicable √Not Applicable
4. Important joint operations
□Applicable √Not Applicable
5. Equity in structured entities not included in the consolidated financial statements
Notes on structured entities not included in the consolidated financial statements:
□Applicable √Not Applicable
6. Others
□Applicable √Not Applicable
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2021 Annual Report
X. Risks associated with financial instruments
√Applicable □Not Applicable
1. Categorization of financial instruments
The book values of financial instruments on the balance sheet date are as follows:
2021
Financial assets
Financial assets that
measured at fair
are measured by
value and whose
fair value and of
changes are
which the changes Measured at amortized
included in Total
in fair value are cost
other
recognized in the
comprehensive
profit or loss for the
income
current period
Requirements in the Designated
standard
Monetary capital - 4,831,468,386.25 - 4,831,468,386.25
Held-for-trading
75,375,083.21 - - 75,375,083.21
financial assets
Accounts receivable - 185,237,530.89 - 185,237,530.89
Other receivables - 1,355,924,282.96 - 1,355,924,282.96
Other current assets - 2,780,294.82 - 2,780,294.82
Long-term receivables - 222,307,363.40 - 222,307,363.40
Other equity
- - 642,187,968.77 642,187,968.77
instruments investment
Other non-current
1,524,819,255.41 - - 1,524,819,255.41
financial assets
1,600,194,338.62 6,597,717,858.32 642,187,968.77 8,840,100,165.70
Financial liabilities Other financial
liabilities
Short-term borrowings 942,736,046.04
Accounts payable 493,360,429.02
Other payables 1,908,742,835.15
Non-current liabilities due within one 3,664,241,923.08
year
Other current liabilities 3,081,384,800.50
Long-term borrowings 771,250,000.00
Lease liabilities 205,942,673.93
11,067,658,707.72
2020
Financial assets
Financial assets
measured at fair
that are measured
value and whose
by fair value and of
changes are
which the changes Measured at amortized
included in Total
in fair value are cost
other
recognized in the
comprehensive
profit or loss for the
income
current period
Requirements in the Designated
standard
Monetary capital
- - 5,612,642,932.21
5,612,642,932.21
Held-for-trading
51,712,734.31 - - 51,712,734.31
financial assets
Accounts receivable - 153,573,476.86 - 153,573,476.86
Other receivables - 2,708,478,136.25 - 2,708,478,136.25
Other current assets - 3,279,187.50 - 3,279,187.50
Long-term receivables - 126,756,573.81 - 126,756,573.81
Other equity
- - 662,256,342.79 662,256,342.79
instruments investment
Other non-current financial
assets
1,523,925,249.81 - - 1,523,925,249.81
1,575,637,984.12 8,604,730,306.63 662,256,342.79 10,842,624,633.54
Financial liabilities Other financial
liabilities
Short-term borrowings 1,257,179,389.40
Accounts payable 636,463,802.23
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2021 Annual Report
Other payables 1,908,742,835.15
Non-current liabilities due within one 1,315,026,574.43
year
Other current liabilities 3,008,141,460.22
Long-term borrowings 282,000,000.00
Bonds payable 3,552,161,709.68
11,067,658,707.72
2. Risks associated with financial instruments
The risks associated with financial instruments faced by the Group in regular activities
mainly include credit risk, liquidity risk and market risk. The main financial instruments
of the Group include cash, borrowings from banks, bonds payable and commercial
papers payable. Those instruments are used mainly to finance the operation of the
Group. The Group has lots of other financial assets and liabilities directly arising from
operation, such as accounts receivable, other receivables, accounts payable and other
payables. The risks associated with those financial instruments and the risk
management strategy taken by the Group to reduce those risks are stated as follows.
Credit risk
The Group only deals with the recognized third parties with good reputation. According
to its policy, the Group needs to carry out credit review on all clients who require to
deal with the Group on credit. In addition, the Group keeps monitoring the balance of
accounts receivable to ensure it will not face any material bad debt risk. For the
transactions settled other than in the functional currency of related business entities,
unless with specific approval of the Group’s credit control department, the Group will
not provide the conditions for dealing on credit. The Group also faces credit risks due
to the provision of financial guarantees. See Note XIV. 2 for details.
As the counterparties to the transactions of cash are banks with good reputation and
high credit ratings, the credit risk of those financial instruments is relatively low.
The Group’s other financial assets include cash, debt investment, other receivables
and certain derivatives, the credit risk of which is sourced from default by the
counterparties, and the maximum risk exposure is equal to the book value of those
instruments.
As the clients from which the Group’s accounts receivable are receivable are scattered
in different sectors and industries, there’s no material credit risk concentrated within
the Group. The Group does not have any collaterals or other credit enhancements for
the balance of its accounts receivable.
See Notes VII. 5 and 8 for quantitative data on the Group's credit risk exposure in
relation to receivables and other receivables.
Criteria for significant increase in credit risk
The Group evaluates, on each balance sheet date, whether the credit risk of related
financial instruments has increased significantly since the initial recognition thereof. In
determining whether the credit risk of a financial instrument has increased significantly
since the initial recognition thereof, the Group takes into account the reasonable and
well-grounded information that is accessible without unnecessary extra costs or
efforts, including the qualitative and quantitative analyses based on the Group’s
historical data, external credit risk rating and forward-looking information. The Group
compares the risk of financial instruments defaulting on the balance sheet date and
the risk of them defaulting on the date of initial recognition based on an individual
financial instrument or a Group of financial instruments with similar credit risk
characteristics to determine the changes in anticipated default risk of the financial
instrument(s) within the duration thereof.
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2021 Annual Report
If a financial instrument meets one or more of the following quantitative or qualitative
criteria, the Group will determine that its credit risk has increased significantly:
（1） The main quantitative criterion is that its probability of default within the
remaining duration on the reporting date rises by a certain margin from that at its
initial recognition;
（2） The main qualitative criterion is that the debtor has materially adverse changes in
business or financial conditions or is on the warning list of clients.
Definition of the assets whose credit has been impaired
In order to determine whether the credit of an asset has been impaired, the Group
adopts the criteria consistent with its internal credit risk management goal for related
financial instruments and also takes into account the quantitative and qualitative
indicators. The Group mainly considers the following factors while assessing whether
the credit of a debtor has been impaired:
（1） the issuer or debtor suffers material financial difficulty;
（2） the debtor is in breach of contract, such as breach in interest payment,
principal repayment or overdue payment;
（3） the creditor makes a compromise to the debtor which it would in no case make,
based on the economic or contract considerations in connection with the
debtor’s financial difficulty;
（4） the debtor is very likely to go bankrupt or enter into other financial
reorganizations;
（5） the financial difficulty of the issuer or debtor results in the disappearance of
the active market of the financial asset;
（6） a financial asset is purchased or derived at a large discount and the discount
points to the fact of credit loss having been incurred.
The credit impairment of financial assets may be caused by multiple events together
and may not necessarily be caused by an individually identifiable event.
Measurement parameters of expected credit loss
Depending on whether credit risk has increased significantly and whether credit has
been impaired, the Group makes impairment provisions for the expected credit losses
of different assets within 12 months or the entire duration. The key parameters of
expected credit loss include the probability of default, loss given default and default
risk exposure. The Group has built the models of probability of default, loss given
default and default risk exposure based on the quantitative analysis of historical data
(e.g. rating of counterparties, form of guarantee and category of collaterals or pledges,
form of repayment) and forward-looking information.
The related definitions are as follows:
（1） The probability of default refers to the possibility that the debtor will be unable to
fulfill its payment obligations in the next 12 months or throughout the remaining
duration. The Group adjusts the probability of default based on the results of the
expected credit loss model and with forward-looking information included to
reflect the debtors’ probability of default under the current macro economic
environment.
（2） The default loss rate refers to the Group’s expectation on the extent of losses
incurred due to the default risk exposure. The loss given default varies with the
type of counterparty, the form and priority of claims and collaterals. The loss
given default is the percentage of risk exposure loss at the time of default and is
calculated based on the coming 12 months or the entire remaining duration.
（3） The default risk exposure refers to the amount that the Group should pay out
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2021 Annual Report
when a default occurs in the next 12 months or throughout the remaining
duration.
The determination of significant increase in credit risk and the calculation of expected
credit loss both involve forward-looking information. The Group identifies the key
economic indicators that affect the credit risk and expected credit loss of various types
of businesses through the analysis of historical data.
The influence of those economic indicators on the probability of default and loss given
default varies with the type of business. The Group predicts those indicators on a
quarterly basis based on experts’ judgments and determines their influence on the
probability of default and loss given default through regression analysis.
The Group makes impairment provisions for the expected credit loss of accounts
receivable and other receivables within the coming 12 months with the simplified
method and general method respectively. Please refer to Notes VII. 5 and 8 for details.
Liquidity risk
The Group manages the cash shortage risk with the cyclical liquidity plan tool. The tool
considers not only the maturity dates of financial instruments but also the estimated
cash flows arising from the operation of the Group.
