OFFCN EDUCATION TECHNOLOGY CO., LTD.
2020 Semi-Annual Report
Stock Code: 002607
Stock Abbr.: OFFCN EDU
August, 2020
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
2
Chapter I. Important Notes, Contents and Definitions
Whether directors, supervisors or senior managers have any objection to the contents of this semi-annual report or
cannot guarantee its authenticity, accuracy and completeness.
□ Yes √ No
The board of directors, the supervisor committee, the directors, supervisors, and senior management of the
company shall hereby guarantee the authenticity, accuracy and completeness of this semi-annual report without
misrepresentations, misleading statements, or material omissions, and bear individual and joint legal liabilities.
Wang Zhendong, the Company’s legal representative, Shi Lei, the responsible person in charge of accounting
work, and Luo Xue, the person in charge of the accounting department, hereby declare that the financial report in
this semi-annual report is authentic, accurate and complete.
All directors attended the board meeting approving this semi-annual report.
Non-standard audit report
□Applicable √ Not applicable
Risk tips of the future planning involved in the semi-annual report
√Applicable □ Not applicable
The forward-looking statements on future plans involved in this semi-annual report do not constitute a substantial
commitment to investors. Please pay attention to the potential investment risks.
Whether the Company needs to comply with the disclosure requirements of a particular industry.
No
Plan of semi-annual profit distribution or plan of increasing share capital by converting capital reserves reviewed
by the board of directors within reporting period.
□Applicable √ Not applicable
The Company plans not to distribute cash dividends, bonus shares, nor to increase share capital by converting
capital reserves.
Note: The Company’s 2020 semi-annual report is prepared and published in Chinese version, and the English
version is for reference only. Should there be any inconsistency between the Chinese version and English version,
the Chinese version shall prevail.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
3
Contents
Chapter I. Important Notes, Contents and Definitions ................................................................................... 2
Chapter II. Corporate Profile & Key Financial Indicators .............................................................................. 6
Chapter III. Corporate Business Summary ..................................................................................................11
Chapter IV. Discussion and Analysis of Corporate Operating ........................................................................16
Chapter V. Significant Events ...................................................................................................................30
Chapter VI. Changes in Shares and Information about Shareholders ..............................................................62
Chapter VII. Preferred Shares ...................................................................................................................70
Chapter VIII. Convertible Corporate Bonds ................................................................................................71
Chapter IV. Information of Directors, Supervisors and Senior Executives .......................................................72
Chapter X. Corporate Bonds .....................................................................................................................73
Chapter XI. Financial Report ....................................................................................................................74
Chapter XII Documents Available for Reference ....................................................................................... 223
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
4
Definitions
Term(s) Definition
The listed Company , The Company,
Offcn Edu
Offcn Education Technology Co., Ltd.
Yaxia Auto Yaxia Automobile Co., Ltd. (predecessor of the listed Company)
The Counterparty, Li Yongxin and
other 10 Counterparties, All
Shareholders of Offcn Ltd.
Lu Zhongfang, Li Yongxin, Wang Zhendong, Aerospace Industry, Guangyin Venture, Kerui
Technology Innovation, Guo Shihong, Liu Bin, Zhang Yongsheng, Yang Shaofeng, Zhang
Zhi’an
This major assets restructuring,
This transaction,
This restructuring
Base on the assessment, Yaxia Auto takes all assets and liabilities other than retained assets
as the exchange-out assets to swap the equivalent portion of 100% equity of Offcn which
held by Li Yongxin and other 10 counterparties, and the swapping deficiency is settled by
issuance of Yaxia Auto shares according to the proportion of shareholding. At the same time,
Yaxia Industrial transfers 80,000,000 and 72,696,561 Yaxia Auto shares to Offcn Partnership
and Li Yongxin respectively. All shareholders of Offcn entrust Yaxia Auto to directly deliver
the exchange-out assets to Yaxia Industrial or its designated third party as the consideration
for the transfer of 80,000,000 shares to Offcn Partnership, and Li Yongxin offers RMB1
billion in cash as the consideration for the transfer of 72,696,561 shares.
Retained Assets
In this transaction, the retained assets of the listed Company as of the evaluation base date,
including:
18% shares of Shanghai Zuihuibao Network Technology Co., Ltd.
7.81% shares of Anhui Ningguo Rural Commercial Bank Co., Ltd.;
12 cases of state-owned land use rights and attached properties and construction in process
on the land.
Exchange-out Assets All assets and liabilities of Yaxia Auto except retained assets
Yaxia Industrial Anhui Yaxia Industrial Co., Ltd.
Phase I Employee Stock Ownership
Plan
Phase I employee stock ownership plan of Yaxia Auto Co., Ltd.
Yaxia Industrial and Persons Acting
in Concert
Yaxia Industrial, Zhou Xiayun, Zhou Hui, Zhou Li, Phase I employee stock ownership plan
Aerospace Industry Beijing Aerospace Industry Investment Fund (Limited Partnership)
Guangyin Venture Beijing Guangyin Venture Capital Center (Limited Partnership)
Kerui Technology Innovation Beijing Kerui Technology Innovation Investment Center (Limited Partnership)
Offcn Partnership
Beijing Offcn Future Information Consulting Center (Limited Partnership), established by
all shareholders of Offcn Ltd. in accordance with the shareholdings ratio, which is used to
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
5
Term(s) Definition
undertake 80,000,000 shares of the listed Company transferred by Yaxia Industrial.
Offcn Ltd.
Beijing Offcn
Predecessor of Beijing Offcn
Beijing Offcn Education Technology Co., Ltd. (predecessor: Beijing Offcn Education
Technology Stock Co., Ltd.)
Profit forecast compensation
agreement
Profit forecast compensation agreement.signed by Yaxia Auto and Lu Zhongfang, Li
Yongxin, Wang Zhendong, Guo Shihong, Liu Bin, Zhang Yongsheng, Yang Shaofeng,
Zhang Zhi’an.
CSRC China Securities Regulatory Commission
Company Law Company Law of the People’s Republic of China
Securities Law Securities Law of the People’s Republic of China
Articles of Association Articles of Association of Offcn Education Technology Co., Ltd.
RMB Chinese yuan
The Live Program
Students can watch real-time online teaching (including but not limited to video, audio.,
PPT, animation, etc.) on the Internet within a fixed time. During the teaching process,
interaction among teachers and students can be realized through voice or text.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
6
Chapter II. Corporate Profile & Key Financial Indicators
Section I. Corporate profile
Stock Abbreviation OFFCN EDU Stock Code 002607
Stock Abbreviation after Changed
Stock Exchange Shenzhen Stock Exchange
Name of the Company
in Chinese
中公教育科技股份有限公司
Abbreviation of the Company’s
Name in Chinese
中公教育
Name of the Company
in English
Offcn Education Technology Co., Ltd.
Abbreviation of the Company’s
Name in English
OFFCN EDU
Legal Representative of the
Company
Wang Zhendong
Note: if the stock abbreviation of the Company changes during the period from the end of the reporting period to
the disclosure date of the semi-annual report, the changed stock abbreviation shall be disclosed at the same time.
Section II. Contact information
Secretary of the Board Representative of Securities Affairs
Name Gui Hongzhi Gu Pan
Address
Block B, Hanhua Century Mansion, No.23 Xueqing
Road, Haidian District, Beijing, China
Block B, Hanhua Century Mansion, No.23 Xueqing
Road, Haidian District, Beijing, China
Tel. 010-83433677 010-83433677
Fax 010-83433666 010-83433666
E-mail ir@offcn.com ir@offcn.com
Section III. Other information
1. Company contact information
Whether the Company’s registered address, office address and its postal code, website and/or email address
changed during the reporting period
□ Applicable √ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
7
The Company’s registered address, office address and its postal code, website and email address remain the same
during this reporting period. Details can be found in 2019 Annual Report.
2. Location of information disclosure and storage
Whether location of information disclosure and storage changed during the reporting period
□ Applicable √ Not applicable
The newspaper designated by the Company for information disclosure, website designated by CSRC for
semi-annual report publishing, and storage location of this semi-annual report remain the same during the
reporting period. Details can be found in 2019 Annual Report.
3. Other relevant information
Whether other relevant information changed during the reporting period
□Applicable √Not applicable
Section IV. Key accounting information and financial indicators
Does the Company needs to adjust its financial information retrospectively or restate its accounting information of
previous year?
□ Yes √ No
Current reporting period
Same period of the
previous year
Increase/decrease in current
reporting period over same
period of the previous year
Revenue (RMB) 2,807,980,480.60 3,637,419,515.48 -22.80%
Net profit attributable to shareholders
of the listed Company (RMB)
-233,026,645.16 493,025,465.15 -147.26%
Net profit attributable to shareholders
of the listed Company after deducting
non-recurring gains or losses
(RMB)
-367,542,382.83 472,434,917.34 -177.80%
Net cash flow from operating
activities (RMB)
4,063,675,504.19 4,354,766,798.53 -6.68%
Basic earnings per share (RMB/share) -0.040 0.08 -150.00%
Diluted earnings per share
(RMB/share)
-0.040 0.08 -150.00%
Weighted average return on assets -9.00% 16.56% -25.56%
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
8
End of current reporting
period
End of the previous year
Increase/decrease at the end
of this reporting period over
end of the previous year
Total assets (RMB) 13,263,976,215.43 9,960,705,427.94 33.16%
Total net assets attributable to
shareholders of the listed Company
(RMB)
1,745,243,405.30 3,431,545,903.82 -49.14%
The total share capital of the Company as of the previous trading day before disclosure：
The total share capital of the company as of the previous
trading day before disclosure（share）
6,167,399,389
Fully diluted earnings per share using latest share capital：
Dividend paid for preferred shares 0.00
Fully diluted earnings per share using latest share capital
(RMB/share)
-0.0378
Section V. Differences of accounting data under domestic and overseas accounting standards
1. Differences between net profits and net assets disclosed in the financial reports under Chinese accounting
standards and international accounting standards :
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in the financial reports of the Company
under Chinese accounting standards and international accounting standards during the reporting period.
2. Differences between net profits and net assets disclosed in the financial reports under Chinese accounting
standards and overseas accounting standards:
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in financial reports of the Company under
Chinese accounting standards and overseas accounting standards during the reporting period.
3. Reasons for the differences between accounting data under domestic and foreign accounting standards
□ Applicable √ Not applicable
Section VI. Items with non-recurring gains or losses and the amounts
√ Applicable □ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
9
Unit:RMB
Items Amount Note
Disposal gains or losses of non-current assets (including the offset
part of the provision for asset impairment)
162,043.59
Tax refunds, reductions
and exemptions with unauthorized approval or without formal
approval documents
Government subsidies included in the current gains and losses
(closely related to the business of the enterprise, except for
government subsidies that are fixed or quantified in accordance
with national unified standards)
169,304.01
Capital occupation fee charged to non-financial enterprises
included in current gains or losses
Profits derived from the fair value of identifiable net assets when
the investment cost from the subsidiaries, associates and joint
ventures is less than the investment.
Gains or losses from the exchange of non-monetary assets
Gains or losses from entrusting others to invest or manage assets 90,927,476.86
Provisions for impairment of any asset due to force majeure
factors, such as natural disasters
Gains or losses from debt reconstruction
Enterprise restructuring expenses, such as personnel placement
expenses, integration expenses, etc.
Gains or losses from the excess of the unfair transaction price over
the fair value
Net profits or losses in the current period from the beginning of
the period to the date of the merger arising from a business
combination under common control
Gains or losses arising from contingent events unrelated to the
Company’s normal business operations
Gains and losses on changes in fair value arising from the
possession of transactional financial assets, derivative financial
assets, transactional financial liabilities, and derivative financial
liabilities; and the investment income from the disposal of
transactional financial assets, derivative financial assets,
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
10
transactional financial liabilities, derivative financial liabilities and
other debt investments except the effective hedging business
related to the company’s normal business operations.
The reverse of receivables and the provision for contract assets
impairment which are tested for impairment separately
Gains or losses from external entrusted loans
Gains or losses arising from changes in the fair value of
Investment properties that are subsequently measured at the fair
value model
The impact of a one-off adjustment on the current gains or losses
according to the requirements of taxation, accounting and other
laws and regulations
Custody income from entrusted operations
Other non-operating income and expenses except for the items
above
-93,154.28
Other gains or losses items that meet the definition of
non-recurring gains and losses
43,350,067.49
Less: Impact on income tax
Impact on minority shareholders’ equity (after tax)
Total 134,515,737.67 --
Provide explanations for classifying items of non-recurring gains and losses defined or listed in the Explanatory
Announcement No. 1 for Public Company Information Disclosures – Non-recurring Gains and Losses as items of
recurring gains and losses.
□ Applicable √ Not applicable
The Company has no non-recurring gains and losses items that are defined or listed in the Explanatory
Announcement No. 1 for Public Company Information Disclosures – Non-recurring Gains and Losses during the
reporting period.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
11
Chapter III. Corporate Business Summary
Section I. The Company’s main business during the reporting period
Offcn Edu is a leading full-category vocational education institution in China, and it is also the pioneer and leader
in the field of recruitment examination training. the Company's main business covers three major sectors
including recruitment examination training, academic qualification preparation and vocational training, and it
provides more than 100 categories of comprehensive vocational training services. The Company operates in more
than 1,300 outlets across the country, covering more than 300 prefecture-level cities, and is rapidly expanding into
thousands of counties and universities.
Offcn Edu mainly serves knowledge-based employment population including college students, university
graduates, and various professionals, ranging from age 18 to 45. Employment and vocational improvement are
their two core demands. Vocational skills determines labor productivity which is the key to China's success in
overcoming the “middle income trap”. Employment is not only a barometer of economic growth, but also a
fulcrum of the entire vocational education. It is also the ultimate arena for vocational education institutions. For
this reason, the vocational education institutions that can get closer to the employment needs in the largest scope
and to the greatest extent can get more opportunities to turn the flywheel of multi-category growth and can
become a dominator in the overall vocational education.
Currently, Offcn Edu has a large-scale full-time R&D team of more than 2,700 people, a large-scale teacher team
of more than 18,000 people, and a total staff of more than 41,000 people. Relying on outstanding team execution
and nationwide vertical integration and rapid response capabilities, the Company has developed into an
innovation-driven high-growth enterprise platform.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
12
Section II. Major Changes in Key Assets
1. Major Changes in Key Assets
Key Assets Description on major Changes
Equity assets No major changes
Fixed assets No major changes
Intangible assets No major changes
Construction in progress No major changes
Accounts Receivable Mainly due to the increase in rent receivable
Other receivables Mainly due to deposits, guarantees, and intention fee for land purchase
Other current assets Mainly due to the increase in the prepaid rent and property fee
Deferred tax assets Mainly due to the payment of unpaid remuneration of the previous year
Other non-current assets Mainly due to the prepayment of renovation costs
2. Key Overseas Assets
□ Applicable √ Not applicable
Section III. Analysis of the Company’s core competitiveness
The Company's core competitiveness is based on the formation of an enterprise platform which empowers rapid
growth driven by the capability of vertically integrated quick response. The key driving factors are as follows:
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
13
1. Outstanding execution fosters the fast-growth culture
The team built the Company with outstanding execution, and fostered the Company's fast-growth culture through
a long period of endeavoring to grow in adversity and persistently pursuing to break the growth boundary. The
team always maintains the firm will and belief to create the future, invests audaciously, achieves economies of
scale in a highly fragmented and regionally isolated market, strives to be close to the optimal output, captures
opportunities, and confronts fluctuations. With constant self-revolution of creative destruction, the team can
always create new markets in inconspicuous places, making sustained rapid growth possible.
2. Clustered professional R&D output continuously increases the momentum for innovation
At the beginning of the career, the Company took the lead in carrying out full-time and professional R&D, based
on which it created a brand-new market. Over the past decade, the Company has fostered an expert team with rich
practical experience of R&D and R&D management through front-line teaching practice and adaption to market
upgrading. Under the joint lead of the founding team and the expert team, a full-time R&D team of more than
2,700 people has formed. With the expansion of categories and the involvement of different sectors, the
Company's professional R&D not only achieves the continuous division of labor under the scale effect, but also
continuously creates R&D cluster effect of continuous collaboration between categories, which greatly improves
the efficiency of R&D, especially the graft efficiency of stock R&D resources for new categories and new
businesses.
3. Rapid response capability based on the vertical integrated system supports the Company’s sustainable
high growth structurally and efficiently.
The high operation efficiency far beyond the general industries is a necessity to realize scale economy and
establish competitive barrier in the decentralized market. Therefore, vertical integrated rapid response system and
capability can best adapt to this kind of market environment. In each exam, ‘Business outlets - Headquarters
command center - Teaching sites’ are giving responses and feedback with high frequency every day. Thus, the
effect of management and learning far above average can be realized.
Vertical integrated corporate structure can not only realize the high efficiency of operation, but also be effectively
compatible with the management impact brought by high growth and rapid business category expansion. So
investment in and innovation on this corporate structure has always been a central part of the management reform.
At present, Offcn Edu has established more than 1,300 business outlets covering 300 prefecture-level cities with
constantly accelerating expansion. Simultaneously, the headquarters command center continues to seek the scale
effect of management with the help of management reform and digital operation. In recent years, Offcn Edu has
also continuously invested in the construction of large-scale one-stop bases for food, housing and learning to
promote the realization of large-scale factory operation on the teaching sites.
4. “The flywheel effect of multi-categories growth” magnifies the Company’s growth prospects step by step
Investment capacities between multi-categories gets accumulated and superposed, and the flywheel effect of
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
14
multi-categories growth constantly increases, and the development of new and old categories mutually amplifies
investment adequacy, thus a stronger ability of operating infrastructure is jointly promoted .
At present, the flywheel effect of growth has expanded to involve the three sectors of recruitment examination
training, academic qualification preparation and vocational training, and magnified the Company’s growth
prospects step by step. The sector of academic qualification preparation will become an important impetus for
growth in 3 to 5 years while the sector of vocational training will become the largest and the most significant
contributor to the growth of the Company in 5 to 10 years.
5. Digital operation forms the enterprise platform with “real-time situational awareness”
The team’s exploration for digital operation has lasted for more than 15 years, and in recent years, the investment
scale for digital operation infrastructure has increased significantly. One reason is to meet the management needs
for fast growth and rapid expansion of categories. The other reason lies in the great adaptability of vertically
integrated fast response system to the digitization. After the system was integrated with the digitization in depth, it
generated higher operating efficiency and significantly improved the front and background response frequency
from units of days to a level close to “real-time situational awareness”, which greatly enhanced the Company’s
core competitiveness based on speed economy.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
15
6. The values of kindness and altruism allow the Company to maintain strong organizational cohesion in
high growth
As a knowledgeable staff-intensive vocational education institution, the Company has established a concise and
effective corporate culture in the long journey of arduous entrepreneurship, with the core value of “Be Kind & Do
Right” and advocating altruism. Not only has it become a company system, but also the founding team has taken
the lead to set an example, driven it step by step, and unswervingly implemented it in the operation, making the
values of Offcn Edu ubiquitous and flourishing in the enterprise. This distinctive and tangible corporate culture
allows the company to maintain strong organizational cohesion in high growth.
7. Offcn Edu strives to strengthen the Party's construction to promote the healthy and vigorous
development of the Company
From the establishment of the Party committee in 2018 to the establishment of the first Party school of
non-public-owned enterprise in 2019, the Party committee of Offcn Edu has fully utilized the Company’s
advantages of knowledge, theory, and technology and actively promotes and implements the Party’s political
routes, principles, and policies to employees and students. Meanwhile, Offcn Edu focuses on the integration of the
Party building of non-public enterprises and corporate culture construction to promote the healthy and vigorous
development of the enterprise.
As of June 30, 2020, the Company had more than 10,000 Party members, accounting for more than one-fifth of
the total number of employees.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
16
Chapter IV. Discussion and Analysis of Corporate Operating
Section I. Overview
In the first half of this year, the outbreak of the pandemic led to the national suspension from work and classes. As
a result, a large number of recruitment examinations were postponed.These significant changes have had a huge
impact on the entire education and training industry. With the gradual lifting of the pandemic, the industry has
fully recovered and achieved rapid growth.
In response to the new situation after the pandemic, the central government put forward policies to ensure stability
and security in six areas (Ensure stability in employment, financial operations, foreign trade, foreign investment,
domestic investment, and expectations; ensure security in job, basic living needs, operations of market entities,
food and energy security, stable industrial and supply chains, and the normal functioning of primary-level
governments). These policies make the "employment" a top priority, which is evident in three measures. The first
is to expand employment in public sectors. The number of civil servants, governmental institutions, state-owned
enterprises and other recruitment increased by more than 20% year-on-year. The second is to expand admissions
of postgraduate students, college students applying for university study, students pursuing second bachelor's
degrees, and students aimed at vocational education, the number of whom has reached 1.7 million. These
measures indicate a clear expansion trend in the mid-term and long-term recruitment sector. In this case, the
education and training industry will still be developing at a medium and high speed in the next 5 to 10 years.
Faced with the sudden outbreak of the pandemic, which had a huge impact on the operating environment, the
Company responded quickly and effectively to maximize the enterprise’s strengths of digital resources, to
considerably increase the total number of online classes, and to fully explore the potential of online and offline
curriculum integration, which not only ensures the continuity of operation and teaching, but also strengthens the
enterprise’s leading force of online and offline curriculum integration, an innovative product. Besides, the
Company continues to expand teacher-reserve and branches, focusing on the long-term expansion trend. Due to
the postponement of related examinations, part of the revenue was delayed for nearly 4 months, which made the
Company’s recognized operating revenue decreased during the reporting period, compared with the same period
of last year. With the resumption of all kinds of recruitment examinations, the Company has entered a period of
explosive growth.
The number of college graduates reached 8.74 million in this year of 2020, creating a new record. However, the
nationwide pandemic has further increased employment pressures. Two decades after the expansion of university
enrollment, the employment population structure has undergone significant changes, and the number of college
graduates has reached more than half of the total of new employees.The focus of stabilized employment will also
be shifted from the general job seekers to college graduates.
With the changes of the international situation, the central government put forward a new policy of internal
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
17
circulation; and an important support for the development of internal circulation is the new urbanization. The new
urbanization is not only the reconfirmation of the trend of mid-term and long-term urbanization, but also the
refinement of the urbanization path, which presents diverse patterns of urban clusters with different levels, such as
metropolitan areas, central cities, counties, featured towns ,etc, which can further expand the development
space.More importantly, the new urbanization will also be a deepening process and the most important aspect of
which is the deepening and upgrading of public services.Therefore, the following expansion of public sector’s
recruitment will be strongly guided by the new policy on internal circulation..
1.The postponement of recruitment examinations result in the delay of income recognition, but the trend of
enrollment expansion is again confirmed.
The civil servant provincial joint examination was postponed for nearly 4 months, and other recruitment
examinations were also postponed to a certain extent in the first half of this year. In the case that the agreement
class accounted for a relatively high proportion, the delay of the examination resulted in a significant discrepancy
between the level of revenue recognition for the reporting period and that of actual operation.During the reporting
period, the Company achieved a total income of RMB 2,807,980,480.60 , down 22.80% from
RMB3,637,419,515.48 in the same period of last year.
Contrary to the decrease in recognized revenue, the number of students increased by 37.08% year-on-year, from
1,788,952 to 2,452,252 during the reporting period; the contract liabilities (advanced payment after deducting the
VAT ) was RMB 7,222,148,935.39, an increase of 31.50% over the same period of last year.
Normally, the first half of the year is an intensive period for civil service examinations. As a result of the
pandemic, the focus of the civil service examinations was delayed by 3-4 months and moved back to the second
half of the year. Nevertheless, not only did the examination resume successfully, but the number of recruits also
achieved a more consistent or even higher growth rate than expected. Compared with civil servants recruitment,
there is much more room for recruitment in public services such as teachers, doctors and police. Therefore, the
reconfirmation of expansion trend in civil servants recruitment clearly indicates the expansion trend in the
recruitment of public service categories.
The key operating resources and performance indicators are shown in the table below:
Item Indicators
At the end of the
reporting period
At the end of last year
Change at the end of this
reporting period
compared with the end of
last year
Operating resources
Directly operated branches 1,335 1,104 20.92%
Employees 41,911 35,209 19.03%
R&D personnels 2,702 2,051 31.74%
Teaching professionals 18,036 13,475 33.85%
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
18
Item Indicators
At the end of the
reporting period
Same period last year
Year-on-year
change (%)
Business &
Revenues
Revenue of face-to-face
training (RMB)
1,622,095,227.36 3,167,825,822.38 -48.79%
Revenue of online training
(RMB)
1,166,091,772.30 444,519,141.21 162.33%
Training Students
2,452,252 1,788,952 37.08%
Revenue (RMB) 2,807,980,480.60 3,637,419,515.48 -22.80%
Net profits Attributable to
Shareholders of the
Company(RMB)
-233,026,645.16 493,025,465.15 -147.26%
2. The outbreak of Covid-19 is preventable, controllable, and predictable, and the Company has established
a comprehensive response system as a countermeasure, which greatly enhanced its leading force in
education and training industry.
The outbreak of the pandemic has caused great distress to the whole education industry. With the advantages of
the enterprise’s platform and its excellent execution, the Company quickly created an effective response system,
which not only enabled itself to go through the special period smoothly, but also took the opportunity to expand its
leading force and dominance.
In response to the problem that face-to-face teaching could not be carried out smoothly within a certain period of
time, the Company made every effort to explore the digital resources in the enterprise platform. With the
advantageous and standardized teaching and researching ability as a lever, digital penetration is carried out on the
main course products, which again strengthens the leading advantage of online and offline integrated curriculum,
so that more students can obtain the convenience of online learning and the effectiveness of face-to-face learning
at the same time. As a result, the number of students in the reporting period increased significantly.
After the second quarter, with the pandemic gradually put into normalized prevention and control, people all over
the country return to work and production. The second round of the epicemic in Beijing, Dalian and other places
has been controlled rapidly and effectively, which once again reflects the relevant judgment that the pandemic is
preventable, controllable and predictable.
3. Focusing on the future long-term growth, the Company significantly expands talent reserve and branches,
though moving against general trend.
Based on a clearer med-term and long-term trends in recruitment expansion and the expectation that the pandemic
can be prevented and controlled, the company did not reduce the number of staff or eliminate branches but
considerably expanded talent reserve and the scale of branches.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
19
At the end of this reporting period, the total number of employees of the company was 41911, an increase of 6,702
compared with 35,209 in 2019, an increase of 19.03%. Among them, there are 18,036 teaching professionals,
4,561 more than 13,475 in 2019, an increase of 33.85%. There are 2,702 full-time R&D personnels, 651 more
than 2,051 in 2019, an increase of 31.74%.
There are 1,335 outlets, 231 more than 1,104 in 2019, an increase of 20.92%.
4. The “take-off action” of the new business sector has been fruitful, and the capacity of talent reserve has
been gradually released.
During the reporting period, new businesses such as postgraduate entrance examinations and medical services still
remained highly active, and new businesses seldom adopted the product model of agreement classes. The revenue
recognition was not affected by examination delays,thus driving the comprehensive sequence in which they were
located with revenue increased by 26.04% year-over-year increase.At the same time, as delays of recruitment
examinations led to a decrease in revenue recognition of the relevant sequences,the revenue share of integrated
sequence increased to 34.58 percent from 21.18 percent in the same period of last year .
Around 2019, the Company completed a round of intensive investments in resources of the active new businesses,
especially in key categories such as postgraduate entrance examinations to achieve the leading scale of core
teaching and research resources at one time.In addition, starting from the second half of 2019, the Company has
taken "take-off action" for the new business segments, investing more management resources in the new
businesses from the top level.
The outbreak of the pandemic strengthened the Company's determination to expand its operations across sectors,
which also verified the rationality of strengthening the development of the marketing part for recruitment
examinations. As a result, the special actions have been further strengthened and deepened.It has also boosted the
current performance of related categories,and more importantly, further improved the overall layout advantages,
which is conducive to realizing the medium and long-term sector’s rotating growth trend.
In terms of the external situation, the academic qualification improvement sector has directly benefited from the
strengthening of the employment stabilization policy since the pandemic. The Ministry of Education has increased
its enrollment for further studies this year. The three expanded enrollments for postgraduates, undergraduates and
second bachelors will absorb more than 1.7 million people, including about 1.4 million fresh graduates. According
to relevant departments, 189,000 more graduate students will be admitted this year. It is estimated that the
enrollment expansion will exceed 20%. The enrollment expansion of ordinary junior college students is 322,000.
The enrollment expansion will mainly favor college applicants who will apply for majors that are promoted by
national strategy or urgently needed by the society; and the enrollment expansion will take place in colleges and
universities which are in the central and western regions and northeast China.
Section II. Core business analysis
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
20
Overview
Whether the content is the same as the information disclosed in the “Section I. Overview” of “Chapter IV.
Discussion and Analysis of Corporate Operating”:
√ Yes □ No
Refer to “Section I. Overview” of “ Chapter IV. Discussion and Analysis of Corporate Operating”.
Year-on-year changes of major financial data
Unit: RMB
Current Reporting Period Same period last year
Year-on-year
increase or
decrease
Reasons of changes
Revenue 2,807,980,480.60 3,637,419,515.48 -22.80%
Mainly due to the impact of the
COVID-19 pandemic, which
postponed the civil servant
entrance examinations in most
provinces and resulted in the delay
of the related income.
Operating cost 1,452,611,180.39 1,545,288,459.56 -6.00%
Marketing expenses 700,817,453.92 675,313,099.29 3.78%
Management expenses 518,959,454.14 499,631,045.91 3.87%
Financial expenses 182,654,623.66 42,509,488.64 329.68%
Mainly due to the spike of loan
interests and fees of financial
institution.
Income tax expenses 9,055,694.44 101,672,138.32 -91.09%
Mainly due to the decrease in
profits.
R&D investment 383,227,531.01 304,030,157.51 26.05%
Mainly due to the increase of R&D
personnel enlarging the labor
expenditure.
Net cash flow of business
operation
4,063,675,504.19 4,354,766,798.53 -6.68%
Net cash flow of
investment
-1,155,418,651.54 -2,505,196,440.60 53.88%
Mainly due to the redemption of
financial products
Net cash flow of fund
raising
-966,792,941.80 -1,094,282,815.85 11.65%
Increase of cash and cash 1,941,463,910.85 755,287,542.08 157.05% Mainly due to the redemption of
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
21
equivalents financial products
Whether components or origin of profits changed during the reporting period
□ Applicable √ Not applicable
Components or origin of profits did not change during the reporting period
Composition of revenue
Unit: RMB
This reporting period Same period last year
Year-on-year
increase or decrease Amount
Proportion of
revenue
Amount
Proportion of
revenue
Revenue 2,807,980,480.60 100% 3,637,419,515.48 100% -22.80%
Sectors
Educational training 2,788,186,999.66 99.30% 3,612,344,963.59 99.31% -22.82%
Others 19,793,480.94 0.70% 25,074,551.89 0.69% -21.06%
Categories of product
Training for Civil
Servant Test
1,218,210,409.21 43.38% 2,061,116,376.83 56.66% -40.90%
Training for Public
Institution Test
249,112,502.48 8.87% 260,093,409.92 7.15% -4.22%
Training for
Teachers’
Recruitment Test
350,053,110.07 12.47% 520,893,800.00 14.32% -32.80%
Training for other
public services test
and new businesses
970,810,977.90 34.58% 770,241,376.84 21.18% 26.04%
Others 19,793,480.94 0.70% 25,074,551.89 0.69% -21.06%
Regions
Northeast China 411,190,963.24 14.65% 450,418,680.94 12.38% -8.71%
North China 505,278,366.94 17.99% 559,352,002.04 15.38% -9.67%
East China 777,042,423.85 27.67% 1,158,525,187.01 31.85% -32.93%
Middle China 311,713,998.87 11.10% 393,438,273.80 10.82% -20.77%
South China 224,764,348.31 8.01% 295,686,575.61 8.13% -23.99%
Southwest China 286,608,910.60 10.21% 358,342,361.45 9.85% -20.02%
Northwest China 271,587,987.85 9.67% 396,581,882.74 10.90% -31.52%
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
22
Others 19,793,480.94 0.70% 25,074,551.89 0.69% -21.06%
Particulars of sectors, products or regions that account for more than 10% of the revenue or operating income
□ Applicable √ Not applicable
Explanation on changes in the relevant data by more than 30% year-on-year
□ Applicable √ Not applicable
Section III. Non-core Business Analysis
√ Applicable □ Not applicable
Unit: RMB
Amount
Proportion of Total
Profit
Reasons Sustainable or Not
Investment Income 128,818,126.44 -57.51%
Mainly due to the financial
income and fixed deposit
interest
Yes
Gains and losses
from changes in fair
value
Impairment of
assets
Non-operating
income
20,148.00 -0.01%
Mainly due to the
government’s subsidies in the
pandemic
No
Non-operating
expenses
93,502.28 -0.04% Others No
Section IV. Analysis of Assets and Liabilities
1. Major Changes in Asset Composition
Unit: RMB
End of the reporting period
End of the same period last
year Increase or
decrease in
proportion
Explanations on major changes
Amount
Proportion
of Total
Assets
Amount
Proportion
of Total
Assets
Monetary fund 4,665,798,912.43 35.18% 2,724,335,001.58 27.35% 7.83%
Mainly due to the redemption of
financial products
Accounts
receivable
14,349,954.64 0.11% 2,721,638.09 0.03% 0.08%
Mainly due to the increase of
rent receivable
Inventories
Investment 678,502,813.80 5.12% 688,475,053.53 6.91% -1.79% No major changes
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
23
properties
Long-term equity
investment
Fixed assets 870,207,450.02 6.56% 672,429,601.44 6.75% -0.19%
Refer to section VII, item 21 in
chapter XI. financial report of
this semi-annual report for
explanations on changes.
Construction in
progress
811,011,730.47 6.11% 653,580,160.32 6.56% -0.45%
Refer to section VII, item 22 in
chapter XI. financial report of
this semi-annual report for
explanations on changes.
Short-term Loan 3,457,000,000.00 26.06% 2,867,000,000.00 28.78% -2.72%
For purchasing and constructing
training centers; (2) for
preparation of uncertainties in
opening face-to-face classes due
to the pandemic.
Long-term Loan
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Items
Opening
Balance
Gains and losses
from the changes
in fair value
during the period
Cumulative
changes in fair
value attributed
to equity
Impairment
accrued in
the current
period
Amount of
purchase in
the current
period
Amount of
sales in the
current
period
Other
Changes
Closing
Balance
Financial Assets
1.Transactional
financial assets
(excluding derivative
financial assets)
1,892,562,
787.50
17,969,488,
090.00
17,567,171,1
73.89
2,294,879,7
03.61
2. Derivative
financial assets
3. Other debt
investments
4.Investment in other 155,450,0 7,350,000.00 162,800,000
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
24
equity instruments 00.00 .00
Subtotal of financial
assets
2,048,012,
787.50
7,350,000.00
17,969,488,
090.00
17,567,171,1
73.89
2,457,679,7
03.61
Investment properties
Productive biological
assets
Others
Total
2,048,012,
787.50
7,350,000.00
17,969,488,
090.00
17,567,171,1
73.89
2,457,679,7
03.61
Financial liabilities 0.00 0.00 0.00
Others changes
None.