The Group aims to make use of such financing instruments as bank loans, commercial
papers, MTNs, corporate bonds and long-term borrowings to maintain the balance
between the continuity and flexibility of financing. As of December 31, 2021, 87.59%
(December 31, 2020: 66.99%) of the Group's debts would be due within one year.
The following table summarizes the analysis on the due day of financial liabilities based
on non-discounted contractual cash flows:
2021
3 months-1 year (1 year 1 year - 5 years (5 Above
Item At call 1-3 months Total
inclusive) years inclusive) 5 years
Short-term
2,580,651.41 253,953,316.72 702,138,696.23 - - 958,672,664.36
borrowings
Accounts payable 433,048,081.66 60,312,347.36 - - - 493,360,429.02
Other payables 1,337,240,761.48 - - 571,310,673.67 - 1,908,934,235.15
Other current
4,304,034.67 - 3,064,041,095.89 - - 3,068,345,130.56
liabilities
Non-current
liabilities due 326,666.67 50,424,666.67 3,639,370,038.05 - - 3,690,121,371.39
within one year
Long-term
2,178,645.83 4,357,291.67 19,607,812.50 785,678,164.58 - 811,821,914.58
borrowings
Total 1,779,678,841.72 369,047,622.42 7,425,157,642.67 1,356,988,838.25 - 10,931,064,345.06
2020
Above
3 months-1 year (1 1 year - 5 years (5
Item At call 1-3 months 5 Total
year inclusive) years inclusive)
years
Short-term
3,043,884.75 704,443,269.49 559,256,951.23 - - 1,266,744,105.47
borrowings
Accounts payable 538,556,910.03 97,906,892.20 - - - 636,463,802.23
Other payables 1,168,708,392.46 - - 477,637,169.16 - 1,646,345,561.62
Other current
4,131,670.37 1,002,071,232.88 2,012,205,479.45 - - 3,018,408,382.70
liabilities
Non-current
liabilities due within 980,000.00 51,731,333.33 1,285,433,398.48 - - 1,338,144,731.81
one year
Long-term
868,333.33 1,736,666.67 7,815,000.00 298,671,166.67 - 309,091,166.67
borrowings
Bonds payable - - 141,930,000.00 3,588,613,260.27 - 3,730,543,260.27
Total 1,716,289,190.94 1,857,889,394.57 4,006,640,829.16 4,364,921,596.10 - 11,945,741,010.77
Market risks
Interest rate risk
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2021 Annual Report
The risk of changes in market interest rates faced by the Group is mainly related to the
Group's long-term liabilities at floating interest rates.
The Group manages interest costs by maintaining an appropriate combination of fixed-
rate debts and variable-rate debts. In the long-term debts of the Group as of December
31, 2021, there are long-term loans of RMB 282 million in total. The interest rate is
adjusted based on the benchmark loan interest rate on that day at the end of each
year, and will not be adjusted in the middle of the year. Therefore, the management
believes that the risk of changes in market interest rates is relatively low.
Foreign exchange rate risk
The Group faces trading exchange rate risks. Such risks are caused by sales or
purchases made by certain business units in currencies other than their bookkeeping
currency. 0.86% (2020: 3%) of the Group's sales in the current period were
denominated in a currency other than the functional currency of the operating unit
where the sales occurred, while 99% (2020: 98%) of the costs were denominated in
the functional currency of the operating unit. Considering the Group’s short time of
inventory and timely collection of accounts receivable, the management believe that its
foreign exchange rate risk is relatively low.
Price risk of equity instrument investments
The price risk of equity instrument investments refers to the risk of the fair value of
equity securities decreasing due to the changes in stock indices and value of individual
securities. As of December 31, 2021, the Group was exposed to the price risk of equity
instrument investments arising from the individual equity instrument investments
classified as the financial instruments that are measured by fair value and of which the
changes in fair value are recognized in income in current period (Note VII. 2) or
recognized in other comprehensive income (Note VII. 18). The listed equity instruments
that were invested and held by the Group were listed on the Shanghai Stock Exchange
and the Shenzhen Stock Exchange, respectively,the determination is made through
discounting and adjustment using the trading prices of similar circulating stocks of the
same listed company on the balance sheet date, combined with liquidity.
The market stock indexes of the following stock exchanges at the closing point of the
trading day that is closest to the balance sheet date, and their respective highest and
lowest closing points during the year are as follows:
At the end of 2021 2021 At the end of 2020 2020
Highest/lowest Highest/lowest
SZSE-A Share Index 2,648 2,691/2,229 2,438 2,442/1,683
SSE-A Share Index 3,814 3,912/3,472 3,640 3,640/2,788
The following table indicates the sensitivity of the Group’s net profit and loss and other
comprehensive income after tax to the change each 10% of the fair value of equity
instrument investment (based on the book value on the balance sheet date) under the
assumption that all other variables remain unchanged.
2021
Equity
Other
instrument Total shareholders'
Net profit or loss comprehensive
investment equity
income net after tax
Book value
Equity instrument investment increase/(decrease) increase/(decrease) increase/(decrease)
Fair value increase/decrease
by10%
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2021 Annual Report
Shenzhen - Investment in the
equity instruments that are
measured by fair value and of
642,187,968.77 - 48,164,097.66 48,164,097.66
which the changes in fair value
are recognized in other
comprehensive income
Shanghai - Equity instrument
investment at fair value through 50,375,083.20 3,778,131.24 - 3,778,131.24
profit or loss
2020
Equity
Other
instrument Total shareholders'
Net profit or loss comprehensive
investment equity
income net after tax
Book value
Equity instrument investment increase/(decrease) increase/(decrease) increase/(decrease)
Fair value increase/decrease
by10%
Shenzhen - Investment in the
equity instruments that are
measured by fair value and of
662,256,342.79 49,669,225.71 49,669,225.71
which the changes in fair value
are recognized in other
comprehensive income
Shanghai - Equity instrument
investment at fair value through 51,712,734.31 3,878,455.07 - 3,878,455.07
profit or loss
3. Capital management
The main objective of the Group in capital management is to ensure the Group’s ability
to continue operations and maintain a healthy capital ratio to support its business
development and maximize the values for shareholders.
The Group manages and adjusts its capital structure based on the changes in the
economic situation and the risk characteristics of related assets. To maintain or adjust
the capital structure, the Group may adjust the distribution of profits to shareholders,
return capital contribution to shareholders or issue new shares. The Group is not subject
to external mandatory capital requirements. In 2021 and 2020, there was no change in
capital management objectives, policies or procedures.
XI. Disclosure of fair value
1. Closing fair value of the assets and liabilities measured by fair value
√Applicable □Not Applicable
Unit: RMB
Closing fair value
Item Level 1 fair Level 2 fair Level 3 fair
Total
value value value
I. Continuous fair
value measurement
(1) Held-for-trading
50,375,083.20 25,000,000.00 75,375,083.20
financial assets
1. Financial assets
that are measured at
fair value and whose
changes are 50,375,083.20 25,000,000.00 75,375,083.20
included in the
current profit and
loss
(2) Investment in
50,375,083.20 50,375,083.20
equity instruments
(4) Bank wealth
25,000,000.00 25,000,000.00
management
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2021 Annual Report
products
(3) Other equity
instruments 642,187,968.77 642,187,968.77
investment
(vi) Other non-
current financial - 894,066,000.44 630,753,254.97 1,524,819,255.41
assets
Total assets
continuously
692,563,051.97 894,066,000.44 655,753,254.97 2,242,382,307.38
measured by fair
value
2. Basis for determining the market prices of the items continuously and non-continuously
measured by Level 1 fair value
√Applicable □Not Applicable
The Group's continuous first-level fair value measurement items mainly include listed equity
instruments, whose fair value is determined based on the market quotation on the last trading day
of 2021.
3. Valuation techniques and qualitative and quantitative information of important
parameters for the items continuously and non-continuously measured by Level 2 fair
value
√Applicable □Not Applicable
The Group’s level-2 items continuously measured at fair value mainly include unlisted equity
investments and listed equity instruments with restricted sales conditions. The fair value of unlisted
equity investments is determined based on the information in the financial statements of these
unlisted companies on December 31, 2021, combined with comparable information of listed
companies in the same industry under the comparable company multiplier method. In the listed
equity instruments subject to restricted sales conditions, the valuation model is used to determine
the fair value based on the market quotation, and the important observable input value is the
liquidity discount.
4. Valuation techniques and qualitative and quantitative information of important
parameters for the items continuously and non-continuously measured by Level 3 fair
value
√Applicable □Not Applicable
The Group’s level-3 items continuously measured at fair value include equity investments and
debt investments in non-listed companies for which the comparable company multiplier method
cannot be used. The fair value of the equity investments and debt investments in non-listed
companies for which the comparable company multiplier method cannot be used are determined
under the asset-based method as of December 31, 2021.