Whether the Company’s major assets measurement attributes have significant changes during the reporting period
□ Yes √ No
3. Assets with restricted rights as of the end of the reporting period
Items Book value at the end of the period Reasons for Restriction
Non-current assets maturing within
one year
1,500,000,000.00 Pledged Loan
Total 1,500,000,000.00
Section V. Analysis of Investments
1. Overview
√ Applicable □ Not applicable
Amount of investment during the reporting
period (RMB)
Amount of investment in the same period
of last year
Variation
18,542,275,652.81 12,023,712,775.12 54.21%
2. Major equity investment obtained during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment ongoing during the reporting period
√ Applicable □ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
25
Unit: RMB
Project Zhongcheng Real Estate
Project
Offcn Office Building in
Fushun
Total
Investment Method Self-built project Self-built project --
Whether it is a fixed asset
investment
Yes Yes --
Industries involved in
investment projects
Educational technology
development, service and
culture consultation
Educational Technology
Development, Service and
Culture Consultation
--
Amount of investment in this
reporting period
37,502,650.03 10,645,266.56 48,147,916.59
Cumulative amount of
investment as of the end of the
reporting period
313,408,135.12 123,665,491.93 437,073,627.05
Sources of funds Self-owned fund Self-owned fund --
Project progress 69.65% 37.47% --
Expected income 0.00 0.00 0.00
Cumulative income as of the
end of the reporting period
0.00 0.00 0.00
Reasons for not reaching the
planned progress and expected
income
Not Completed Not Completed --
Date of disclosure (If any) --
Index of disclosure (If any) --
4. Financial Assets Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Asset Type Trust Products Others Total
Initial investment cost 6,324,828,090.00 13,661,810,000.00 19,986,638,090.00
Gains and losses from changes
in fair value during the period
0.00 0.00 0.00
Cumulative changes in fair
value attributed to equity
7,350,000.00 7,350,000.00
Amount of purchase during 5,247,828,090.00 12,721,660,000.00 17,969,488,090.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
26
the reporting period
Sales amount during the
reporting period
4,822,611,173.89 12,744,560,000.00 17,567,171,173.89
Cumulative income of
investment
69,037,526.25 21,889,950.60 90,927,476.85
Closing Balance 1,502,216,916.11 967,250,000.00 2,469,466,916.11
Sources of Funds Self-owned fund Self-owned fund --
5. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
There is no securities investment during the reporting period
(2) Derivatives investment
□ Applicable √ Not applicable
There is no derivatives investment during the reporting period.
6. Use of raised funds
□ Applicable √ Not applicable
There is no use of raised funds during the reporting period.
7. Major project invested by non-raised funds
□ Applicable √ Not applicable
There is no major project invested by non-raised funds during the reporting period.
Section VI. Sale of Major Assets and Equity
1. Sales of major assets
□ Applicable √ Not applicable
There is no sales of major assets during the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
Section VII. Analysis of major shareholding companies
√ Applicable □ Not applicable
Major subsidiaries and shareholding companies that have impact on more than 10% net profit of the Company
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
27
Unit: RMB
Company name Beijing Offcn Education Technology Co., Ltd.
Company type Subsidiary
Major business Educational technology consultation, technology development, technical services, technology
promotion, technology transfer; educational consultation, cultural consultation; enterprise
management consultation; enterprise investment
Registered capital 90,000,000.00
Total assets 12,021,201,387.37
Net assets 655,359,632.61
Revenue 2,798,594,797.14
Operating income -206,588,270.39
Net profit -215,834,413.14
Acquisition and disposal of subsidiaries during the reporting period.
√ Applicable □ Not applicable
Company name
Method of acquisition and disposal of
subsidiaries in the reporting period
The Impact on the overall business
operation and performance
Shaanxi Offcn Education Technology
Co.,Ltd.
New establishment
Not yet operated; no impact on overall
performance
Beijing Offcn Future Education Technology
Co.,Ltd.
New establishment
Not yet operated; no impact on overall
performance
Section VIII. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
Section IX. Prediction on business performance from January to September 2020
Alarm and explanations on that the cumulative net profit from the beginning of the year to the end of the next
reporting period may be a loss or have a significant change compared with the same period of the last year.
□ Applicable √ Not applicable
Section X. Risks and countermeasures
1. Risks of macroeconomic fluctuations
At present, the domestic pandemic caused by the novel coronavirus has not completely ended, and the social and
economic development is still facing the influence of many uncertain factors. Vocational education is an important
guarantee for promoting high-quality economic and social development, and it will also be affected by
macroeconomic conditions. Future macroeconomic fluctuations will have a certain impact on the overall
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
28
development of country's vocational education industry and company performance.
Countermeasures: Faced with complex and changeable potential market risks, the company continuously upgrades
its vertical integrated rapid response capabilities, improves its risk management and control system, closely
monitors market development and changes, and makes forward-looking plans for this, and adjusts its strategic
direction and focus in time Etc., to minimize the impact of changes in the external market environment on the
company’s business and future development.
2. Risks of policies
The prosperity of the vocational education industry has a high correlation with the policy environment, and is
easily affected by vocational education policies. In recent years, in order to support the development of the
vocational education industry, the state has successively issued a number of industry support and encouragement
policies. However, if there are major changes and adjustments to relevant laws, regulations or industrial policies in
the future, it may have an impact on the development trend of the vocational education industry, which may affect
the company's future business development and performance. In addition, the company has many branches and
wide distribution of training venues. It is not ruled out that in the future, relevant regulatory departments of
provinces, autonomous regions and municipalities will issue more stringent regulations for the local education and
training industry, which may affect the company's operations in the region.
Countermeasures: In response to the above risks, the company's various branches have established a tracking
research policy team to do in-depth analysis of various policies that have been issued. At the same time, the
company's deep accumulated strength in independent IT development and effective digital transformation of
operations simultaneously ensure the efficiency of information feedback. Through the upgrade and transformation
of basic systems such as ERP, CRM, and teaching platforms, it is possible to obtain, perceive and predict the
direction and trend of relevant policy changes in various places in a timely manner, arrange and adjust in advance,
avoid relevant policy risks, and leverage industry policies to help the company business development.
3. Risks of marketing competition
The education and training market is large and sparsely concentrated, and the initial investment scale is relatively
small. Therefore, there are a large number of enterprises in the industry, especially in first-tier cities with relatively
concentrated educational resources, a large base of training subjects, and relatively high income levels. The
competition is more intense. At the same time, with the increase in household income in the future, the public's
emphasis on high-quality educational resources will continue to increase, and the industry will continue to
maintain a high level of prosperity. This is bound to cause more and more capital to flow into the education and
training industry, leading to increasingly fierce market competition. How to effectively deal with the competition
and impact of competing products in the industry and emerging institutions is a challenge facing the company's
comprehensive development of the vocational education industry.
Countermeasures：In response to the above risks, the company will continue to maintain heavy R&D investment,
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
29
continue to increase investment in technological infrastructure and technical teams, and integrate technological
productivity into the operating system to drive business innovation. At the same time, it will continue to explore
new subdivision tracks, create a full-category market for mid-to-high-end vocational education, and further
enhance the company's core competitiveness in the industry. After more than 20 years of accumulation, the
company has a fast iterative teaching and research system, offline channel resources and online layout, and has
significant advantages in future market competition
4. Risks of operation and management
The company must face the risk of mismatch between business expansion and management capabilities. First,
there is a risk that the cost of venue leasing and manpower will continue to increase, and the pursuit of rapid
development will lead to the risk of a decline in the current profit level and profit rate; second, the education and
training industry is always facing the risk of talent flow. In particular, the loss of core management and R&D
teams and key teachers may adversely affect the company's long-term stable development.
Countermeasures：In response to the above risks, the company will continue to optimize the vertical integration
and rapid response management system on the one hand, enhance the work collaboration level of large-scale
knowledge workers, improve management and operation efficiency, optimize the human resource structure, and
match the company’s business expansion strategy; on the other hand, it will attach importance to employees The
implementation of basic rights and interests, a sound and fair and transparent performance evaluation system,
provide employees with diversified compensation and incentive paths, pay attention to employees' personal
growth, provide employees with sustainable development opportunities and growth space, and reduce the risk of
core talent loss.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
30
Chapter V. Significant Events
Section I. Information about the annual general meeting of shareholders and extraordinary
general meeting of shareholders held in the reporting period
1. General meeting of shareholders during the reporting period
Session of meeting Type of meeting
Investor
participation %
Date of meeting Date of disclosure Index of disclosure
The first
extraordinary
general meeting in
2020
extraordinary
general meeting
78.29% Jan. 6, 2020 Jan. 7, 2020
Please refer to www.
cninfo.com,
Announcement of
the First
Extraordinary
General Meeting of
Shareholders 2020
(Announcement
Number:2020-001 )
for details.
2019 annual general
meeting of
shareholders
Annual general
meeting of
shareholders
79.66% Mar. 30, 2020 Mar. 31, 2020
Please refer to www.
cninfo.com,
Announcement of
the First Annual
General Meeting of
Shareholders
2020(Announcement
Number:2020-022 )
for details.
2. Extraordinary general meetings convened at the request of preferred shareholders whose voting rights
have been restored
□ Applicable √ Not applicable
Section II. Profit distribution and increase of share capital from capital reserve during the
reporting period
□ Applicable √ Not applicable
For the first half of the year, the Company does not plan to distribute cash dividends or bonus shares, nor to
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
31
convert equity reserves into share capital.
Section III. Commitments made by the Company’s actual controllers, shareholders, related
parties, purchasers, and others that were fulfilled during the reporting period and those
uncompleted as of the end of the reporting period.
√ Applicable □ Not applicable
Important commitments made by the parties involved in the major assets restructuring are as follows:
Commitment
Party
Commitment
Type
Main contents of commitment
Commit
ment
time
Commitm
ent period
Perform
ance
Lu
Zhongfang,
Li Yongxin,
Wang
Zhendong,
Guo
Shihong,
Liu Bin,
Zhang
Yongsheng,
Yang
Shaofeng,
Zhang Zhian
Performance
commitment
and
compensation
arrangement
1. The profit forecast and compensation periods are the
years of 2018, 2019 and 2020.
2. Performance commitment: The compensation obligors
confirm and promise that the net profits attributable to the
shareholders of the parent company after deducting
non-recurring profits and losses under the consolidated
statements of Offcn Ltd. shall not be less than 930 million
RMB, 1.3 billion RMB and 1.65 billion RMB in years of
2018, 2019 and 2020 respectively.
3. The parties agree that the certified public accountants
employed by Yaxia Automobile shall review the actual net
profits of Offcn Ltd. after the end of each of the three
fiscal years. The difference between the actual net profits
of Offcn Ltd. and the net profits committed by the
compensation obligors shall be reviewed and a special
audit report shall be issued. At the end of the third fiscal
year, an auditing agency with qualifications for executing
securities and futures engaged by Yaxia Automobile will
conduct an impairment test on Offcn Ltd. and issue an
impairment test report, within 90 days after the certified
public accountant issues a special audit report.
4. Compensation measures:
(1) If the certified public accountant confirms that the
actual net profits accumulated by Offcn Ltd. fails to meet
the aggregate committed net profits as of the end of each
May 4,
2018
Years of
2018,
2019 and
2020
Performan
ce
commitm
ents of the
year 2018
and 2019
have been
fulfilled.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
32
of three fiscal years, each compensation obligor shall
assume the compensation obligation according to the
proportion of the shares to the total shares of Offcn Ltd.
held by all the compensation obligors before the
transaction. All compensation obligors are given priority
to conduct compensation with shares. When the total
amount of share compensation reaches 90% of the total
number of shares issued for purchasing assets, all
compensation obligors shall conduct compensation in
cash. The formula for calculating the amount of
compensation payable by the obligors in the current
period is as follows: compensation amount for the current
period = (aggregate committed net profits as of the end of
the current period - accumulated net profits as of the end
of the current period) ÷ the sum of committed net profits
of years within the compensation period × the price of
Offcn Ltd. in this transaction - aggregate compensated
amount.
In the application of the above formulas, it should be as
follows: ① “As of the end of the current period” refers to
the period starting from 2018 and ending at the end of the
current period; ② “the sum of committed net profits”
refers to the sum of committed net profits in 2018, 2019
and 2020, that is 3.88 billion RMB. Number of shares to
be compensated by the obligors in the current period =
Obligor's compensation amount ÷ the issue price per share
of the stocks issued for purchasing assets. When the
number of shares for compensation is not a whole number,
it shall be handled in accordance with the rounding
principle.
(2) The upper limit of the compensation obligors in the
compensation commitments and end-of-period
impairment compensation of Offcn Ltd. shall not exceed
the total transaction consideration obtained by all
shareholders in this transaction. When the calculated
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
33
compensable amount is less than or equal to 0, the value is
taken as 0, that is, the amount or the shares that have been
compensated are not redeemed.
(3) If Yaxia Automobile implements ex-rights and
ex-dividends, such as bonus shares, the capitalization of
the capital reserve to share capital, or allotment within the
period of profit compensation, the number of shares to be
compensated shall be adjusted accordingly as follows: the
number of shares to be compensated by the obligor (after
adjustment) = the number of shares to be compensated by
the obligor × (1 + the proportion of bonus shares or
transfer of capital stock).
(4) If Yaxia Automobile implements cash dividends during
the period of profit compensation, the cash dividends shall
be returned accordingly. The calculation formula is that:
repayment amount of the compensation obligor = total
cash distribution received by the compensation obligor
(before tax) ÷ the number of shares obtained by the
compensation obligor in this transaction (including shares
acquired in this transaction and shares newly added by
bonus shares and transfer of capital stock) × the number of
obligor’s compensation shares.
5. Impairment test and compensation after the
performance commitment period expires:
(1) At the end of the performance commitment period, the
audit institution with qualifications for executing
securities and futures engaged by Yaxia Automobile will
perform an impairment test on exchange-in assets in this
transaction (i.e. 100% of the shares of Offcn Ltd.) and
issue an Impairment Test Report.
(2) If the amount of exchange-in assets impairment at the
end of the period> the total number of compensated shares
× the issue price + the amount of compensated cash, each
compensation obligor shall compensate Yaxia Automobile
separately according to the proportion of the shares to the
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
34
total shares of Offcn Ltd. held by all the compensation
obligors before the transaction. The calculation formula is:
the amount to be compensated for the impairment of the
exchange-in assets= the amount of impairment of
exchange-in assets at the end of the period－the total
amount of compensation in the commitment year. In any
situations, the total amount of the compensation for
exchange-in assets impairment and the compensation for
performance commitment shall not exceed the total
amount of this transaction's consideration received by all
the shareholders of Offcn Ltd.
(3) The aforementioned amount of impairment is the
consideration of exchange-in assets minus the estimated
value of exchange-in assets at the end of the period,
deducting the effects of capital injection, capital reduction,
gift acceptance and profit distribution of the shareholders
during compensation period.
6. Implementation of compensation:
(1) If the compensation obligor is required to compensate
Yaxia Automobile because the net profits generated by
exchange-in assets are lower than its commitment, Yaxia
Automobile shall convene a board meeting within 30
working days after the special audit report or impairment
test report is issued by the accounting firm, and shall
determine the number of shares or cash amounts to be
compensated by each compensation obligor in accordance
with the "Profit Forecast Compensation Agreement". The
board of directors shall convene a general meeting of
shareholders to consider the issue of cancellation of
compensation share repurchase for the current period.
(2) Based on the terms and conditions of the agreement,
each compensation obligor will compensate Yaxia
Automobile in the following order: each compensation
obligor shall perform the compensation obligation
according to the proportion of the shares to the total shares
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
35
of Offcn Ltd. held by all the compensation obligors before
the transaction.
① Firstly, all compensation obligors shall compensate the
listed Company with Yaxia Automobile shares obtained in
this transaction according to the proportion of the shares
to the total shares of Offcn Ltd. held by all the
compensation obligors before the transaction. If the
aforementioned shares are insufficient for compensation,
each compensation obligor shall make compensation by
purchasing Yaxia Automobiles shares from the secondary
market or by other legal means. In order to avoid
ambiguity, the compensation obligors shall not bear joint
liability for the above compensation obligations.
②Yaxia Automobile shall notify all compensation
obligors in writing within 5 working days after the date of
announcement of resolution by the shareholders’ meeting.
All compensation obligors shall transfer their
compensation shares of the current year to the designated
account set up by the board of directors of Yaxia
Automobile at a total price of 1.00 RMB within 5 working
days after receiving the aforementioned notice, and cancel
the repurchase of aforementioned shares in accordance
with relevant laws and regulations. (If there are changes in
relevant laws and regulations and/or in regulations of
relevant authorities at that time, the cancellation shall be
completed in accordance with the relevant regulations at
that time)
③From the date on which the number of compensation
shares of each compensation obligor is determined until
the cancellation of these shares, these shares are with no
voting rights or rights for dividend distribution.
④If the compensation obligor needs to compensate Yaxia
Automobile in cash in accordance with the stipulations of
the Profit Forecast Compensation Agreement, each
compensation obligor shall pay the compensation amount
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
36
to Yaxia Automobile within the period specified in the
notice. In case of overdue payment, the compensation
obligor shall pay the late payment interest to Yaxia
Automobile on the overdue portion at daily interest rate of
5? , with the continuity of obligation of compensation.
Yaxia
Industry,
Zhou
Xiayun,
Zhou Hui,
Zhou Li,
Phase-Ⅰ
employee
stock
ownership
plan
Letter of
commitment
on lock-up
period
After the completion of the transaction (starting from the
date of the listing of shares issued in this transaction), the
company/I/the plan shall not transfer the company's shares
in Yaxia Automobile within 36 months .
After the completion of the transaction, the shares held by
the Company/I/the plan, derived from Yaxia Automobile
shares due to the distribution of stock dividends and the
transfer of the capital reserve to share capital shall also
comply with the above-mentioned arrangement of
restricted sale of shares.
If the China Securities Regulatory Commission and/or
Shenzhen Stock Exchange have/has other provisions for
the above-mentioned lock-up period arrangement , the
company/I/the plan will adjust and implement the
above-mentioned lock-up period according to the latest
regulations of the China Securities Regulatory
Commission and/or Shenzhen Stock Exchange.
If violating the above commitments, the company/I/the
plan will bear all losses caused to Yaxia Automobile.
May 4,
2018
Jan. 31,
2022
Under
normal
impleme
ntation
Li Yongxin
Letter of
Commitment
on lock-up
period for
subscription
of shares
1. The shares of the listed Company subscribed by myself
in this transaction shall not be transferred or dealt with in
any other forms within 36 months from the date of the
listing of the shares. Within 6 months after the listing of
the shares, if the closing price of the listed Company stock
is lower than the issue price for consecutive 20 trading
days , or the closing price of the stock at the end of the 6
months after the listing of the shares is lower than the
issue price, the lock-up period of consideration shares
acquired by myself is automatically extended for 6
months. (If dividend distribution, bonus shares, transfer of
Apr. 27,
2018
Jan. 31,
2022
Under
normal
impleme
ntation
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
37
capital stock, or allotment to the listed Company occurred
during the above period, the aforementioned issue price is
calculated based on the price adjusted by factors as
ex-dividend and ex-rights, etc.)
2. As the transferee of 72,696,561 Yaxia Automobile
shares held by Anhui Yaxia Industry Co., Ltd., I shall not
transfer them within 36 months from the date of
registration in my securities account.
3. The aforesaid arrangement of share lock-up does not
affect the implementation of profit compensation for this
transaction, that is, when I need to make profit
compensation, the listed Company has the right to relieve
the lock-up of shares in corresponding amount in advance
for profit compensation.
4. I promise to abide by the following provision: if the
transaction is investigated by judiciary authorities or the
China Securities Regulatory Commission on suspicion of
misrepresentations, misleading statements, or material
omissions in regard to the information provided or
disclosed, the shares of the listed Company acquired in
this transaction shall not be transferred until the
conclusion of the investigation is clarified.
5. After the completion date of this transaction, my
increased shares due to bonus shares and transfer of
capital stock of the listed Company shall also comply with
the foregoing requirements.
6. If the aforementioned lock-up period arrangement does
not match the latest laws and regulations and the latest
regulatory requirements of the securities regulatory
institution, the enterprise agrees to implement the latest
laws and regulations and the requirements of the
regulatory agency.
7. After the lock-up period expires, it will be implemented
in accordance with the relevant regulations of the China
Securities Regulatory Commission and the Shenzhen
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
38
Stock Exchange.
Lu Zhong
Fang
Letter of
commitment
on lock-up
period for
subscription
of shares
1. The shares of the listed Company subscribed by myself
in this transaction shall not be transferred or dealt with in
any other forms within 36 months from the date of listing
of the shares. Within 6 months after the listing of the
shares, if the closing price of the listed Company stock is
lower than the issue price for consecutive 20 trading days ,
or the closing price of the stock at the end of the 6 months
after the listing of the shares is lower than the issue price,
the lock-up period of consideration shares acquired in this
transaction by myself is automatically extended for 6
months. (If dividend distribution, bonus shares, transfer of
capital stock, or allotment to the listed Company occurred
during the above period, the aforementioned issuance
price is calculated based on the price adjusted by factors
as ex-dividend and ex-rights, etc.)
2. The aforesaid share lock-up arrangement does not affect
the implementation of profit compensation for this
transaction, that is, when I need to make profit
compensation, the listed Company has the right to relieve
the lock-up of shares in corresponding amount in advance
for profit compensation.
3. I promise to abide by the following provision: if the
transaction is investigated by judiciary authorities or the
China Securities Regulatory Commission on suspicion of
misrepresentations, misleading statements, or material
omissions in regard to the information provided or
disclosed, the shares of the listed Company acquired in
this transaction shall not be transferred until the
conclusion of the investigation is clarified.
4. After the completion date of this transaction, my
increased shares due to bonus shares and transfer of
capital stock of the listed Company shall also comply with
the foregoing requirements.
5. If the aforementioned lock-up period arrangement does
Apr. 27,
2018
Jan. 31,
2022
Under
normal
impleme
ntation
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
39
not match the latest laws and regulations and the latest
regulatory requirements of the securities regulatory
institution, I agree to implement the latest laws and
regulations and the requirements of the regulatory agency.
6. After the lock-up period expires, it will be implemented
in accordance with the relevant regulations of the China
Securities Regulatory Commission and the Shenzhen
Stock Exchange.
Kerui
Technology
Innovation
Letter of
commitment
on lock-up
period for
subscription
of shares
1. The shares of the listed Company subscribed by the
enterprise in this transaction shall not be transferred or
dealt with in any other forms within 36 months from the
date of listing of the shares. Within 6 months after the
listing of the shares, if the closing price of the listed
Company stock is lower than the issue price for
consecutive 20 trading days , or the closing price of the
stock at the end of the 6 months after the listing of the
stock is lower than the issue price, the lock-up period of
consideration shares acquired in this transaction is
automatically extended for 6 months. (If dividend
distribution, bonus shares, transfer of capital stock, or
allotment to the listed Company occurred during the
above period, the aforementioned issue price is calculated
based on the price adjusted by factors as ex-dividend and
ex-rights, etc.)
2. The enterprise promises to abide by the following
provision: if the transaction is investigated by judiciary
authorities or the China Securities Regulatory
Commission on suspicion of misrepresentations,
misleading statements, or material omissions in regard to
the information provided or disclosed, the shares of the
listed Company acquired in this transaction shall not be
transferred until the conclusion of the investigation is
clarified.
3. After the completion date of this transaction, the shares
that the enterprise owns increased due to bonus shares and
Jul. 27,
2018
Jan. 31,
2022
Under
normal
Impleme
ntation
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
40
transfer of capital stock of the listed Company shall also
comply with the foregoing requirements.
4. If the aforementioned lock-up period arrangement does
not match the latest laws and regulations and the latest
regulatory requirements of the securities regulatory
institution, the enterprise agrees to implement the latest
laws and regulations and the requirements of the
regulatory agency.
5. After the lock-up period expires, it will be implemented
in accordance with the relevant regulations of the China
Securities Regulatory Commission and the Shenzhen
Stock Exchange.
Aerospace
Industry,
Guangyin
Venture
Letter of
commitment
on lock-up
period for
subscription
of shares
1. The shares of the listed Company subscribed by the
enterprise in this transaction shall not be transferred or
dealt with in any other forms within 24 months from the
date of listing of the shares. Within 6 months after the
listing of the shares, if the closing price of the listed
Company stock is lower than the issue price for 20
consecutive trading days , or the closing price of the stock
at the end of the 6 months after the listing of the shares is
lower than the issue price, the lock-up period of
consideration shares acquired in this transaction is
automatically extended for 6 months. (If dividend
distribution, bonus shares, transfer of capital stock, or
allotment to the listed Company occurred during the
above period, the aforementioned issue price is calculated
based on the price adjusted by factors as ex-dividend and
ex-rights, etc.)
2. The enterprise promises to abide by the following
provision: if the transaction is investigated by judiciary
authorities or the China Securities Regulatory
Commission on suspicion of misrepresentations,
misleading statements, or material omissions in regard to
the information provided or disclosed, the shares of the
listed Company acquired in this transaction shall not be
Jul. 27,
2018
Jan. 31,
2021
Under
normal
impleme
ntation
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
41
transferred until the conclusion of the investigation is
clarified.
3. After the completion date of this transaction, the shares
that the enterprise owns increased due to bonus shares and
transfer of capital stock of the listed Company shall also
comply with the foregoing requirements.
4. If the aforementioned lock-up period arrangement does
not match the latest laws and regulations and the latest
regulatory requirements of the securities regulatory
institution, the enterprise agrees to implement the latest
laws and regulations and the requirements of the
regulatory agency.
5. After the lock-up period expires, it will be implemented
in accordance with the relevant regulations of the China
Securities Regulatory Commission and the Shenzhen
Stock Exchange.
Wang
Zhendong,
Guo
Shihong, Liu
Bin, Zhang
Yongsheng,
Yang
Shaofeng,
Zhang Zhian
Letter of
commitment
on lock-up
period for
subscription
of shares
1. The shares of the listed Company subscribed by myself
in this transaction shall not be transferred or dealt with in
any other forms within 24 months from the date of listing
of the shares. Within 6 months after the listing of the
shares, if the closing price of the listed Company stock is
lower than the issue price for consecutive 20 trading days ,
or the closing price of the stock at the end of the 6 months
after the listing of the shares is lower than the issue price,
the lock-up period of consideration shares acquired in this
transaction by myself is automatically extended for 6
months. (If dividend distribution, bonus shares, transfer of
capital stock, or allotment to the listed Company occurred
during the above period, the aforementioned issuance
price is calculated based on the price adjusted by factors
as ex-dividend and ex-rights, etc.)
If Offcn Ltd. fails to meet the committed net profits as
stipulated in the Profit Forecast Compensation Agreement
in either 2018 or 2019, the lock-up period of the shares of
the listed Company I obtained in this transaction will be
Jul. 27,
2018
Jan. 31,
2021
Under
normal
impleme
ntation
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
42
extended to 36 months. At the expiration of 36 months
from the date when the aforementioned shares are
registered to my securities account, if the performance
compensation obligations under the Profit Forecast
Compensation Agreement have not been fulfilled, the
above lock-up period will be extended to the date when
the compensation obligations are fulfilled.
2. The aforesaid share lock-up arrangement does not affect
the implementation of profit compensation for this
transaction, that is, when I need to make profit
compensation, the listed Company has the right to relieve
the shares in corresponding amount in advance for profit
compensation.
3. I promise to abide by the following provision: if the
transaction is investigated by judiciary authorities or the
China Securities Regulatory Commiss ion on suspicion of
misrepresentations, misleading statements, or material
omissions in regard to the information provided or
disclosed, the shares of the listed Company acquired in
this transaction shall not be transferred until the
conclusion of the investigation is clarified.
4. After the completion date of this transaction, my
increased shares due to bonus shares and transfer of
capital stock of the listed Company shall also comply with
the foregoing requirements.
5. If the aforementioned lock-up period arrangement does
not match the latest laws and regulations and the latest
regulatory requirements of the securities regulatory
institution, I agree to implement the latest laws and
regulations and the requirements of the regulatory agency.
6. After the lock-up period expires, it will be implemented
in accordance with the relevant regulations of the China
Securities Regulatory Commission and the Shenzhen
Stock Exchange.
Offcn Letter of Within 36 months from the date of the transfer of Apr. 27, Jan. 31, Under
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
43
Partnership commitment
on the
lock-up of
shares
80,000,000 shares of Yaxia Automobile held by Anhui
Yaxia Industry Co., Ltd. to the enterprise, the shares shall
not be transferred. The lock-up period of the shares
increased during the above period due to bonus shares,
transfer of capital stock or allotment of shares by Yaxia
Automobile, shall also comply with the foregoing
requirements.
If the Company violates commitments listed above, it will
bear all losses caused to Yaxia Automobile.
2018 2022 normal
impleme
ntation
Li Yongxin
and other 10
counterpartie
s
Letter of
commitment
on the
lock-up of
Offcn
Partnership’s
contribution
shares
Within 36 months from the date of the transfer of
80,000,000 shares of Yaxia Automobile held by Anhui
Yaxia Industry Co.,Ltd. to Beijing Offcn Future
Information Consulting Center (Limited Partnership), I or
the Company shall not in any way transfer the shares of
Beijing Offcn Future Information Consulting Center
(Limited Partnership) or withdraw from the partnership
with Beijing Offcn Future Information Consulting Center
(Limited Partnership), nor do we transfer, assign or
authorize other entities in any way to fully or partially
have the rights and interests indirectly related to the shares
of Yaxia Industry Co., Ltd. held by Beijing Offcn Future
Information Consulting Center (Limited Partnership).
Jul. 27,
2018
Jan. 31,
2022
Under
normal
impleme
ntation
Li Yongxin
Lu
Zhongfang
Wang
Zhendong
Offcn
Partnership
Letter of
commitment
on
maintaining
independence
of the listed
Guarantee the independence of the listed Company’s
personnel
It is guaranteed that after the completion of transaction,
the labor, personnel and salary management of the listed
Company shall completely independent from
myself/Offcn Partnership, and from other related parties,
such as companies, enterprises or economic organizations,
controlled by myself/Offcn Partnership.
Ii is guaranteed that after the completion of transaction,
senior executives shall work as full-time employees and
receive remuneration in the listed Company. They shall
not hold any positions other than directors or supervisors
in other companies, enterprises, or economic
April
27,
2018
Long-ter
m
Under
impleme
ntation
normally
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
44
organizations controlled by myself/Offcn Partnership.
It is guaranteed that after the completion of transaction,
the official powers of the shareholders’ meeting and board
of director on personnel appointments and dismissals shall
not be interfered.
Guarantee the independence of institutes of the listed
Company
(1) It is guaranteed that after the completion of
transaction, the listed Company shall build a sound
structure of corporate governance and develop an
independent and complete organizational structure.
(2) It is guaranteed that after the completion of
transaction, the shareholders’ meeting, the board of
directors, and the board of supervisors shall independently
exercise their powers in accordance with laws, regulations
and company’s articles.
3. Guarantee the independence and completeness of the
assets of the listed Company.
(1) It is guaranteed that after the transaction, the listed
Company shall have independent and complete assets
related to production and operation.
(2) It is guaranteed that after the completion of
transaction, the business premises of the listed Company
shall be independent from myself/Offcn Partnership, and
other related parties, such as companies, enterprises, or
other economic organizations controlled by myself/Offcn
Partnership.
(3) It is guaranteed that after the completion of
transaction, except for normal business dealings, there
shall be no capital and assets of the listed Company
occupied by myself/Offcn Partnership, and other related
parties, such as companies , enterprises or economic
organizations, controlled by myself or Offcn Partnership..
4. Guarantee the independence of the listed Company’s
business.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
45
(1) It is guaranteed that after the completion of
transaction, the listed Company shall have the
qualifications of independently conducting business
activities and the capabilities of running market-oriented,
independent, autonomous, sustainable business.
(2) It is guaranteed that after the completion of
transaction, I/Offcn Partnership,or other related
parties,such as companies, enterprises, or other economic
organization controlled by myself/Offcn Partnership shall
avoid businesses which have a competitive relationship
with the listed Company and its subsidiaries.
(3) It is guaranteed that after the completion of
transaction, I/Offcn Partnership, or related parties, such as
companies, enterprises, or other economic organizations
controlled by myself/Offcn Partnership shall reduce
related-party transaction with the listed Company and its
subsidiaries. Related-party transactions that are really
necessary and unavoidable shall be conducted in a
market-oriented and fairly way and perform relevant
approval processes and information disclosure obligations
in accordance with relevant laws, regulations and
regulatory documents.
5. Guarantee the financial independence of the listed
Company.
(1) It is guaranteed that after the completion of
transaction, the listed Company shall establish an
independent financial department with independent
financial accounting systems and standardized and
independent financial accounting rules.
(2)It is guaranteed that after the completion of transaction,
the listed Company shall open bank accounts
independently and shall not share bank accounts with
myself/Offcn Partnership/other related parties, such as
companies, enterprises or other economic organizations
controlled by myself or Offcn Partnership.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
46
(3) It is guaranteed that after the completion of
transaction, financial personnel hired by the listed
Company shall not hold part-time positions in other
related parties, such as companies, enterprises or other
economic organizations controlled by myself or Offcn
Partnership
(4) It is guaranteed that after the completion of
transaction, the listed Company can make financial
decisions independently. I/Offcn Partnership shall not
interfere with the use of funds by the listed Company.
(5) It is guaranteed that after the completion of
transaction, the listed Company will pay taxes
independently according to laws.
I/Offcn Partnership shall be liable for all losses caused to
the listed Company and its subsidiaries due to my/Offcn
Partnership’s failure in fulfilling the above commitments.
Li Yongxin,
Lu
Zhongfang
Letter of
Commitment
on avoiding
horizontal
competition
1. As of the date of signing this commitment letter,
myself, my close relatives and other companies,
enterprises or economic organizations controlled by
myself, and my close relatives, except for Beijing Offcn
Online Education Technology Co., Ltd. (hereinafter
referred to as Offcn Online), controlled by my relatives
Xuhua and Lu Yan, and its affiliated schools which are
involved in the same or similar businesses conducted by
Offcn Ltd., other related parties are not involved in any
same, similar or related businesses conducted by the listed
Company, Offcn Ltd. and its affiliated companies and
schools.. Except for serving as a director in Kunming
Wuhua Offcn training school, which is affiliated to Offcn
Online, Li Yongxin neither holds any full-time or
part-time positions nor provides consultancy at any
companies or enterprises, which conducts competitive
businesses with the listed Company, Offcn Ltd. and their
affiliates. I also hold directly or indirectly no stock
rights(shares) of companies or enterprises conducting the
Sept.
20,
2018
1. The
transfer of
Kairuier
Training
School in
Haidian
District of
Beijing:
within 24
months
from the
date of
the
signing of
this letter
of
commitm
ent
2. The
As of
the end
of the
reportin
g period,
Kairuier
Training
School
Haidian
District
of
Beijing
had been
transferr
ed to an
unrelate
d third
party.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
47
same, similar or related businesses as the listed Company,
Offcn Ltd. and its affiliates.
2. As of the date of signing this commitment letter,
Offcn Online and its two subordinate training schools’
disposals are as follow: Offcn Online conducts no
education businesses(to be canceled after subordinate
schools transferred). Kairuier Training School in Haidian
District of Beijingis to be transferred to an unrelated third
party and the transfer agreement has been signed. If the
transfer is not completed within 24 months since the date
of signing this commitment letter, I will urge Offcn Online
to cancel the Kairuier Training School in Haidian
District of Beijing. Kunming Wuhua Offcn Training
School, associated with Offcn Online, has been closed and
it will be transferred to an unrelated third party or will be
canceled within 12 months after the revised Regulations
for the Implementation of the Law on the Promotion of
Private Education of the People’s Republic of China
(hereinafter referred to as Regulations of Implementation)
is officially promulgated and implemented and supporting
regulations formulated by relevant local education
authorities in accordance with the revised Regulations of
Implementation comes into effect.