5. Adjustment information between the opening book value and closing book value, and
the sensitivity analysis of unobservable parameters for items continuously measured by
Level 3 fair value
□Applicable √Not Applicable
6. For items continuously measured by fair value, if there is conversion between different
levels in the current period, the reasons for the conversion and the policy for
determining the time of conversion
□Applicable √Not Applicable
7. Changes in valuation techniques in the current period and reasons for changes
□Applicable √Not Applicable
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2021 Annual Report
8. Fair value of financial assets and financial liabilities not measured by fair value
√Applicable □Not Applicable
December 31, 2021
Entries used in the fair value measurement
Quotation in an active market Important observable Important non-observable
Entry Entry
Level 1 Level 2 Level 3 Total
Bonds payable (current portion included) 3,552,960,829.66 3,552,960,829.66
9. Others
√Applicable □Not Applicable
Estimate of fair value
Fair value of financial instruments
The table below shows the differences between book value and fair value of the Group’s
financial instruments other than the financial instruments with very small differences
between book value and fair value and the equity instruments that did not have an offering
price in the active market and whose fair value could not be measured reliably:
Book value Fair value
2021 2020 2021 2020
Financial
liabilities
Bonds payable
(current
portion
included) 3.552.960.829.66 4,584,565,819.27 3.549.754.103.37 4,566,553,461.90
The management have evaluated cash and cash equivalents, accounts receivable,
notes payable and accounts payable. Their fair values were equivalent to their book
values as their remaining terms were not long. The fair values of long-term receivables,
other non-current assets, long and short-term borrowings and long-term accounts
payable were determined with the discounted future cash flow method, with the market
yields of other financial instruments with similar contract terms, credit risks and
remaining terms as the discount rates. Their fair values were equivalent to their book
values.
The Group's finance department, headed by the General manager of the Group
Finance Center, is responsible for developing policies and procedures for the fair value
measurement of financial instruments. The General Manager of the Group Finance
Center reports directly to the Group Finance Officer, who reports to the Audit
Committee. On each balance sheet date, the financial department analyzes the
changes in the value of financial instruments and determines the main input values
applicable to the valuation. The valuation shall be reviewed and approved by the
Group's Financial Director. For the preparation of semi-annual and annual financial
statements, the valuation process and results are discussed with the audit committee
twice a year.
The fair values of financial assets and financial liabilities refer to the amounts
determined based on the voluntary exchange of assets or repayment of debts by the
parties to arm’s length transactions who are familiar with the transactions rather than
forced sale or liquidation. The following methods and assumptions are used to
estimate fair value.
204 / 228
2021 Annual Report
The fair value of bonds payable is determined with the discounted future cash flow
method, with the market yields of other financial instruments with similar contract
terms, credit risks and remaining terms as the discount rates, and falls in Level 2. The
significant unobservable inputs for measurement of the fair value of bonds payable are
the prepayment rate and loss given default.
If there are no restrictions on the sale of listed equity instruments, the fair value is
determined at the quoted market price. In the listed equity instruments subject to
restricted sales conditions, the valuation model is used to determine the fair value
based on the market quotation, and the important observable input value is the liquidity
discount. The Group believes that the fair value estimated by valuation techniques is
reasonable and is also the most appropriate value on the balance sheet date.
There was no significant conversion of the Group’s and the Company’s financial
instruments measured by fair value between different levels in the current year and in
the previous year.
XII. Related parties and related-party transactions
1. Parent company of the Company
√Applicable □Not Applicable
Unit: RMB10,000
Shareholding Voting right
Name of parent Place of Registered
Business ratio in the ratio in the
company registration capital
Company (%) Company (%)
Yiwu China Yiwu, Asset 100,000 55.33 55.33
Commodities City Zhejiang management
Holdings Limited
Notes on the parent company of the Company
None
The ultimate controlling party of this enterprise is the State-owned Assets Supervision and
Administration Office of Yiwu Municipal People's Government.
Other notes:
None
2. Subsidiaries of the Company
For details of the Company’s subsidiaries, please refer to the Notes
√Applicable □Not Applicable
For details of subsidiaries, please refer to Note IX. 1. Equity in subsidiaries
3. Joint ventures and associates of the Company
For details of the Company’s important joint ventures or associates, please refer to the Notes
√Applicable □Not Applicable
For details, please refer to Note IX. 3. Interests in joint ventures or associated enterprises
Other joint ventures or associates that have related-party transactions with the Company in the
current period or had related-party transactions with the Company in the prior year which resulted in
an outstanding amount are as follows
√Applicable □Not Applicable
Name of joint venture or associate Relationship with
the Company
Yiwu Shanglv Joint venture
Redbud Capital Joint venture
Binjiang Shangbo Associate
Huishang Micro-finance Associate
Zhejiang Yemai Data Technology Co., Ltd. Associate
Yiwu Meipinshu Supply Chain Management Co., Ltd. Associate
EBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND Associate
OPERATZON FZCO
205 / 228
2021 Annual Report
Yiwu Digital Port Technology Co., Ltd. Associate
Yiwu China Commodities City Property Development Co., Ltd. Associate
Other statements
□Applicable √Not Applicable
4. Other related parties
√Applicable □Not Applicable
Name of other related party Relationship with the Company
Parent company of controlling
SCO shareholder of the Company’s
largest shareholder
Controlling shareholder of the
MDG
Company’s largest shareholder
Subsidiary of the Company’s
Yiwu China Commodities City Property Service Co., Ltd.
largest shareholder
Branch of Controlling shareholder
Yourworld International Conference Center Company of
of the Company’s largest
Yiwu Market Development Group Co., Ltd.
shareholder
Subsidiary of controlling
Yiwu Security Service Co., Ltd. shareholder of the Company’s
largest shareholder
Subsidiary of controlling
Zhejiang Xingfuhu Sports Development Co., Ltd. shareholder of the Company’s
largest shareholder
Huangyuan Shangbo Subsidiaries of joint ventures
Chengzhen Property Subsidiaries of joint ventures
Gongchen Shangbo Subsidiaries of joint ventures
Tonghui Shangbo Subsidiaries of joint ventures
Subsidiary of the Company’s
Zhejiang Shangbo Property Co., Ltd.
largest shareholder
Handing Shangbo Subsidiaries of associates
Other statements
None
5. Related-party transactions
(1).Related-party transactions of purchasing and selling goods and rendering and
accepting service
Purchasing goods/accepting service
√Applicable □Not Applicable
Unit: RMB
Amount in
Contents of related-party Amount in the
Related party the previous
transaction current period
period
Yiwu Security Service Co., Epidemic prevention and
Ltd. control and exhibition security 23,279,926.97 69,300.00
service fee
Yiwu China Commodities
Property service fee and
City Property Service Co., 13,721,576.38 -
greening maintenance fee
Ltd.
Yiwu China Commodities
City Creative Design and
Design fee 1,953,465.33 -
Development Services Co.,
Ltd.
206 / 228
2021 Annual Report
Selling goods/rendering service
√Applicable □Not Applicable
Unit: RMB
Contents of related- Amount in the Amount in the
Related party
party transaction current period previous period
MDG and its branch Xingfuhu
Laundering fees 1,594,054.55 1,515,186.29
International Conference Center
Procurement
Meipinshu 231,822.45 310,367.07
agency
Notes on related-party transactions of purchasing and selling goods and rendering and accepting
service
□Applicable √Not Applicable
(2).Entrustment/contracting from and to related parties
Entrustment/contracting to the Company:
√Applicable □Not Applicable
Unit: RMB
Starting Ending Entrustment
date of date of Pricing of income/contra
Name of Name of Type of
entrustm entrustm entrustment cting income
consignor/empl consignee/contr entrusted/contr
ent ent income/contra recognized in
oyer actor acted assets
/contracti /contracti cting income the current
ng ng period
Entrustment of February January Negotiated 1,453,314.18
MDG The Company
other assets 1, 2020 31, 2025 price
Notes on entrustment/contracting from related parties
√Applicable □Not Applicable
According to the Xingfuhu International Conference Center Management Contract signed by
and between the Company and the Market Development Group, the Company is entrusted to
manage Xingfuhu International Conference Center Hotel located at No. 100, Xingfuhu Road, Yiwu
City. The hotel management fee collected during the reporting period was RMB 1,453,314.18 (2020:
RMB 1,020,591.87)
Entrusted management/contracted by the Company
□Applicable √Not Applicable
Notes on related-party management/contracting
□Applicable √Not Applicable
(3).Related-party lease
The Company as the lessor:
√Applicable □Not Applicable
Unit: RMB
Rental income
Type of Rental income
recognized in
Name of lessee leased recognized in the
the previous
asset current period
period
CCCP Office 3,767,104.11 -
space
Huishang Micro-finance Office 103,301.70 312,233.27
space
MDG Office - 836,793.82
space
Redbud Capital Office - 246,819.09
space
Zhejiang Yemai Data Technology Co., Ltd. Office - 28,793.86
space
207 / 228
2021 Annual Report
The Company as the lessee
√Applicable □Not Applicable
Unit: RMB
Rental fee Rental fee
Type of
lessor name confirmed in the confirmed in the
leased asset
current period previous period
CCCH Warehouses 3,947,798.16 -
Notes on related-party lease
√Applicable □Not Applicable
The Group rent office spaces from above related parties at market prices
(4).Related-party guarantees
The Company as the guarantor
√Applicable □Not Applicable
Unit: RMB
Amount of Starting date of the Expiry date of the Is the guarantee
The guaranteed
guarantee guarantee guarantee fulfilled in full
Yiwu Shanglv 145,287,733.04 July 1, 2015 December 15, No
2026
Yiwu Shanglv 8,283,103.03 December 25, December 24, No
2020 2023
The Company as the guaranteed party
√Applicable □Not Applicable
Unit: RMB
Amount of Starting date of the Expiry date of the Is the guarantee
Guarantor
guarantee guarantee guarantee fulfilled in full
CCCH 8,283,103.03 December 25, December 24, No
2020 2023
Notes on related-party guarantees
√Applicable □Not Applicable
1. The Group provided guarantee for the borrowings of Yiwu Shanglv. As of December 31,
2021, Yiwu Shanglv actually borrowed RMB 296,505,600 (RMB 477,659,700 as of Dec 31, 2020)
from banks. According to the guarantee contract, the Group assumed liability for RMB145,287,700
(RMB 234,053,300 as of Dec 31, 2020). The state-owned capital operation center provided counter-
guarantee for the said loan.