3. As of the date of signing this commitment letter, Offcn
Ltd. as the organizer intends to transfer its 100% of the
rights of 33 private schools for non-academic
qualifications to Li Yongxin and singed the Aagreement
on Transfer of Rights of Private Schools for
Non-Academic Qualifications Affiliated to Beijing Offcn
Education Technology Co., Ltd. Li Yongxin is willing to
entrust the transferred 33 private schools for
non-academic qualifications to Offcn Ltd. and signed the
Trusteeship Agreement of Private Schools for
Non-academic Qualifications.
4. After the completion of transaction, except for the
transfer of
Kunming
Wuhua
Offcn
Training
School :
within 12
months
after the
revised
Regulatio
ns of
Implemen
tation
officially
promulgat
ed and
implemen
ted and
supportin
g
regulation
s
formulate
d by
relevant
local
education
authoritie
s in
accordanc
e with the
revised
Regulatio
ns of
Other
commit
ments
are
under
impleme
ntation
normally
.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
48
above-mentioned cases, I promise that during the time of
being the actual controller of the listed Company, I, my
close relatives and other related parties, such as
companies, enterprises or other economic organizations,
controlled by myself and my close relatives shall not in
any way (including but not limited to self operated or with
other parties to operate joint venture, cooperation, joint
operation, investment, mergence, and trustee operation
home and aboard) engage in the same, similar, related and
competitive businesses with the listed Company, which
includes the follows:
I will not directly or indirectly operate, participate in or
assist others to conduct same, similar businesses or other
economic activities which directly or indirectly constitute
a competitive relationship with businesses currently
operated by the listed Company and its affiliated
companies. 2. .I will not directly or indirectly invest on
any economic entities whose businesses constitute a direct
or indirect competitive relationship with the listed
Company and its affiliates. 3. I will not be hired by any
competitors that directly or indirectly compete with the
listed Company and its affiliates, or provide any advice,
assistance or business opportunities directly or indirectly
to such competitors;. 4. I will not instigate, mislead,
encourage or otherwise induce, persuade, or coerce the
employees or management personnel in the listed
Company and its affiliates to terminate their labor or
employment relationship with the Company and its
affiliates. 5. I will not urge others to hire employees or
management personnel from the listed Company and its
affiliates.
5. I promise that if I, my close relatives and other related
parties, such as companies, enterprises or other economic
organizations controlled by myself and my close relatives
obtain any business opportunities from any third party,
Implemen
tation
comes
into
effect.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
49
which can or may compete with the listed Company and
its affiliates in the future, I will notify the listed Company
and its affiliates in writing within 5 working days. After
obtaining the third party’s promise, I will attempt to
transfer these business opportunities to the listed
Company and its affiliates.
6. I guarantee that I would never use my knowledge about
and the information I’m aware of the listed Company and
its affiliates to assist third parties to engage, participate, or
invest in businesses or projects that compete with the
listed companies and its affiliates.
7. If I violate the above commitments, the benefits
obtained by the violation of commitments shall belong to
the listed Company and I shall be liable for all losses
caused to the listed Company and its affiliates. Within 30
working days since receiving the writing notice from the
listed Company, compensation will be made in cash.
8. I will disclose relevant information in a timely manner
if commitments fail to be fulfilled or to be fulfilled on
schedule because of objective reasons, such as changes in
relevant laws, regulations and policies, or natural
disasters. Except for the above-mentioned objective
reasons, if the commitment is anyhow unable to be
fulfilled or fulfilling the commitment is not conducive to
safeguarding the rights and interests of the listed
Company, I should fully disclose the reasons and either
provide a new commitment to the listed Company and
related investors to replace the original one, or propose an
exemption from fulfilling the commitment.
9. The commitment is valid from the date when the
commit letter is signed to the time when I cease to be the
actual controller of the listed Company.
Wang
Zhendong,
Offcn
Letter of
Commitment
on avoiding
1. As of the date of signing this letter of commitments, I,
my close relatives, related parties, such as companies,
enterprises or other economic organizations controlled by
April 4,
2018
Long-ter
m
Under
impleme
ntation
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
50
Partnership horizontal
competition
myself and my close relatives, Offcn Partnership and
related parties, such as other enterprises or economic
organizations controlled by Offcn Partnership, participate
in no businesses which are the same, similar o or related
to businesses competing with the listed Company, Offcn
Ltd. and their affiliated companies and schools. Except for
serving as a director at Beijing Haidian District Kairuier
Training School, affiliated to Offcn Online ( Offcn Online
tends to transfer the rights of Kairuier Training School to
an unrelated third party and after this transfer, Wang
Zhendong will not hold the post as a director.), I neither
holds any full-time or part-time positions nor provides
consultancy at any companies or enterprises which
conducts competitive businesses with the listed Company,
Offcn Ltd. and their affiliates.serve as a consultant or a
part-time employee in other companies or enterprises that
pose competitions against the listed Company, Offcn Ltd.
and its affiliates. I do not directly or indirectly hold the
equity of an company or entity that runs the same, similar
or relevant business engaged by the listed Company,
Offcn Ltd. and its affiliates.
2.. After the completion of transaction, I/Offcn Partnership
promise that during the time of being shareholders of the
listed Company, I, my close relatives and other related
parties, such as companies, enterprises or other economic
organizations, controlled by myself and my close
relatives，Offcn Partnership and related parties, such as
other enterprises or economic organizations controlled by
Offcn Partnership, shall not in any way (including but
not limited to self operated or with other parties to operate
joint venture, cooperation, joint operation, investment,
mergence, and trustee operation home and aboard) engage
in the same, similar, related and competitive businesses
with the listed Company, which includes the follows:
I will not directly or indirectly operate, participate in or
normally
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
51
assist others to conduct same, similar businesses or other
economic activities which directly or indirectly constitute
a competitive relationship with businesses currently
operated by the listed Company and its affiliated
companies. 2. .I will not directly or indirectly invest on
any economic entities whose businesses constitute a direct
or indirect competitive relationship with the listed
Company and its affiliates. 3. I will not be hired by any
competitors that directly or indirectly compete with the
listed Company and its affiliates, or provide any advice,
assistance or business opportunities directly or indirectly
to such competitors;. 4. I will not instigate, mislead,
encourage or otherwise induce, persuade, or coerce the
employees or management personnel in the listed
Company and its affiliates to terminate their labor or
employment relationship with the Company and its
affiliates. 5. I will not urge others to hire employees or
management personnel from the listed Company and its
affiliates.
3. I/Offcn Partnership promise that if I, my close relatives
and other related parties, such as companies, enterprises or
other economic organizations controlled by myself and
my close relatives, Offcn Partnership and related parties,
such as other enterprises or economic organizations
controlled by Offcn Partnership, obtain any business
opportunities from any third party, which can or may
compete with the listed Company and its affiliates in the
future, I/Offcn Partnership will immediately notify the
listed Company. After obtaining the third party’s promise,
I will attempt to transfer these business opportunities to
the listed Company and its affiliates.
4. I guarantee that I would never use my knowledge about
and the information I’m aware of the listed Company and
its affiliates to assist third parties to engage, participate, or
invest in businesses or projects that compete with the
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
52
listed companies and its affiliates.
If I/Offcn Partnership shall be liable for all losses caused
to the listed Company and its affiliates due to my/Offcn
Partnership’s failure in fulfilling commitments.
Li Yongxin,
Lu
Zhongfang
Letter of
Commitment
on reducing
and
regulating
related-party
transactions
1. After the transaction is completed, during the time of
being the actual controller of the listed Company, I, my
close relatives and other companies, enterprises or other
economic organizations controlled by myself, my close
relatives will try to avoid and reduce the related-party
transactions with the listed Company and its affiliates;
unless it is necessary for the business development of the
listed Company, any related-party transactions with the
listed Company and its affiliates will not be conducted.
2. After the transaction is completed, for the related-party
transactions which are unavoidable or reasonable to
happen with the listed Company and its affiliates, I, my
close relatives and other companies, enterprises or
economic organizations controlled by myself and my
close relatives, will sign related-party
transactionagreements with the listed Company and its
affiliates in accordance with the relevant laws, regulations
and regulatory documents and follow the general business
principles of equality, willingness, equivalence and
paid-use. The prices of related-party transactions shall be
fair. Decision-making procedures, lawful information
disclosure obligations and relevant reporting and approval
procedures regarding the related-party transactions, shall
be followed. The status of shareholders shall not be used
to damage the legitimate rights and interests of the listed
Company and other shareholders.
3. After the completion of the transaction, I will not use
the shareholders’ rights of the listed Company to
manipulate or instruct the listed Company or its directors,
supervisors and senior executives to make the listed
Company provide or accept funds, commodities, services
Jul. 27,
2018
Long-ter
m
Under
normal
impleme
ntation
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
53
or other assets under inequal conditions or engage in any
behaviors that would damage the interests of the listed
companies.
4. I will urge my close relatives and other companies,
enterprises and other economic organizations controlled
by myself and my close relatives to abide by the
aforementioned commitments.
5. If I, my close relatives and other companies, enterprises
and other economic organizations controlled by myself
and my close relatives violate the above commitments, the
profits obtained by the violation of commitments belong
to the listed Company, and I shall be liable for all losses
caused to the listed Company and its affiliates. Within 30
working days since receiving the written notice from the
listed Company, compensation will be made in cash.
6. The commitment is valid from the date when it is
signed to the time when I cease to be the actual controller
of Yaxia Automobile and there is no other related
relationship with Yaxia Automobile.
Wang
Zhendong,
Aerospace
Industry,
Offcn
Partnership
Letter of
Commitment
on reducing
and
regulating
related-party
transactions
1. After the completion of transaction, during the period of
being the actual controller/shareholder， I, my close
relatives and other companies, enterprises or other
economic organizations controlled by myself, my close
relatives，Aerospace Industry or Offcn Partnership, will
try to avoid and reduce the related-party transactions with
the listed Company.
2. After the transaction is completed, for the related-party
transactions which are unavoidable or reasonable to
happen with the listed Company and its affiliates, myself,
my close relatives and other companies, enterprises or
economic organizations controlled by myself and my
close relatives, Aerospace Industry or Offcn Partnership,
will sign related-party transactionagreements with the
listed Company and its affiliates in accordance with the
relevant laws, regulations and regulatory documents and
April
27,
2018
Long-ter
m
Under
impleme
ntation
normally
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
54
Section IV. Appointment and dismissal of accounting firms
Has the semi-annual financial report been audited?
□ Yes √ No
The semi-annual financial report has not been audited yet.
Section V. Explanations provided by the Board of Directors and the Supervisory Committee,
regarding the “non-standard audit report” issued by the auditor for the reporting period
□ Applicable √ Not applicable
follow the general business principles of equality,
willingness, equivalence and pa id-use. The prices of
related-party transactions shall be fair. Decision-making
procedures, lawful information disclosure obligations and
relevant reporting and approval procedures regarding the
related-party transactions, shall be followed. The status of
shareholders shall not be used to damage the legitimate
rights and interests of the listed Company and other
shareholders.
3. After the completion of the transaction, I/Aerospace
Industry/Offcn Partnership will not use the shareholders’
rights of the listed Company to manipulate or instruct the
listed Company or the directors, supervisors and senior
executives of the listed Company to make the listed
Company provide or accept funds, commodities, services
or other assets in different forms under unequal conditions
or engage in any behaviors that would damage the
interests of listed companies.
I/Aerospace Industry/Offcn Partnership shall be liable for
all losses caused to the listed company and its affiliates
due to my/Aerospace Industry’s/Offcn Partnership’s
failures in fulfilling commitments.
Whether the
commitment
s are fulfilled
on time
Yes
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
55
Section VI. Explanations provided by the Board of Directors regarding the “non-standard
audit report” issued by the auditor for the last year
□ Applicable √ Not applicable
Section VII. Bankruptcy and Reorganization
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
Section VIII. Significant lawsuit or arbitration
Significant lawsuit or arbitration
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
Other legal cases
√ Applicable □ Not applicable
During the reporting period, the legal proceedings of the listed Company and its subsidiaries were as follows:
1. The total amount involved in the legal cases resolved during the reporting period was RMB 3,962,000, the
actual judgement amount of effective legal documents was RMB542,700. The litigation results have no significant
impact on the Company’s operations.
2. By the end of the reporting period, the amount of litigation involved in unsettled cases was RMB 14,719,700,
which accounted for 0.43% of the unaudited net assets attributable to shareholders of listed Company at the end of
2019, and has no significant impact on the Company’s operations.
Section IX. Questioning by the media
□ Applicable √ Not applicable
The Company did not experience widespread media questioning during the reporting period.
Secton X. Punishment and Rectification
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
Section XI. Integrity of the Company, its controlling shareholders and actual controller
□ Applicable √ Not applicable
Section XII. The Implementation of the Company’s equity incentive plan, employee stock
ownership plan or other employee incentive measures.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
56
□ Applicable √ Not applicable
The Company has no equity incentive plan, employee stock ownership plan nor other employee incentive
measures that was implemented during the reporting period. .
Section XIII. Significant related-party transactions
1. Related-party transactions relevant to routine operations
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
2. Related-party transactions about acquisitions or sales of assets or equity
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
3. Related-party transactions for overseas joint investment
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
4. Related credit and debt transactions
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
5. Other significant related-party transactions
√ Applicable □ Not applicable
On Jan. 9, 2019, Offcn Ltd., signed an RMB 360 million loan contract with the Sidaokou branch of Hua Xia Bank
with the contract number YYB7610120180014 and the loan period is from Jan. 9, 2019 to Jan. 9, 2020, which had
been settled on Jan. 9, 2020.
Section XIV. Status of capital of the listed Company used for non-operating purposes by the
controlling shareholder or its related parties
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
Section XV. Significant contracts and their execution
1. Trusteeships, Contracts, and Leases
(1) Trusteeships
√ Applicable □ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
57
Explanations on trusteeships
On Sept.20,2018, Offcn Ltd. and Li Yongxin signed the Agreement on the Transfer of the Rights and Interests of
Organizers of the Private Schools affiliated to Beijing Offcn Education Technology Co.,Ltd. All 100% rights of
organizers as of Sept. 20, 2018 were to be transferred to Li Yongxin. On the same day, Li Yongxin and Offcn Ltd.
signed the Trusteeship Agreement of Private Schools stipulating that Li Yongxin would entrust the transferred
private schools to Offcn Ltd. for management. The period of trusteeship started from the date when Li Yongxin
paid all the transfer price to the day when the private schools’ 100% rights of organizers were transferred to the
unrelated third party or canceled (Note: within 12 months after the revised Implementation Regulations was
officially promulgated and the relevant local education authorities passed the supporting regulations in accordance
with the revised Implementation Regulations, Li Yongxin transferred 100% of the owner’s rights to the unrelated
third party or canceled them.)
Projects that gains or losses reached more than 10% of the total operating income of the Company
□ Applicable √ Not applicable
There was no such project of the Company during the reporting period.
(2) Contract
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
(3) Lease
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
2. Significant guarantees
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
3. Entrusted Financing
√ Applicable □ Not applicable
Unit: RMB
Types
Sources of Entrusted
Financing
Amount of Entrusted
Financing
Unexpired Balance
Nonrecoverable
Overdue Amount
Bank Financial Products Self-owned fund 2,369,310,000 754,450,000 0
Brokerage Financial
Products
Self-owned fund 80,000,000 0 0
Trust Financial Products Self-owned fund 5,199,530,029.04 1,502,216,916.11 0
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
58
Total 7,648,840,029.04 2,256,666,916.11 0
Particulars of high-risk entrusted financial management with a large single amount, low security, poor liquidity or
no capital protection
□ Applicable √ Not applicable
Entrusted financing is overdue and the principal cannot be recovered or there are other cases that may cause
impairments.
□ Applicable √ Not applicable
4. Other significant contracts
√ Applicable □ Not applicable
Name of the
company signing
the contract
Beijing Offcn
Education
Technology
Co.,Ltd
Beijing Offcn
Education
Technology
Co.,Ltd
Beijing Offcn
Education
Technology
Co.,Ltd
Beijing Offcn
Education
Technology
Co.,Ltd
Offcn Education
Technology Co.,
Ltd
Name of the other
party signing the
contract
Beijing Jingchen
Technological
Development
Co.,Ltd
Harbin Yuheng
Pharmaceutical
Co.,Ltd
Shengyang Lijing
Mingzhu Hotel
Management
Co.,Ltd
Beijing
Chuangsheng
Building
Decoration
Engineering
Co.,Ltd
Shaanxi
Guancheng
Industry Co.,Ltd
Contract subject Lease No. 1 and 2
of Unit B, No. 1,
18, 19 and 21 of
Unit A in the East
Yard of Daokou
Village,
Wangsiying Town,
Chaoyang District,
Beijing
Lease the West
Building, Building
1, No.23, Xueqing
Road, Haidian
District, Beijing (1
to 5 floors above
ground, except for
the security room)
Lease No. 129
Building, Beishun
Road, Shenhe
District,
Shengyang
Renovation project
of Offcn branches
(building area is
roughly 150,000
square meters)
Purchase building
No. 1,
Guanchengjiuding
International,
Fengcheng No. 4
Road, Weiyang
Date of signing July 1, 2014 June 16, 2013 July 1, 2016 August 7, 2019 February 26, 2020
The Book value of
the assets involved
in the contract
(Unit: RMB)
38,306.00
Appraised value of 38,306.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
59
assets involved in
the contract (If
any) (Unit; RMB)
Name of evaluation
agency (If any)
Not applicable Not applicable Not applicable Not applicable Beijing Zhuoxin
Dahua Assets
Appraisal Co.,Ltd.
Evaluation base
date
December 31, 2019
Pricing principle Market fair value Market fair value Market fair value Market fair value Evaluated value
Transaction Price
( RMB10
thousands)
9,810.87 10,753.69 25,090.48 28,674.70 38,306.00
Whether it is a
related-party
transaction
No No Yes No No
Relations No No A company
actually controlled
by Beijing Huiyou
Zhiyuan Investing
Center (Limited
Partnership),
Which is an
institution actually
controlled by
executives and core
employees of
Offcn Edu
No No
Implementation as
of the end of the
reporting period
Under normal
Implementation
Under normal
implementation
Under normal
implementation
Under normal
implementation
Under normal
implementation
Date of disclosure December 1, 2018 December 1, 2018 December 1, 2018 December 1, 2018 Feb.27, 2020
Index of disclosure Juchao Information
Website
(http://www.cn
info.com.cn)
Juchao Information
Website
(http://www.cn
info.com.cn)
Juchao Information
Website
(http://www.cn
info.com.cn)
/ Juchao Information
Website
(http://www.cn
info.com.cn)
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
60
Major Asset
Replacement and
Issuance of Shares
to Purchase Assets
and related-party
transactionReport
(Nov. 2018)
Major Asset
Replacement and
Issuance of Shares
to Purchase Assets
and related-party
transactionReport
(Nov. 2018)
Major Asset
Replacement and
Issuance of Shares
to Purchase Assets
and related-party
transactionReport
(Nov. 2018)
Major Asset
Replacement and
Issuance of Shares
to Purchase Assets
and related-party
transactionReport
(Nov. 2018)
Section XVI. Social Responsibilities
1. Major Environmental Problems
Whether the listed Company and its subsidiaries belong to the major pollutant units labeled by the Ministry of
Ecology and Environment
None.
2. Social Responsibility for Targeted Poverty Alleviation
(1) Targeted Poverty Alleviation Plan
The Company has not carried out targeted poverty alleviation work for the first half of the year, neither there is
any follow-up target poverty alleviation plan.
(2) Semi-annual summary of targeted poverty alleviation
None.
Section XVII. Other Major Matters
√ Applicable □ Not applicable
Name of temporary announcement Disclosure date of
temporary
announcement
Websites for disclosures of temporary
announcement
Announcement on the advance purchase of pledged shares for
shareholders with more than 5% shares
January 2, 2020 Juchao Information Website,
Announcement Number; 2019-075
The first interim general board meeting in 2020 January 7, 2020 Juchao Information Website,
Announcement Number; 2020-001
Announcement on the pledged shares for shareholders with more
than 5% shares
February 5, 2020 Juchao Information Website,
Announcement Number; 2020-003
Announcement on the release of pledges of certain shares for
controlling shareholders and actual controller.
February 12, 2020 Juchao Information Website,
Announcement Number; 2020-004
Announcement on the acquisition of Shaanxi Guangcheng Jiuding
International Building No.1
February 27, 2020 Juchao Information Website,
Announcement Number; 2020-006
Announcement on the distribution of the 2019 profit plan March 10, 2020 Juchao Information Website,
Announcement Number; 2020-012
Announcement on estimated amount of daily related transactions
of 2020
March 10, 2020 Juchao Information Website,
Announcement Number; 2020-013
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
61
Announcement on the company and its subsidiaries to carry out
entrusted wealth management
March 10, 2020 Juchao Information Website,
Announcement Number; 2020-014
Announcement of the 2020 remuneration plan for the company
directors,supervisors and senior managers
March 10, 2020 Juchao Information Website,
Announcement Number; 2020-015
Announcement on changes in accounting policies March 10, 2020 Juchao Information Website,
Announcement Number; 2020-016
Announcement on renewing the appointment of the accounting
firm
March 10, 2020 Juchao Information Website,
Announcement Number; 2020-017
Announcement on the difference between Beijing Offcn
Education and Technology Co.,Ltd.’s 2019 actual net profit and
committed net profit
March 10, 2020 Juchao Information Website,
Announcement Number; 2020-018
Announcement on the company and its subsidiaries applying to
the bank for a comprehensive credit
March 10, 2020 Juchao Information Website,
Announcement Number; 2020-019
Announcement on the release of pledge shares and deferred
repurchase of the pledges for shareholders with more than 5%
shares
March 12, 2020 Juchao Information Website,
Announcement Number; 2020-020
Announcement on the online business performance conference March 19, 2020 Juchao Information Website,
Announcement Number; 2020-021
Announcement on the resolution of the 2019 Annual General
Meeting of Shareholders
March 31, 2020 Juchao Information Website,
Announcement Number; 2020-022
Announcement on the reply to the inquiry letter of the Annual
Report of the Shenzhen Stock Exchange
April 8, 2020 Juchao Information Website,
Announcement Number; 2019-023
Announcement on the pledge of shares by controlling
shareholders and actual controllers
April 18, 2020 Juchao Information Website,
Announcement Number; 2020-024
Announcement on 2019 annual equity distribution implementation May 13, 2020 Juchao Information Website,
Announcement Number; 2020-026
Announcement on pledge of certain shares for controlling
shareholders and actual controllers
June 24, 2020 Juchao Information Website,
Announcement Number; 2020-027
Section XVIII. Major Matters of Subsidiaries
□ Applicable √ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
62
Chapter VI. Changes in Shares and Information about Shareholders
Section I. Changes in Shares
1. Changes in Shares
Unit: share
Before change Increase or decrease (+ or -) After change
Number of
shares
Proportion
New
shares
issued
Bonus
shares
Conversion
of
equity
reserves
into share
capital
Others Subtotal
Number of
shares
Proportion
1. Shares with sales
restrictions
5,347,063,
429
86.70%
36,345,00
0
36,345,00
0
5,383,408,429 87.29%
Shares held by state
Shares held by
state-owned legal
person
(3) Other shares
held by domestic
capital
5,347,063,
429
86.70%
36,345,00
0
36,345,00
0
5,383,408,429 87.29%
Of which: held by
domestic legal
person
534,706,34
1
8.67% 534,706,341 8.67%
held by domestic
natural person
4,812,357,
088
78.03%
36,345,00
0
36,345,00
0
4,848,702,088 78.62%
(4) Shares held by
overseas capital
Of which: shares
held by overseas
legal person
shares held by
overseas natural
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
63
person
2. Shares without
trading restrictions
820,335,96
0
13.30%
-36,345,0
00
-36,345,0
00
783,990,960 12.71%
(1) RMB common
shares
820,335,96
0
13.30%
-36,345,0
00
-36,345,0
00
783,990,960 12.71%
(2) Domestic- listed
shares for oversea
investors
(3) Foreign- listed
shares for overseas
investors
(4) Others
3. Total number of
shares
6,167,399,
389
100.00% 0 0 6,167,399,389 100.00%
Reasons of changes in shares
□ Applicable √ Not applicable
36,345,000 shares locked by senior executives are newly issued in this reporting period
Approvals of changes in shares
□ Applicable √ Not applicable
Account transferring of changes in shares
□ Applicable √ Not applicable
Progress of share repurchase
□ Applicable √ Not applicable
Progress in the implementation of the centralized bidding method to reduce the repurchased shares
□ Applicable √ Not applicable
The impact of share changes on financial indicators such as basic earnings per share, and diluted earnings per
share, net assets per share attributable to common shareholders of the company,etc.
□ Applicable √ Not applicable
Other contents deemed necessary by the company or required by securities institutions
□ Applicable √ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
64
2. Changes in shares with sales restrictions:
√ Applicable □ Not applicable
Unit: share
Name of
shareholder
Number of
shares with
sales
restrictions
at the
beginning of
the period
Number of
shares with
sales
restrictions
released in
the period
Number of
shares with
sales
restrictions
increased in
the period
Number of
shares with
sales
restrictions
at the end of
the period
Reasons for sales restrictions
Date of
releasing
restrictions on
sales
Lu Zhongfang 2,550,549,260 0 0 2,550,549,260
Major asset replacement and
issuance of shares to purchase assets
for obtaining 2,550,549,260
restricted shares
Jan. 31, 2022
Li Yongxin 1,058,718,560 0 36,345,000 1,095,063,560
Major asset replacement and
issuance of shares to purchase assets
for obtaining 1,058,718,560
restricted shares. New 36,345,000
shares locked by senior executives
added.
Jan. 31, 2022
Wang Zhendong 962,471,418 0 962,471,418
Major asset replacement and
issuance of shares to purchase assets
for obtaining 962,471,418 restricted
shares.
Jan. 31, 2021
Beijing
Aerospace
Industry
Investment
Fund(Limited
Partners)
267,353,171 0 0 267,353,171
Major asset replacement and
issuance of shares to purchase assets
for obtaining 267,353,171 restricted
shares.
Jan. 31, 2021
Beijing Guangyin
Venture
Investment
Center (Limited
Partners)
178,235,447 0 0 178,235,447
Major asset replacement and
issuance of shares to purchase assets
for obtaining 178,235,447 restricted
shares.
Jan. 31, 2021
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
65
Beijing Kirui
Venture
Investment
Center(Limited
Partners)
89,117,723 0 0 89,117,723
Major asset replacement and
issuance of shares to purchase assets
for obtaining 89,117,723 restricted
shares.
Jan.31, 2022
Yang Shaofeng 48,123,570 0 0 48,123,570
Major asset replacement and
issuance of shares to purchase assets
for obtaining 48,123,570 restricted
shares.
Jan. 31, 2021
Zhang Zhian 48,123,570 0 0 48,123,570
Major asset replacement and
issuance of shares to purchase assets
for obtaining 48,123,570 restricted
shares.
Jan. 31, 2021
Liu Bin 48,123,570 0 0 48,123,570
Major asset replacement and
issuance of shares to purchase assets
for obtaining 48,123,570 restricted
shares.
Jan. 31, 2021
Zhang Yongsheng 48,123,570 0 0 48,123,570
Major asset replacement and
issuance of shares to purchase assets
for obtaining 48,123,570 restricted
shares.
Jan. 31, 2021
Guo Shihong 48,123,570 0 0 48,123,570
Major asset replacement and
issuance of shares to purchase assets
for obtaining 48,123,570 restricted
shares.
Jan. 31, 2021
Total 5,347,063,429 0 36,345,000 5,383,408,429 -- --
Section II. Issuance and listing of securities
□ Applicable √ Not applicable
Section III. Numbers of Shareholders and Shareholdings
Unit: Share
Total number of shareholders
with ordinary shares at the end
of the reporting period
33,231
Total number of preferred
shareholders with voting rights
restored at the end of the reporting
0
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
66
period (if any) (See Note 8)
Shareholders with over 5% ordinary shares or top 10 ordinary shareholders
Name of
Shareholder
Nature of
shareholder
Shareh
olding
Percen
tage
(%)
Total ordinary
shares held at
the end of the
reporting
period
Increase
and
decrease
of shares
during the
reporting
period
Number of
ordinary
shares held
with sales
restrictions
Number of
ordinary
shares held
without
sales
restrictions
Pledged or Frozen
Status of
shares
Number of shares
Lu Zhongfang
Domestic natural
person
41.36
%
2,550,549,260 0
2,550,549,2
60
0 Pledged 450,000,000
Li Yongxin
Domestic natural
Person
18.35
%
1,131,415,121 0
1,095,063,5
60
36,351,561 Pledged 774,495,000
Wang
Zhendong
Domestic natural
person
15.61
%
962,471,418 0 962,471,418 0 Pledged 107,100,000
Beijing
Aerospace
Industry
Investment
Fund(Limited
Partnership)
Domestic non-state-
owned legal person
4.33% 267,353,171 0 267,353,171 0
Beijing
Guangyin
Venture
Investment
Center (Limited
Partnership)
Domestic
non-state-owned
legal person
2.89% 178,235,447 0 178,235,447 0
Beijing Kirui
Venture
Investment
Center(Limited
Partnership)
Domestic
non-state-owned
legal person
1.44% 89,117,723 0 89,117,723 0
Beijing Offcn
Future
Information
Domestic
non-state-owned
legal person
1.30% 80,000,000 0 0 80,000,000
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
67
Consulting
Center(Limited
Partnership)
Zhou Xiayun
Domestic natural
person
1.28% 78,848,640 0 0 78,848,640 Pledged 37,148,845
Zhou Hui
Domestic natural
person
1.17% 72,277,920 0 0 72,277,920 Pledged 9,450,000
Hong Kong
Securities
Clearing
Co.,Ltd.
Overseas legal
person
0.84% 52,098,611 5,338,749 0 52,098,611
Strategic Investors or Ordinary Legal
Persons Become the Top 10
Shareholders with Ordinary Shares by
the replacement of New Shares
No
Description of the Above-mentioned
Shareholders’ Relationship or
Concerted Action
The company's controlling shareholder and actual controller Lu Zhongfang and Li Yongxin
are in a parent-child relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future
Information Consulting Center (Limited Partnership) constitute persons acting in concert.
Zhou Xiayun and Zhou Hui have a father-son relationship. It is unknown whether there is an
associated relationship among the above-mentioned other shareholders, and whether the
above-mentioned shareholders belong to the parties acting in concert as stipulated in the
Administrative Measures on Disclosure of Information Disclosure of Shareholding Changes
in Listed Companies.
\Description of top 10 shareholders with ordinary Shares without sales restrictions
Name of Shareholder
Number of ordinary shares without sales restrictions at the
end of the reporting period
Type
Type Quantities
Beijing Offcn Future Information
Consulting Center(Limited
Partnership)
80,000,000
RMB ordinary
shares
80,000,000
Zhou Xiayun 78,848,640
RMB ordinary
shares
78,848,640
Zhou Hui 72,277,920
RMB ordinary
shares
72,277,920
Hong Kong Securities Clearing
Co.,Ltd.
52,098,611
RMB ordinary
shares
52,098,611
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
68
Zhou li 48,185,280
RMB ordinary
shares
48,185,280
Li Yongxin 36,351,561
RMB ordinary
shares
36,351,561
China CITIC Bank Co.,Ltd.-Band of
Communications Schroder New
Vitality Flexible Configuration
Hybrid Securities Investment Fund
16,513,031
RMB ordinary
shares
16,513,031
National Social Security Fund 102
Portfolio
15,000,311
RMB ordinary
shares
15,000,311
National Social Security Fund 414
Portfolio
10,763,018
RMB ordinary
shares
10,763,018
Agricultural Band of China Co.,
Ltd-Bank of Communications
Schroder Growth Hybrid Securities
Investment Fund
10,704,416
RMB ordinary
shares
10,704,416
Description of the relationship or
concerted action among the top 10
shareholders of ordinary shares
without restrictions on , and between
the top 10 shareholders of ordinary
shares without restriction and the top
10 shareholders of ordinary shares
The company's controlling shareholder and actual controller Lu Zhongfang and Li Yongxin
are in a parent-child relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future
Information Consulting Center (Limited Partnership) constitute persons acting in concert.
Zhou Xiayun and Zhou Hui have a father-son relationship. It is unknown whether there is an
associated relationship among the above-mentioned other shareholders, and whether the
above-mentioned shareholders belong to the parties acting in concert as stipulated in the
Administrative Measures on Disclosure of Information Disclosure of Shareholding Changes
in Listed Companies.
Description of the Top 10 Ordinary
Shareholders Participating in the
Margin trading(if any)
None
Whether the company’s top 10 ordinary shareholders and top 10 ordinary shareholders without restrictions
conducted agreed repurchase transactions during the reporting period
□ Yes √ No
The company’s top 10 ordinary shareholders and top 10 ordinary shareholders without restrictions didn’t conduct
agreed repurchase transactions during the reporting period
Section IV. Change of controlling shareholders or actual controller
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
69
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
No changes of controlling shareholders during the reporting period
Changes of actual controllers during the reporting period
□ Applicable √ Not applicable
No changes of actual controllers during the reporting period.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
70
Chapter VII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares existed during the reporting period
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
71
Chapter VIII. Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds existed during the reporting period
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
72
Chapter IV. Information of Directors, Supervisors and Senior Executives
Section I. Changes in shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes in shares held by the directors, supervisors and senior executives of the Company during the reporting
period, please refer to the annual report of 2019.
Section II. Changes of Company’s directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes of directors, supervisors and senior executives during the reporting period, please refer to the annual
report of 2019.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
73
Chapter X. Corporate Bonds
Whether there is corporate bonds that the Company has publicly issued and listed on the stock exchange, and is
not due on the date of approval of the semi-annual report or has not been fully redeemed at maturity
None.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
74
Chapter XI. Financial Report
Section I. Auditor’s Report
Whether audit has been performed on this semi-annual financial report.
□ Yes √ No
The Company’s 2020 semi-annual financial report has not been audited.
Section II. Financial Statement
The unit of statement in financial notes is : RMB
1. Consolidated Balance Sheet
Company: Offcn Education Technology Co., Ltd.