2. The Group provided Yiwu Shanglv with a loan guarantee with the maximum amount not
exceeding RMB 49 million to Yiwu Branch of Bank of Communications Co., Ltd. As of December
31, 2021, Yiwu Shanglv actually borrowed RMB 16,904,300 from the bank (December 31, 2020:
RMB 11.50 million). As agreed in the guarantee contract, the Bank of Communications Co., Ltd.
Yiwu Branch assumed a guarantee liability of RMB 8.2831 million (December 31, 2020: RMB 5.635
million). CCCH provided a counter-guarantee
(5).Related-party lending and borrowing
√Applicable □Not Applicable
Unit: RMB
Related Starting Maturity
Amount Remarks
party date date
Borrowings
Huangyuan 539,000,000.00 July 31, The Group allocated a total of RMB
Shangbo 2020 539,000,000.00 of surplus funds from
Huangyuan Shangbo in 2020, and a
total of RMB 171,500,000.00 of surplus
funds from Huangyuan Shangbo in
2021. The allocation was based on the
208 / 228
2021 Annual Report
share holding rate and the annual
interest rate was 0%. As of December
31 2021, RMB 102,900,000.00 has
been transferred back, and the return
date of the remaining funds would be
determined according to the capital
needs of the Huangyuan Business
Expo project.
Huangyuan 171,500,000.00 January Ditto
Shangbo 26, 2021
Chengzhen 27,200,000.00 October In 2020, theGGroup allocated a total of
Property 22, 2020 RMB 27,200,000.00 of surplus funds
from Chengzhen Real Estate a total of
RMB 72,000,000.00 of surplus funds
from Chengzhen Real Estate in 2021.
The allocation was based on the share
holding rate and the annual interest
rate was 0%. The repayment date
would be determined according to the
capital needs of the Chengzhen Real
Estate project.
Chengzhen 172,800,000.00 January Ditto
Property 26, 2021
Related party Amount Starting Maturity Remarks
date date
Lending to
Gongchen 472,659,831.00 February May 27, In 2020, the Group provided
Shangbo 28, 2020 2021 Gongchen Shangbo with financial
assistance totaling RMB
521,659,831.00 at the annual
interest rate of 10%. As of
December 31, 2021, Gongchen
Shangbo has repaid off
successively.
Gongchen 49,000,000.00 June 22, May 27, Ditto
Shangbo 2020 2021
Tonghui 743,800,000.00 November December In 2020, the Group provided a
Shangbo 17, 2020 29, 2021 total of RMB1,486,368,548.00 in
financial assistance to Tonghui
Shangbo, and in 2021, it provided
a total of RMB138,160,000.00 in
financial assistance to Tonghui
Shangbo, with an annual interest
rate of 6.5%. Tonghui Shangbo
has repaid RMB 743,800,000.00
successively in 2021.
Tonghui 742,568,548.00 November Ditto
Shangbo 17, 2020
Tonghui 138,160,000.00 February Ditto
Shangbo 26, 2021
Handing 267,540,000.00 December December In 2020, the Group provided
Shangbo 11, 2020 29, 2021 financial assistance to Handing
Shangbo totaling RMB
472,144,400.00, and in 2021, it
provided financial assistance to
Handing Shangbo totaling RMB
17,845,800.00, with an annual
209 / 228
2021 Annual Report
interest rate of 6%. Handing
Shangbo has repaid RMB
267,540,000.00 successively in
2021.
Handing 204,604,400.00 December Ditto.
Shangbo 11, 2020
Handing 17,845,800.00 May 11, Ditto
Shangbo 2021
Guoshen 1,372,000,000.00 April 19, December In 2019, the Group provideda total
Shangbo 2021 30, 2021 of RMB 451,816,700.00 of
financial assistance to Chengzhen
Real Estate at an annual interest
rate of 0% or 10%. Among them,
the annual interest rate of the
portion beyond the shareholding
ratio is 10%. As of December 31,
2020, Chengzhen Real Estate
has repaid off successively.
JEBEL ALI 63,465,484.42 March 9, The Group provided financial
FREE ZONE 2020 assistance to JEBEL ALI FREE
TRADER ZONE TRADER MARKET
MARKET DEVELOPMENT AND
DEVELOPMENT OPERATZON FZCO totaling
AND RMB 63,465,484.42 in 2020, and
OPERATZON provided financial assistance to
FZCO JEBEL ALI FREE ZONE
TRADER MARKET
DEVELOPMENT AND
OPERATZON FZCO totaling
RMB 173,102,001.51 in 2021,
with an annual interest rate of 6-
month average EIBOR plus 5%,
and the financial aid repayment
period would be determined
according to the progress of the
project.
JEBEL ALI 109,636,517.09 March 31, Ditto
FREE ZONE 2021
TRADER
MARKET
DEVELOPMENT
AND
OPERATZON
FZCO
(6).Related-party transfer of assets and restructuring of debts
□Applicable √Not Applicable
(7).Remunerations of key officers
√Applicable □Not Applicable
Unit: RMB
Amount in the previous
Item Amount in the current period
period
Remunerations of key officers 23,333,482.40 22,487,812.15
(8).Other related-party transactions
□Applicable √Not Applicable
210 / 228
2021 Annual Report
6. Accounts receivable from and payable to related parties
(1).Receivables
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Accounts
Tonghui Shangbo 6,200,000.00 - - -
receivable
Yourworld
International
Accounts Conference Center
369,743.93 - - -
receivable Company of Yiwu
Market Development
Group Co., Ltd.
Yiwu Gongchen
Accounts
Shangbo Property 97,351.08 - -
receivable
Co., Ltd.
Accounts
CCCP 9,000.00 - - -
receivable
Accounts
Meipinshu - - 3,791,271.51 -
receivable
Total 6,676,095.01 - 3,791,271.51 -
Other
receivables-
Gongchen Shangbo - - 101,380,259.61 -
interest
receivable
Other
receivables-
Tonghui Shangbo 92,249,275.44 - 18,391,082.53 -
interest
receivable
Other
receivables-
Handing Shangbo - - 1,629,868.34 -
interest
receivable
Other
Gongchen Shangbo - - 521,659,831.00 -
receivables
Other
Tonghui Shangbo 880,728,548.00 - 1,486,368,548.00 -
receivables
Other
Handing Shangbo 222,450,200.00 - 472,144,400.00 -
receivables
Total 1,195,428,023.44 - 2,601,573,989.48 -
Long-term
Yiwu Shanglv 41,650,000.00 - 61,250,000.00 -
receivables
JEBEL ALI FREE
ZONE TRADER
Long-term MARKET
173,102,001.51 - 65,506,573.8 -
receivables DEVELOPMENT
AND OPERATZON
FZCO
Total 214,752,001.51 - 126,756,573.81 -
(2).Payables
√Applicable □Not Applicable
Unit: RMB
211 / 228
2021 Annual Report
Item Related party Closing book Opening book
balance balance
Accounts Zhejiang Yemai Data Technology 176,873.43 1,944,907.37
payable
Total 176,873.43 1,944,907.37
Advance from CCCP 612,288.99 612,289.00
customers
Advance from Huishang Micro-finance 20,798.09 119,444.13
customers
Advance from Yiwu Digital Port Technology Co., Ltd. 112,281.94 116,090.04
customers
Advance from Redbud Capital 82,273.06 82,272.97
customers
Advance from Zhejiang Yemai Data Technology Co., - 7,395.00
customers Ltd.