June 30, 2020
Unit: RMB
Item June 30, 2020 December 31, 2019
Current Assets:
Cash and cash equivalents 4,665,798,912.43 2,724,335,001.58
Settlement reserve
Due from banks and other
financial institutions
Financial assets held for trading 2,156,713,143.65 1,754,396,227.54
Derivative Financial assets
Notes Receivable
Accounts Receivable 14,349,954.64 2,721,638.09
Financing receivables
Prepayments 5,069,205.17 2,461,009.00
Premium receivable
Reinsurance premium receivable
Reserve receivable for reinsurance
Other receivables 533,546,149.67 255,013,296.96
Inc: interest receivables 568,426.66 567,341.68
Dividends receivables
Financial assets purchased under
resale agreements
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
75
Inventories
Contract assets
Assets held for sale
Non-current assets due within one
year
1,838,527,164.24
Other current assets 242,135,136.12 97,336,600.16
Total current assets 9,456,139,665.92 4,836,263,773.33
Non-current assets:
Loans And Advances
Debt investments 122,023,500.00 1,923,598,909.09
Other debt investments
Long-term receivables
Long-term equity investments
Other equity instruments 162,800,000.00 162,800,000.00
Other non-current financial assets 138,166,559.96 138,166,559.96
Investment properties 678,502,813.80 688,475,053.53
Fixed assets 870,207,450.02 672,429,601.44
Construction in progress 811,011,730.47 653,580,160.32
Bearer biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 194,133,316.45 197,507,227.40
Development expenditure
Goodwill 99,867,720.38 99,867,720.38
Long-term deferred expense 232,654,802.11 240,565,962.02
Deferred tax assets 11,163,089.94 21,482,832.13
Other non-current assets 487,305,566.38 325,967,628.34
Total Non-current Assets 3,807,836,549.51 5,124,441,654.61
Total Assets 13,263,976,215.43 9,960,705,427.94
Current liabilities:
Short-term borrowings 3,457,000,000.00 2,867,000,000.00
Borrowings from central bank
Placement from banks and other
financial institutions
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
76
Financial liabilities held for trading
Derivative Financial liabilities
Notes payable
Accounts payable 25,285,867.85 236,481,990.86
Receipts in advance 2,634,276,203.88
Contract liabilities 7,222,148,935.39
Financial assets sold under
repurchase agreements
Absorbing deposit and deposit in
inter-bank market
Customer deposits for trading in
securities
Amounts due to issuer for
securities underwriting
\ Employee benefits payable 422,605,744.49 411,475,636.03
Taxes payable 14,792,410.55 184,306,027.84
Other payables 54,583,260.88 88,693,411.98
Inc: Interest payables 13,367,960.06 4,521,557.54
Dividends payables
Fees and commissions payable
Reinsurance accounts payable
Held-for-sale liabilities
Non-current Liabilities due within
One Year
Other current liabilities 216,664,468.06
Total Current Liabilities 11,413,080,687.22 6,422,233,270.59
Non-current Liabilities:
Deposits for insurance contracts
Long-term borrowings
Bonds payable
Inc: preferred shares
Perpetual bond
Lease liabilities
Long-term payables
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
77
Long-term employee benefits
payable
Provisions
Deferred Income
Deferred tax liabilities 105,663,825.85 106,932,273.03
Other non-current liabilities
Total Non-current Liabilities 105,663,825.85 106,932,273.03
Total Liabilities 11,518,744,513.07 6,529,165,543.62
Owners’ equity:
Paid-in capital (share capital) 103,807,623.00 103,807,623.00
Other equity instrument
Inc: preferred shares
Perpetual bond
Capital reserve 1,225,481,049.50 1,198,581,049.50
Deduct: Treasury stock
Other comprehensive income 37,500,000.00 37,500,000.00
Special reserve
Surplus reserve 45,000,000.00 45,000,000.00
General risk reserve
Retained earnings 333,454,732.80 2,046,657,231.32
Total Owners’ Equity Attributable To
the Company
1,745,243,405.30 3,431,545,903.82
Minority interests -11,702.94 -6,019.50
Total Owners’ Equity 1,745,231,702.36 3,431,539,884.32
Total Liabilities and Owners’ Equity 13,263,976,215.43 9,960,705,427.94
Legal Representative: Wang Zhendong
Person in charge of the accounting work: Shi Lei
Person in charge of the accounting department: Luo Xue
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
78
2. Balance sheet of the Company
Unit: RMB
Item June 30, 2020 December 31, 2019
Current Assets:
Cash and cash equivalents 6,681,747.05 6,931,803.33
Financial assets held for trading 1,601,681.64 101,681.64
Derivative Financial assets
Notes Receivable
Accounts Receivable 7,258,379.44
Financing receivables
Prepayments
Other receivables 688,067,588.44 1,717,949,520.99
Inc: interest receivables
Dividends receivables 1,700,000,000.00
Inventories
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 913,141.57
Total current assets 704,522,538.14 1,724,983,005.96
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 18,582,307,907.14 18,582,307,907.14
Other equity instruments 162,800,000.00 162,800,000.00
Other non-current financial assets
Investment properties 390,310,224.04 395,978,156.15
Fixed assets
Construction in progress 372,569,103.57 72,569,103.57
Bearer biological assets
Oil and gas assets
Right-of-use assets
Intangible assets
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
79
Development expenditure
Goodwill
Long-term deferred expense
Deferred tax assets 10,900,433.61 10,804,928.62
Other non-current assets
Total Non-current Assets 19,518,887,668.36 19,224,460,095.48
Total Assets 20,223,410,206.50 20,949,443,101.44
Current liabilities:
Short-term borrowings 800,000,000.00
Financial liabilities held for trading
Derivative Financial liabilities
Notes payable
Accounts payable 561,752.26 561,752.26
Receipts in advance
Contract liabilities
Employee benefits payable
Taxes payable 1,421,656.07 791,191.77
Other payables 7,715,532.90 40,275,566.88
Inc: Interest payables 957,000.01
Dividends payables
Held-for-sale liabilities
Non-current liabilities due within one
year
Other current liabilities
Total Current Liabilities 809,698,941.23 41,628,510.91
Non-current Liabilities:
Long-term borrowings
Bonds payable
Inc: preferred shares
Perpetual bond
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
80
Deferred Income
Deferred tax liabilities 12,500,420.41 12,500,420.41
Other non-current liabilities
Total Non-current Liabilities 12,500,420.41 12,500,420.41
Total Liabilities 822,199,361.64 54,128,931.32
Owners’ equity:
Paid-in capital (share capital) 6,167,399,389.00 6,167,399,389.00
Other equity instrument
Inc: preferred shares
Perpetual bond
Capital reserve 12,775,326,370.33 12,775,326,370.33
Deduct: Treasury stock
Other comprehensive income 37,500,000.00 37,500,000.00
Special reserve
Surplus reserve 387,458,806.65 387,458,806.65
Retained earnings 33,526,278.88 1,527,629,604.14
Total Owners’ Equity 19,401,210,844.86 20,895,314,170.12
Total Liabilities and Owners’ Equity 20,223,410,206.50 20,949,443,101.44
3. Consolidated Income Statement
Unit: RMB
Item Half year of 2020 Half year of 2019
Total operating income 2,807,980,480.60 3,637,419,515.48
Inc: Operating income 2,807,980,480.60 3,637,419,515.48
Interest income
Insurance gained
Fee and commission income
Total operating costs 3,244,547,876.16 3,098,605,498.12
Inc: Operating cost 1,452,611,180.39 1,545,288,459.56
Interest expense
Fee and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
81
Reinsurance expense
Taxes and surcharges 6,277,633.04 31,833,247.21
Sales expense 700,817,453.92 675,313,099.29
General and administrative expenses 518,959,454.14 499,631,045.91
Research and development expenses 383,227,531.01 304,030,157.51
Financial expenses 182,654,623.66 42,509,488.64
Inc: Interest expenses 85,130,012.11 46,924,890.43
Interest income 2,889,907.48 37,722,676.13
Add: Other income 84,454,707.44 230,676.42
Investment income (Losses are indicated by “-”) 128,818,126.44 53,971,926.62
Inc: Investment income on affiliated company and joint
venture
The termination of income recognition for financial assets
measured by amortized cost
Exchange income (Loss is indicated by “-”)
Net exposure hedging income (Loss is indicated by “-”)
Income from change of fair value (Loss is indicated by “-”)
Loss of credit impairment (Loss is indicated by “-”) -770,761.79
Losses of devaluation of asset (Loss is indicated by “-”)
Income from assets disposal (Loss is indicated by “-”) 162,043.59 198,807.74
Operating profit (Loss is indicated by “-”) -223,903,279.88 593,215,428.14
Add: Non-operating income 20,148.00 1,565,171.86
Less: Non-operating expenses 93,502.28 82,996.53
Total profit (Total Loss is indicated by “-”) -223,976,634.16 594,697,603.47
Less: Income tax expenses 9,055,694.44 101,672,138.32
Net profit (Net loss is indicated by “-”) -233,032,328.60 493,025,465.15
Classified by continuing/discontinuing operation
(1) Net profit from continuing operations (Net loss is
indicated by “-”)
-233,032,328.60 493,025,465.15
(2) Net profit from discontinued operations (Net loss
is indicated by “-”)
Classified by ownership
Net profit attributable to owners of the Company -233,026,645.16 493,025,465.15
Minority shareholders’ gains and losses -5,683.44
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
82
Other comprehensive income after tax
Net other comprehensive income after tax attributable to
controlling interest
1. Other comprehensive income not reclassified into
gains or losses
Changes of the defined benefit plans that re-measured
Under the equity method, the share of other comprehensive
income not reclassified into gains or losses
Changes in the fair value of other equity instruments
Change in fair value of the enterprise’s own credit risk
Others
2. Other comprehensive income classified into gains or losses
Under the equity method, the share of other
comprehensive income classified into gains or losses
Changes in the fair value of other debt
instruments
Amount of financial assets reclassified to other
comprehensive income
Credit impairment provision for other debt
investment
Cash flow hedging reserve
Translation differences arising on translation of
foreign currency financial statements
Others
Net after-tax of other comprehensive income attributable to
minority shareholders
VII. Total comprehensive income -233,032,328.60 493,025,465.15
Total comprehensive income attributable to owners of the
Company
-233,026,645.16 493,025,465.15
Total comprehensive income attributable to minority interests -5,683.44
VIII. Earnings per share
1. Basic earnings per share -0.04 0.08
2. Diluted earnings per share -0.04 0.08
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
83
Should there be any merger of enterprises under the same control during this reporting period, the net profit
achieved by the merged party before the merger shall be: RMB 0.00, and the net profit achieved by the merged
party in the previous period shall be: RMB 0.00.
Legal Representative: Wang Zhendong
Person in charge of the accounting work: Shi Lei
Person in Charge of the Accounting Department: Luo Xue
4. Income statement of the Company
Unit: RMB
Item Half Year of 2020 Half Year of 2019
I. Total operating income 7,276,570.86 7,276,570.86
Less: Operating cost 5,667,932.11 5,668,813.35
Taxes and surcharges 2,120,841.35 16,402,430.70
Sales expense
General and administrative expenses 2,930,657.06 11,921,385.81
Research and development expenses
Financial expenses 10,672,898.30 120.21
Inc: Interest expenses 10,703,779.17
Interest income -43,607.28 2,270.78
Add: Other income 474,801.04
Investment income (Losses are indicated by “-”) 30,534.61
Inc: Investment income on affiliated company and joint
venture
The termination of income recognition for financial assets
measured by amortized cost(Loss is indicated by “-”)
Net exposure hedging income (Loss is indicated by “-”)
Income from change of fair value (Loss is indicated by “-”)
Loss of credit impairment (Loss is indicated by “-”) -382,019.97
Losses of devaluation of asset (Loss is indicated by
“-”)
Income from assets disposal (Loss is indicated by “-”)
I. Operating profit (Loss is indicated by “-”) -14,022,976.89 -26,685,644.60
Add: Non-operating income
Less: Non-operating expenses
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
84
III. Total profit (Total Loss is indicated by “-”) -14,022,976.89 -26,685,644.60
Less: Income tax expenses -95,504.99
IV. Net profit (Net loss is indicated by “-”) -13,927,471.90 -26,685,644.60
1. Net profit from continuing operations (Net loss is indicated
by “-”)
-13,927,471.90 -26,685,644.60
2. Net profit from discontinued operations (Net loss is
indicated by “-”)
V. Other comprehensive income after tax
1. Other comprehensive income not reclassified into gains or
losses
Changes of the defined benefit plans that
re-measured
Under the equity method, the share of other
comprehensive income not reclassified into gains or losses
Changes in the fair value of other equity
instruments
Change in fair value of the enterprise’s own
credit risk
Others
2. Other comprehensive income classified into gains or losses
Under the equity method, the share of other
comprehensive income classified into gains or losses
Changes in the fair value of other debt i
nstruments
Amount of financial assets reclassified to other
comprehensive income
Credit impairment provision for other debt
investment
Cash flow hedging reserve
Translation differences arising on translation of
foreign currency financial statements
Others
VI. Total comprehensive income -13,927,471.90 -26,685,644.60
VII. Earnings per share
1. Basic earnings per share
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
85
2. Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB
Item Half Year of 2020 Half Year of 2019
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the rendering of services 7,685,015,351.32 7,475,964,695.98
Net increase in customer bank deposits and due to banks and other
financial institutions
Net increase in borrowings from central bank
Net increase in placements from other financial institutions
Premiums received from original insurance contracts
Net cash received from reinsurance
Net increase in deposits from policyholders
Cash received from interest, fee and commission
Net increase in placements from banks and other financial
institutions
Net increase in repurchase business capital
Net cash from acting trading securities
Tax rebates received
Cash received relating to other operating activities 14,139,064.39 887,943.94
Sub-total of cash inflows from operating activities 7,699,154,415.71 7,476,852,639.92
Cash payments for goods purchased and services received 519,654,701.91 691,809,578.76
Net increase in loans and advances to customers
Net increase in deposits with central bank and other financial
institutions
Original insurance contract claims paid
Net increase in loans to banks and other financial institutions
Cash paid for interest, fee and commission
Policyholder Dividend Paid Cash paid as policy dividend
Cash paid to and for employees 2,295,211,119.61 1,744,813,719.22
Cash paid for all types of taxes 199,637,364.28 261,157,371.15
Cash paid relating to other operating activities 620,975,725.72 424,305,172.26
Sub-total of cash outflows from operating activities 3,635,478,911.52 3,122,085,841.39
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
86
Net cash flow from operating activities 4,063,675,504.19 4,354,766,798.53
II. Cash flows from investing activities:
Cash receipts from disposals and recovery of investments 17,567,171,173.89 9,456,190,000.00
Cash receipts from investment income 91,865,286.31 59,805,746.06
Net cash receipts from disposals of fixed assets, intangible assets
and other long-term assets
162,043.59
Net cash receipts from disposals of subsidiaries and other business
units
Cash received relating to other investing activities
Sub-total of cash inflows from investing activities 17,659,198,503.79 9,515,995,746.06
Cash payments to acquire or construct fixed assets, intangible
assets and other long-term assets
844,329,065.33 214,352,186.66
Cash paid for investment 17,970,288,090.00 11,806,840,000.00
Net increase in pledged loans receivables
Net cash payments for acquisitions of subsidiaries and other
business units
Cash paid relating to other investing activities
Sub-total of cash outflows from investing activities 18,814,617,155.33 12,021,192,186.66
Net cash flow from investing activities -1,155,418,651.54 -2,505,196,440.60
III. Cash flows from financing activities:
Cash received from investors
Inc: cash receipts from capital contributions from minority owners
of subsidiaries
Cash from borrowings 2,320,000,000.00 360,000,000.00
Other cash received relating to other financing activities
Sub-total of cash inflows from financing activities 2,320,000,000.00 360,000,000.00
Cash repayments of borrowings 1,730,000,000.00
Cash payments for distribution of dividends or profits or settlement
of interest expenses
1,556,459,462.95 1,453,962,092.80
Inc: payments for distribution of dividends or profits to minority
owners of subsidiaries
Cash paid relating to other financing activities 333,478.85 320,723.05
Sub-total of cash outflows from financing activities 3,286,792,941.80 1,454,282,815.85
Net cash flow from financing activities -966,792,941.80 -1,094,282,815.85
IV. Effect of foreign exchange rate changes on cash and cash
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
87
equivalents
V. Net increase in cash and cash equivalents 1,941,463,910.85 755,287,542.08
Add: Initial cash and cash equivalents balance 2,724,335,001.58 648,711,545.32
VI. The final cash and cash equivalents balance 4,665,798,912.43 1,403,999,087.40
6. Cash Flow Statements of the Company
Unit: RMB
Item Half Year of 2020 Half Year of 2019
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the rendering of services
Tax rebates received
Cash received relating to other operating activities 1,748,092.19 563,220,614.96
Sub-total of cash inflows from operating activities 1,748,092.19 563,220,614.96
Cash payments for goods purchased and services received
Cash paid to and for employees 895,723.48
Cash paid for all types of taxes 2,606,189.88 19,409,326.35
Cash paid relating to other operating activities 707,635,847.22 125,205,047.40
Sub-total of cash outflows from operating activities 710,242,037.10 145,510,097.23
Net cash flow from operating activities -708,493,944.91 417,710,517.73
II. Cash flows from investing activities:
Cash receipts from disposals and recovery of investments 23,960,000.00
Cash receipts from investment income 1,700,000,000.00 1,550,030,534.61
Net cash receipts from disposals of fixed assets, intangible assets
and other long-term assets
Net cash receipts from disposals of subsidiaries and other business
units
Cash received relating to other investing activities
Sub-total of cash inflows from investing activities 1,700,000,000.00 1,573,990,534.61
Cash payments to acquire or construct fixed assets, intangible
assets and other long-term assets
300,000,000.00 1,929,500.00
Cash paid for investment 1,500,000.00 24,060,000.00
Net cash payments for acquisitions of subsidiaries and other
business units
Cash paid relating to other investing activities
Sub-total of cash outflows from investing activities 301,500,000.00 25,989,500.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
88
Net cash flow from investing activities 1,398,500,000.00 1,548,001,034.61
III. Cash flows from financing activities:
Cash received from investors
Cash from borrowings 800,000,000.00
Other cash received relating to other financing activities
Sub-total of cash inflows from financing activities 800,000,000.00
Cash repayments of borrowings 216,000,000.00
Cash payments for distribution of dividends or profits or settlement
of interest expenses
1,489,922,632.52 1,738,432,883.87
Cash paid relating to other financing activities 333,478.85 1,503,370.80
Sub-total of cash outflows from financing activities 1,490,256,111.37 1,955,936,254.67
Net cash flow from financing activities -690,256,111.37 -1,955,936,254.67
IV. Effect of foreign exchange rate changes on cash and cash
equivalents
V. Net increase in cash and cash equivalents -250,056.28 9,775,297.67
Add: Initial cash and cash equivalents balance 6,931,803.33 5,304,519.61
VI. The final cash and cash equivalents balance 6,681,747.05 15,079,817.28
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
89
7. Consolidated Statement of Changes in Owners’ Equity
Figures of Current per
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
90
Year of 2019
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
91
8. Statement of Changes in Owners’ Equity
Figures of current period
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
92
Figures of previous period
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
93
Section III. General Information
1. Overview of the Company
Offcn Education Technology Co., Ltd. (hereinafter referred to as the “Company” or “the Company”) was formerly
known as Yaxia Automobile Co., Ltd. (hereinafter referred to as “Yaxia Auto”). Yaxia Auto, a limited company
established by Wuhu Yaxia Industrial Co., Ltd obtained the Enterprise Business License of Enterprise Legal
Person No. 3402012104768 issued by Wuhu Administration for Industry and Commerce on November 30, 2006.
Yaxia Auto was approved by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”)
for The approval of the initial public offering of Wuhu Yaxia Automobile Co., Ltd. (CSRC License [2011] No.
1046) and issued RMB 22 million ordinary shares to the public and traded on the Shenzhen Stock Exchange in
August 2011. The controlling shareholder is Anhui Yaxia Industrial Co., Ltd. (hereinafter referred to as “Yaxia
Industrial”). On July 1, 2016, the Company obtained the No. 91340200711040703A “Enterprise Business License
of Enterprise Legal Person” issued by Wuhu Administration for Industry and Commerce. As of June 30, 2020, the
Company's share capital was RMB 6,167,399,389.00.
In accordance with the resolution of the 3rd Extraordinary General Meeting of Yaxia Auto in 2018 and the
resolution of the 24th Board Meeting of the 4th Board of Directors, and approved by China Securities Regulatory
Commission’s The approval of major asset restructuring of Yaxia Automobile Co., Ltd. and the issuance of shares
to Lu Zhongfang and others for asset purchase (Securities Regulatory Commission [2018] No. 1975), Yaxia Auto
swapped all assets and liabilities (“exchange-out assets”) as of the assessment date, excluding the retained assets
that do not constitute business, with the equivalent portion (“exchange-in assets”) of 100.00% of the equity in
Beijing Offcn Education Technology Co., Ltd. (hereinafter referred to as “Offcn Ltd.”) respectively held by 11
transaction counter-parties including Li Yongxin, and paid the difference between the exchange-out assets and the
exchange-in assets by issuing shares.
On December 27, 2018, Yaxia Auto and the counterpart Yaxia Industrial signed the Confirmation of Delivery of
Exchange-out Assets. The delivery date of the exchange-out assets was December 27, 2018. And from the date of
delivery, Yaxia Auto and the counterpart would complete the delivery obligations, regardless of whether the
delivery, ownership change registration or filing procedures of exchange-out assets (including but not limited to
land use rights, housing ownership, intellectual property rights and qualifications, licenses, other intangible assets,
etc.) is actually completed; the ownership of the exchange-out assets belongs to Yaxia Industrial, and all the rights,
obligations, responsibilities and risks related to the disposed assets (including contingent liabilities and implicit
liabilities) are owned and undertaken by Yaxia Industrial, which has the completely exclusive actual control and
disposal rights over the exchange-out assets, while Yaxia Auto no longer has any actual rights. On the same day,
Offcn Ltd. completed the registration procedures for industrial and commercial changes on the matters of
shareholder change. After the completion of this alteration, Yaxia Auto holds a 100.00% stake in Offcn Ltd., and
accordingly, Li Yongxin and Lu Zhongfang become the controlling shareholder and actual controller of the
Company. On February 2, 2019, Yaxia Auto changed its name and its business scope.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
94
On January 23, 2019, the registration procedures for the transfer of shares of the Company and the new shares of
the Company related to the restructuring transaction were completed.
Unified social credit code: 91340200711040703A
Company residence: Yaxia Automobile City, Yijiang North Road, Jiujiang District, Wuhu City, Anhui Province
Headquarters Address: Hanhua Century Building B, Xueqing Road 23, Haidian District, Beijing
Nature of business: Education
Nature of customer: Mainly natural persons
Business Scope: engaged in technology development, technical services, technology promotion, technology
transfer, technical consulting and the business of education and training (reserved to branches) in the field of
education and technology; holding exhibitions; organizing cultural and artistic exchange activities (excluding
performances); offering conference services and consulting services of enterprise management. (Projects subject
to approval according to the law can be carried out under the approval of the relevant departments)
The Financial Statements were approved by the Board of Directors of the Company on August 28, 2020.
2. The scope of the consolidated financial statements
The consolidated scope of the consolidated financial statements of the Company is determined on a control basis,
including the financial statements of the Company and all subsidiaries. A subsidiary is an enterprise or entity
controlled by the Company. The scope of the consolidated financial statements is detailed in Note IX (1) “Interest
in subsidiaries” of this report; changes in the scope of consolidated financial statements are detailed in Note VIII.
“Changes in the Consolidated Scope” of this report.
Section IV. Basis for Preparation of Financial Statements
1. Basis of preparation
The financial statements are prepared on a going concern basis, according to the actual transactions and the
relevant provisions of the Accounting Standards for Business Enterprises (collectively referred to as the “CASs”),
and based on the important accounting policies and accounting estimates described below.
2. Going concern
The Company evaluated the ability to continue operations for 12 months from the end of the reporting period and
did not find any matters and situations that may cast significant doubts on the ability to continue operations.
Therefore, it is reasonable for the Company to prepare financial statements on a going concern basis.
Section V. The Company’s Significant Accounting Policies and Accounting Estimates
Notes on specific accounting policies and accounting estimates:
None
1. Statement of compliance with the Accounting Standards for Business Enterprises
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
95
The financial statements based on the above-mentioned preparation basis meet the requirements of the latest
CASs and its application guidelines, interpretations, and other relevant regulations issued by the Ministry of
Finance, which truly and completely present the Company’s financial position, business performance, cash flows
and other information for the year then ended. In addition, the financial report is compiled by reference to the
listing and disclosure requirements of the Rules for the Information Disclosure and Compilation of Companies
Publicly Issuing Securities NO.15 — General Provisions for Financial Report (Revised in 2014) of the CSRC as
well as the Notice on Implementation of the New Accounting Standards for Listed Companies (Letter of the
Accounting Department [2018] no. 453).
2. Accounting period
The Company’s accounting period starts on January 1 and ends on December 31.
3. Business cycle
The Company’s business cycle starts on January 1 and ends on December 31.
4. Recording currency
The Company adopts Renminbi (RMB) as their recording currency.
5. The accounting treatment of business combinations involving enterprises under common control and business
combinations not involving enterprises under common control
5.1 The accounting treatment of business combinations involving enterprises under common control
The Company achieves a merger under the same control in one transaction or through step-by-step multiple
transactions. Assets and liabilities obtaining from the merger of enterprise are measured according to the share of
book value of consolidated financial statements of final controlling party under the owner’s equity of combined
party within combining date. The difference between the book value of the net assets obtained by the Company
and book value of combined consideration paid (or the aggregate face value of shares issued as consideration) is
adjusted to the capital reserve; if the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
5.2 The accounting treatment of business combinations involving enterprises under uncommon control
Where the cost of combination exceeds the acquiree’s interest in the fair value of the acquiree’s identifiable net
assets, the difference is treated as an asset and recognized as goodwill, which is measured at cost on initial
recognition. If the combination cost is less than the share of identifiable fair value of net assets of acquiree, firstly,
conducting the review of measurement is necessary to achieve the acquiree the identifiable assets, liabilities and
the fair value of contingent liabilities as well as the combination costs. If the acquiree combination costs after
reviews are still less than the fair value of identifiable net asset, the difference will be added into the current
profits and losses.
To achieve business combinations not under common control by step-by-step multiple transactions should be
handled in the following order:
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
96
(1) Adjust the initial investment cost of long-term equity investments. If the equity held before the purchase date
is accounted for using the equity method, it is remeasured at the fair value of the equity on the purchase date, and
the difference between the fair value and its book value is included in the current investment income; Changes in
other comprehensive income and other owners’ equity under the equity method shall be converted to the current
income at the acquisition date, except for other comprehensive income arising from the net liabilities or net assets’
changes of the benefit plan remeasured by the investee.
(2) Recognize goodwill (or the amount included in the current profit or loss). Compare the initial investment cost
of the adjusted long-term equity investment with the fair value of the identifiable net assets of the subsidiary that
should be enjoyed on the purchase date. If the former is greater than the latter, the difference is recognized as
goodwill; the former is less than the latter, and the difference is booked into the current profit and loss.
Circumstances of disposing of equity through step-by-step multiple transactions to the loss of control over
subsidiaries
(1) Determine whether the various transactions in the process of step-by-step disposal of equity to the loss of
control over subsidiaries follow the “package deal” principle
Generally transactions in stages are treated as a package deal in accounting if the transaction terms, conditions,
and economic impact of the disposal of the subsidiary’s equity interests comply with one or more of the following:
1) These transactions are made simultaneously or with consideration of influence on each other;
2) These transactions can only achieve a complete business outcome when treated as a whole;
3) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
4) A transaction is uneconomical when treated alone, but is economical when considered together with other
transactions.
(2) The accounting method of each transaction belonging to the “package deal” in the process of disposing of the
equity in stages to the loss of control over the subsidiary
All the transactions, belonging to the package deal in the process of disposing of equity investments in
subsidiaries to the loss of control, should be accounted for as one transaction disposing of the subsidiary to the
loss of control over it; however, the difference between each disposal price and the share of the subsidiary’s net
assets obtained by the disposal of investment before the loss of control shall be recognized as other
comprehensive income in the consolidated financial statements and shall be transferred to the profit and loss of
the period when the control is lost.
In the consolidated financial statements, the remaining equity should be remeasured at its fair value on the date
when the control is lost. The difference between the sum of the consideration obtained from the disposal of the
equity and the fair value of the remaining equity, and the shares of the net assets of the original subsidiary
calculated from the purchase date based on the original shareholding ratio, shall be included in the investment
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
97
income of the period when the control is lost. Other comprehensive income related to the original subsidiary’s
equity investment shall be converted to current investment income when control is lost.
(3) The accounting method of each transaction not belonging to the “package deal” in the process of disposing of
the equity in stages to the loss of control over the subsidiary
If the disposal of the investment in the subsidiary does not lose control, the difference between the disposal price
in the consolidated financial statements and the share of the subsidiary’s net assets obtained from the disposal of
investment is included in the capital reserve (capital premium or equity premium). If the capital premium is
insufficient to offset, the retained earnings should be adjusted.
When the control over disposing of the investment in a subsidiary is lost, in the consolidated financial statements,
the remaining equity should be remeasured at its fair value on the date when control is lost. The sum of the
consideration obtained from the disposal of equity and the fair value of the remaining equity minus the share of
the net assets that should be calculated by the original subsidiary from the date of purchase based on the original
shareholding ratio is included in the investment income of the period when the control is lost. Other
comprehensive income related to the equity investment of the original subsidiary shall be converted to current
investment income when control is lost.
6. Preparation of consolidated financial statements
Consolidated financial statements based on the Parent’s and its subsidiaries’ financial statements are prepared by
the Company in accordance with the CASs No.33 — Consolidated financial statement and other relevant
materials.
7. Classification of joint arrangement and accounting methods of joint operations
7.1 Identification and classification of joint arrangements
A joint arrangement refers to an arrangement jointly controlled by two or more parties. The joint arrangement has
the following characteristics: (1) all participants are bound by the arrangement; (2) two or more participants
exercise joint control over the arrangement. No single party shall be able to control the arrangement, and any party
that has joint control over the arrangement shall be able to prevent any other party or combination of parties from
controlling the arrangement alone.
Joint control refers to the shared control over a certain arrangement as required in the contract. And the decision
about the activities of the arrangement can be made only when all participants with the shared control have
consented.
A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a joint
arrangement whereby the joint operators have rights to the assets, and obligations for the liabilities, related to the
arrangement. A joint venture is a joint arrangement whereby the joint parties only have the rights to the net assets
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
98
under this arrangement.
7.2 Accounting treatment of joint arrangements
A joint operator shall recognize the following items in relation to its interests in a joint operation, and account for
them in accordance with relevant accounting standards: (1) Its solely-held assets, and its share of any assets held
jointly; (2) Its solely-assumed liabilities, and its share of any liabilities incurred jointly; (3) Its revenue from the
sale of its share of the output arising from the joint operation; (4) Its share of the revenue from sale of the output
by the joint operation; (5) Its solely-incurred expenses and its share of any expenses incurred jointly.
The participants in a joint venture shall, in accordance with the Accounting Standards for Enterprises No.2 —
Long-term Equity Investment, make accounting arrangements for the investment of the joint venture.
8. Criteria for the recognition of cash and cash equivalents
The term “cash” in cash flow statement refers to cash on hand and deposits that are available for payment at any
time. The term of “cash equivalents” refers to short-term (usually due within 3 months from the purchase date)
and highly liquid investments that are readily convertible to known amounts of cash and subject to an insignificant
risk of changes in value.
9. Translation of foreign currency transactions and foreign currency statement
9.1 Translation of transactions denominated in foreign currencies
On initial recognition, a foreign currency amount is translated into the amount denominated in RMB by applying
the spot exchange rate on the date of the transaction announced by People’s Bank of China. At the balance sheet
date, foreign currency balance comprised of foreign currency monetary items shall be translated at the spot
exchange rate on the balance sheet date, and the exchange differences caused by different exchange rates, except
the exchange difference of the principal and interest of foreign currency special loans related to the acquisition
and construction of assets that meet the capitalization conditions, shall be included into profit and loss for the
period; foreign currency non-monetary items measured at historical cost are still converted at the spot exchange
rate on the transaction date, and their RMB amount is not changed; foreign currency non-monetary items
measured at fair value, are translated at the spot exchange rate on the fair value determination date, and the
difference shall be included into profit and loss for the period or other comprehensive income.
9.2 Translation of financial statements denominated in foreign currencies
The assets and liabilities of the balance sheet are translated at the spot exchange rate of the balance sheet date; all
items about the owner’s equity except the “undistributed profits” are translated at the spot exchange rate on the
transaction date; the revenue and expenses in the income statement are translated at the approximate rate of the
spot exchange rate on the transaction date. Differences arising from the above translation of financial statements
denominated in foreign currencies are recognized as other comprehensive income.
10. Financial instruments
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
99
10.1 Recognition and derecognition of financial instruments
The Company recognizes a financial asset or a financial liability when it becomes the contractual party of the
financial instrument.
All regular ways of purchasing or selling of financial assets are recognized and derecognized on a trade date basis.
Regular ways of purchasing or selling mean that the receiving or delivery of financial assets should be within the
time limit stipulated by regulations or common practices, as agreed in the terms of the contract. Trade date is the
date on which the Company promises to buy in or sell out the financial assets.
The Company will derecognize the financial assets (either a part, or a part of a similar group), and write it off the
account and the balance sheet, if following conditions are met:
(1) Expiration of the right to receive cash flows from financial assets;
(2) The Company’s right to receive cash flows from financial assets has been transferred, or bear the obligation to
pay all cash received to the third party in time due to “Hand-Over arrangement”; and (a) almost all risks and
benefits of the ownership of the financial assets have been transferred virtually, or (b) though none of risks and
benefits of the ownership the financial assets have been transferred or retained virtually, the Company waives
the control of the financial assets.
10.2 Classification and measurement of financial assets
According to the business model for managing financial assets and the contractual cash flow characteristics of
financial assets, the Company’s financial assets have initially been classified as follows: financial assets measured
at amortized cost, financial assets measured at fair value and the changes are included in other comprehensive
income, and financial assets measured at fair value and the changes are included in profit or loss of the period.
Subsequent measurement of financial assets depends on its categories.
The Company’s classification of financial assets is based on the Company’s business model of managing financial
assets and its characteristics of cash flows.
(1) Financial assets at amortized cost
Financial assets are classified as financial assets at amortized cost when following conditions are met: the
Company’s business model for managing financial assets targets to receive contractual cash flows; The contractual
terms of the financial assets stipulate that the cash flows generated on a specific date are exclusively used to pay
the principal and the interest based on the outstanding principal amount. For such financial assets, effective
interest rate method is applied to subsequently measure them at amortized cost, and gains or losses arising from
amortization or impairment are recognized in current profit or loss.
(2) Liability investment at fair value through other comprehensive income
Financial assets are classified as liability at fair value through other comprehensive income when following
conditions are met: the Company’s business model for managing financial assets targets at both the receiving of
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
100
contractual cash flows and the sale of financial assets; the contractual terms of the financial asset stipulate that the
cash flows generated on a specific date are exclusively used to pay the principal and the interest based on the
outstanding principal amount. Such financial assets are subsequently measured at fair value. The discount or
premium is amortized by using the effective interest method and recognized as interest income or expense. Except
that the impairment loss and the exchange differences of foreign currency monetary financial assets are
recognized as profit or loss for the period, the changes in the fair value of such financial assets are recognized as
other comprehensive income, and the accumulated gains or losses are transferred into profit or loss until such
financial assets are derecognized. Interest income related to such financial assets is included in the current profit
and loss.
(3) Equity investment at fair value through other comprehensive income
The Company irrevocably designated the non-trading equity investment as financial assets at fair value through
other comprehensive income, and the related dividend income is included in profit or loss. The changes of fair
value are included in other comprehensive income and the accumulated gains or losses are transferred to retained
earnings until the financial assets are derecognized.
(4) Financial assets at fair value through profit or loss
Any financial assets that are not recognized as the financial assets at amortized cost or at fair value through other
comprehensive income mentioned above are measured at fair value through profit or loss. At the time of initial
recognition, in order to eliminate or significantly reduce accounting mismatches, financial assets can be
designated as financial assets at fair value through profit or loss. Such financial assets are subsequently measured
at fair value, and all changes in fair value are recognized in profit or loss.
When and only when, the Company changes its business model for managing financial assets it must reclassify all
affected financial assets.
For financial assets at fair value through profit or loss, the related-party transaction expense is directly recognized
in current profit or loss as incurred. And other financial assets’ transaction expense is included in the initial
recognition amount.
10.3 Classification and measurement of financial liabilities
The Company’s financial liabilities have initially been classified as follows: financial liabilities at amortized cost
and financial liabilities at fair value through profit or loss.
The financial liabilities meeting any of the following conditions can be initially designated as the financial
liabilities at fair value through profit and loss: (1) Such designation can eliminate or significantly reduce
accounting mismatches. (2) According to corporate risk management or investment strategies as stated in formal
written documents, the management and performance evaluation of financial liability portfolios or combinations
of financial assets and financial liabilities are based on fair value, and reported to key management personnel on
this basis within the enterprise. (3) Such financial liabilities include embedded derivatives that need to be split
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
101
separately.
The Company determines the classification of financial liabilities at initial recognition. For financial liabilities
measured at fair value through profit or loss, the related-party transactionexpense is directly recognized in current
profit or loss. The related-party transactionexpense of other financial liabilities is included in the initial
recognition amount.
Subsequent measurement of financial liabilities depends on its categories:
(1) Financial liabilities at amortized cost
Such financial liabilities are subsequently measured by using the effective interest rate method at amortized cost.
(2) Financial liabilities at fair value through profit or loss
Financial liabilities measured at fair value and booked into current profits and losses, which includes trading
financial liabilities (including derivatives of financial liabilities) and those initially designated as financial
liabilities at fair value through profit or loss.
10.4 Offsetting of financial instruments
If the following conditions are met at the same time, the net amount obtained after the offsetting of financial assets
and financial liabilities shall be shown in the balance sheet: there is a legal right to offset the recognized amount,
and such legal right is currently enforceable; plan to settle on a net basis, or cash the financial assets and liquidate
the financial liabilities at the same time.
10.5 Impairment of financial assets
The Company undertakes impairment treatment and confirms loss provisions based on expected credit losses as
for the financial assets at amortized cost, debt instrument investments at fair value through other comprehensive
income . financial guarantee contracts and etc.. Credit loss refers to the difference between the cash flow of all
contracts discounted at the original effective interest rate and the expected cash flow of all contracts receivables,
i.e. the present value of all cash shortages.
The Company estimates, individually or in combination, the expected credit losses of financial assets measured at
amortized cost and financial assets (debt instruments) measured at fair value through other comprehensive income,
taking into account all reasonable and evidence-based information, including forward-looking information.
(1) General model of expected credit loss
If the credit risk of the financial instrument has increased significantly since the initial recognition, the Company
shall measure the loss provision at the amount equivalent to the expected credit loss of the financial instrument for
the entire life of the instrument; If the credit risk of the financial instrument has not increased significantly since
the initial recognition, the Company shall measure the loss provision at the amount equivalent to the expected
credit loss of the financial instrument in the next 12 months. The increase or rollover amount of the loss provision
shall be recorded in the current profit and loss as an impairment loss or gain. For the Company’s specific
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
102
assessment of credit risk, please refer to this report Note X “Risks Associated With Financial Instruments” for
details.
The credit risk of the instrument is generally deemed to have increased significantly if the default is more than 30
days, unless there is conclusive evidence that the credit risk of the instrument has not increased significantly since
the initial recognition.
Specifically, the Company divides the process of credit impairment of financial instruments without credit
impairment at the time of purchase or origination into three stages. There are different accounting treatments for
the impairment of financial instruments at different stages:
Stage 1: credit risk has not increased significantly since initial recognition.
For the financial instrument at this stage, the Company shall measure the loss provision according to the expected
credit loss in the next 12 months, and calculate the interest income according to its book balance (that is, the
impairment provision is not deducted) and the actual interest rate (if the instrument is a financial asset, the same as
below).
Stage 2: Credit risk has increased significantly since the initial recognition, but credit impairment has not yet
occurred.
For a financial instrument at this stage, the Company shall measure the loss provision according to the expected
credit loss of the instrument throughout its life, and calculate interest income according to its book balance and
actual interest rate.
Stage 3: Credit impairment occurs after initial recognition.
For the financial instrument in this stage, the Company shall measure the loss provision according to the expected
credit loss of the instrument throughout its lifetime, but the calculation of interest income is different from that of
the financial asset in the first two stages. For the financial assets whose credit impairment has occurred, the
Company shall calculate the interest income at their amortized cost (book balance less the impairment provision,
that is, book value) and the actual interest rate.
For financial assets whose credit impairment has occurred at the time of purchase or origin, the Company shall
only recognize the changes in the expected credit loss during the whole duration after the initial recognition as
loss provision, and calculate interest income at their amortized cost and the actual interest rate adjusted by credit.
(2) The Company chooses not to compare the credit risk of a financial instrument with a lower credit risk on the
balance sheet date with the credit risk at the time of the initial recognition, but directly assumes that the credit risk
of the instrument has not increased significantly since the initial recognition.
If the Company confirms that the default risk of the financial instruments is low, the borrowers’ short-term ability
to fulfill its obligation to pay the contract cash flow is very strong, and even the economic situation and business
environment is in a long-term adverse change, the borrower’s ability to fulfill its obligation to pay the contract
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
103
cash flow will not be necessarily reduced, then the financial instruments can be deemed with a lower credit risk.
(3) Receivables and lease receivables
The Company, for the receivables stipulated in the Accounting Standards for Enterprises No. 14 — Revenues and
without major financing elements (including the situation when the financing elements no more than a year in the
contract are not taken into consideration according to the Standards), adopts the simplified model of expected
credit losses, and measures the loss provision always in accordance with the expected amount of credit losses
throughout the duration.
For receivables containing significant financing elements and lease receivables specified in the Accounting
Standards for Business Enterprises No. 21 — Leasing, the Company makes an accounting policy choice and
adopts a simplified model of expected credit loss, that is, to measure the loss provision according to the amount
equivalent to the expected credit loss in the whole duration.
10.6 Financial assets transfer
If almost all the risks and rewards of ownership of financial assets have been transferred to the transferee, the
financial assets are derecognized; if almost all the risks and rewards of ownership of the financial assets are
retained, the financial assets are not derecognized.
Neither transfer nor retain almost all risks and rewards of ownership of financial assets, which are dealt with as
follows: if the control of financial assets are waived, derecognize the financial assets and recognize the assets
and liabilities; if not, it needs to recognize the relevant financial assets according to the extent to which they
continue to be involved in the transferred financial assets, and recognize the related liabilities.
If the transferred financial assets are continued to be involved by financial warranty, the assets should be
recognized at the lower one between the book value of the financial assets and the financial warranty amount. The
financial warranty amount refers to the maximum amount of the consideration received that will be required to be
repaid.
11. Notes receivable
None
12. Accounts receivable
For accounts receivable, whether significant financing is involved in or not, the simplified model of expected
credit loss is adopted. The Company will always measure its provision for loss based on the amount equivalent to
the expected credit loss of its entire duration, and the increase or reversal amount of the provision for loss
resulting therefrom is included in the profit and loss of the period as an impairment loss or gain.
The Company considers all reasonable and evidence-based information, including forward-looking information,
to estimate the expected credit loss of the accounts receivables individually or in combination.
When a single financial asset can evaluate the expected credit loss at a reasonable cost, the Company chooses to
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
104
calculate the credit loss individually. When a single financial asset cannot evaluate the expected credit loss at a
reasonable cost, the Company will divide the accounts receivables into several combinations in accordance with
the characteristics of credit risk, and the expected credit loss is calculated on the basis of the combination. The
basis for determining the combination is as follows:
Types of combination Determining the basis of the combination
Combination 1 Receivables from related companies
Combination 2 Receivables from hotel services
Combination 3 Other receivables
For the accounts receivable classified as a combination, the Company refers to the historical credit loss experience,
and combines the current situation and the forecast of future economic conditions, to prepare a comparison table
of the age of accounts receivable and the expected credit loss rate for its entire duration and calculate the expected
credit loss.
13. Receivables financing
If a financial asset meets the following conditions at the same time, it is recognized as a financial assets at fair
value through other comprehensive income: the Company’s business model for managing the financial asset is to
both collect contractual cash flows and sell financial assets.The contractual terms of the financial asset stipulate
that the cash flows generated on a particular date are only used as payment of principal and interest based on the
amount of outstanding principal.
The Company transfers the receivables held by discount or endorsement with a high frequency and a large amount,
and its actual business model of management is characterized by both receiving contractual cash flows and selling
them. In accordance with the relevant provisions about financial instruments, the receivables mentioned above are
recognized as financial assets at fair value through other comprehensive income.
14. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivables
The Company adopts the general model of expected credit loss to deal with other receivables, as detailed in Note
V (10) “Financial Instruments”.
The Company considers all reasonable and substantiated information, including forward-looking information, to
estimate the expected credit loss of other receivables individually or in combination.
When single financial assets can evaluate the expected credit loss at a reasonable cost, the Company chooses to
calculate the credit loss individually. When a single financial asset cannot evaluate the expected credit loss at a
reasonable cost, the Company will divide the other receivables into severalportfolios in accordance with the
characteristics of credit risk, and the expected credit loss is calculated on the basis of the combination. The basis
for determining the combination is as follows:
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
105
Type of combination Determining the basis of the combination
Combination 1 Receivables from related parties
Combination 2 Receivables from employee reserve funds, deposits, and security deposits
Combination 3 Receivables not in Combination 1 and Combination 2
For other receivables divided into portfolios, the Company refers to the historical credit loss experience and
combines the current situation and the forecast of future economic conditions, to calculate the expected credit loss
based on default risk exposure and expected credit loss rate in the next 12 months or the whole duration.
15. Inventory
15.1 Classification of inventories
Inventories refer to the finished goods or commodities held for sale in daily activities, goods in progress in the
production process, and consumed materials and supplies in the process of production or providing services.
15.2 Method of valuation for delivery of inventory
The monthly weighted average method is used to deliver the inventory.
15.3 The basis for determining the net realizable value of inventories and the method of accruing inventory
depreciation reserves
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of inventories is made. For
inventories directly used for sale, in the normal production and operation process, the net realizable value is
determined by the amount of the estimated selling price of the inventory less the estimated sales cost and relevant
taxes and fees; for material inventories that need to be processed, in the normal production and operation process,
the net realizable value is determined by the amount of the estimated selling price of finished products produced
less the estimated cost to be occurred during the producing process, the estimated selling expenses and related
taxes and fees; on the balance sheet date, if some of the inventory has contractual price and the others do not , the
net realizable value is determined separately and by comparing with its corresponding cost, the amount of the
provision for inventory depreciation or reversal is determined separately.
15.4 Inventory stocktaking system
The perpetual inventory system is maintained for inventory stocktaking system.
15.5 Amortization of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized by one-time write-off.
(2) Packages
Packages are amortized by one-time write-off.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
106
16. Contract assets
None
17. Contract costs
None
18. Holding for sale
The Company divides the corporate components (or non-current asset) that meet all of the following conditions
into holding for sale:(1) Based on the usual practice of selling such assets or disposal groups in similar
transactions, they can be sold immediately under current conditions; (2) The sale is highly probable, a resolution
has been made on a sale plan, a firm purchase commitment (a firm purchase commitment refers to a legally
binding purchase agreement signed by the enterprise and other parties.The agreement has important items about
transaction price, time and sufficiently severe default penalty so there is little possibility of significant
adjustment or revocation of the agreement) has been obtained and it is expected that the sale will be completed
within one year. Approvals from relevant authorities or regulatory authorities have been obtained in accordance
with relevant regulations.
The Company adjusts the expected net salvage value held for sale to reflect the net amount of its fair value less
costs to sell (not over its original book value). The difference between the original book value and the adjusted net
residual value is included in the profit or loss of the current period as an asset impairment loss. At the same time,
provision for impairment of assets held for sale is made. For the amount of impairment loss of assets confirmed by
the disposal group held for sale, the book value of goodwill in the disposal group should be offset first, and then
the the book value should be offset on the proportion of the book value of various non-current assets in the
disposal group which is applicable to the measurement requirements of this standard.
If the net value of the fair value of the non-current assets held for sale on the balance sheet date less than the
selling expenses increases, the amount of the previous write-down shall be restored, it shall be reversed within the
amount of asset impairment loss recognized after being classified as held for sale, and the reversed amount shall
be included in the current profit and loss. The amount of the loss is reversed and the amount reversed is included
in the current profit or loss. Impairment losses on assets recognized prior to classification as held for sale shall not
be reversed. If the net value of the fair value of the disposal group held for sale on the subsequent balance sheet
day less than the selling expenses increases, the amount previously written down shall be restored, it shall be
reversed within the amount of asset impairment loss recognized by the non-current assets which are applicable to
the measurement requirements of this standard after being classified as held for sale, and the reversed amount is
included in the current profit or loss. The book value of the goodwill that has been offset and the asset impairment
loss recognized before the non-current assets applicable to the measurement of this standard are classified as held
for sale shall not be reversed. For the subsequent reversal of the asset impairment loss confirmed by the disposal
group held for sale, the face value shall be increased on the proportion of the book value of various non-current
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
107
assets applicable to the measurement requirements of this standard in the disposal group except the goodwill.
If the Company loses control of the subsidiary because of some reasons including its sale of investments in the
subsidiary, it shall classify the overall investment in the subsidiary as held for sale in the parent company’s
individual financial statements and classify all the assets and liabilities of the subsidiary as held for sale in the
consolidated Financial Statements when the investment in the subsidiary to be sold meets the criteria for the held
for sale, whether the Company retains part of the equity investment after the sale.
19. Debt investment
The Company uses the general model of expected credit losses for debt investment. For details, please refer to
Note V. (10). “Financial Instruments”.
20. Other debt investment
None
21. Long-term receivables
None
22. Long-term equity investments
22.1 Determination of investment costs
(1) In case the enterprise mergers are under same control and the combining party offers combined consideration
by paying in cash, transferring non-cash assets, assuming debt or issuing equity securities, the initial investment
cost shall be book value of the share of the combined party owner’s equity in the consolidated financial statements
of the final control party on the combination date. Capital reserves (capital premium or equity premium) are
adjusted based on the difference between initial investment cost in the long-term equity investment and book
value of the paid merger consideration or the total amount of the face value of the issued shares; if capital reserves
are insufficient to write-downs, it needs to adjust the retained earnings.
Where an enterprise merger under the samecontrol is realized step by step, the initial investment cost shall be
the owner’s equity share in the combined party’s book calculated on shareholding ratio on the merger date. The
difference between the initial investment cost and the book value of the original long-term equity investment plus
the sum of the book values of further consideration paid for the new shares on the merger date is adjusted for
capital reserve (capital premium or equity premium). If capital reserve is insufficient to offset, it needs to adjust
the retained earnings.
(2) If the enterprise mergers are under the same control , the initial investment cost shall be the fair value of
merger consideration paid on the acquisition date.
(3) Except for the situation of enterprise merger: if the purchase is paid in cash, the initial investment cost shall be
the purchase price actually paid; Where equity securities are issued, the fair value of equity securities issued shall
be taken as the initial investment cost; Where an investor invests, the initial investment cost shall be the value
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
108
agreed upon in the investment contract or agreement (except where the value agreed upon in the contract or
agreement is not fair).
22.2 Subsequent measurement and recognition methods of profits and losses
For the long-term equity investment controlled by the Company to the investee, the Company shall adopt the cost
method in the individual financial statements of the Company; long-term equity investments with joint control or
significant influence shall be accounted for using the equity method.
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for the the
price actually paid upon investment or cash dividends or profits already declared but not yet paid in the
consideration, investment income is recognized in the period in accordance with the attributable share of cash
dividends or profit distributions declared by the investee. And at the same in accordance with the relevant asset
impairment policy, whether the long-term investment is declined in value shall be considered.
For checking by the equity method, if the initial investment cost of the long-term equity investment is greater than
the fair value share of the net identifiable assets of the investee in the investment, the difference between them
shall be classified as initial investment cost of the long-term equity investment; if the initial investment cost of the
long-term equity investment is smaller than the fair value share of the net identifiable assets of the investee in the
investment, the difference is included in current profit and loss and the cost of the long-term equity investment is
adjusted.
When the equity method is adopted, after the acquisition of long-term equity investment, the investment profit and
loss shall be recognized and the book value of long-term equity investment shall be adjusted according to the
share of net profit and loss realized by the investee that should be enjoyed or shared. Upon the confirmation of the
enjoyed share of the net profit and loss from the invested entity, it shall be made on the basis of the fair value of
the identifiable assets of the investee when the investment is acquired, according to the company's accounting
policies and accounting periods, offsetting insider trading profits and losses between associated enterprises and
joint ventures, calculating the proportion that shall be included in investor according to the shareholding ratio (but
if insider trading loss belongs to the asset impairment loss, it should be fully confirmed) and adjusting the net
profit of the investee. According to the profit or cash dividend declared to be distributed by the investee, the share
payable shall be calculated, and correspondingly the book value of the long-term equity investment is reduced.
The company shall recognize the net loss incurred by the investee to the extent that the book value of the
long-term equity investment and other long-term rights and interests substantially constituting the net investment
of the investee shall be written down to zero, except where the company is obligated to bear additional losses. For
the changes of owners' equity other than the net profit and loss of the investee, the book value of the long-term
equity investment shall be adjusted and included in the owners' equity.
22.3 Determine the basis of controlling and significant influence on the invested entity
Control refers to having the power over the investee, enjoying the variable return through participating in the
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
109
investee's relevant activities, and having the ability to use the power over the investee to affect the return amount;
major influence means that the investor has the right to participate in the decision making of the financial and
business policies of the investee, but cannot control or jointly control the formulation of these policies with other
parties.
22.4 Disposal of long-term equity investments
(1) Partial disposal of a long-term equity investment in a subsidiary without loss of control
If part of the long-term equity investment in the subsidiary is disposed of without losing control, the difference
between the disposal price and the book value corresponding to the disposal investment shall be recognized as the
current investment income.
(2) Loss of control over a subsidiary for partial disposal of an equity investment or other reasons
If the Company loses control over the subsidiary due to the disposal of equity investment or other reasons, the
book value of the long-term equity investment corresponding to the sold equity shall be carried forward, and the
difference between the sale price and the book value of the disposal long-term equity investment shall be
recognized as investment income (loss); meanwhile, the remaining equity shall be recognized as long-term equity
investment or other relevant financial assets according to its book value. If the remaining equity after disposal is
able to exert joint control or significant influence on the subsidiary, accounting treatment shall be conducted
according to the relevant provisions of the conversion from cost method to equity method.
22.5 Methods of impairment assessment and determining the provision for impairment loss
For the long term investment in subsidiaries, joint venture and associates, if there is an objective evidence for the
impairment on the balance sheet date, the corresponding impairment provision is made based on the difference
between the book value and the recoverable amount.
23. Investment properties
Measurement model of Investment properties
Measured by cost method
Depreciation or amortization method
23.1 The Company’s investment properties include the land use right that is leased out, the land use right held for
transfer upon capital appreciation, and the building that is leased out.
23.2 The Company initially measures the Investment properties at cost, uses the cost model for subsequent
measurement, and adopts a depreciation or amortization policy for the investment property, which is consistent
with that for fixed assets or intangible assets. On the balance sheet date, if there are signs that the Investment
properties is impaired, the corresponding impairment provision shall be made based on the difference between the
book value and the recoverable amount.
24. Fixed Assets
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
110
(1) Recognition criteria for fixed assets
24.1 Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for
rental to others, or for administrative purposes, and have useful lives of more than one accounting year. Fixed
assets are initially measured at acquisition cost, and depreciated over its useful life using the straight-line method
since the month subsequent to the one in which it is ready for intended use.
(2) Deprecation methods for fixed assets
Category Deprecation methods
Depreciation period
(years)
Residual value rate (%)
Annual depreciation rate
(%)
Buildings Straight-line 20-40 5% 4.75%-2.38%
Decoration of buildings Straight-line 10 -- 10.00%
Transportation
equipment
Straight-line 4 5% 23.75%
Electronic equipment Straight-line 3-5 5% 31.67%-19.00%
Office equipment Straight-line 3-5 5% 31.67%-19.00%
(3) Basis of asserting, valuation method and depreciation ,method for fixed assets acquired under financing leases
Financial leasing shall be deemed as if it meets one or more of the following criteria :(1) upon expiration of the
lease term, the ownership of the leased asset shall be transferred to the lessee;(2) The lessee has an option to
purchase the leased asset, and the purchase price is expected to be far lower than the fair value of the leased asset
at the time of exercising the option, so it can be reasonably determined that the lessee will exercise such option at
the beginning of the lease;(3) Even if the ownership of the assets is not transferred, the lease term shall account
for most of the useful life of the leased assets (usually more than 75% (including 75%) of the useful life of the
leased assets);(4) The present value of the minimum lease payment of the lessee on the lease starting date is
almost equivalent to the fair value of the lease assets on the lease starting date [more than 90% (including
90%)];The present value of the lessor's minimum lease receipt on the lease commencement day is almost
equivalent to the fair value of the lease assets on the lease commencement day [more than 90% (including
90%)];(5) The leased assets are of special nature, and only the lessee can use them without major
transformation.The fixed assets leased in financing shall be recorded at the lower of the fair value of the leased
assets and the present value of the minimum lease payment at the beginning of the lease, and the depreciation
shall be calculated and withdrawn according to the depreciation policy of the fixed assets owned by the lessee.
25. Construction in progress
25.1 Construction in progress should be transferred into fixed assets at its actual costs after it has reached the
working condition for its intended use. Construction in progress that has reached the working condition but not
completed, shall be transferred at its estimated costs. The estimated cost of construction in progress should be
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
111
adjusted against the actual costs after completion of settlement, while the depreciation already provided will not
be adjusted.
25.2 On the balance sheet date, if there is any indication that the construction in progress may be impaired, the
corresponding impairment provision shall be made based on the difference between the book value and the
recoverable amount.
26. Borrowing cost
26.1 Recognition criteria of capitalization
Borrowing costs are capitalized when expenditures for such asset and borrowing costs are incurred and activities
relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its
intended use or sale have commenced. Other borrowing costs shall be recognized as expenses when incurred and
shall be included in the current profit and loss.
26.2 Period of capitalization
(1) When borrowing costs meet the following conditions at the same time, capitalization starts 1) Asset
expenditure has occurred. 2) Borrowing costs have incurred 3)The purchase, construction or production activities
necessary to make the assets usable or saleable have started.
(2) Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or
production of a qualifying asset is suspended abnormally and when the suspension is for a continuous period of
more than 3 months. Capitalization is suspended until the acquisition, construction or production of the asset is
resumed.
(3) Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or produced
becomes ready for its intended use or sale.
26.3 Capitalization amount of borrowing costs
Where funds are borrowed for the purpose of purchasing, constructing or producing assets that meet the
capitalization conditions, the amount of interest to be capitalized is the actual interest expenses incurred on that
borrowing for the period (including the amortization of discounts or premiums determined in accordance with the
actual interest rate method), less any bank interest earned from depositing the borrowed funds before being used
on the asset or any investment income on the temporary investment. Where general borrowings are occupied for
the purchase, construction or production of assets that meet the capitalization conditions, the Company determines
the amount of interest to be capitalized on such borrowings by applying a capitalization rate to the weighted
average of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings.
The capitalization rate is the weighted average of the interest rates applicable to the general borrowings.
27. Biological assets
None
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
112
28. Oil and gas assets
None
29. Right-of-use assets
None
30. Intangible assets
(1) Valuation method, service life and impairment test
30.1 Intangible assets, including land use rights etc. are recognized at costs.
30.2 Intangible assets with finite useful lives are amortized in accordance with the expected realization method of
the economic benefits related to the intangible asset over its estimated useful life. If it is not possible to reliably
determine the expected realization method, use the straight-line method. The specific years are as follows:
Item Validity period (Year)
Land use rights 40
Software use rights 5-10
Trademark rights 10
30.3 On the balance sheet date, if there is any indication that the intangible assets with definite life has been
impaired, the corresponding impairment provision shall be made based on the difference between the book value
and the recoverable amount. Intangible assets with uncertain service life and intangible assets that have not yet
reached the usable state, whether or not there are signs of impairment, are tested for impairment every year.
(2) Accounting policies for internal research and development expenditure
Expenditure in the research phase of internal research and development projects is included in the current profits
and losses when they occur. Expenditure during the development phase that meets the following conditions at
the same time is recognized as intangible asset. (1) It is technically feasible to complete the intangible asset so that
it will be available for use or sale; (2) The Company has the intention to complete the intangible asset and use or
sell it; (3) The Company can demonstrate the ways in which the intangible asset will generate economic benefits,
including the evidence of the existence of a market for the output of the intangible asset or the intangible asset
itself or, if it is to be used internally, the usefulness of the intangible asset; (4) The availability of adequate
technical, financial and other resources to complete the development and the ability to use or sell the intangible
asset; and(5) The expenditure attributable to the intangible asset during its development phase can be reliably
measured.
31. Impairment of long-term assets
The Company make judgement on whether there is any indication that the asset may be impaired at the balance
sheet date.
The goodwill and intangible assets with an uncertain useful life resulting from a business combination was tested
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
113
for impairment annually, regardless of whether there is any indication of impairment.
The impairment should be recorded when the assets occur the following indications:
(1) The market price of assets fell sharply in the current period, and the decline was significantly higher than the
expected decline due to the passage of time or normal use; (2) Significant changes of the economic, technical or
legal environment in which the enterprise operates and the market in which the assets are located will occur in the
current period or in the near future, which will adversely affect the company; (3) The market interest rate or other
market investment returns have increased during the current period, which affects the company’s discount rate for
calculating the present value of the expected future cash flow of assets, leading to the recoverable amount has
been greatly reduced; (4) There is evidence that the assets have become obsolete or their entities have been
damaged; (5) The assets have been or will be idle, terminated or planned to be disposed of in advance; (6)The
evidence reported by the enterprise indicates that economic performance of the assets has been or will be lower
than expected, such as the net cash flow created by the assets or the realized operating profit (or loss) is far lower
(or higher) than the expected amount; (7) Other indications that the asset may have signs of impairment.
If there are any signs of asset impairment, the recoverable amount should be estimated.
The recoverable amount should be determined based on the higher of the net amount of the fair value of the asset
minus the disposal costs and the present value of the estimated future cash flows of the asset.
Disposal costs include legal costs related to asset disposal, related taxes, transportation charges, and direct costs
incurred to make the asset available for sale.
The present value of the estimated future cash flows of the asset should be determined by discounting the amount
of the asset based on the expected future cash flow generated during the continuous use of the asset and at the
time of final disposal. The present value of the expected future cash flow of the asset should take into account
factors such as the estimated future cash flow of the asset, its useful life, and the discount rate.
The measurement results of the recoverable amount indicate that if the recoverable amount of the asset is lower
than its book value, the book value of the asset should be written down to the recoverable amount, and the reduced
amount should be recognized as the asset impairment loss and included in the current profit and loss. Meanwhile,
corresponding provisions for asset impairment should be made.
32. Long-term deferred expense
Long-term deferred expense are recorded according to the actual amount incurred and amortized in the period of
benefit or within the prescribed period. If the long-term deferred expense item cannot benefit the subsequent
accounting period, the amortized value of the item that has not been amortized will be transferred into the current
profit and loss.
33. Contract liabilities
Contract liabilities refer to the Company’s obligation to transfer goods to a customer from whom the Company
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
114
has received consideration or the amount is due from the customer. If the customer has paid the contract
consideration or the company has obtained the unconditional right to receive the payment before the Company
transfers the goods to the customer, the Company shall present the received or receivable as a contract liability at
the earlier time of the actual payment and due payment. The Company shall present the net amount of contract
assets and contract liabilities under the same contract and contract assets and contract liabilities under different
contracts are not offset.
34. Employee compensation
(1) Accounting treatment methods of short-term employee remuneration
Employee compensation is to point to the all forms of remuneration or compensation that the Company receive
services rendered by employees or give except share-based payment in order to terminate the labor relationship.
Employee compensation includes short-term compensation, severance welfare, dismissal benefits and other
long-term employee benefits. The compensation that Company offers to the worker spouse, children, dependents,
the deceased employee survivors and other beneficiaries, also belongs to employee compensation.
During the accounting period when the employees provide services, the Company shall recognize the actual
short-term compensation as liabilities and record it into the current profit and loss or the cost of related assets.
Among them, non-monetary welfare is measured according to fair value.
（2）Accounting treatment methods of post-employment benefits
The Company's employees participated in the social basic endowment insurance organized and implemented by
the local labor and social security departments.The company pays endowment insurance premium to orgnaization
of agency of local society primary endowment insurance according to the social primary endowment insurance
pay base and scale with local regulation monthly. After the employee retires, the local labor and social security
department has the responsibility to pay the social basic pension to the retired employee. The accounting period
during which the company provides services to its employees, and the amount calculated in accordance with the
above social security provisions shall be recognized as a liability and recorded into the current profit and loss or
the cost of relevant assets.
(3) Accounting treatment methods of termination benefits
When the Company terminates the employment relationship with employees before the expiration of the
employment contracts or provides compensation as an offer to encourage employees to accept voluntary
redundancy, if the Company has a formal plan for termination of employment relationship or has made an offer
for voluntary redundancy which will be implemented immediately, and the Company cannot unilaterally withdraw
from the termination plan or the redundancy offer, a provision for the compensation payable arising from the
termination of employment relationship with employees is recognized with a corresponding charge to the profit or
loss for the period, and include in current profits or losses.
(4)Accounting treatment methods of other long-term employee benefits
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
115
None
35. Lease liabilities
None
36. Provisions
36.1 The Company shall recognize this obligation as contingent liability when the obligations arising from the
provision of external guarantees, litigation matters, product quality guarantees, loss contracts and other
contingencies become the current obligations assumed by the Company and the fulfillment of such obligations is
likely to result in the outflow of economic benefits from the company and the amount of such obligations can be
reliably measured.
36.2 The Company shall initially measure the provisions according to the best estimate of the expenses required to
perform the relevant current obligations, and shall review the book value of the estimated liabilities on the balance
sheet date.
37. Share-based payments
37.1 Categories of share-based payments
Share-based payments comprise equity-settled and cash-settled payments.
37.2 Determination of fair value of equity instruments
(1) If there is an active market, it should be determined based on the quoted price in the active market.
(2) If there is no active market, it is determined by using valuation techniques, including considering the prices
used in recent market transactions made by parties familiar with the situation and taking transactions voluntarily,
and considering the current fair values and cash flows of other financial instruments that are substantially the
same discount method and option pricing model.
37.3 Basis for determining the best estimate of exercisable equity instruments
The Company would make best estimate in accordance with the newly acquired information such as changes in
the number of employees entitled to equity instruments.
37.4 Relevant accounting treatment of implementation, modification and termination of share-based payment plan
(1) Equity-settled share-based payments
Equity-settled share-based payments that are immediately available after the grant in exchange for employee
services are included in related costs or expenses based on the fair value of the equity instruments on the grant
date, and the capital reserve is adjusted accordingly. Equity-settled share-based payments for services that have
been completed during the waiting period or that are exercisable only if the required performance conditions are
met are exchanged for employee services. At each reporting date during the waiting period, the best estimate of
the number of exercisable equity instruments is based on the fair value of the equity instrument grant date, the
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
116
services obtained in the current period are included in related costs or expenses, and the capital reserve is adjusted
accordingly.
For equity-settled share-based payments in exchange for services provided by other parties, if the fair value of
services provided by other parties can be reliably measured, they should be measured at the fair value of the
services of other parties on the acquisition date; if the fair values of services provided by other parties cannot be
measured reliably, but for the equity instruments whose fair value can be reliably measured, they should be
measured at the fair value of the equity instrument on the date of service acquisition and included in related costs
or expenses, increasing owner’s equity accordingly.
(2) Cash-settled share-based payments
The cash-settled share-based payment in exchange for employee services immediately after the grant is included
in the related costs or expenses at the fair value of the liability assumed by the Company on the grant date, and the
liability is increased accordingly. Cash-settled share-based payments for services that have been completed within
the waiting period or that have met the required performance conditions in exchange for employee services are
based on the best estimate of the right to exercise at each balance sheet date during the waiting period, According
to the fair value of liabilities assumed by the company, the services obtained in the current period are included in
related costs or expenses and corresponding liabilities.
(3) Modifying and terminating the share payment plan
If the amendment increases the fair value of the equity instruments granted, the Company will recognize the
increase in the acquisition of services in accordance with the increase in the fair value of the equity instruments; if
the amendment increases the number of equity instruments granted, the company will increase the value of the
equity instruments. The fair value is correspondingly recognized as an increase in access to services; if the
company modifies the conditions of the exercisable rights in a manner that benefits employees, the company
considers the modified conditions of the exercisable rights when processing the conditions of the exercisable
rights.
If the amendment reduces the fair value of the equity instrument granted, the Company continues to recognize the
amount of services obtained based on the fair value of the equity instrument on the grant date, without considering
the decrease in the fair value of the equity instrument; if the amendment reduces the equity granted for the number
of instruments, the company will treat the reduction as the cancellation of the granted equity instruments; if the
conditions of the exercisable rights are modified in a manner that is not conducive to employees, the revised
conditions of the exercisable rights are not considered when processing the conditions of the exercisable rights.
If the Company cancels the granted equity instruments or clears the granted equity instruments during the waiting
period (except for those that are canceled because the conditions of the exercisable rights are not met), the
cancellation or settlement is treated as an expedited exercisable right and the original amount recognized during
the remaining waiting period.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
117
38. Other financial instruments such as preferred stocks and perpetual bonds
None
39. Revenue
Accounting policies applied in revenue recognition and measurement
39.1 Recognition of income
The Company has fulfilled its performance obligation in the contract, that is, to recognize revenue when the
customer acquires control of the relevant goods. Access to control of related commodities refers to the ability to
dominate the use of the commodity and obtain almost all economic benefits from it.
39.2 According to the relevant provisions of the income standards, the Company judges that the nature of the
relevant performance obligations belongs to “performance obligations performed within a certain period of time”
or “performance obligations performed at a certain point of time”, and respectively recognizes the income
according to the following principles.
(1) If the Company meets one of the following conditions, it belongs to the performance obligation within a
certain period of time:
1) The customer obtains and consumes the economic benefits brought by the Company's performance when the
Company fulfills its performance.
2) The customer can control the assets under construction during the performance of the Company.
3) The assets produced by the Company during the performance have irreplaceable uses, and the Company has the
right to collect payment for the cumulative performance that has been completed so far during the entire contract
period.
For performance obligations performed within a certain period of time, the Company shall recognize the income
according to the performance schedule within that period, except where the performance schedule can not be
reasonably determined. The Company considers the nature of the goods and adopt the output method or input
method to determine the appropriate progress of performance.
(2) For performance obligations that are not performed within a certain period of time, but are performance
obligations performed at a certain point of time, the Company recognizes revenue at the point when the customer
obtains control of the relevant products.
When judging whether the customer has obtained control of the product, the Company considers the following
signs:
1) The Company has the current right to collect payment for the goods or services, that is, the customer has the
current payment obligation for the product;
2) The Company has transferred the legal ownership of the goods to the customer, that is, the customer has the
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
118
legal ownership of the goods;
3) The Company has transferred the goods in kind to the customer, that is, the customer has taken possession of
the goods in kind;
4) The Company has transferred the legal ownership of the product or the main risks and rewards of ownership to
the customer, that is, the customer has obtained the main risks and rewards in the ownership of the goods;
5) The customer has accepted the commodity in control;
6) Other indications that customers have taken control of the goods.