Advance from Yiwu Meipinshu Supply Chain 31,195.06 29,076.43
customers Management Co., Ltd.
Advance from Yiwu China Commodities City Property 32,052.85 -
customers Service Co., Ltd.
Total 890,889.99 966,567.57
Contract Huishang Micro-finance 7,966.42 12,609.59
liabilities
Contract Yiwu Digital Port Technology Co., Ltd. 22,205.25 2,192.92
liabilities
Contract Yiwu Security Service Co., Ltd. 2,004.40 -
liabilities
Contract Yiwu China Commodities City Property 332.00 -
liabilities Service Co., Ltd.
Total 32,508.07 14,802.51
Other Huangyuan Shangbo
607,600,000.00 539,000,000.00
payables
Other Chengzhen Property
200,000,000.00 27,200,000.00
payables
Other MDG
63,334.76 400,421.10
payables
Other Huishang Micro-finance
33,000.00 85,000.00
payables
Other Zhejiang Yemai Data Technology Co.,
- 24,000.00
payables Ltd.
Other CCCP
240,000.00 240,000.00
payables
Other Yiwu Meipinshu Supply Chain
57,000.00 57,000.00
payables Management Co., Ltd.
Other Yiwu Digital Port Technology Co., Ltd.
26,300.00 26,300.00
payables
Other Yiwu Shangfu Chuangzhi Investment
34,000,500.00 -
payables Center (limited partnership)
Other Binjiang Shangbo
14,700,000.00 -
payables
Other Yiwu Huishang Redbud Equity Investment
4,500,000.00 -
payables Co., Ltd.
Other Yiwu Shanglv Investment Development
75,000.00 -
payables Co., Ltd.
Other Gongchen Shangbo
3,000.00 -
payables
Total 861,298,134.76 567,032,721.10
212 / 228
2021 Annual Report
7. Related-party commitments
□Applicable √Not Applicable
8. Others
□Applicable √Not Applicable
XIII. Share-based payment
1. Overview of share-based payment
√Applicable □Not Applicable
Unit: Share Currency: RMB
Total amount of equity instruments granted by the 2,340,000.00
Company in the current period
The total amount of equity instruments exercised -
by the Company during the current period
The total amount of the Company's equity 980,000.00
instruments that have lapsed during the current
period
Scope of the exercise price of the stock options The grant price was RMB 2.94, in 60 months
issued by the Company and the remaining period from the date of grant registration
of the contract at the end of the period
Scope of the exercise price of other equity
instruments issued by the Company and the
remaining period of the contract at the end of the
period
Other statements
None
2. Share-based payment settled with equity
√Applicable □Not Applicable
Unit: RMB
Method for determining the fair value of equity Market price on grant day
instruments on the grant date
Basis for determining the number of exercisable Determined based on the number of incentive
equity instruments objects that have reached the assessment
target, through annual assessment on the
Company’s financial performance indicators
and personal performance indicators.
Reason for the significant difference between the
estimates in the current period and in the
previous period
Cumulative amount of equity-settled share-based 33,415,506.37
payments included in the capital reserve
Total amount of expenses recognized by equity- 33,415,506.37
settled share payments in the current period
Other statements
On December 10, 2020, the 2020 fifth provisional general meeting of shareholders of the
Company reviewed and approved the “Plan on the Company's Restricted Equity incentive Plan
2020 (Draft)” and its summary. A total of 50,480,000 restricted shares were granted, accounting for
about 0.927% of the Company's total share capital of 5,443,214,176 shares, of which 47,920,000
shares were granted for the first time and 2,560,000 shares were reserved. During the subscription
process, 10 incentive objects voluntarily waived the restrictions to be granted to them due to
personal reasons. Therefore, 46,700,000 restricted shares were actually granted this time, and the
number of incentive objects was 395. On January 15, 2021, the Company's board of directors has
completed the registration of the first grant of restricted stocks.
After consideration and approval at the thirty-fifth meeting of the eighth the Board of Directors
and the ninth meeting of the eighth Board of Supervisors of the Company held on August 9, 2021,
in view of the fact that among the original incentive objects granted for the first time, 6 incentive
objects including ZHAO Qitong no longer worked in the Company due to their position adjustments,
213 / 228
2021 Annual Report
and three incentive objects including HOU Wenbin had resigned due to personal reasons,
according to the relevant regulations of the "Incentive Plan" and the authorization of the Fifth
Provisional General Meeting of Shareholders in 2020, the Board of Directors of the Company
decided to repurchase and canceled a total of 980,000 restricted shares granted to the above nine
persons but yet to be released. The Company would repurchase and cancel the restricted shares
held by the above-mentioned 9 persons that had been granted but not yet been released at the
sum of interest calculated at RMB 2.885 per share and the fixed deposit interest rate announced by
the People's Bank of China for the same period. The total amount of restricted stock repurchase
funds this time was RMB 2.852 million , and the above-mentioned repurchase funds would all be
paid with the Company's own funds.
On September 6, 2021, Zhejiang Zhicheng Certified Public Accountants (Special General
Partnership) issued the capital verification report (Zhe Zhi Kuai Yi Zi [2021] No. 17): The Company
has received a total of RMB 5,592,600.00 for subscription of restricted shares from 31 restricted
equity incentive objects, including RMB 2,340,000.00 in newly registered capital (share capital), and
RMB 3,252,600.00 in capital reserve. The registered capital and share capital of the Company
before the capital increase were both RMB 5,489,914,176.00, and the registered capital and share
capital after the change were both RMB 5,492,254,176.00. During this grant registration process, in
view of the fact that 3 of the incentive objects to be granted on the reserved grant date are no
longer eligible for incentive objects due to their voluntary abandonment; 31 incentive objects
actually subscribed this time, and 2.34 million shares were subscribed. On November 4, 2021, the
registration procedures for the reserved grant of restricted stocks involved in this incentive plan
were completed, and the Shanghai Branch of China Securities Depository and Clearing Corporation
Limited issued the "Securities Change Registration Certificate".
The restricted stocks granted for the first time under the restricted equity incentive plan should
be vested in three terms from the first trading day after 24 months after the grant registration is
completed until the last trading day in 60 months after the grant registration is completed. That is,
after the vesting conditions have been satisfied, employees have the right to purchase stocks at the
vesting price. If the vesting conditions of the restricted equity incentive plan have been satisfied
during the vesting period, the incentive objects can apply for the ownership of stocks and being
listed for circulation.
3. Share-based payment settled with cash
□Applicable √Not Applicable
4. Modification and termination of share-based payment
□Applicable √Not Applicable
5. Others
□Applicable √Not Applicable
XIV. Commitments and contingencies
1. Important commitments
√Applicable □Not Applicable
Important external commitments, nature and amount thereof as of the balance sheet dates
Unit: RMB Yuan
Capital commitments 2021 2020
Signed but not provided 2,165,863,780.60 1,346,968,354.17
Investment commitments:
In 2017, the Group’s wholly-owned subsidiary Yiwu China Commodities City Financial Holdings
Co., Ltd. (“CCCF”) and Shanghai Fuxing Industry Group Co., Ltd. (“Fuxing”) jointly established an
industry fund Yiwu China Commodities City Fuxing Investment Center (limited partnership)
(hereinafter referred to as the “FoF”). The FoF invested in 12 sub-funds including Yiwu Shangfu
Chuangzhi Investment Center (limited partnership) (“Shangfu Chuangzhi Fund”). CCCF subscribed
for capital contribution of RMB998million in the FoF as a limited partner, accounting for 49.9% of
the total capital contribution, and has paid in RMB102.92million. The unpaid portion of its
subscribed capital contribution was promised to be RMB895.08million and was not subject to a term.
214 / 228
2021 Annual Report
CCCF also made capital contribution of RMB9.8million (49% equity) to Yiwu China Commodities
City Investment and Management Co., Ltd. (hereinafter referred to as the “CCCIM”), which was a
general partner of the above FoF and sub-funds. Fuxing made capital contribution of 51% to and
had control over CCCIM.
Shangfu Chuangzhi Fund raised funds of RMB823.36million in total. The FoF has subscribed
for and paid in capital contribution of RMB205.84million as a limited partner (including the above
RMB102.92million from CCCIM and the rest was contributed by Fuxing, the other limited partner of
the FoF). As the other limited partner of Shangfu Chuangzhi Fund, CCCF has separately
subscribed for and paid in capital contribution of RMB617.51million. In addition, neither the Group
nor CCCF have invested in other sub-funds of the FoF. Subsequently, Shangfu Chuangzhi Fund
made capital contribution of RMB820.54million to subscribe for the increase in the registered capital
of Hubei Provincial Asset Management Co., Ltd. to acquire 22.667% equity therein. By 2019, 9 out
of the above 12 sub-funds had been deregistered.