Specific policies for revenue recognition:
The Company’s revenue mainly includes training revenue from the common courses training and the contractual
courses training. When a face-to-face training in the common courses is completed, all the training fees received
in advance are recognized as revenue. Revenue from online training in common courses is recognized on a
straight-line basis during the validity period of the service provided. Non-refundable portion of advance payments
received for the contractual courses is recognized as revenue upon completion of training services. According to
the agreement on the contractual courses, the refund part of the advance received is recognized as revenue when
the non-refundable conditions are met.
39.3 Measurement of revenue
The Company shall measure revenue at the transaction price allocated to each individual performance obligation.
In determining the transaction price, the Company considers the influence of factors such as variable
consideration, major financing components in the contract, non-cash consideration, and consideration payable to
customers.
(1) Variable consideration
The Company determines the best estimate of the variable consideration based on the expected value or the most
likely amount, but the transaction price including the variable consideration should not exceed the accumulated
recognized revenue when the relevant uncertainty is eliminated. When assessing whether the cumulative
recognized income is likely not to be significantly reversed, the enterprise shall also consider the possibility and
proportion of the income reversal.
(2) Significant financing component
Where there is a significant financing component in the contract, the Company shall determine the transaction
price based on the amount payable in cash on the assumption that the customer acquires control of the goods. The
difference between the transaction price and the contract consideration shall be amortized by the effective interest
method during the contract period.
(3) Non-cash consideration
If the customer pays non-cash consideration, the company shall determine the transaction price based on the fair
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
119
value of the non-cash consideration. If the fair value of the non-cash consideration can not be reasonably
estimated, the Company shall indirectly determine the transaction price with reference to the separate selling price
of the goods it undertakes to transfer to the customer.
(4)Consideration payable to customer
For the consideration payable to the customer, the consideration payable shall be offset by the transaction price,
and the current revenue shall be offset at the time when the relevant revenue is recognized and the payment (or
promised to pay) of the customer’s consideration is later. Except where the customer consideration is due to obtain
other clearly distinguishable goods from the customer.
If the enterprise pays the customer consideration to obtain other clearly distinguishable goods from the customer,
it shall confirm the purchased goods in a manner consistent with other purchases by the enterprise. If the
consideration payable by the enterprise to the customer exceeds the fair value of the clearly distinguishable
commodity obtained from the customer, the excess amount shall be offset against the transaction price. If the fair
value of the clearly distinguishable commodity obtained from the customer cannot be reasonably estimated, the
enterprise shall offset the transaction price in full from the consideration payable to the customer.
Differences in accounting policies for revenue recognition due to different business models
None
40. Government grants
40.1 Government grants include asset related government grants and income related government grants.
40.2 If a government grant is in the form of monetary asset, it is measured at the amount received or receivable. If
a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be
reliably determined, it is measured at a nominal amount.
40.3 The government grant adopts the total method
(1) A government grant related to an asset is recognized as deferred income, and amortized to profit or loss on a
reasonable and systematic basis over the useful life of the related asset. If the relevant assets are sold, transferred,
scrapped or damaged before the end of their useful lives, the undistributed balance of related deferred income will
be transferred to the profit or loss of the asset disposal in the current period.
(2) If a government grant related to income is used to compensate for the related expenses or losses in the
subsequent period, it shall be recognized as deferred income and shall be recorded in the current profit or loss in
which the relevant expenses are recognized; For the compensation of related expenses or losses that have occurred,
they shall be directly included in the current profits and losses.
For government grants that include both the asset-related portion and the income-related portion, the different
parts are separately accounted for; if it is indistinguishable, the overall classification is revenue-related
government subsidies.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
120
40.4 Government grants related to the company’s daily activities in accordance with the nature of the economic
business are included in other income or written down the related costs; government grants that are unrelated to
the daily activities of the company shall be included in non-operating income and expenditure.
41. The deferred income tax assets and the deferred income tax liabilities
41.1 According to the book value of the assets, liabilities and its tax base the difference between the (not
confirmed project as assets and liabilities of its tax base can be determined in accordance with the provisions of
the tax law, the tax base and the difference between the book number), according to the forecast of the asset is
recovered or the applicable tax rate calculation during the debt confirmed Deferred tax assets and deferred tax
liabilities.
41.2 Confirm the deferred income tax assets to probably get used to making the deductible temporary differences
are limited to the amount of taxable income. During the balance sheet date, there is strong evidence that the future
is likely to obtain sufficient taxable income to offset the deductible temporary difference, confirm the unconfirmed
deferred income tax assets in previous accounting periods.
41.3 On the balance sheet date, review the book value of the deferred income tax assets, and if during the period
of the future may not be able to obtain sufficient taxable income to offset the benefit of the deferred income tax
assets, the write-downs on the book value of the deferred income tax assets. If it is likely to obtain sufficient
taxable income, return the amount of write-downs.
41.4 The Company’s current income tax and deferred income tax as recorded into the profits and losses of the
current income tax expenses, or earnings, but does not include the income tax in the following circumstances: (1)
The business combination;(2) Direct confirmation of transactions or events in the owner’s equity.
42. Lease
42.1 Accounting treatment of operating leases
The Company as lessee under operating leases: operating lease payments are recognized on a straight-line basis
over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss
for the period. Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are charged
to profit or loss in the period in which they are actually incurred.
The Company as lessor under operating leases: rental income from operating leases is recognized in profit or loss
on a straight-line basis over the term of the relevant lease. Initial direct costs with more than an insignificant
amount are capitalized when incurred, and are recognized in profit or loss on the same basis as rental income over
the lease term. Other initial direct costs with an insignificant amount are charged to profit or loss in the period in
which they are incurred. Contingent rents are charged to profit or loss in the period in which they actually arise.
42.2 Accounting treatment of financial leases
The Company as lessee under finance leases: at the commencement of the lease term, the Company records the
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
121
leased asset at an amount equal to the lower of the fair value of the leased asset and the present value of the
minimum lease payments at the inception of the lease, and recognizes a long-term payable at an amount equal to
the minimum lease payments. The difference between the recorded amounts is accounted for as unrecognized
finance charge. Unrecognized finance charges are recognized as finance charge for the period using the effective
interest method over the lease term.
The Company as lessor under finance leases: at the commencement of the lease term, the aggregate of the
minimum lease receivable at the inception of the lease and the initial direct costs is recognized as a finance lease
receivable, and the unguaranteed residual value is recorded at the same time. The difference between the
aggregate of the minimum lease receivable, the initial direct costs and the unguaranteed residual value, and the
aggregate of their present values is recognized as unearned finance income. Unearned finance income is
recognized as finance income for the period using the effective interest method over the lease term.
43. Other significant accounting policies and accounting estimates
None
44.Changes in Important Accounting Policies and Accounting Estimates
(1) Changes in Important Accounting Policies
√ Applicable □ Not applicable
Content and reasons of changes in
accounting policies
Approval procedures Remarks
According to the revised Accounting
Standards for Business Enterprises
No. 14 - Revenue (Accounting
[2017] No. 22) (hereinafter referred
to as the new revenue standard)
issued by the Ministry of Finance on
July 5, 2017, the Company will
implement the new revenue standard
from January 1, 2020.
Approved by the 10th Meeting of the
5th Board of Directors and the 9th
Meeting of the 5th Board of
Supervisors.
The Company adjusted the amount
of relevant items in the opening
financial statements, not adjusting
the information in the comparable
periods.
(2) Changes in Important Accounting Estimates
□ Applicable √ Not applicable
(3) The new revenue standard and the new lease standard adjustment have been implemented for the first
time since 2020. Here are the related items of financial statements at the beginning of the year.
Applicable
Whether to adjust the balance sheet account at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit：RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
122
Item Dec. 31st, 2019 Jan. 1st, 2020 Adjustment
Current Assets:
Cash and cash equivalents 2,724,335,001.58 2,724,335,001.58
Settlement reserve
Due from banks and other
financial institutions
financial assets held for
trading
1,754,396,227.54 1,754,396,227.54
Derivative financial assets
Notes Receivable
Accounts Receivable 2,721,638.09 2,721,638.09
Financing receivables
Prepayments 2,461,009.00 2,461,009.00
Premium receivables
Reinsurance accounts
receivable
Reinsurance contract
reserve receivables
Other receivables 255,013,296.96 255,013,296.96
Inc: Interest receivables 567,341.68 567,341.68
Dividends receivables
Financial assets purchased
under resale agreements
Inventories
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 97,336,600.16 97,336,600.16
Total current assets 4,836,263,773.33 4,836,263,773.33
Non-current assets:
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
123
Loans and Advances
Debt investments 1,923,598,909.09 1,923,598,909.09
Other debt investments
Long-term receivables
Long-term equity
investment
Other equity instruments 162,800,000.00 162,800,000.00
Other non-current financial
assets
138,166,559.96 138,166,559.96
Investment properties 688,475,053.53 688,475,053.53
Fixed assets 672,429,601.44 672,429,601.44
Construction in progress 653,580,160.32 653,580,160.32
Bearer biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 197,507,227.40 197,507,227.40
Development expenditure
Goodwill 99,867,720.38 99,867,720.38
Long-term deferred expense 240,565,962.02 240,565,962.02
Deferred tax assets 21,482,832.13 21,482,832.13
Other non-current assets 325,967,628.34 325,967,628.34
Total Non-current Assets 5,124,441,654.61 5,124,441,654.61
Total Assets 9,960,705,427.94 9,960,705,427.94
Current liabilities:
Short-term borrowings 2,867,000,000.00 2,867,000,000.00
Borrowing from the
Central Bank
Borrowings from Banks and
Other Financial Institutions
Transactional Financial
liabilities
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
124
Derivative financial
liabilities
Notes payable
Accounts payable 236,481,990.86 236,481,990.86
Receipts in advance 2,634,276,203.88 -2,634,276,203.88
Contract liabilities 2,557,549,712.50 2,557,549,712.50
Financial assets sold for
repurchase
Receipt of deposits and
deposits from other banks
Receivings from
Vicariously Traded Securities
Receivings from
Vicariously Sold Securities
Employee benefits payable 411,475,636.03 411,475,636.03
Taxes payable 184,306,027.84 184,306,027.84
Other payable 88,693,411.98 88,693,411.98
Inc：Interest payables
4,521,557.54 4,521,557.54
Dividends payable
Fees and commission
payable
Accounts payable
reinsurance
Held-for-sale liabilities
Non-current Liabilities due
within One Year
Other current liabilities 76,726,491.38 76,726,491.38
Total Current Liabilities 6,422,233,270.59 6,422,233,270.59
Non-current Liabilities:
Deposits for insurance
contracts
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
125
Long-term loans
Bonds payable
Inc: preferred
shares
Perpetual bond
Lease liabilities
Long-term payable
Long-term payroll payable
Provisions
Deferred Income
Deferred tax liabilities 106,932,273.03 106,932,273.03
Other non-current liabilities
Total non-current liabilities 106,932,273.03 106,932,273.03
Total liabilities 6,529,165,543.62 6,529,165,543.62
Owners' equity:
Deferred Income 103,807,623.00 103,807,623.00
Other equity instrument
Inc: preferred shares
Perpetual bond
Capital surplus 1,198,581,049.50 1,198,581,049.50
Less: Treasury stock
Other comprehensive
income
37,500,000.00 37,500,000.00
Special reserve
Surplus reserve 45,000,000.00 45,000,000.00
General risk reserve
Retained earnings 2,046,657,231.32 2,046,657,231.32
Total owners' equity attributable
to the parent company
3,431,545,903.82 3,431,545,903.82
Minority interests -6,019.50 -6,019.50
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
126
Total Owners' Equity 3,431,539,884.32 3,431,539,884.32
Total Liabilities and Owners'
Equity
9,960,705,427.94 9,960,705,427.94
Balance sheet of parent company
Unit: RMB
Item Dec. 31st, 2019 Jan. 1st, 2020 Adjustment
Current Assets:
Cash and cash equivalents 6,931,803.33 6,931,803.33
Financial assets held for
trading
101,681.64 101,681.64
Derivative financial assets
Note receivables
Accounts Receivable
Financing receivables
Prepayments
Other receivables 1,717,949,520.99 1,717,949,520.99
Inc：Interest receivables
Dividends receivables 1,700,000,000.00 1,700,000,000.00
Inventories
Contract assets
Assets held for sale
Non current assets due
within one year
Other current assets
Total current assets 1,724,983,005.96 1,724,983,005.96
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity 18,582,307,907.14 18,582,307,907.14
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
127
investment
Other equity instruments 162,800,000.00 162,800,000.00
Other non-current financial
assets
Investment properties 395,978,156.15 395,978,156.15
Fixed assets
Construction in progress 72,569,103.57 72,569,103.57
Bearer biological assets
Oil and gas assets
Right-of-use assets
Intangible assets
Development expenditure
Goodwill
Long-term deferred
expense
Deferred tax assets 10,804,928.62 10,804,928.62
Other non-current assets
Total non-current assets 19,224,460,095.48 19,224,460,095.48
Total assets 20,949,443,101.44 20,949,443,101.44
Current liabilities:
Short-term loans
Financial liabilities held
for trading
Derivative financial
liabilities
Note payable
Accounts payable 561,752.26 561,752.26
Receipts in advance
Contract liabilities
Employee benefits payable
Taxes payable 791,191.77 791,191.77
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
128
Other payable 40,275,566.88 40,275,566.88
Inc：Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due
within one year
Other current liabilities
Total Current Liabilities 41,628,510.91 41,628,510.91
Non-current Liabilities:
Long-term loans
Bonds payable
Inc: preferred shares
Perpetual bond
Lease liabilities
Long-term payable
Long-term payroll payable
Provisions
Deferred Income
Deferred tax liabilities 12,500,420.41 12,500,420.41
Other non-current
liabilities
Total non-current Liabilities 12,500,420.41 12,500,420.41
Total liabilities 54,128,931.32 54,128,931.32
Owners' equity:
Paid-in capital (share
capital)
6,167,399,389.00 6,167,399,389.00
Other equity instrument
Inc: preferred shares
Perpetual bond
Capital reserve 12,775,326,370.33 12,775,326,370.33
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
129
Less: Treasury stock
Other comprehensive
income
37,500,000.00 37,500,000.00
Special reserve
Surplus reserve 387,458,806.65 387,458,806.65
Retained earnings 1,527,629,604.14 1,527,629,604.14
Total owners' Equity 20,895,314,170.12 20,895,314,170.12
Total liabilities and owners'
equity
20,949,443,101.44 20,949,443,101.44
（4）Description of comparative data in the early stage of retroactive adjustment of the new revenue
standard and the new lease standard initially implemented since 2020
□ Applicable √ Not Applicable
45. Others
None
Section VI. Taxes
1. Major categories of taxes and tax rates
Category of tax Basis of tax Tax rate
Value-added tax
Taxable revenue for sales of goods
and supply of services
3%、5%、6%
Consumption tax
City maintenance and construction
tax
Turnover taxes payable 5%、7%
Corporate income tax Taxable income 15%、20%、25%
Education supplementary tax Turnover taxes payable 3%
Local education supplementary tax Turnover taxes payable 1.5%、2%
Disclosure statement on taxpayers with different corporate income tax rates
Names of taxpayers Income tax rates
1.The Company 25%
2.Offcn Ltd. 15%
3.Wuhu Yawei Automobile Sales Service Co., Ltd 20%
4. Ningguo Yaxia Motor Vehicle Driver Training School(Co.,
Ltd)
20%
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
130
5.Huangshan Yaxia Fudi Automobile Sales Services Co.,
Ltd.
20%
6.Chaohu Yaxia Kaixuan Automobile Sales Service Co., Ltd 20%
7.Bozhou Yaxia Motor Vehicle Driver Training School(Co.,
Ltd)
20%
8.Suzhou Bokai Automobile Sales Service Co., Ltd 20%
9.Zhejiang Offcn Co. Ltd 25%
10.Taizhou Offcn Enterprise Management Consulting Co.,
Ltd
20%
11.Beijing Offcn Xinzhiyu Online Technology Co., Ltd. 20%
12.Hulunbeier Hailar Offcn Co., Ltd 20%
13.Xilinhot Offcn Co., Ltd 25%
14.Yueqing Lecheng Offcn Co., Ltd 20%
15.Jiaozuo Offcn Co., Ltd 20%
16.Xinzheng Offcn Co., Ltd 20%
17.Chongqing Jiangbei Offcn Co., Ltd 20%
18.Nanjing Offcn Co., Ltd 25%
19.Beijing Xinde Zhiyuan Enterprise Management
Consulting Co., Ltd
20%
20.Baiyin Offcn Co., Ltd 20%
21.Shandong Kunzhong Real Estate Co., Ltd 25%
22.Nanjing Huiyue Hotel Management Co., Ltd. 25%
23.Sanmenxia Offcn Co., Ltd. 20%
24.Liaoning Offcn Academic & Cultural Exchange Co., Ltd. 25%
25.Liaoning Offcn Co., Ltd. 25%
26.Tianjin Wuqing Offcn Co., Ltd. 25%
27.Shandong Offcn Co., Ltd. 25%
28.Jilin Changyi Offcn Co., Ltd. 25%
29.Yuxi Offcn Co., Ltd. 25%
30.Tonghua Offcn Co., Ltd. 25%
31.Hunan Qingyan Offcn Co., Ltd. 25%
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
131
32.Tianjin Hexi Offcn Co., Ltd. 25%
33.Chengdu Offcn Co., Ltd. 25%
34.Shandong Zuoda Business Management Co., Ltd. 25%
35.Liaoning Zhongcheng Real Estate Development Co.,Ltd. 25%
36.Shaanxi Offcn Co., Ltd. 25%
37.Beijing Offcn Co., Ltd. 25%
2. Preferential taxation
1.Value-added tax
(1) According to the Notice on Implementing the Inclusive Tax Reduction Policy for Small and Micro
Enterprises (CS [2019] No. 13), in order to further support the development of small and micro enterprises, from
January 1st, 2019 to December 31st, 2021, small-scale value-added taxpayers with monthly sales of less than RMB
100,000 (including the actual amount) are exempt from value-added tax. The company's branches and subsidiaries
that meet the exemption conditions are exempt from VAT.
(2) According to the Notice of the Ministry of Finance and the State Administration of Taxation on the
Relevant Policies on Deduction of Value Added Tax for Special Equipment and Technical Maintenance Costs of
Value Added Tax Control System (CS [2012] No. 15), if the VAT taxpayers first purchase special equipment for the
VAT tax control system (including separate ticket machines) after December 1st, 2011 (including, the same below),
the VAT invoice obtained from the purchase of special equipment for the VAT tax control system can be fully
deducted from the VAT payable (the deduction is the total amount of price and tax), and the deduction that is
insufficient can be carried forward to the next period to continue the deduction. The VAT taxpayer's technical
maintenance fee paid after December 1st, 2011 (excluding the technical maintenance fee paid before November
30th, 2011) can be added to the value of the technical maintenance fee invoice issued by the technical maintenance
service unit. The full amount of the tax payable is deductible, and those that are insufficient for deduction can be
carried forward to the next period to continue the deduction. The company and the qualified branches and
subsidiaries should deduct the VAT payable amount in full according to the regulations.
(3) According to the Tax Policy Announcement on Prevention and Control of COVID-19 (Joint
Announcement from Ministry of Finance and State Taxation Administration 2020 No. 8), the income from the
provision of public transport services, living services, and delivery services of essential living materials for
residents are exempt from VAT. The specific scope of public transport services shall be implemented in
accordance with Provisions on the Pilot Project of Replacing Business Tax with Value Added Tax (CS [2016] No.
36). And the specific scope of life services and delivery services shall be implemented in accordance with the
Notes on Sales Services, Intangible Assets and Real Estate (CS [2016] No. 36).
2. Education surtax, local education surtax
(1) According to the Notice of the Ministry of Finance and the State Taxation Administration on Expanding
the Exemption Scope of Government Funds (CS [2016] No. 12), from February 1st, 2016, the exemption scope of
the education surtax, local education surtax and water conservancy construction fund should be expanded from the
current taxpayers whose monthly sales or turnover is not more than RMB 30,000 (quarterly sales or turnover is
not more than RMB 90,000) to the taxpayers whose monthly sales or turnover is not more than RMB 100,000 (the
quarterly sales or turnover is not more than RMB 300,000). Branches and subsidiaries of the company that meet
the conditions are exempted from education surtax and local education surtax.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
132
(2)According to the Opinions of the General Office of the Provincial People's Government on Reducing
Enterprise Costs and Stimulating Market Vigor, Hubei Political Affairs Office [2016] No. 27, from May 1st, 2016,
the local education surtax rate for the enterprises will be reduced from 2 % to 1.5%. The company's qualified
subsidiaries apply this policy to calculate and pay the local education surtax.
3. Corporate income tax
(1) On August 10th, 2017, Offcn Ltd. passed the high-tech enterprise certification organized by Beijing State
Taxation Bureau, Beijing Local Taxation Bureau, Beijing Finance Bureau, and Beijing Science and Technology
Commission, and obtained the high-tech enterprise certificate numbered GR201711001302. The certificate is
valid from 10 August 2017 to 9 August 2020. The re-certification after expiration is in progress. During the
reporting period, corporate income tax was calculated and paid at the rate of 15% for the Company and its
subsidiaries.
(2) According to the Notice on Implementing the Inclusive Tax Reduction Policy for Small and Micro Enterprises
(CS [2019] No. 13), from January 1st, 2019 to December 31st, 2021, the portion of the annual taxable income that
does not exceed RMB 1 million is deducted from the taxable income by 25% and the corporate income tax is paid
at a rate of 20%; the part of annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million,
50% of the taxable income should be deducted, and corporate income tax should be paid at the rate of 20%.
3、Others
None
VII、Notes To Consolidated Financial Statements
1. Cash and cash equivalents
Unit：RMB
Item Closing balance Opening balance
Cash on hand 17,333.64 40,288.16
Cash on bank 4,474,380,595.23 2,657,929,052.80
Other cash and cash equivalents 191,400,983.56 66,365,660.62
Total 4,665,798,912.43 2,724,335,001.58
Inc：Total amount of cash
deposited abroad
Total amount of funds
restricted by mortgage, pledge or
freezing
Other description
Note: 1. Other cash and cash equivalents mainly include the balances of third-party payment platforms such as POS,
Alipay, and Tenpay.
2. At the end of the period, there are no mortgage, pledge, freezing and other restrictions on the use of funds.
3. There were no cash deposited abroad at the end of the period.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
133
2. Transactional financial assets
Unit：RMB
Item Closing balance Opening balance
Financial assets measured at fair
value with changes included in
current profit and loss
2,156,713,143.65 1,754,396,227.54
Inc：
Debt instrument investment 2,156,713,143.65 1,754,396,227.54
Financial assets designated to be
measured at fair value with changes
included in current profits and losses
Inc：
Total 2,156,713,143.65 1,754,396,227.54
3. Derivative financial assets
Unit：RMB
Item Closing balance Opening balance
4. Notes receivable
(1) Classification of notes receivable
Unit：RMB
Item Closing balance Opening balance
Unit：RMB
Category
Closing balance Opening balance
Book balance
Bad debt
provision
Book
value
Book balancet
Bad debt r
provision
Book
value
Amount
Proporti
on
Amoun
t
Proporti
on of
provisio
n
Amount
Proporti
on
Amount
Proportio
n of
provision
Provision for bad debts by per item:
Unit：RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
134
Name
Closing balance
Book balance Bad debt provision
Proportion of
provision
Reason for provision
Total -- --
Provision for bad debts by portfolio:
Unit：RMB
Name
Closing balance
Book balance Bad debt reserves Accrual ratio
If the bad debt provision of notes receivable is calculated according to the general model of expected credit loss,
please disclose the relevant information of bad debt provision with reference to the disclosure method of other
receivables:
□ Applicable √ Not Applicable
(2) Provision, recovery and reversal for bad debts in current period
Provision for bad debts in current period
Unit：RMB
Category
Opening
balance
Amount of change in the current period
Closing
balance Provision
Withdrawal or
reversal
Writing off Others
Important provision, withdrawal or reversal for bad debts in current period:
□ Applicable √ Not Applicable
(3) Notes receivable pledged by the company at the end of the period
Unit：RMB
Item Pledged amount at the end of the period
(4) Notes receivable that have been endorsed or discounted by the company at the end of the period and
have not yet matured at the balance sheet date
Unit：RMB
Item
Amount of confirmation at the end
of the period
Amount not confirmation at the end
of the period
(5) Notes transferred to accounts receivable by the company due to the drawer's failure to perform the
contract at the end of the period,
Unit：RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
135
(6)Notes receivable actually written off in current period
Unit：RMB
Item Amount of writing off
Writing off important notes receivable:
Unit：RMB
Name of the
Company
Nature of notes
receivable
Amount of
writing off
Reasons for
writing off
Procedure of
writing off
Whether the funds
are generated by
related party
transactions
5. Accounts receivable
(1)Classified disclosure of accounts receivable
Unit：RMB
Category
Closing balance Opening balance
Book balance Bad debt provision
Book
value
Book balance Bad debt provision
Book
value
Amount
Proport
ion
Amount
Proportio
n of
provision
Amount
Proporti
on
Amount
Proportio
n of
provision
Accounts
receivable
with
individual
provision
for bad
debts
Inc：
Accounts
receivable
with
provision
for bad
15,105,21
5.41
100.00
%
755,260
.77
5.00%
14,349,
954.64
2,864,882.
20
100.00%
143,244.
11
5.00%
2,721,63
8.09
Item
Amount transferred to accounts receivable at the end of
the period
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
136
debts in
combination
Inc：
Combinatio
n 1
1,250,000.
00
8.28%
62,500.
00
5.00%
1,187,5
00.00
Combinatio
n 2
3,875,247.
76
25.65%
193,762
.39
5.00%
3,681,4
85.37
2,864,882.
20
100.00%
143,244.
11
5.00%
2,721,63
8.09
Combinatio
n 3
9,979,967.
65
66.07%
498,998
.38
5.00%
9,480,9
69.27
Total
15,105,21
5.41
100.00
%
755,260
.77
14,349,
954.64
2,864,882.
20
143,244.
11
2,721,63
8.09
Provision for bad debts according to individual items:
Unit：RMB
Name
Closing balance
Book balance Bad debt provision
Proportion of
provision
Reasons for provision
Provision for bad debts according to combination: 755260.77
Unit：RMB
Name
Closing balance
Book balance Bad debt provision Proportion of provision
Combination 1 1,250,000.00 62,500.00 5.00%
Combination 2 3,875,247.76 193,762.39 5.00%
Combination 3 9,979,967.65 498,998.38 5.00%
Total 15,105,215.41 755,260.70 --
Description of the basis for determining the combination:
Provision for bad debts according to combination:
Unit：RMB
Name
Closing balance
Book balance Bad debt provision Proportion of provision
Description of the basis for determining the combination:
If the provision for bad debts of accounts receivable is calculated according to the general model of expected
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
137
credit loss, please refer to the disclosure method of other receivables to disclose the relevant information of bad
debt provision:
□ Applicable √ Not Applicable
Disclosure by account age
Unit：RMB
Ages Closing balance
Within 1 year (included) 13,436,364.14
1 to 2 years 1,668,851.27
2 to 3 years
More than 3 years
3 to 4 years
4 to 5 years
More than 5 years
Total 15,105,215.41
(2)Provision, withdrawal and reversal for bad debts in current period
Provision for bad debts in the current period:
Unit：RMB
Category
Opening
balance
Amount of change in the current period
Closing
balance Provision
withdrawal or
reversal
Write off Others
Provision for
bad debts of
accounts
receivable
143,244.11 612,016.66 755,260.77
Total 143,244.11 612,016.66 755,260.77
Important provision, recovery and reversal for bad debts in current period:
Unit：RMB
Name of the Company Amount recovered or reversed Recovery method
None
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
138
（3）Accounts receivable actually written off in the current period
Unit：RMB
Item Write off amount
Writing off important accounts receivable:
Unit：RMB
Name of the
Company
Nature of
accounts
receivable
Amount of
writing off
Reasons for write
off
Procedures of
writing off
Whether the
funds are
generated by
related party
transactions
Account receivable write-off instructions:
None
（4）Accounts receivable of top five closing balance collected by debtors
Unit：RMB
Name of company
Closing balance of accounts
receivable
Proportion in the total
closing balance of accounts
receivable
Closing balance of bad debt
reserves
Customer 1 2,214,317.00 14.80% 110,715.85
Customer 2 1,250,000.00 8.35% 62,500.00
Customer 3 387,600.00 2.59% 19,380.00
Customer 4 352,478.00 2.36% 17,623.90
Customer 5 312,800.00 2.09% 15,640.00
Total 4,517,195.00 30.19%
(5)Accounts receivable terminated due to transfer of financial assets
None
(6)Amount of assets and liabilities formed by transferring accounts receivable and continuing involvement
None
6. Receivables financing
Unit：RMB
Item Closing balance Opening balance
Changes in receivable financing and fair values in current period
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
139
□ Applicable √ Not applicable
If the provision for impairment of receivables financing is withdrawn according to the general model of expected
credit loss, please refer to the disclosure method of other receivables to disclose the relevant information of
impairment provision:
□ Applicable √ Not applicable
2、Prepayments
（1）Advances to suppliers
(1)Disclosure by account age
Unit：RMB
Account age
Closing balance Opening balance
Amount Proportion Amount Proportion
Within 1 year 5,069,205.17 100.00% 2,461,009.00 100.00%
1 to 2 years
2 to 3 years
More than 3years
Total 5,069,205.17 -- 2,461,009.00 --
Reasons for not timely settling the important prepayments with an account age of more than one year. :
(3)Prepayment of top five closing balance collected by prepayment objects
Name of company Nature of Payment Closing balance Account
age
Proportion in total
amount of
prepayment(%)
Provision
for bad
debts
Nanjing Tuniu International
Travel Agency Co., Ltd
Air ticket payment 5,069,205.17 Within 1
year
100
Total 5,069,205.17 100
7. Other receivables
Unit：RMB
Item Closing balance Opening balance
Interest receivable 568,426.66 567,341.68
Dividends receivable
Other receivables 532,977,723.01 254,445,955.28
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
140
Total 533,546,149.67 255,013,296.96
(1) Interest receivable
1) Classification of interest receivable
Unit：RMB
Item Closing balance Opening balance
Fixed deposit 568,426.66 567,341.68
Entrusted loan
Bond investment
Total 568,426.66 567,341.68
2) Important overdue interest
Unit： RMB
Borrower Closing balance Overdue time Overdue reasons
Whether there is
impairment and its
judgment basis
3）Provision for bad debts
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit：RMB
Item (or Investee) Closing balance Opening balance
2) Important dividends receivable with an account age of over 1 year
Unit：RMB
Item (or Investee) Closing balance Account age
Reasons for non
recovery
Whether there is
impairment and its
judgment basis
3）Provision for bad debts
□ Applicable √ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
141
(3) Other receivables
1)Classification of other receivables by nature
Unit：RMB
Nature of payment Closing Book balance Opening Book balance
Deposits and guarantees 530,565,592.57 252,096,657.97
Reserve fund 430,185.61 214,164.38
deferred expense and others 1,981,944.83 2,135,132.93
Total 532,977,723.01 254,445,955.28
2)Provision for bad debts
Unit： RMB
Provision for bad debts
Stage 1 Stage 2 Stage 3
Total
Expected
credit loss in
the next 12
months
Expected credit loss in
the whole duration (no
credit impairment has
occurred)
Expected credit loss in
the whole duration
(credit impairment has
occurred)
Balance at Jan. 1st, 2020 194,490.90 510,300.00 704,790.90
Balance at Jan. 1st, 2020
in current period
—— —— —— ——
--Move on to stage 2
--Move on to stage 3
--Go back to stage 2
--Go back to stage 1
Provision in the current
period
158,745.13 158,745.13
Reversal in the current
period
Resale in the current
period
Write-off in the current
period
Other changes
Balance at June 30th, 353,236.03 510,300.00 863,536.03
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
142
2020
Changes in Book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
Disclosure by account age
Unit：RMB
Account age Closing balance
Within 1 year (included) 495,336,363.28
1 to 2 years 18,352,615.10
2 to 3 years 2,673,850.61
More than 3 years 16,614,894.02
3 to 4 years 9,239,089.90
4 to 5 years 521,629.04
More than 5 years 6,854,175.08
Total 532,977,723.01
3) Provision, withdrawal and reversal for bad debts in current period
Provision for bad debts in current period:
Unit：RMB
Category
Opening
balance
Amount of change in the current period
Closing
balance Provision
Withdrawal or
reversal
Write-off Others
Provision for
bad debts of
other
receivables
704,790.90 158,745.13 863,536.03
Total 704,790.90 158,745.13 863,536.03
The important amount of bad debt reserves transferred back or recovered in the current period:
Unit：RMB
Name of company Amount of withdrawal or reversal Recovery method
4)Other receivables actually written off in the current period
Unit：RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
143
Item Write-off amount
Write-off of other important receivables:
Unit：RMB
Name of
company
Nature of other
receivables
Write-off amount Write-off reasons
Write off
procedures
Whether the
funds are
generated by
related party
transactions
Description of other receivables write-off:
None
5)Other receivables of top five closing balance collected by debtors
Unit：RMB
Name of company Nature of payment
Closing
balance
Account age
Proportion in
total other
closing balance
receivables (%)
Closing
balance
of bad
debt
provision
Liaoning Hanhui Industrial
Co., Ltd
Deposits and
guarantees
200,000,000.0
0
Within 1 year 37.46%
Changsha Nanhu New City
Construction and Development
Co., Ltd
Deposits and
guarantees
200,000,000.0
0
Within 1 year 37.46%
Beijing Wushuang Technology
Co., Ltd
Deposits and
guarantees
15,900,000.00 1 to 2 years 2.98%
Rizhao Economic and
Technological Development
Zone Finance Bureau
Deposits and
guarantees
10,000,000.00 Within 1 year 1.87%
Shenyang Lijing Mingzhu
Hotel Management Co., Ltd
Deposits and
guarantees
5,675,200.00 4 to 5 years 1.06%
Total --
431,575,200.0
0
-- 80.84%
6) Receivables involving government subsidies
Unit：RMB
Name of company
Name of government
subsidy project
Closing balance
Account age at the
end of the period
Estimated time,
amount and basis of
collection
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
144
7) Other receivables terminated due to transfer of financial assets
None
8）Amount of assets and liabilities formed by transferring other receivables and continuing involvement
None
9. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
(1) Inventory classification
Unit：RMB
Item
Closing balance Opening balance
Book balance
Provision for
inventory
depreciation or
contract
performance
cost
impairment
provision
Book value Book balance
Provision for
inventory
depreciation or
contract
performance
cost
impairment
provision
Book value
(2) Reserves for inventory depreciation and impairment of contract performance costs
Unit：RMB
Item
Opening
balance
Increase in current period Decrease in current period
Closing
balance Provision Others
Reversal or write
off
Others
(3) Description of capitalization amount of borrowing costs included in closing balance of inventory
(4)Description of amortization amount of contract performance cost in current period
10. Contract assets
Unit：RMB
Item
Closing balance Opening balance
Book
balance
Provision for
impairment
Book value
Book
balance
Provision for
impairment
Book value
The amount and reasons for significant changes in the book value of contract assets in the current period:
Unit：RMB
Item Change in the amount Reasons for changes
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
145
If the provision for bad debt of contract assets is withdrawn according to the general model of expected credit loss,
please refer to the disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
Provision for impairment of contract assets in the current period
Unit：RMB
Item
Provision in the
current period
Reversal in current
period
Write-off in current
period
Reasons
11、Assets held for sale
Unit：RMB
Item
Book balance
at the end of
the period
Provision for
impairment
Book value at
the end of the
period
Fair value
Estimated
disposal costs
Estimated
disposal time
12. Non-current assets due within one year
Unit：RMB
Item Closing balance Opening balance
Debt investment due within one year 1,838,527,164.24
Other debt investment due within
one year
Total 1,838,527,164.24
Important debt investment / Other debt investment
Unit：RMB
Credit item
Closing balance Opening balance
Par value
Coupon
rate
Real
interest
rate
Due date
Par
value
Nominal
rate
Real
interest
rate
Due
date
Beijing Sidaokou
Branch of Huaxia
Bank Co., Ltd.
500,000,000.0
0
4.12% 4.12% April 4th, 2021
Qianmen Branch of
China Construction
Bank Co., Ltd
500,000,000.0
0
3.85% 3.85%
April 13th ,
2021
Beijing Shangdi sub-
branch of China
Minsheng Bank Co.,
500,000,000.0
0
4.30% 4.30% June 6th , 2021
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
146
Ltd
Meihekou Rural
Credit Cooperative
Union Sales
Department
50,000,000.00 4.20% 4.20% May 15th, 2021
Meihekou Rural
Credit Cooperative
Union Sales
Department
150,000,000.0
0
4.20% 4.20% Jan. 1st, 2021
Total
1,700,000,000.
00
—— —— —— —— —— ——
13. Other current assets
Unit：RMB
Item Closing balance Opening balance
Contract acquisition cost
Return cost receivable
Deferred expenses 218,760,179.46 97,166,903.13
Input tax to be deducted / certified 960,351.61 169,697.03
Prepayment of corporate income tax 22,414,605.05
Total 242,135,136.12 97,336,600.16
14. Debt investment
Unit：RMB
Item
Closing balance Opening balance
Book balance
Provision for
impairment
Book value Book balance
Provision for
impairment
Book value
Fixed deposit
122,023,500.0
0
122,023,500.0
0
1,923,598,909.
09
1,923,598,909.
09
Total
122,023,500.0
0
122,023,500.0
0
1,923,598,909.
09
1,923,598,909.
09
Important debt investment
Unit：RMB
Credit item
Closing balance Opening balance
Par value Coupon Real Due date Par value Coupon Real Due date
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
147
rate interest
rate
rate interest
rate
Beijing Sidaokou
Branch of Huaxia
Bank Co., Ltd.
500,000,0
00.00
4.12% 4.12%
April 5th,
2021
Qianmen Branch of
China Construction
Bank Co., Ltd
500,000,0
00.00
3.85% 3.85%
April 13th,
2021
Beijing Shangdi
Branch of China
Minsheng Bank Co.,
Ltd
500,000,0
00.00
4.30% 4.30%
June 6th,
2021
Meihekou Rural
Credit Cooperative
Union Sales
Department
50,000,00
0.00
4.20% 4.20%
May 15th,
2021
Meihekou Rural
Credit Cooperative
Union Sales
Department
150,000,0
00.00
4.20% 4.20%
June 1st,
2021
Meihekou Rural
Credit Cooperative
Union Sales
Department
100,000,0
00.00
4.20% 4.20%
July 3rd,
2021
100,000,0
00.00
4.20% 4.20%
July 3rd,
2021
Beijing Fangzhuang
Branch of China
Merchants Bank Co.,
Ltd.
20,000,00
0.00
4.18% 4.18%
Dec. 18th,
2021
20,000,00
0.00
4.18% 4.18%
Dec. 18th,
2021
Total
120,000,0
00.00
—— —— ——
1,820,000,
000.00
—— —— ——
Provision for impairment
Unit：RMB
Provision for bad
debts
Stage 1 Stage 2 Stage 3 Total
Changes in book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
148
15. Other debt investments
Unit：RMB
Item
Opening
balance
Accrued
interest
Changes in
fair value
in the
current
period
Closing
balance
Cost
Changes in
accumulate
d fair value
Accumulat
ed loss
reserves
recognized
in other
comprehen
sive
income
Remarks
Other important debt investment
Unit：RMB
Other credit items Closing balance Opening balance
Provision for impairment
Unit：RMB
Provision for bad
debts
Stage 1 Stage 2 Stage 3 Total
Changes in book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
16. long-term receivables
(1) long-term receivables
Unit：RMB
Item Closing balance Opening balance
Discount rate
range
Impairment of bad debt reserves
Unit：RMB
Provision for bad
debts
Stage 1 Stage 2 Stage 3 Total
Changes in book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
(2) Long term receivables terminated due to transfer of financial assets
(3) Amount of assets and liabilities formed by transferring long-term receivables and continuing
involvement
17. Long term equity investment
Unit：RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
149
Investee
Opening balance (book
value)
Increase and decrease in the
current period
Closing balance
(book value)
Closing balance of
provision for
impairment
18. Investment in other equity instruments
Unit：RMB
Item Closing balance Opening balance
Shanghai Zuihuibao Network Technology
Co., Ltd
136,000,000.00 136,000,000.00
Anhui Ningguo Rural Commercial Bank Co.,
Ltd
26,800,000.00 26,800,000.00
Total 162,800,000.00 162,800,000.00
Disclosure of non tradable equity instrument investment in the current period
Unit：RMB
Item
Recognized
dividend
income
Accumulated
profit
Accumulated
losses
Amount of
other
comprehensive
income
transferred to
retained
earnings
Reasons for
fair value
measurement
and its change
included in
other
comprehensive
income
Reasons for
transferring
other
comprehensive
income into
retained
earnings
Shanghai
Zuihuibao
Network
Technology
Co., Ltd
50,000,000.00
Plan for long
term holding
Anhui Ningguo
Rural
Commercial
Bank Co., Ltd
Plan for long
term holding
Total 50,000,000.00
19. Other non-current financial assets
Unit：RMB
Item Closing balance Opening balance
Beijing Jinwu Venture Capital
Center (limited partnership)
38,050,000.00 38,050,000.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
150
Financial products 100,116,559.96 100,116,559.96
Total 138,166,559.96 138,166,559.96
20. Investment properties
(1) Investment properties adopting cost measurement mode
√ Applicable □ Not applicable
Unit：RMB
Item Houses and buildings Land-use rights
Construction in
progress
Total
I. Original book value
1. Opening balance 377,111,222.22 473,825,849.87 850,937,072.09
2.Increase in current
period
525,587.10 525,587.10
（1）Outsourcing 525,587.10 525,587.10
（2）Inventory/ Fixed
assets/ Transfer in
from construction in
progress
（3）Increase in
business combination
3.Decrease in current
period
（1）Disposal
（2）Other transfers
4.Closing balance 377,636,809.32 473,825,849.87 851,462,659.19
II. Accumulated
depreciation and
amortization
1. Opening balance 41,891,136.83 60,373,277.81 102,264,414.64
2. Increase in current
period
7,027,592.40 3,470,234.43 10,497,826.83
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
151
(1) Provision or
amortization
7,027,592.40 3,470,234.43 10,497,826.83
3.Decrease in current
period
（1）Disposal
（2）Other transfers
4. Closing balance 48,918,729.23 63,843,512.24 112,762,241.47
III. Provision for
impairment
1. Opening balance 6,556,268.55 53,641,335.37 60,197,603.92
2. increase in current
period
(1) Provision
3. Decrease in current
period
（1）Disposal
（2）Other transfers
4. Closing balance 6,556,268.55 53,641,335.37 60,197,603.92
IV. Book value
1. Book value at the
end of the period
322,161,811.54 356,341,002.26 678,502,813.80
2. Book value at the
beginning of the
period
328,663,816.84 359,811,236.69 688,475,053.53
（2）Investment properties adopting fair value measurement mode
□ Applicable √ Not applicable
（3）Investment properties without property right certificate
Unit：RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
152
Item Book value
Reasons for not completing the
certificate of title
Houses and buildings 240,448,764.80 In process
Land-use right 5,382,308.97 In process
Other information
1. Investment properties includes the land-use right that has been leased, the land use-right held and prepared to
transfer after appreciation,and the leased buildings.
2. Investment properties is initially measured at cost, followed by cost model, and depreciated or amortized in the
same way as fixed assets and intangible assets. On the balance sheet date, if there is any indication that the
Investment properties is impaired, the corresponding impairment provision shall be made according to the
difference between the book value and the recoverable amount.
21. Fixed Assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 870,207,450.02 672,429,601.44
Disposal of fixed assets
Total 870,207,450.02 672,429,601.44
(1) Fixed assets
Unit: RMB
Item Buildings
Decoration of
fixed assets
Transportation
facility
Electronic
equipment
Office equipment Total
I. Original book
value
1. Opening balance 613,771,922.00 39,832,104.02 74,816,972.09 184,870,489.12 12,025,551.21 925,317,038.44
2. Increase in the
current period
183,015,413.44 24,876,320.00 760,833.62 19,090,135.48 16,116.00 227,758,818.54
(1) Purchase 9,500.00 760,833.62 10,061,768.88 16,116.00 10,848,218.50
(2)Transfer from
construction in
progress
183,005,913.44 24,876,320.00 9,028,366.60 216,910,600.04
(3) Increase in
business
combination
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
153
3. Decrease in the
current period
583,400.00 583,400.00
(1) Disposal or
obsolescence
583,400.00 583,400.00
4. Closing balance 796,787,335.44 64,708,424.02 74,994,405.71 203,960,624.60 12,041,667.21 1,152,492,456.98
II. Accumulated
depreciation
1. Opening balance 70,706,861.28 13,940,973.90 62,359,914.70 95,736,942.74 10,063,760.04 252,808,452.66
2. Increase in the
current period
10,191,475.22 3,942,651.62 2,640,564.87 12,932,209.64 244,898.61 29,951,799.96
(1) Accrual 10,191,475.22 3,942,651.62 2,640,564.87 12,932,209.64 244,898.61 29,951,799.96
(2)Others 0.00
3. Decrease in the
current period
554,230.00 554,230.00
(1) Disposal or
obsolescence
554,230.00 554,230.00
4. Closing balance 80,898,336.50 17,883,625.52 64,446,249.57 108,669,152.38 10,308,658.65 282,206,022.62
III. Impairment
provision
1. Opening balance 4,309.80 74,674.54 78,984.34
2. Increase in the
current period
(1) Accrual
3. Decrease in the
current period
(1) Disposal or
obsolescence
4. Closing balance 4,309.80 74,674.54 78,984.34
IV. Book value
1. Closing book
value
715,888,998.94 46,824,798.50 10,548,156.14 95,287,162.42 1,658,334.02 870,207,450.02
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
154
2. Opening book
value
543,065,060.72 25,891,130.12 12,457,057.39 89,129,236.58 1,887,116.63 672,429,601.44
(2) Temporarily idle fixed assets
Unit: RMB
Item Original book value
Accumulated
depreciation
Impairment
provision
Book value Note
(3) Fixed assets rented through financing lease
Unit: RMB
Item Original book value
Accumulated
depreciation
Impairment provision Book value
(4) Fixed assets leased out through operating lease
Unit: RMB
Item Closing book value
(5)Fixed assets without property rights certificate
Unit: RMB
Item Book value
Reasons for failing to complete the
property rights certificate
Buildings 19,570,000.00 In progress
(6) Liquidation of fixed assets
Unit: RMB
Item Closing Balance Opening Balance
22. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 811,011,730.47 653,580,160.32
Engineering materials
Total 811,011,730.47 653,580,160.32
(1) Construction in progress
Unit: RMB
Item
Closing Balance Opening Balance
Book balance Impairment Book value Book balance Impairment Book value
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
155
provision provision
Liaoning Zhongcheng
Land
313,408,135.12 313,408,135.12 275,905,485.09 275,905,485.09
Offcn Shandong
Building
0.00 0.00 182,917,951.44 182,917,951.44
Offcn Fushun Building 123,665,491.93 123,665,491.93 113,020,225.37 113,020,225.37
Yaxia Bozhou Fortune
Plaza
62,847,721.95 62,847,721.95 62,847,721.95 62,847,721.95
GAC-Toyota Bozhou 4S
Stores
9,721,381.62 9,721,381.62 9,721,381.62 9,721,381.62
Double-teacher type
training system
0.00 0.00 7,798,395.00 7,798,395.00
Yaxia Huangshan Fudi
Stores
1,368,999.85 1,368,999.85 1,368,999.85 1,368,999.85
Shaanxi Guancheng
Building
300,000,000.00 300,000,000.00 0.00 0.00
Total 811,011,730.47 811,011,730.47 653,580,160.32 653,580,160.32
(2) Changes of significant projects in construction in the current period
Unit: RMB
Item Budget
Opening
balance
Increase
in the
period
Transferred
fixed assets
in the
period
Other
decrease
in the
period
Closing
balance
Proportion
of
accumulativ
e project
investment
in budget
(%)
Project
progress
(%)
Accumulat
ive amount
of interest
capitalizati
on
Includi
ng:
capitali
zation
amount
of
current
interest
Current
interest
capitali
zation
rate
(%)
Capital
sources
Liaoning
Zhongch
eng
Land
450,00
0,000.0
0
275,905,
485.09
37,502,6
50.03
313,408,
135.12
69.65% 69.65% Others
Offcn
Shandon
g
210,00
0,000.0
0
182,917,
951.44
24,964,2
82.00
207,882,23
3.44
98.99%
100.00
%
Others
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
156
Building
Offcn
Fushun
Building
330,00
0,000.0
0
113,020,
225.37
10,645,2
66.56
123,665,
491.93
37.47% 37.47% Others
Shaanxi
Guanche
ng
Building
400,00
0,000.0
0
300,000,
000.00
300,000,
000.00
75.00% 75% Others
Total
1,390,0
00,000.
00
571,843,
661.90
373,112,
198.59
207,882,23
3.44
737,073,
627.05
-- -- --
(3) Accrual of impairment provision for construction in progress in the period
Unit: RMB
Item Accrual amount Reason
(4) Engineering materials
Unit: RMB
Item
Closing balance Opening balance
Book balance
Impairment
provision
Book value Book balance
Impairment
provision
Book value
23. Productive biological assets
(1) Productive biological assets measured at cost
□ Applicable √ Not applicable
(2) Productive biological assets measured by fair value
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
Unit: RMB
Item Total
I. Original book value
26. Intangible assets
(1) Intangible assets
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
157
Unit: RMB
Item Land use right Patent right
Non-patent
technology
Software use
right
Trademark
right
Total
I. Original book value
1. Opening balance 205,199,737.07 7,760,286.02 7,140,521.53 220,100,544.62
2. Increase in the period 4,000.00 4,000.00
(1)Purchase 4,000.00 4,000.00
(2) Internal R&D
(3) Increase in business
combination
3. Decrease in the period
(1)Disposal
4. Closing balance 205,199,737.07 7,764,286.02 7,140,521.53 220,104,544.62
II. Accumulated amortization
1. Opening balance 17,787,580.14 3,076,750.06 1,725,876.02 22,590,206.22
2. Increase in the period 2,645,818.70 711,862.61 20,229.64 3,377,910.95
(1) Accrual 2,645,818.70 711,862.61 20,229.64 3,377,910.95
3. Decrease in the period
(1)Disposal
4. Closing balance 20,433,398.84 3,788,612.67 1,746,105.66 25,968,117.17
III. Impairment provision
1. Opening balance 3,111.00 3,111.00
2. Increase in the period
(1) Accrual
3. Decrease in the period
(1)Disposal
4. Closing balance 3,111.00 3,111.00
IV. Book value
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
158
1. Closing book value 184,766,338.23 3,972,562.35 5,394,415.87 194,133,316.45
2. Opening book value 187,412,156.93 4,680,424.96 5,414,645.51 197,507,227.40
No intangible assets formed through internal research and development at period-end.
(2) Land use rights without property rights certificate
Unit: RMB
Item Book value
Reasons for failing to complete the
property rights certificate
27. Development expenditure
Unit: RMB
Item
Opening
balance
Increase in the period Decrease in the period
Closing
balance
Internal
development
expenditure
Others
Recognized
as intangible
assets
Transferred
to current
profit and
loss
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
Name of the
investee and item
forming goodwill
Opening balance
Increase in the current period Decrease in the current period
Closing balance
Formed by
business
combination
Disposal
Shandong
Kunzhong Real
Estate Co., Ltd.
39,378,573.51 39,378,573.51
Nanjing Huiyue
Hotel Management
Co., Ltd.
60,489,146.87 60,489,146.87
Total 99,867,720.38 99,867,720.38
(2) Goodwill impairment provision
Unit: RMB
Name of the
investee and item
Opening balance
Increase in the current period Decrease in the current period
Closing balance
Accrual Disposal
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
159
forming goodwill
Relevant information of asset group or combination of asset group where goodwill is located
The company acquired Shandong Kunzhong Real Estate Co., Ltd. in 2016 and generated goodwill of RMB
39,378,573.51. The goodwill was divided into corresponding asset groups with a book value of RMB
192,286,478.23. The recoverable amount of the asset group is determined based on the net amount of the fair
value minus the disposal expenses.
The company’s acquisition of Nanjing Huiyue Hotel Management Co., Ltd. in 2018 generated goodwill of
RMB 60,489,146.87, which was divided into corresponding asset groups with a book value of RMB
195,383,990.96. The recoverable amount of the asset group is determined based on the net amount of the fair
value minus the disposal expenses.
Goodwill impairment testing process, key parameters (such as growth rate of the present value of projected
future cash flow in forecast period, growth rate in stable period, rate of profit, discount rate and the forecast period)
and confirmation method of goodwill impairment loss:
Impairment test method and provision method for impairment of goodwill. are detailed in Note V (31)
“Impairment of long-term assets”.
The recoverable amount of the company’s asset group including goodwill is estimated based on the net
amount of the fair value of the asset group in which the goodwill is located minus the disposal costs. As the main
assets have a fair value that can be referred in the market, the market comparison method is used to estimate the
fair value of the base date of the assets to be estimated, taking into account differences in time, transaction,
regional and individual factors. The company entrusted an asset assessment company to conduct an impairment
test on goodwill. After testing, no goodwill was found to be impaired, and no provision for impairment was made.
29. Long-term deferred expense
Unit: RMB
Item Opening balance
Increase in the
period
Amortization in the
period
Other decrease Closing balance
Decoration
expenditure
186,953,773.64 43,441,083.12 31,958,369.36 198,436,487.40
Marketing fee 4,877,521.71 230,400.00 228,282.94 4,879,638.77
Rent and property
fees
47,239,952.20 564,942.00 19,661,006.38 28,143,887.82
Other 1,494,714.47 41,400.00 194,551.55 146,774.80 1,194,788.12
Total 240,565,962.02 44,277,825.12 52,042,210.23 146,774.80 232,654,802.11
30. Deferred tax assets and deferred tax liabilities
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
160
(1) Deferred income tax assets without offsetting
Unit: RMB
Item
Closing balance Opening balance
Deductible temporary
difference
Deferred income tax
assets
Deductible temporary
difference
Deferred income tax
assets
Provision for impairment of
assets
1,678,746.50 358,161.32 930,130.35 177,903.51
Unrealized profit in internal
transaction
Deductible losses 43,219,714.47 10,804,928.62 43,219,714.47 10,804,928.62
Accrued and unpaid employee
compensation
70,000,000.00 10,500,000.00
Total 44,898,460.97 11,163,089.94 114,149,844.82 21,482,832.13
(2) Deferred income tax liabilities without offsetting
Unit: RMB
Item
Closing balance Opening balance
Taxable temporary
difference
Deferred tax liabilities
Taxable temporary
difference
Deferred tax liabilities
Appraisal and
Appreciation of
Consolidated Assets of
Non-identical Controlled
Enterprises
370,244,163.40 92,561,040.85 375,304,896.84 93,826,224.21
Changes in fair value of
other debt investments
Changes in fair value of
other equity instrument
investments
50,000,000.00 12,500,000.00 50,000,000.00 12,500,000.00
Changes in fair value of
financial assets held for
trading
1,712,787.50 261,265.80 1,712,787.50 261,265.80
Fixed asset accounting
depreciation is less than
tax law
2,276,794.67 341,519.20 2,298,553.47 344,783.02
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
161
Total 424,233,745.57 105,663,825.85 429,316,237.81 106,932,273.03
(3) Deferred income tax assets or liabilities presented in net amount after offsetting
Unit: RMB
Item
Mutual offset amount at
the end
of the reporting period
Closing balance of
deferred tax assets or
liabilities after offset
Mutual offset amount at
the end
of the reporting period
Opening balance of
deferred tax assets or
liabilities after offset
Deferred tax assets 11,163,089.94 21,482,832.13
Deferred tax liabilities 105,663,825.85 106,932,273.03
(4) Details of unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference
Deductible losses 266,086,583.15 32,969,109.71
Total 266,086,583.15 32,969,109.71
(5) Deductible losses of unrecognized deferred income tax assets will expire in the following years
Unit: RMB
Year Closing balance Opening balance Note
2020
2021 11,383,708.37 11,383,708.37
2022 119,383.82 119,383.82
2023 11,480,964.23 11,480,964.23
2024 9,985,053.29 9,985,053.29
2025 233,117,473.44
Total 266,086,583.15 32,969,109.71 --
31. Other non-current assets
Unit: RMB
Item
Closing balance Opening balance
Book balance
Impairment
provision
Book value Book balance
Impairment
provision
Book value
Contract acquisition costs
Contract performance costs
Receivable return cost
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
162
Contract assets
Prepayment for land 248,853,257.21 248,853,257.21 218,449,062.00
218,449,062.
00
Prepayment for decoration 221,573,491.15 221,573,491.15 93,560,250.00
93,560,250.0
0
Input tax to be deducted / to be
certified
15,778,818.02 15,778,818.02 13,658,316.34
13,658,316.3
4
Investment funds 1,100,000.00 1,100,000.00 300,000.00 300,000.00
Total 487,305,566.38 487,305,566.38 325,967,628.34
325,967,628.
34
32. Short-term borrowings
(1) Classification
Unit: RMB
Item Closing balance Opening balance
Pledge borrowings 1,297,000,000.00 1,397,000,000.00
Mortgage loans
Guarantee borrowings 360,000,000.00
Credit borrowings 2,160,000,000.00 1,110,000,000.00
Total 3,457,000,000.00 2,867,000,000.00
A description of the classification of short-term borrowings:
(2) Overdue short-term loans
The total amount of overdue short-term loans at the end of the period is RMB 0.00 , and the important overdue
short-term loans are as follows.
Borrower Closing balance borrowing rates Overdue time Overdue interest rates
33. Tradable financial liability
Unit: RMB
Item Closing balance Opening balance
34. Derivative financial liability
Unit: RMB
Item Closing balance Opening balance
35. Notes payable
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
163
Category Closing balance Opening balance
36. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Direct cost for class operating 3,051,459.23 188,285,128.46
Project payments 7,350,754.19 13,062,592.12
Marketing fees 2,694,697.25 26,766,715.00
Decoration costs 11,221,697.78 7,863,306.78
Rent and property fees 915,259.40 452,248.50
Fixed assets payment 52,000.00 52,000.00
Total 25,285,867.85 236,481,990.86
(2) Major accounts payable aged over one year
Unit: RMB
Item Closing balance Causes for outstanding or carry-over
37. Receipts in advance
(1) List of receipts in advance
Unit: RMB
Item Closing balance Opening balance
(2) Major receipts in advance aged over one year
Unit: RMB
Item Closing balance Causes for outstanding or carry-over
38. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advanced receipts from training 7,222,063,935.39 2,556,903,384.51
Others 85,000.00 646,327.99
Total 7,222,148,935.39 2,557,549,712.50
Amount and reasons for major changes in book value in the period
Unit: RMB
Item Changes in amount Reasons for changes
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
164
39. Employee compensation payable
(1) List of employee compensation payable
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
I. Short-term
compensation
404,338,198.91 2,258,690,849.50 2,247,247,771.07 415,781,277.34
II. Post-employment
welfare-defined
contribution plan
7,137,437.12 50,510,393.07 50,823,363.04 6,824,467.15
III. Dismission welfare
IV. Other welfare due
within one year
Total 411,475,636.03 2,309,201,242.57 2,298,071,134.11 422,605,744.49
(2) List of short-term compensation
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
1. Wages or salaries, bonuses,
allowances and subsidies
393,403,204.25 2,111,212,339.92 2,098,918,928.35 405,696,615.82
2. Staff welfare 4,121,013.63 4,121,013.63
3. Social security contributions 4,964,980.66 65,025,954.43 63,679,727.67 6,311,207.42
Inc: Medical insurance 4,433,301.20 61,763,213.55 60,109,746.07 6,086,768.68
Employment injury insurance 165,403.54 1,028,532.20 1,116,580.74 77,355.00
Maternity insurance 366,275.92 2,234,208.68 2,453,400.86 147,083.74
4. Housing fund 5,970,014.00 78,267,903.32 80,464,463.22 3,773,454.10
5. Labor union expenditure and
employee education expenditure
63,638.20 63,638.20
6. Short-term compensated
absences
7. Short-term profit sharing plan
Total 404,338,198.91 2,258,690,849.50 2,247,247,771.07 415,781,277.34
(3) List of post-employment welfare-defined contribution plan
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
165
1. Basic endowment
insurance
6,806,195.23 49,287,227.90 49,502,307.42 6,591,115.71
2. Unemployment
insurance
331,241.89 1,223,165.17 1,321,055.62 233,351.44
3. Enterprise annuity
payment
Total 7,137,437.12 50,510,393.07 50,823,363.04 6,824,467.15
40. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Value-added tax 5,706,855.30 48,652,668.81
Consumption tax
Enterprise income tax 87,468.97 116,032,612.72
Individual income tax 142,759.48 5,527,794.99
City maintenance and construction tax 372,940.14 3,413,989.84
Deed tax 5,847,718.44 5,847,718.44
Property tax 1,501,207.30 1,288,867.69
Education surcharge 166,260.18 1,475,646.01
Land use tax 811,945.26 943,956.91
Others 155,255.48 1,122,772.43
Total 14,792,410.55 184,306,027.84
41. Other payables
Unit: RMB
Item Closing balance Opening balance
Interest payable 13,367,960.06 4,521,557.54
Dividends payable
Other payables 41,215,300.82 84,171,854.44
Total 54,583,260.88 88,693,411.98
(1) Interest payable
Unit: RMB
Item Closing balance Opening balance
Interest on long-term loans with interest
paid in installments and principal
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
166
repayable at maturity
Interest on corporate bonds
Interest payable on short term loans 13,367,960.06 4,521,557.54
Preferred stocks and perpetual bonds
classified as financial liabilities
Others
Total 13,367,960.06 4,521,557.54
Major overdue interest payable:
Unit: RMB
Borrower Amount outstanding Reason
(2) Dividends payable
Unit: RMB
Item Closing balance Opening balance
(3) Other accounts payable
1) List of other payables by nature
Unit: RMB
Item Closing balance Opening balance
Current expense 28,290,707.79 44,839,078.80
Equity transfer payable 34,663,519.48
Reimbursed expenses and others 3,373,940.51 3,370,870.09
Social security and housing fund 9,550,652.52 1,298,386.07
Total 41,215,300.82 84,171,854.44
2)Major other payables aged over one year
Unit: RMB
Item Closing balance Causes for outstanding or carry-over
42. Held-for-sale liabilities
Unit: RMB
Item Closing balance Opening balance
43. Non-current Liabilities due within One Year
Unit: RMB
Item Closing balance Opening balance
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
167
44. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Short-term bonds payable
Refund payable
Value-added tax on receipts in advance 216,664,468.06 76,726,491.38
Total 216,664,468.06 76,726,491.38
Changes in short-term bonds payable
Unit: RMB
Name
Face
value
Date of
Issue
Bond
period
Amount
Opening
balance
Issuance
in the
period
Accrual
of interest
at face
value
Premium
and
discount
amortizati
on
Repay in
the period
Closing
balance
45. Long-term borrowings
(1) Category of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
46. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
(2) Changes in bonds payable (Excluding other financial instruments such as preferred stocks and perpetual bonds
classified as financial liabilities)
Unit: RMB
Name
Face
value
Date of
Issue
Bond
period
Amount
Opening
balance
Issuance
in the
period
Accrual
of interest
at face
value
Premium
and
discount
amortizati
on
Repay in
the period
Closing
balance
(3) Description of conversion conditions and conversion time of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilities
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
168
Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the
period
None
Unit: RMB
Financial
instruments
issued
Opening Increase in the period Decrease in the period Closing
Amount Book value Amount Book value Amount Book value Amount Book value
Explanation of the basis for classifying other financial instruments as financial liabilities
47. Lease liability
Unit: RMB
Item Closing balance Opening balance
48. Long-term payable
(1) List of long-term payable by nature of payment
Unit: RMB
Item Closing balance Opening balance
(2) Special payable
Unit: RMB
Item Opening balance
Increase in the
period
Decrease in the
period
Closing balance Reason
49. Long-term employee benefits payable
(1) Long-term employee compensation payable
Unit: RMB
Item Closing balance Opening balance
(2) Changes in defined benefit plans
Present value of defined benefit plan obligations:
Unit: RMB
Item Amount in the current period Amount in the prior period
Plan assets:
Unit: RMB
Item Amount in the current period Amount in the prior period
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
169
Defined benefit plan net debt (Net assets)
Unit: RMB
Item Amount in the current period Amount in the prior period
50. Estimated liabilities
Unit: RMB
Item Closing balance Opening balance Reason
51. Deferred income
Unit: RMB
Item Opening balance
Increase in the
period
Decrease in the
period
Closing balance Reason
Projects involving government subsidies
Unit: RMB
Item
Opening
balance
Increased
subsidies
Amount
included in
non-operating
income
Amount
included in
other income
Amount of
cost
reduction
Other
changes
Closing
balance
Related to
assets /
income
52. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
53. Share capital
Unit: RMB
Opening
balance
Changes in the current period (+/-)
Closing
balance
New shares
issued
Bonus shares
Shares
transferred
from capital
reserve
Others Subtotal
Total number
of shares
103,807,623.00 103,807,623.00
54. Other equity instruments
(1)Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the
period
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
170
None
(2) Changes for other financial instruments such as preferred stocks and perpetual bonds issued at the end of the
period
Unit: RMB
Financial
instruments
issued
Opening Increase in the period Decrease in the period Closing
Amount Book value Amount Book value Amount Book value Amount Book value
Changes of other equity instruments in the current period, explanations of the reasons for the changes, and the
basis for related accounting treatments:
None
55. Capital reserve
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
Equity premium 956,481,049.50 956,481,049.50
Other Capital reserve 242,100,000.00 26,900,000.00 269,000,000.00
Total 1,198,581,049.50 26,900,000.00 1,225,481,049.50
Other explanations, including changes in the period and reasons for the changes:
None
56. Treasury stock
Unit: RMB
Item Opening balance Increase in the period Decrease in the period Closing balance
Other explanations, including changes in the period and reasons for the changes:
None
57. Other comprehensive income
Unit: RMB
Item
Opening
balance
Closing
balance
Amount
before
current
income tax
Less: Earned
to other
comprehensi
ve income in
Less:
Earned to
other
comprehe
Less:
income tax
expenses
Attributabl
e to the
parent
company,
Attributabl
e to
minority
shareholde
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
171
for the
current
period
the previous
period and
transferred to
profit and
loss in the
current
period
nsive
income in
the
previous
period and
transferred
to retained
earnings in
the current
period
after tax rs after tax
1. Other comprehensive income
not reclassified into gains or
losses
37,500,000.
00
37,500,0
00.00
Inc: changes arising from
remeasured and redefined benefit
plan
Other comprehensive income not
reclassified into gains or losses by
the equity method
Changes in the fair value of other
equity instrument investments
37,500,000.
00
37,500,0
00.00
Changes in the fair value of the
enterprise’s own credit risk
2. Other comprehensive income
reclassified into gains or losses
Inc: other comprehensive income
reclassified into gains or losses by
the equity method
Changes in the fair value of other
debt investments
Amount of financial assets
reclassified into other
comprehensive income
Credit impairment provision for
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
172
other debt investment
Cash flow hedging reserve
Differences arising from
conversion of financial statements
denominated in foreign currencies
Total other comprehensive income
37,500,000.
00
37,500,0
00.00
Other descriptions: including the adjustment of the effective part of the cash flow hedge gains and losses
converted into the initially confirmed amount of the hedged item:
None
58. Special reserve
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Other explanations, including changes in the current period and the corresponding reasons:
None
59. Surplus reserve
Unit: RMB
Item Opening balance
Increase in the current
period
Decrease in the current
period
Closing balance
Statutory surplus reserve 45,000,000.00 45,000,000.00
Discretionary surplus
reserve
Reserve funds
Corporate development
funds
Others
Total 45,000,000.00 45,000,000.00
Descriptions for surplus reserve, including the changes and the reasons in the current period:
None.
60. Retained earnings
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
173
Item Amount for the current period Amount for the prior period
Retained earnings at the end of the previous period
before adjustment
2,046,657,231.32 1,660,363,232.50
Adjusting retained earnings at the beginning of the
period(Increase +, decrease-)
0.00 247,170.28
Retained earnings at the beginning of the year
after adjustment
2,046,657,231.32 1,660,610,402.78
Add: net profit attributable to owners of the Parent
Company for the current period
-233,026,645.16 1,804,548,688.01
Less: Withdrawal of statutory surplus reserve
Withdrawal of discretionary surplus reserves
Withdrawal of general risk provisions
Dividend payable for ordinary shares 1,480,175,853.36 1,418,501,859.47
Ordinary shares dividends converted into
equity
Retained earnings at the end of the year 333,454,732.80 2,046,657,231.32
Details for the adjustment of the retained earnings at the beginning of the period:
(1) The retained earnings at the beginning of the period impacted by the retroactive adjustment of the ASBE
(Accounting Standards for Business Enterprises) and its new regulations:RMB0.00 .
(2) The retained earnings at the beginning of the period impacted by the changes in accounting policies:
RMB0.00 .
(3) The retained earnings at the beginning of the period impacted by the major accounting error correction:
RMB0.00 .
(4) The retained earnings at the beginning of the period impacted by the change of combination scope under
common control:RMB0.00 .
(5) The retained earnings at the beginning of the period impacted by other adjustments:RMB0.00 .
61. Revenue and cost of revenue
Unit: RMB
Item
Amount for the current period Amount for the prior period
Revenue Cost of revenue Revenue Cost of revenue
Main business 2,788,186,999.66 1,428,476,161.97 3,612,344,963.59 1,520,066,781.23
Other business 19,793,480.94 24,135,018.42 25,074,551.89 25,221,678.33
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
174
Total 2,807,980,480.60 1,452,611,180.39 3,637,419,515.48 1,545,288,459.56
Information about income:
Unit: RMB
Types of Contracts Section 1 Section 2 Total
Information about the fulfillment of obligations:
None.
Information about transaction price amortized in the rest of the obligation to be fulfilled:
The income from the unfulfilled or uncompleted obligation with signed contracts at the end of the reporting period:
RMB 0.00 .