In 2018, CCCF learned during its after-investment follow-up management that Fuxing and its
actual controller ZHU Yidong were suspected of having committed a criminal offense and the
22.667% equity held by Shangfu Chuangzhi Fund in Hubei Provincial Asset Management Co., Ltd.
was frozen by the Public Security Bureau of Shanghai for a term from Sep 6, 2018 to Sep 6, 2019
due to Fuxing’s contribution in the sources of the capital contribution. As of the approval date of the
financial statements, the freeze period has been extended until September 2, 2022.
As of the approval date of the financial statements, the Group had not received any notice of
capital contribution other than the above contributions that had been made or any notice of action
involving the Group, CCCF, FoF and its sub-funds.
In addition, as of December 31, 2021, the Group had other investment commitments totaling
RMB 1.28078 billion (December 31, 2020: RMB 201.71 million).
2. Contingencies
(1).Important contingencies on the balance sheet dates
√Applicable □Not Applicable
Unit: RMB Yuan
Item 2021 2020
Contingent liabilities resulting from the 158,634,169.67 973,992,539.81
guarantee provided externally
According to relevant regulations, before the purchaser of the commercial housing sold by the
Group has obtained the property certificate, the Group shall provide the purchaser with a bank
mortgage guarantee. As of June 30, 2021, the unsettled guarantee amount was RMB 9,928,856.22
(December 31, 2020: RMB 16,170,141.08). Those guarantees would be released after the issuance
of the property ownership certificates and are thus little likely to incur losses. Therefore, the
management believed that it was not necessary to make provision for the guarantees.
According to the resolution of the 15th meeting of the 7th Board of Directors on Jul 1, 2015, the
Group applied to the Yiwu Branch of ABC for a RMB750million loan for Yiwu Shanglv and provided
guarantee based on its shareholding ratio. The guarantee was a joint and several liability guarantee,
the maximum amount of guarantee was RMB367.5million and the term was 11 years. As of
December 31, 2021, Yiwu Shanglv actually borrowed RMB 296,505,577.63 (December 31, 2020:
RMB 477,659,739.88) from the banks in total. According to the agreement of the guarantee contract,
it assumed the guarantee liability of RMB 145,287,733.04 (December 31, 2020: RMB
234,053,272.54) for the Agricultural Bank of China Yiwu Branch. Yiwu State-owned Capital
Operation Co., Ltd. provided a counter guarantee for this guarantee.
According to the resolution of the 19th Meeting of the 8th Board of Directors on August 13,
2020, the Group applies for a loan with a total amount of not more than RMB 100 million for Yiwu
Shanglv with the Bank of Communications Co., Ltd. Yiwu Branch and provided a guarantee in
proportion to the shareholding ratio. The guarantee method was under joint liability, the maximum
amount of the guarantee was RMB 49 million, and the guarantee period was two years, from the
date of the expiry of the debt performance period agreed in the independent contract until the date
of the expiration of the debt performance period of all last due main debt under the master contract.
As of December 31, 2021, Yiwu Shanglv actually borrowed RMB 28,404,291.89 (December 31,
2020: RMB 11,500,000.00) from banks in total. According to the agreement of the guarantee
contract, it assumed the guarantee liability of RMB 8,283,103.03 (December 31, 2020: RMB
5,635,000.00) for the Agricultural Bank of China Yiwu Branch. CCCH provided a counter-guarantee
215 / 228
2021 Annual Report
(2).Notes shall also be made even if the Company has no important contingencies to be
disclosed:
□Applicable √Not Applicable
3. Others
□Applicable √Not Applicable
XV. Post-balance sheet date events
1. Important non-adjusting events
√Applicable □Not Applicable
Unit: RMB
Issuance
of ultra-
short-term
Effect on
financing
financial
notes for
Item Content status and
which the
operating
impact
results
cannot be
estimated:
Reasons
On February 22, 2022, the Company issued
the first issue of medium-term note of RMB 1
Medium Term Note billion of Zhejiang China Commodities City
Issuance Group Co., Ltd. in 2022, with a term of 3
years and annual interest payment at an
interest rate of 3.29%.
2. Profit distribution
√Applicable □Not Applicable
Unit: RMB
Profits or dividends to be distributed 400,863,014.85
Profits or dividends announced through 400,863,014.85
deliberation and approval
3. Sales return
□Applicable √Not Applicable
4. Other post-balance sheet date events
□Applicable √Not Applicable
XVI. Other important events
1. Correction of previous accounting errors
(1).Retrospective restatement
□Applicable √Not Applicable
(2).Prospective application
□Applicable √Not Applicable
2. Debt restructuring
□Applicable √Not Applicable
216 / 228
2021 Annual Report
3. Exchange of assets
(1).Exchange of non-monetary assets
□Applicable √Not Applicable
(2).Exchange of other assets
□Applicable √Not Applicable
4. Annuity plan
□Applicable √Not Applicable
5. Termination of operations
□Applicable √Not Applicable
6. Information of divisions
(1).Determination basis and accounting policy of reporting divisions
√Applicable □Not Applicable
Information of divisions is reported based on business divisions of the Group. In the
identification of region-based divisions, revenue is attributable to the divisions in the regions where
the clients are located, and assets are attributable to the divisions in the regions where the assets
are located. As the Group’s main operating activities and operating assets are both concentrated in
mainland China, it is not required to report more detailed information on region-based divisions.
The Group’s businesses are organized and managed separately based on the nature of
business and the products and services provided. Each business division of the Group is a
business department or a subsidiary and provides the products and services that face the risk
different from that faced by other business divisions and bring the compensations different from
those brought by other business divisions. The detailed information on business divisions are
summarized as follows:
(a) Market operation segment refers to the business that the Group is engaged in market
operation, including the collection of business space usage fees and the rent of auxiliary buildings
and office buildings;
(b) The commodities sales division engages in the purchase and sale of goods such as export
trade;
(c) The hotel service division engages in the operation of hotels including accommodation and
catering services;
(d) The exhibition advertising division engages in the design, production, placement and
agency of advertisements;
(e) Other services division covers the provision of market-related auxiliary services.
The transfer pricing between divisions is made based on the prices offered to third parties and
the then prevailing market prices.
(2).Financial information of reporting divisions
√Applicable □Not Applicable
Unit: RMB million
Exhibition Set-offs
Market Sales of Hotel Other
Item and among Total
operation goods service services
advertising divisions
Revenue from
external 2,756 2,618 138 147 375 - 6,034
transactions
Revenue from
inter-division 15 44 6 12 49 126 -
transactions
Profits before 1,683 -42 -75 6 158 73 1,657
217 / 228
2021 Annual Report
tax
Total assets 39,021 1,361 452 622 5,404 15,980 30,880
Total liabilities 23,290 1,269 523 586 1,059 10,234 16,493
Capital
1,493 2 190 11 72 - 1,768
expenditures
Long-term
equity
investment in 4,606 1 - - 1,166 - 5,773
joint ventures
and associates
(3).If the Company does not have reporting divisions or is unable to disclose the total
assets and total liabilities of each division, please explain
□Applicable √Not Applicable
(4).Other statements
□Applicable √Not Applicable
7. Other important transactions and events that have influence on investors’ decisions
□Applicable √Not Applicable
8. Others
□Applicable √Not Applicable
XVII. Notes to main items in financial statements of parent company
1. Accounts receivable
(1).Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
Account age Closing book balance
Within 1 year 23,204,362.72
1 to 2 years 100,234.00
2 to 3 years 352,588.44
Total 23,657,185.16
(2).Categorized disclosure based on the bad debt provision method
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Bad debt Bad debt
Book balance Book balance
Catego provision provision
ry Provisi Book Provisi Book
Proport Amoun on value Proport Amoun on value
Amount Amount
ion (%) t ratio ion (%) t ratio
(%) (%)
Accoun
ts
receiva
ble for
which
bad 23,657,18 27,502 23,629,68 14,686,56 14,988 14,671,57
100.00 0.12 100.00 0.10
debt 5.16 .47 2.69 5.66 .19 7.47
provisi
on is
made
by
Group
218 / 228
2021 Annual Report
23,657,18 27,502 23,629,68 14,686,56 14,988 14,671,57
Total / / / /
5.16 .47 2.69 5.66 .19 7.47
Accounts receivable for which bad debt provision is made individually:
□Applicable √Not Applicable
Explanation for making bad debt provision for accounts receivable by Group:
√Applicable □Not Applicable
Items for which the bad debts are provided for by combination: by combination of credit risk
characteristics
Unit: RMB
Closing balance
Name Accounts Bad debt Provision ratio
receivable provision (%)
Provision for bad debt by combination of 23,657,185.16 27,502.47 0.12
credit risk characteristics
Total 23,657,185.16 27,502.47 0.12
Standard for recognition of provision for bad debt by combination of credit risk characteristics and
descriptions:
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, please
refer to the disclosure of other receivables:
√Applicable □Not Applicable
Unit: RMB Yuan
2021 2020
Estimated book Expected Expected Estimated book Expected Expected
Account age
balance in credit loss credit loss in balance in default credit loss credit loss in
default rate (%) whole duration rate (%) whole duration
Within 1 year 23,204,362.72 0.01 50.87 14,267,749.52 0.01 1,350.33
1 - 2 years 100,234.00 0.29 286.13 407,254.08 0.51 2,075.80
2 -3 years 352,588.44 7.70 27,165.47 - 13.76 -
Over 3 years - 100.00 - 11,562.06 100.00 11,562.06
Total 23,657,185.16 27,502.47 14,686,565.66 14,988.19
(3).Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
Amount of change during the current
period
Category Opening balance Closing balance
Recovery or
Provision
reversal
Bad debt provision 14,988.19 50,558.20 38,043.92 27,502.47
for accounts
receivable
Total 14,988.19 50,558.20 38,043.92 27,502.47
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(4).Accounts receivable actually written off during the current period
□Applicable √Not Applicable
Information of write-off of important accounts receivable
219 / 228
2021 Annual Report
□Applicable √Not Applicable
(5).Accounts receivable from the five debtors with the highest closing balance
□Applicable √Not Applicable
(6).Accounts receivable derecognized due to transfer of financial assets
□Applicable √Not Applicable
(7).Amounts of assets and liabilities formed by the transfer of accounts receivable and
continuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
2. Other receivables
Presentation of items
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Interest receivable 92,249,275.44 121,401,210.48
Other receivables 1,114,837,610.55 2,530,219,399.58
Total 1,207,086,885.99 2,651,620,610.06
Other notes:
□Applicable √Not Applicable
Interest receivable
(1). Classification of interest receivable
√Applicable □Not Applicable
Unit: RMB
Item Closing balance Opening balance
Cash occupation fee for 92,249,275.44 121,401,210.48
receivables
Total 92,249,275.44 121,401,210.48
(2). Significant overdue interest
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
√Applicable □Not Applicable
As of December 31, 2021, the receivable capital occupation fee was the capital occupation fee
collectable by the Company for providing financial assistance to joint ventures and associated
enterprises.
220 / 228
2021 Annual Report
Dividend receivable
(1). Dividend receivable
□Applicable √Not Applicable
(2). Important dividend receivable with an account age longer than 1 year
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Other receivables
(1). Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
Account age Closing book balance
Within 1 year 6,125,410.03
1 to 2 years 1,103,741,875.92
2 to 3 years 200,000.00
Over 3 years 5,663,633.70
Bad debt provision for other receivables -893,309.10
Total 1,114,837,610.55
(2). Classification based on the nature of accounts
√Applicable □Not Applicable
Unit: RMB
Nature of receivable Closing book balance Opening book balance
Financial assistance receivable 1,103,178,748.00 2,480,172,779.00
from joint ventures
Receivables from self-operated - 42,493,714.00
land
Reserve 267,208.49 430,887.57
Withholdings, deposit and 11,391,654.06 7,142,019.01
margin
Total 1,114,837,610.55 2,530,239,399.58
(3). Bad debt provision
√Applicable □Not Applicable
Unit: RMB
Phase I Phase 2 Phase 3
Expected credit Expected credit loss Expected credit loss
Bad debt provision loss in the in the entire duration in the entire duration Total
coming 12 (credit has not been (credit has been
months impaired) impaired)
Balance on January
1, 2021
285,589.88 285,589.88
Provision made in
the current period
1,305,420.60 1,305,420.60
Current reversal 327,974.30 327,974.30
Current write-off 369,727.08 369,727.08
Balance on
December 31, 2021
893,309.10 893,309.10
221 / 228
2021 Annual Report
Significant changes in the book balance of other receivables with changes in loss provisions:
□Applicable √Not Applicable
Basis for the bad debt provision made in the current period and for assessing whether the credit risk
of financial instruments has increased significantly:
□Applicable √Not Applicable
(4). Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
Amount of change during the current period
Opening Closing
Category Recovery or Charge-off or
balance Provision balance
reversal write-off
Bad debt
provision for
285,589.88 1,305,420.60 327,974.30 369,727.08 893,309.10
other
receivables
Total 285,589.88 1,305,420.60 327,974.30 369,727.08 893,309.10
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(5). Other receivables actually written off during the current period
□Applicable √Not Applicable
(6). Other receivables from the five debtors with highest closing balance
√Applicable □Not Applicable
Unit: RMB
Weight in the
total closing Bad debt
Nature of Account balance of provision
Debtor Closing balance
receivable age other Closing
receivables balance
(%)
Yiwu Tonghui
Financial
Shangbo Real 880,728,548.00 1-2 years 78.94 -
assistance
Estate Co., Ltd.
Yiwu Handing
Financial
Shangbo Real 222,450,200.00 1-2 years 19.94 -
assistance
Estate Co., Ltd.
Zhejiang
Yuntong Current Over 3
596,580.00 0.05 -
Advertising Co., payments years
Ltd.
Yiwu Haoyang
Current Within 1
Construction 278,106.18 0.02 -
payments year
Co., Ltd.
Yiwu Chengxi
Sub-district Margin 225,000.00 1-2 years 0.02 -
Office
Total / 1,104,278,434.18 / 98.97 -
(7). Receivables involving government grants
□Applicable √Not Applicable
222 / 228
2021 Annual Report
(8). Other receivables derecognized due to transfer of financial assets
□Applicable √Not Applicable
(9). Amounts of assets and liabilities formed by the transfer of other receivables and
continuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
3. Long-term equity investment
√Applicable □Not Applicable
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment
in 4,190,057,937.33 570,000,000.00 3,620,057,937.33 3,727,825,391.43 570,000,000.00 3,157,825,391.43
subsidiaries
Investment
in
associates 4,625,942,083.47 - 4,625,942,083.47 2,925,310,036.59 - 2,925,310,036.59
and joint
ventures
Total 8,816,000,020.80 570,000,000.00 8,246,000,020.80 6,653,135,428.02 570,000,000.00 6,083,135,428.02
(1). Investment in subsidiaries
√Applicable □Not Applicable
Unit: RMB
Current Closing
Decrease in
Opening Increase in the Closing provision balance of
Investee the current
balance current period balance for impairment
period
impairment provision
Yiwu China
Commodities City
Supply Chain 55,255.02 100,741,437.51 - 100,796,692.53 - -
Management Co.,
Ltd.
Yiwu China
Commodities City
50,073,398.48 51,358,314.60 - 101,431,713.08 - -
Import and Export
Co., Ltd.
Yiwu China
Commodities City
Tourism 70,264,019.49 1,168,355.68 - 71,432,375.17 - -
Development Co.,
Ltd.
Yiwu China
Commodities City
Overseas
100,041,073.44 749,590.26 - 100,790,663.70 - -
Investment and
Development Co.,
Ltd.
Yiwu China
Commodities City
Commerce and
100,000.00 - - 100,000.00 - -
Trade Service
Training Center Co.,
Ltd.
Zhejiang Yindu Hotel
Management Co., 1,570,540.29 4,177,181.55 - 5,747,721.84 - -
Ltd.
223 / 228
2021 Annual Report
Yiwu China
Commodities City 81,534,944.31 19,896,768.77 - 101,431,713.08 - -
Big Data Co., Ltd.
Yiwu
Comprehensive
Bonded Zone
6,014,844.64 12,677,291.68 - 18,692,136.32 - -
Operation and
Management Co.,
Ltd.
Yiwu China
Commodities City
1,124,741.06 4,670,316.71 - 5,795,057.77 - -
Research Institute
Co., Ltd.
Zhejiang Huajie
Investment and
53,121,810.63 8,738,911.49 - 61,860,722.12 - -
Development Co.,
Ltd.
Yiwu China
Commodities City
Assets Operation 5,080,000.00 4,920,000.00 - 10,000,000.00 - -
and Management
Co., Ltd.
Yiwu China
Commodities City 18,044,533.91 812,743.83 - 18,857,277.74 - -
Exhibition Co., Ltd.
Yiwu China
Commodities City 39,221,752.54 761,983.76 - 39,983,736.30 - -
Advertising Co., Ld.
Hangzhou Shangbo
Nanxing Property 50,000,000.00 - - 50,000,000.00 - -
Co., Ltd.
Yiwu Commodities
City Gonglian 200,000,000.00 - - 200,000,000.00 - -
Property Co., Ltd.
Yiwu Shangbo
300,000,000.00 - - 300,000,000.00 - -
Property Co., Ltd.
Yiwu China
Commodities City
200,594,000.00 - 150,000,000.00 50,594,000.00 - -
Information
Technology Co., Ltd.
Yiwu China
Commodities City
23,471,131.52 39,910,658.40 - 63,381,789.92 - -
Logistics and
Distribution Co., Ltd.
Haicheng Yiwu
China Commodities
City Investment 43,709.21 670,688.91 - 714,398.12 - 570,000,000.00
Development Co.,
Ltd.
Yiwu China
Commodities City
1,957,469,636.88 240,978,302.76 - 2,198,447,939.64 - -
Financial Holdings
Co., Ltd.
Zhejiang China
Commodities City
- 120,000,000.00 - 120,000,000.00 - -
Group Commercial
Factoring Co., Ltd.
Total 3,157,825,391.42 612,232,545.91 150,000,000.00 3,620,057,937.33 - 570,000,000.00
(2). Investment in associates and joint ventures
√Applicable □Not Applicable
Unit: RMB
Change in the current period Closi
ng
Investment
balan
Investment Opening amount gains or losses Closing amount
Additional Declared a cash ce of
Unit Balance recognized Balance
investment dividend or profit impai
with the equity
rmen
method
t
224 / 228
2021 Annual Report
provi
sion
1. Joint ventures
Yiwu Shanglv 365,830,756.91 - 17,837,597.30 - 383,668,354.21 -
Yiwu
Rongshang 22,319,075.64 - 195,068,462.30 - 217,387,537.94 -
Property
Yiwu
Chuangcheng 11,444,786.74 - 76,618,539.06 - 88,063,325.80 -
Property
Others 8,713,045.29 17,850,000.00 23,602,002.68 - 50,165,047.97 -
Sub-total 408,307,664.58 17,850,000.00 313,126,601.34 - 739,284,265.92 -
2. Associates
Binjiang
154,152,267.42 - 17,523,961.66 137,200,000.00 34,476,229.08 -
Shangbo
Huishang Micro-
71,396,566.07 - 11,428,130.57 - 82,824,696.64 -
finance
Chouzhou
371,320,662.02 - 54,700,187.22 - 426,020,849.24 -
Financial Lease
Pujiang Lvgu
Property Co., 370,318,840.76 - 79,608,970.60 - 449,927,811.36 -
Ltd.
CCCP 1,500,517,785.02 1,225,000,000.00 60,365,490.42 - 2,785,883,275.44 -
Others 49,296,250.72 50,000,000.00 8,228,705.07 - 107,524,955.79 -
Sub-total 2,517,002,372.01 1,275,000,000.00 231,855,445.54 137,200,000.00 3,886,657,817.55 -
Total 2,925,310,036.59 1,292,850,000.00 544,982,046.88 137,200,000.00 4,625,942,083.47 -
Other notes:
None
4. Operating revenue and operating cost
(1). Overview of operating revenue and operating cost
√Applicable □Not Applicable
Unit: RMB
Amount in the current period Amount in the previous period
Item
Revenue Cost of sales Revenue Cost of sales
Main 2,538,880,872.96 944,011,791.40 2,323,724,833.35 979,994,093.76
business
Other 383,244,529.97 118,870,105.91 680,736,868.13 77,147,542.46
businesses
Total 2,922,125,402.93 1,062,881,897.31 3,004,461,701.48 1,057,141,636.22
(2). Revenue generated from contracts
√Applicable □Not Applicable
Unit: RMB
Classified by type of contract Total
Types of goods
The use of shops in the Commodity City and its supporting 2,442,029,375.27
services
Hotel accommodation and catering services 151,717,051.19
Revenue from use fees 100,190,909.74
Other services 8,074,777.37
Classified by business area
Chinamainland 2,702,012,113.57
Classified by contract period
Revenue confirmed at certain time point
Hotel catering services 100,740,246.11
Other services 7,806,164.06
Revenue confirmed during certain time period
The use of shops in the Commodity City and its supporting 2,442,029,375.27
225 / 228
2021 Annual Report
services
Hotel accommodation service 50,976,805.08
Revenue from use fees 100,190,909.74
Other services 268,613.31
Total 2,702,012,113.57
Description of the income from contracts:
√Applicable □Not Applicable
The income recognized in the current year and included in the opening book value of
contractual liabilities is as follows:
Unit: RMB
Type of contract Current period
The use of shops in the Commodity City and its 2,252,809,691.96
supporting services
Hotel accommodation service 13,367,212.91
Other services 9,059,873.51
Total 2,275,236,778.38
(3). Contract performance obligations
√Applicable □Not Applicable
The information related to the performance obligations of the Group is as follows:
The use of shops in the Commodity City and its supporting services
The contractual performance obligation is fulfilled when providing the use of shops in the
Commodity City and the supporting services for business. For the use of shops in the Commodity
City and the supporting services for business, the progress of contract performance is determined
based on the number of using days of the shops. Customers usually need to pay in advance before
the use of shops in the Commodity City and the supporting services for business are provided.
Hotel accommodation business
The performance obligation is fulfilled when providing hotel accommodation services. For the
hotel accommodation business, the progress of contractual performance is determined based on
the number of days of stay. For hotel accommodation services, a partial deposit is collected from
the customer first, and the remaining contract price is usually collected upon the completion of the
hotel accommodation services.
Hotel catering business
The performance obligation is fulfilled when the hotel catering services are provided. The
contract price for hotel catering services is usually charged when the hotel catering services are
performed.
Fixed -time paid funding services
The performance obligation is fulfilled when the fixed-time paid funding service is provided. For
the fixed-time paid funding service, the progress of contractual performance is determined based on
the number of using days of the fund. For the fixed-time paid funding service, the contract price is
usually charged regularly as agreed in the contract.
(4). Amortization to remaining contract performance obligations
□Applicable √Not Applicable
Other notes:
As of December 31, 2021, the transaction price allocated to the remaining performance
obligations was RMB 3,029,673,931.75. The Group expects that this amount will be recognized as
an income in the coming 5 years with the progress of relevant service provision.
5. Investment income
√Applicable □Not Applicable
Unit: RMB
Item Amount in the current Amount in the
226 / 228
2021 Annual Report
period previous period
Income from long-term equity investment with the 40,000,000.00 -
cost method
Income from long-term equity investment 544,982,046.87 64,824,176.63
calculated with the equity method
Investment income from disposal of long-term - 551,295,000.00
equity investment
Dividend income from other equity instruments 12,542,733.80 10,034,187.04
investment during holding period
Investment income from disposal of held-for-trading 67,265.74 377,061.16
financial assets
Investment income from disposal of wealth - 461,232.89
management products
Income acquired from other non-current financial 728,950.32 31,738,134.32
assets during the holding period
Total 598,320,996.73 658,729,792.04
Other notes:
None
6. Others
□Applicable √Not Applicable
XVIII. Supplements
1. Detailed statement of current non-recurring items
√Applicable □Not Applicable
Unit: RMB
Item Amount Remarks
Gain or loss from the disposal of non-
-561,416.89
current assets
Government grants that are recognized in
Please refer to details of
the current profit or loss, excluding
other income and
government grants that are closely related
23,559,898.01 government grants
to the businesses of the Company and are
accounted for profit or
provided in a fixed amount or quantity
loss for the current period
according to the unified national standards
Fees paid for using fund
Cash occupation fees charged from non- collected from joint
financial enterprises that are recognized in 107,299,598.45 ventures including
the current profit or loss Tonghui Shangbo and
Handing Shangbo
Gain or loss from changes in fair value of
held-for-trading financial assets, derivative
financial assets, financial liabilities held for Mainly due to gains or
trading and derivative financial liabilities, losses from the changes
and investment income from the disposal in fair value arising from
of held-for-trading financial assets, 7,298,587.58 the holding of held-for-
derivative financial assets, financial trading financial assets
liabilities held for trading, derivative and other non-current
financial liabilities and other debt financial assets
instruments, except for effective hedging
during the ordinary course of business
Net income from other non-operating
3,504,923.76
activities
Other profit and loss items that meet the 1,604,200.49
227 / 228
2021 Annual Report
definition of non-recurring profit and loss
Less: effect of income tax 28,698,936.71
Effect of minority interest 1,718,948.89
Total 112,287,905.80
Explanations shall be made for the non-recurring items identified by the Company according the
Explanatory Announcement No. 1 on Information Disclosure by Companies Publicly Offering
Securities – Non-recurring Items, and for the Company identifying the non-recurring items
enumerated in the Explanatory Announcement No. 1 on Information Disclosure by Companies
Publicly Offering Securities – Non-recurring Items as recurring items.
□Applicable √Not Applicable
2. ROE and EPS
√Applicable □Not Applicable
Weighted average EPS
Profits in the reporting period
ROE (%) Basic EPS Diluted EPS
Net profits attributable to
common shareholders of the 9.38 0.25 0.25
Company
Net profits attributable to
common shareholders of the
8.59 0.22 0.22
Company after deducting non-
recurring gains and losses
3. Differences in accounting data between foreign and Chinese accounting standards
□Applicable √Not Applicable
4. Others
□Applicable √Not Applicable
Chairman of Board of Directors: ZHAO Wenge
Date of approving by the Board of Directors for release: March 22, 2022
Amendment
□Applicable √Not Applicable
228 / 228