62. Taxes and surcharges
Unit: RMB
Item Amount for the current period Amount for the prior period
Consumption tax
City maintenance and construction tax 44,663.79 7,496,891.44
Education surcharge 36,306.17 5,329,806.04
Resource tax
Property tax 3,902,053.06 2,572,709.99
Land use tax 1,693,313.52 1,836,056.86
Vehicle usage tax 99,003.90 86,176.00
Stamp tax 419,401.69 14,387,736.68
Others 82,890.91 123,870.20
Total 6,277,633.04 31,833,247.21
63. Selling expenses
Unit: RMB
Item Amount for the current period Amount for the prior period
Employee’s benefits 514,355,130.96 472,555,044.16
Marketing fee 78,835,398.47 111,427,661.44
Rent property, depreciation and
amortization expenses
62,420,815.84 55,231,065.92
Travel expenses 29,851,665.86 28,472,843.96
Others 15,354,442.79 7,626,483.81
Total 700,817,453.92 675,313,099.29
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
175
65. General and administrative expenses
Unit: RMB
Item Amount for the current period Amount for the prior period
Employee’s benefits 348,545,272.28 341,186,214.75
Rent property, depreciation and
amortization expenses
58,897,950.26 53,945,881.47
Office expenses 46,201,346.59 36,665,219.36
Share payments 26,900,000.00 26,900,000.00
Travel expenses 19,852,720.39 19,262,027.61
Welfare fee 2,910,382.85 2,270,527.72
Others 15,651,781.77 19,401,175.00
Total 518,959,454.14 499,631,045.91
65. Research and development expenses
Unit: RMB
Item Amount for the current period Amount for the prior period
Employee’s benefits 364,891,204.61 291,213,235.99
Travel expenses 7,810,939.90 7,371,388.67
Others 10,525,386.50 5,445,532.85
Total 383,227,531.01 304,030,157.51
66. Financial expenses
Unit: RMB
Item Amount for the current period Amount for the prior period
Interest expenses 85,130,012.11 46,924,890.43
Less: Interest income 2,889,907.48 37,722,676.13
Service Charges 100,414,519.03 33,307,274.34
Total 182,654,623.66 42,509,488.64
67. Other income
Unit: RMB
Sources of other income Amount for the current period Amount for the prior period
Tax reduction and exemption 79,195,831.18
Subsidies for job security 4,606,016.51 45,257.94
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
176
Rent subsidy 49,680.00
Government rent subsidy 109,500.00 178,650.00
Tax handling fee refund 483,555.74 6,768.48
Small financial support income from the
government
10,124.01
Total 84,454,707.44 230,676.42
68. Investment income
Unit: RMB
Item Amount for the current period Amount for the prior period
Long-term equity investment income by equity
method
Investment income from disposal of long-term
equity investments
Investment income of held-for-trading
financial assets during the holding period
Investment income from disposal of
held-for-trading financial assets
Dividend income from other equity
instruments investment during the holding
period
Income from the remeasurement of remaining
equity at fair value after the loss of control
Interest income obtained from debt investment
during the holding period
37,890,649.58
Interest income obtained from other debt
investment during the holding period
Investment income from disposal of other debt
investments
Investment income from financial product 90,927,476.86 53,971,926.62
Total 128,818,126.44 53,971,926.62
69. Net exposure hedging income
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
177
Item Amount for the current period Amount for the prior period
70. Gains from changes in fair values
Unit: RMB
Sources of gains from changes in fair
values
Amount for the current period Amount for the prior period
71. Impairment losses of credit
Unit: RMB
Item Amount for the current period Amount for the prior period
Loss on bad debts of other receivables
Impairment loss of debt investment
Impairment loss of other debt investment
Loss on bad debts of long-term receivables
Impairment loss of contract assets
Loss on bad debts of receivables -770,761.79
Total -770,761.79
72. Impairment losses of assets
Unit: RMB
Item Amount for the current period Amount for the prior period
73. Income from assets disposal
Unit: RMB
Sources of income from assets disposal Amount for the current period Amount for the prior period
Fixed assets 162,043.59 198,807.74
Total 162,043.59 198,807.74
74. Non-operating income
Unit: RMB
Item Amount for the current period Amount for the prior period
Amount included in current
non-recurring gains and losses
Gains from debt restructuring
Gains from non-monetary
assets exchange
Accepting donations
Governmental subsidy 19,800.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
178
Others 348.00 1,565,171.86
Total 20,148.00 1,565,171.86
Government subsidy reckoned into current gains and losses:
Unit: RMB
Item Entity Purpose Type
Whether the
subsidy
impacts the
gain/loss of
the year
Whether it is
special
subsidy
Amount for
the current
period
Amount for
the prior
period
Related to
assets/
income
Special
Subsidy for
infrared
thermometers
for pandemic
Prevention
from Haidian
Development
and Reform
Commission
Development
and Reform
Commission
of Haidian
District,
Beijing
Subsidy No 19,800.00
Related to
income
75. Non-operating expenses
Unit: RMB
Item Amount for the current period Amount for the prior period
Amount included in the current
non-recurring profit
(gains)/losses
Loss on debt restructuring
Loss on non-monetary assets
exchange
Outward donation 90,002.28 70,002.54 90,002.28
Forfeiture and overdue fine 3,500.00 12,000.00 3,500.00
Others 993.99
Total 93,502.28 82,996.53 93,502.28
76. Income tax expenses
(1) Statement of income tax expenses
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
179
Unit: RMB
Item Amount for the current period Amount for the prior period
Current income tax expense 4,399.43 100,561,730.62
Deferred income tax expense 9,051,295.01 1,110,407.70
Total 9,055,694.44 101,672,138.32
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Amount for the current period
Total profit -223,976,634.16
Income tax expenses calculated at statutory/applicable tax rate(s) -33,596,495.12
Impact from different tax rates applicable to subsidiaries -1,751,276.86
Impact from adjustment of previous periods income tax
Impact from non-taxable income
Impact from non-deductible cost, expense and loss 8,479,779.66
Impact from using deductible losses of previously unrecognized
deferred income tax assets
Impact from deductible temporary differences or deductible
losses of deferred income tax assets unrecognized in the current
period
35,923,686.76
Income tax expenses 9,055,694.44
77. Other comprehensive income
For details, please refer to Note VII(57) Other comprehensive income of this report.
78. Cash Flow Statement Items
(1) Other cash received related to operating activities
Unit: RMB
Item Amount for the current period Amount for the prior period
Deposits and guarantees 5,802,263.50 676,098.21
Government subsidy and other
non-operating income
5,403,032.41 211,845.73
interest income 2,889,907.48
Reserve funds 43,861.00
Total 14,139,064.39 887,943.94
Explanation for other cash received related to operating activities:
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
180
(2) Other Cash paid related to operating activities
Unit: RMB
Item Amount for the current period Amount for the prior period
Daily expenses 468,436,624.08 381,436,926.74
Service charges 77,914,519.03 33,307,274.34
Deposits and guarantees 74,271,198.10 9,456,208.83
Non-operating expenses 93,502.28 82,136.54
Reserve funds 259,882.23 22,625.81
Total 620,975,725.72 424,305,172.26
Explanation for other cash paid related to operating activities:
(3) Other cash received related to investment activities
Unit: RMB
Item Amount for the current period Amount for the prior period
Explanation for other cash received related to investment activities:
(4) Other cash paid related to investment activities
Unit: RMB
Item Amount for the current period Amount for the prior period
Explanation for other cash paid related to investment activities:
(5) Other cash received related to fundraising
Unit: RMB
Item Amount for the current period Amount for the prior period
Explanation for other cash received related to fundraising:
(6) Other cash paid related to fundraising
Unit: RMB
Item Amount for the current period Amount for the prior period
Service charges 333,478.85 320,723.05
Total 333,478.85 320,723.05
Explanation for other cash paid related to fundraising:
79. Supplementary information on cash flow statement
(1) Supplementary information on the cash flow statement
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
181
Supplementary information Amount for the current period Amount for the prior period
1. Net profit adjusted to cash flow of operating activities: -- --
Net profit -233,032,328.60 493,025,465.15
Add: Provision for impairment of assets 770,761.79
Depreciation of fixed assets and productive biological
assets, and depletion of oil and gas assets
40,449,626.79 39,566,591.56
Depreciation of right-of-use assets
Amortization of intangible assets 3,377,910.95 3,467,967.09
Amortization of long-term deferred expense 31,958,369.36 41,828,031.38
Losses (gains are indicated by “-”) on disposal of fixed
assets, intangible assets and other long-term assets
-162,043.59 -198,807.74
Losses (gains are indicated by “-”) on write-off of fixed
assets
Losses (gains are indicated by “-”) on changes in fair
values
Financial expenses (income is indicated by “-”) 85,130,012.11 9,878,312.52
Losses (gains are indicated by “-”) from investments -128,818,126.44 -53,971,926.62
Decrease /(increase is indicated by “-”) in deferred
income tax assets
10,319,742.19 2,422,751.53
Increase (decrease is indicated by “-”) in deferred income
tax liabilities
-1,268,447.18 -1,312,343.83
Decrease (increase is indicated by “-”) in inventories 20,062.46
Decrease (increase is indicated by “-”) in operating
receivables
-198,166,879.62 -30,250,871.91
Increase (decrease is indicated by “-”) in operating
payables
4,426,216,906.43 3,823,391,566.94
Others 26,900,000.00 26,900,000.00
Net cash flow from operating activities 4,063,675,504.19 4,354,766,798.53
2. Significant investment and financing activities involving cash
flow:
-- --
Conversion of debt into capital
Convertible bonds due within 1 year
Fixed assets acquired under financing lease
3. Net changes in cash and cash equivalents: -- --
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
182
Closing balance of cash 4,665,798,912.43 1,403,999,087.40
Less: Opening balance of cash 2,724,335,001.58 648,711,545.32
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase of cash and cash equivalents 1,941,463,910.85 755,287,542.08
(2) Net cash paid for acquiring subsidiaries for the current period
Unit: RMB
Amount
Cash or cash equivalents paid for business merger in the current period
(3) Net cash acquired from disposal of subsidiaries in the current period
Unit: RMB
Amount
Cash or cash equivalents acquired from disposal of subsidiaries in the
current period
(4) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 4,665,798,912.43 2,724,335,001.58
Including: Cash on hand 17,333.64 40,288.16
Cash at bank 4,474,380,595.23 2,657,929,052.80
Other monetary capital for
payment at any time
191,400,983.56 66,365,660.62
Amount due from central bank
available for payment
Deposit of interbank funds
Disbursement of interbank funds
II. Cash equivalents
Including: bond investment due within three
months
III. Closing balance of cash and cash
equivalent
4,665,798,912.43 2,724,335,001.58
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
183
Including: Cash and cash equivalents with
restricted use of parent company or
subsidiaries within the group
80. Note on statement of changes in owners' equity
Explanation of the adjustment of name of “other items” and the amount to the closing balance at the end of the
previous year:
Not applicable
81. Assets with restricted ownership or use rights
Unit: RMB
Item Closing book value Reason for restriction
Monetary funds
Bill receivable
Inventories
Fixed assets
Intangible assets
Non-current assets maturing within one year 1,500,000,000.00 Pledge loan
Total 1,500,000,000.00 --
82. Monetary items denominated in foreign currency
(1) Monetary items denominated in foreign currency
Unit: RMB
Item
Closing balance of foreign
currency
Exchange rate
Closing balance of RMB
converted
(2) Descriptions for out-bound operational entity, including the disclosure of important out-bound entity’s
principal place of business, recording currency and the basis of selection. Reasons should be revealed if the
recording currency changes.
□ Applicable √ Not applicable
83. Hedging
Disclosure of hedging items, related hedging tools and the qualitative and quantitative information on hedged
risks according to hedge categories:
Not applicable
84. Government grants
(1) General information of Government grants
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
184
Unit: RMB
Types Amount Listed items
Amount included in current
gains and losses
Subsidy for job security 4,606,016.51 Other income 4,606,016.51
Rent subsidy 49,680.00 Other income 49,680.00
Government rent subsidy 109,500.00 Other income 109,500.00
Tax handling fee refund 483,555.74 Other income 483,555.74
Small financial support income
from the government
10,124.01 Other income 10,124.01
Infrared thermometers received
during the pandemic
19,800.00 Non-performing income 1,045.00
Total 5,278,676.26 5,259,921.26
(2) Refund of government subsidies
□ Applicable √ Not applicable
85. Others
None
Section VIII. Changes in the Consolidation Scope
1. Business combinations not under common control
(1) Business combinations not under common control for the current period
Unit: RMB
Name of the
acquiree
Time of
acquiring
equity
Cost of
acquiring
equity
Proportion of
equity
acquisition
Ways of
acquiring
equity
Date of
acquisition
Basis of
determining
the date of
acquisition
Income of the
acquiree from
the purchase
date to the
end of the
period
Net profit of
the acquiree
from the
purchase date
to the end of
the period
(2) Merger costs and goodwill
Unit: RMB
Merger costs
Explanation of the method of determining the fair value of the merger costs, and contingent consideration and its
changes:
None
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
185
The main reasons for the formation of large goodwill:
None
(3) The identifiable assets and liabilities of the acquiree at the date of acquisition
Unit: RMB
Fair value at the date of acquisition Book value of the date of acquisition
The method of determining the fair value of identifiable assets and liabilities:
None
The contingent liabilities of the acquiree assumed in the business combination:
None
(4) Gains or losses arising from re-measurement of equity held before the purchase date at fair value
Whether there is a transaction that realizes business combination step by step through multiple transactions and
obtains control during the reporting period
□ Yes √ No
(5) Relevant descriptions about the failure of determining the merger consideration or the fair value of the
identifiable assets and liabilities of the acquiree on the date of acquisition or at the end of the merger period
None
(6) Other descriptions
None
2. Business combinations under common control
(1) Business combinations under common control for the current period
Unit: RMB
Name of the
merged party
Equity ratio
obtained in
the business
combination
Basis for
business
combination
under
common
control
Date of
business
combination
Basis of
determining
the
combination
date
Income of the
merged party
from the
beginning of
combination
period to the
combination
date
Net profit of
the merged
party from
the beginning
of the
combination
period to the
combination
date
Income of the
merged party
during the
comparison
period
Net profit of
the merged
party during
the
comparison
period
(2) Cost of business combination
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
186
Unit: RMB
Cost of business combination
Descriptions for the contingent consideration and its changes:
None
(3) Book value of assets and liabilities of the merged party on the combination date
Unit: RMB
Combination date End of the previous period
Contingent liabilities of the merged party assumed in the business combination:
None
3. Reverse purchase
Basic information of the transaction, the basis for recognizing the transaction as reverse purchase, whether the
assets and liabilities retained by the listed company constitute a business and its basis, the determination of the
merger cost, the adjustment amount of equity and its calculation method when treated as equity transactions:
None
4. Disposal of subsidiaries
Whether there is a situation where a single disposal of the investment in the subsidiary results in the loss of
control
□ Yes √ No
Whether there is a situation where the investment in the subsidiary disposed step by step through multiple
transactions results in the loss of control in the current period
□ Yes √ No
5. Changes in the scope of consolidation due to other reasons
Explanation of the changes in the scope of consolidation caused by other reasons (such as newly established
subsidiaries, liquidation subsidiaries, etc.) and the relevant circumstances:
Company
Method of obtaining and
disposing subsidiaries during the
reporting period
Impact on the whole production, operation
and
performance
Shaanxi OFFCN Technology Co., Ltd. New establishment
Not yet operating, no impact on overall
performance
Beijing OFFCN Future Education
Technology Co., Ltd.
New establishment
Not yet operating, no impact on overall
performance
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
187
6. Others
None
Section IX. Interest In Other Entities
1. Interest in subsidiaries
(1) Composition of the Company
Name
Principal
place of
business
Place of
registration
Nature of
business
Shareholding ratio
Acquisition
method Direct Indirect
1. Offcn Ltd. Beijing Beijing
Service
industry
100.00%
Reverse
purchase
2. Yawei Automobile Wuhu Services Co., Ltd. Wuhu Wuhu
Merchandise
sales, etc.
100.00%
New
establishment
3. Yaxia Automobile Ningguo Driver Training School Ningguo Ningguo
Service
industry
100.00%
New
establishment
4. Yaxia Automobile Huangshan Fudi Services Co.,
Ltd.
Huangshan Huangshan
Merchandise
sales, etc.
100.00%
New
establishment
5. Yaxia Automobile Chaohu Kaixuan Services Co.,
Ltd.
Hefei Hefei
Merchandise
sales, etc.
100.00%
New
establishment
6. Yaxia Automobile Haozhou Driver Training
School
Bozhou Bozhou
Service
industry
100.00%
New
establishment
7. Bokai Automobile Suzhou Services Co., Ltd. Suzhou Suzhou
Merchandise
sales, etc.
100.00% Acquisition
8. Zhejiang Offcn Co. Ltd. Hangzhou Hangzhou
Service
industry
100.00%
New
establishment
9. Taizhou Offcn Co. Ltd. Taizhou Taizhou
Service
industry
100.00%
New
establishment
10. Offcn Xinzhiyu Online Technology Co., Ltd. Beijing Beijing
Service
industry
100.00%
New
establishment
11. Hulunbuir Hailar Offcn Co., Ltd.
Hulunbuir Hulunbuir
Service
industry
100.00%
New
establishment
12. Xilinhot Offcn Co., Ltd. Xilinhot Xilinhot
Service
industry
100.00%
New
establishment
13. Yueqing Offcn Co., Ltd. Yueqing Yueqing
Service
industry
100.00%
New
establishment
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
188
14. Jiaozuo Offcn Co., Ltd. Jiaozuo Jiaozuo
Service
industry
100.00%
New
establishment
15. Xinzheng Offcn Co., Ltd. Zhengzhou Zhengzhou
Service
industry
100.00%
New
establishment
16. Chongqing Jiangbei Offcn Co., Ltd. Chongqing Chongqing
Service
industry
100.00%
New
establishment
17. Nanning Offcn Co., Ltd. Nanning Nanning
Service
industry
100.00%
New
establishment
18. Baiyin Offcn Co., Ltd. Baiyin Baiyin
Service
industry
100.00%
New
establishment
19. Beijing Xindezhiyuan Enterprise Consulting Co.,
Ltd.
Beijing Beijing
Service
industry
100.00%
New
establishment
20. Nanjing Huiyue Hotel Management Co., Ltd. Nanjing Nanjing
Service
industry
100.00% Acquisition
21. Shandong Kunzhong Real Estate Co., Ltd. Jinan Jinan
Service
industry
100.00% Acquisition
22. Sanmenxia Offcn Co., Ltd. Sanmenxia Sanmenxia
Service
industry
100.00%
New
establishment
23. Liaoning Offcn Cultural Exchange Co., Ltd. Shenyang Shenyang
Service
industry
100.00%
New
establishment
24. Liaoning Offcn Co., Ltd. Shenfuxinqu Shenfuxinqu
Service
industry
100.00%
New
establishment
25. Tianjin Wuqing Offcn Co., Ltd. Tianjin Tianjin
Service
industry
100.00%
New
establishment
26. Shandong Offcn Co., Ltd. Qingdao Qingdao
Service
industry
100.00%
New
establishment
27. Jilin Changyi Offcn Co., Ltd. Jilin Jilin
Service
industry
100.00%
New
establishment
28. Yuxi Offcn Co., Ltd. Yuxi Yuxi
Service
industry
100.00%
New
establishment
29. Tonghua Offcn Co., Ltd. Tonghua Tonghua
Service
industry
100.00%
New
establishment
30. Hunan Lighsalt Offcn Co., Ltd. Changsha Changsha
Service
industry
90.00%
New
establishment
31. Tianjin Hexi Offcn Co., Ltd. Tianjin Tianjin Service 100.00% New
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
189
industry establishment
32. Chengdu Offcn Co., Ltd. Chengdu Chengdu
Service
industry
100.00%
New
establishment
33. Shandong Zuoda Business Management Co., Ltd. Rizhao Rizhao
Service
industry
100.00%
New
establishment
34. Liaoning Zhongcheng Real Estate Development
Co., Ltd.
Shenfuxinqu Shenfuxinqu Real estate 100.00% Acquisition
35. Shaanxi Offcn Co., Ltd. Xi’an Xi’an
Service
industry
100.00%
New
establishment
36. Beijing OFFCN Future Education Technology
Co., Ltd.
Beijing Beijing
Service
industry
100.00%
New
establishment
Explanation of the differences between the percentage of shares held in the subsidiary and the voting rights ratio:
None.
Basis for the case of holding half or less of the voting rights but still controlling the investee, or holding more than
half of the voting rights but not controlling the investee:
None.
Basis for the important structured entities included in the scope of consolidation:
None.
Basis for determining whether the Company is an agent or a principal:
None.
(2) The important non-wholly owned subsidiary
Unit: RMB
Name of the subsidiary
Minority Shareholding
Ratio
Profit and loss
attributable to minority
shareholders in the
current period
Dividends declared to
minority shareholders in
the current period
The balance of minority
shareholders’ equity at
the end of the period
Explanation for the differences between the ratio of the minority shareholders’ shareholding and the voting rights
ratio:
None.
(3) Major financial information of important non-wholly owned subsidiaries
Unit: RMB
Name of Closing balance Opening Balance
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
190
the
subsidiar
y
Current
assets
Non-curr
ent
assets
Total
assets
Current
liabilities
Non-curr
ent
liabilities
Total
Liabilitie
s
Current
assets
Non-curr
ent
assets
Total
assets
Current
liabilities
Non-curr
ent
liabilities
Total
Liabilitie
s
Unit: RMB
Name of the
subsidiary
Amount for the current period Amount for the prior period
Operating
income
Net profit
Total
comprehensi
ve income
Cash flow
from
operating
activities
Operating
income
Net profit
Total
comprehensi
ve income
Cash flow
from
operating
activities
(4) Significant restrictions on the use of corporate group assets and the settlement of corporate group debts
None
(5) Financial support or other support provided to structured entities included in the scope of consolidated
financial statements
None
2. Changes in the ownership share of the subsidiary and still controlling the subsidiary’s transactions
(1) Explanation of changes in the ownership share of subsidiaries
None.
(2) Impact of the transaction on the equity of minority shareholders and the equity attributable to the parent
company
Unit: RMB
Purchase cost/disposal consideration
3. Interests in joint arrangements or joint ventures
(1) Significant joint ventures and associates
Name of joint
ventures and
associates
The principal
place of business
The place of
registration
Business nature
Shareholding ratio Accounting
treatment of
investment in
joint ventures or
associates
Direct Indirect
Explanation of the differences between the shareholding ratio in a joint venture or an associate and that of the
voting rights ratio:
None.
Basis for the case of holding less than 20% of the voting rights but having significant influence, or holding 20% or
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
191
more of the voting rights but not having significant influence:
None.
(2) Main financial information of important joint ventures
Unit: RMB
Closing balance / Amount for the current
period
Opening Balance/ Amount for the prior
period
(3) Main financial information of important associates
Unit: RMB
Closing balance / Amount for the current
period
Opening Balance/ Amount for the prior
period
(4) Summary financial information of unimportant joint ventures and associates
Unit: RMB
Closing balance / Amount for the current
period
Opening Balance/ Amount for the prior
period
(5) Explanation of significant restrictions on the ability of joint ventures or associates to transfer funds to the
Company
None.
(6) Excess losses incurred by joint ventures or associates
Unit: RMB
Name of joint ventures or
associates
Unrecognized loss accumulated
in the previous period
Unrecognized loss in the
current period (or net profit
shared in the current period)
Accumulated unrecognized loss
at the end of the period
(7) Unconfirmed commitments related to joint venture investment
None.
(8) Contingent liabilities related to investment in joint ventures or associates
None.
4. Important joint business
Name of joint
business
The principal place
of business
The place of
registration
Business nature
Shareholding ratio/shares
Direct Indirect
Explanation of the differences of the shareholding ratio or the shares enjoyed in the joint operation from that of
the voting rights:
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
192
None.
Basis for classification as a joint operation if the joint operation is a separate entity:
None.
5. Equity in structured entities not included in the scope of consolidated financial statements
Explanation of structured entities not included in the scope of consolidated financial statements:
None.
6. Others
None.
Section X. Risks Associated with Financial Instruments
The Company’s main financial instruments include cash and cash equivalents, financial assets held for
trading, accounts receivable, other receivables, debt investments, Other equity instruments, other non-current
financial assets, etc. The risks associated with these financial instruments and the risk management policies
adopted by the Company to reduce these risks are described below. The Company’s management manages and
monitors these exposures to ensure that the risks are contained within a defined range.
Risk management objectives and policies: The Company’s risk management is to strike an appropriate
balance between risks and benefits, minimize the negative impact of risks on the Company’s business
performance and maximize the interests of shareholders and other equity investors. Based on this risk
management objective, the basic strategy of the Company’s risk management is to determine and analyze various
risks faced by the Company, establish an appropriate bottom line for risk tolerance, make risk management and
timely and reliably supervise and control various risks.
The main risks caused by the Company’s financial instruments are credit risk, liquidity risk and market risk.
1. Classification of financial instruments
1.1 Carrying value of various financial assets on the balance sheet date
(1) June 30, 2020
Item
Financial assets
measured at amortized
cost
Financial assets measured at
fair value and with variation
reckoned into current
gains/losses
Financial assets
measured at fair
value and with
variation reckoned
into other
comprehensive
income
Total
Cash and cash equivalents 4,665,798,912.43 4,665,798,912.43
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
193
Financial assets held for trading 2,156,713,143.65 2,156,713,143.65
Accounts receivable 14,349,954.64 14,349,954.64
Other receivables 533,546,149.67 533,546,149.67
Non-current assets maturing
within one year
1,838,527,164.24 1,838,527,164.24
Debt investments 122,023,500.00 122,023,500.00
Investment in other equity
instruments
162,800,000.00 162,800,000.00
Other non-current financial
assets
138,166,559.96 138,166,559.96
(2) January 1,2020
Item
Financial assets
measured at amortized
cost
Financial assets measured
at fair value and with
variation reckoned into
current gains/losses
Financial assets
measured at fair value
and with variation
reckoned into other
comprehensive income
Total
Cash and cash equivalents 2,724,335,001.58 2,724,335,001.58
Financial assets held for trading 1,754,396,227.54 1,754,396,227.54
Accounts receivable 2,721,638.09 2,721,638.09
Other receivables 255,013,296.96 255,013,296.96
Debt investments 1,923,598,909.09 1,923,598,909.09
Investment in other equity
instruments
162,800,000.00 162,800,000.00
Other non-current financial
assets
138,166,559.96 138,166,559.96
1.2 Carrying value of various financial assets on the balance sheet date is as follows:
(1) June 30, 2020
Item
Financial liabilities measured
at fair value and with variation
reckoned into current
gains/losses
Other financial liabilities Total
Short-term borrowings 3,457,000,000.00 3,457,000,000.00
Accounts payable 25,285,867.85 25,285,867.85
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
194
Other payables 54,583,260.88 54,583,260.88
(2) January 1,2020
Item
Financial liabilities measured
at fair value and with variation
reckoned into current
gains/losses
Other financial liabilities Total
Short-term borrowings 2,867,000,000.00 2,867,000,000.00
Accounts payable 236,481,990.86 236,481,990.86
Other payables 88,693,411.98 88,693,411.98
2. Credit risk
The financial assets of the Company include cash and cash equivalents, financial assets held for trading,
accounts receivable, other receivables, etc. The credit risk of these financial assets is caused by the default of the
counterparty. The maximum risk exposure is equal to the carrying value of these instruments, including:
The Company’s monetary capital is deposited in banks with high credit rating, so the credit risk of monetary
capital is low.
The biggest credit risk to the Company is the book value of accounts receivable and other receivables in the
consolidated balance sheet. The Company continuously monitors the balance of accounts receivable and other
receivables to ensure that the overall credit risk of the company is under control. The quantitative data of the
Company’s credit risk exposure arising from accounts receivable and other receivables can be found in Note VII
(5) “Accounts receivable “ and Note VII (8) “Other receivables”.
3. Liquidity risk
The Company adopts the revolving liquidity plan tool to manage the risk of capital shortage. The facility
considers both the maturity date of its financial instruments and the expected cash flow generated by the
company’s operations.
The goal of the Company is to maintain the balance between the sustainability and flexibility of financing
through a variety of financing instruments, including bank loans and other interest-bearing loans.
When managing liquidity risks, the Company shall maintain sufficient cash and cash equivalents as deemed
by the management and monitor them to meet the Company’s operational needs and reduce the impact of cash
flow fluctuations. The managements monitor the use of bank loans and ensure compliance with loan agreements.
Maturity analysis of financial liabilities based on undiscounted contract cash flow:
Closing balance
Item
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
195
Within 1 year 1-5 years Over 5 years Total
Short-term
borrowings
3,457,000,000.00 3,457,000,000.00
Accounts payable 25,285,867.85 25,285,867.85
Other payables 54,583,260.88 54,583,260.88
Continued table:
Opening balance
Item
Within 1 year 1-5 years Over 5 years Total
Short-term
borrowings
2,867,000,000.00 2,867,000,000.00
Accounts payable 236,481,990.86 236,481,990.86
Other payables 88,693,411.98 88,693,411.98
4. Market risk
Market risk refers to the risk that the fair value of financial instruments or future cash flow fluctuates due to
changes in market prices, including interest rate risk and foreign currency risk.
4.1. Interest rate risk
None
4.2. Exchange rate risk
None
Section XI. Fair Value Disclosure
1. The financial assets and financial liabilities measured at fair value at the end of the reporting period
Unit: RMB
Item
Closing fair value
Level 1 Level 2 Level 3 Total
I. Continuous fair value measurement -- -- -- --
1. Held-for-trading financial asset 2,256,829,703.61 38,050,000.00 2,294,879,703.61
(1) Financial assets measured at fair
value and with variation reckoned into
current gains/losses
2,256,829,703.61 38,050,000.00 2,294,879,703.61
① Debt instruments investment 2,256,829,703.61 38,050,000.00 2,294,879,703.61
② Equity instruments investment
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
196
③Derivative financial assets
(2) Designated financial assets
measured at fair value and with
variation reckoned into current
gains/losses
① Debt instruments investment
② Equity instruments investment
2. Other debt investment
3. Other equity instruments investment 162,800,000.00 162,800,000.00
4. Investment properties
(1) Land use rights for lease
(2) Buildings rent
(3) Land use rights to be transferred
after appreciation
5. Biological assets
(1) Consumptive biological assets
(2) Productive biological assets
Total assets measured continuously at
fair value
2,256,829,703.61 200,850,000.00 2,457,679,703.61
6. Held-for-trading financial liabilities
Inc: Trading bonds
Derivative financial liabilities
Others
7. Designated financial liabilities
measured at fair value and with
variation reckoned into current
gains/losses
Total liabilities measured continuously
at fair value
II. Non-continuous fair value
measurement
-- -- -- --
1. Assets holding for sale
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
197
Total assets measured non-continuously
at fair value
Total liabilities measured
non-continuously at fair value
2. The basis for determining the market price of sustainable and non-sustainable fair value measurement
items at the first level
None.
3. Information on the valuation technique and qualitative and quantitative for important parameters
adopted as for sustainable and non-sustainable second-level fair value measurement items
The Company’s sustainable second-level fair value measurement items are mainly financial products. The fair
value is determined by the discounted cash flow method and the expected rate of return.
4. Information on the valuation technique and qualitative and quantitative for important parameters
adopted as for sustainable and non-sustainable third-level fair value measurement items
The Company’s sustainable third-level fair value measurement items are mainly non-tradable equity instruments
investment and debt instruments investment. The fair value is determined by market method and liquidity
discount.
5. Adjustment information between opening and closing book value and sensitivity analysis of unobservable
parameters as for third-level fair value measurement items
None.
6. Reasons for the conversion between different levels during the current period and the policy to determine
the conversion point as for continuous fair value measurement items
None.
7. Valuation technical changes occurred during the period and the reasons for the changes
None.
8. The fair value of financial assets and financial liabilities not measured at fair value
None.
9. Others
None.
Section XII. Related Party and Transactions
1. Parent company of the Company
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
198
Name of the Parent
Company
Place of registration Nature of business Registered capital
The parent
company’s
shareholding ratio in
the Company
Proportion of voting
rights of the parent
company to the
Company
The Company is ultimately controlled by Li Yongxin and Lu Zhongfang.
Other explanation:
As of June 30, 2020, the combined shareholding of Li Yongxin and Lu Zhongfang accounted for 60.58% of the
Company’s share capital.
2. Subsidiaries of the Company
For details of the subsidiaries of the Company, see Note IX (1) “Interest in subsidiaries”.
3. Joint ventures and associates of the company
The important joint ventures or associates of the company are detailed in the notes.
The information of other joint ventures or associates that have related party transactions with the Company in the
current period or that have related party transactions with the Company in the previous period to form a balance is
as follows:
Name of joint ventures or associates Relationship with the Company
4. Other related parties of the Company
Other related party names Relationship between other related parties and the Company
Li Yongxin The controlling shareholder
Beijing Qianqiu Intelligence Book & Media Co., Ltd. Actual controller
Beijing Offcn Online Technology Co., Ltd. Actual controller
Beijing Haidian Offcn Training School Actual controller
Jinan Offcn Training School Actual controller
Kunming Wuhua Offcn Training School Actual controller
Baoding Lianchi Offcn Training School Actual controller
Beijing Haidian Baoquan Financial Training Centre Actual controller
Cangzhou Yunhe Offcn Training School Actual controller
Chengdu Wuhou Offcn Training School Actual controller
Cifeng Hongshan Offcn Training Centre Actual controller
Dezhou Offcn Training School Actual controller
Haikou Meilan Offcn Training School Actual controller
Handan Congtai Offcn Training School Actual controller
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
199
Hegang Offcn Training School Actual controller
Heihe Aihui Offcn Training School Actual controller
Kiamusze Offcn Training School Actual controller
Leshan Shizhong Offcn Training School Actual controller
Mudanjiang Offcn Training School Actual controller
Qiqihar Tiefeng Offcn Training School Actual controller
Shaoyang Shuangqing Offcn Training School Actual controller
Tangshan Lunan Offcn Training School Actual controller
Weifang Offcn Training School Actual controller
Urumqi Shayibake Offcn Training School Actual controller
Yiyang Heshan Offcn Training School Actual controller
Shenyang Lijing Pearl Hotel Management Co., Ltd. A company controlled by our executives and core employees
Beijing Taifu Hotel Management Co., Ltd. A company controlled by our executives and core employees
Beijing Xingshou Fuyuan Plantation
A company controlled by Xu Hua, spouse of Li Yongxin, the
controlling shareholder and actual controller of the Company
Wang Zhendong
The company’s director/ senior manager/ shareholder who directly
hold more than 5% (including 5%) of the Company’s shares
Shi Lei Director of the company
Yi Ziting Director of the company
Wang Qiang Independent director of the company
Tong Yan Independent director of the company
Zhang Xuanming Independent director of the company
Guo Shihong Former supervisor of the Company
Yu Hongwei Supervisor of the Company
Li Wen Supervisor of the Company
He Di Supervisor of the Company
Wang Xuejun Senior management of the Company
He Youli Senior management of the Company
Zhang Yongsheng Former senior management of the Company
Gui Hongzhi Senior management of the Company
Luo Xue Senior management of the Company
Li Lin Core technique staff of the Company
Liu Yan Core technique staff of the Company
Zhang Hongjun Core technique staff of the Company
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
200
5. Related-party transactions
(1) Related transactions in the purchase and sale of goods, provision and receipt of labor services
Table of the procurement of goods/ acceptance of labor services
Unit: RMB
Related parties
Content of related
party transaction
Amount for the
current period
Transaction
amount granted
Whether it exceeds
the transaction limit
(Y/N)
Amount for the
previous period
Beijing Taifu Hotel Management
Co., Ltd.
Accommodation
and catering
services
8,245,500.00 40,000,000.00 N 8,836,650.00
Baoding Lianchi Offcn Training
School
Joint school
running
30,000.00 N 40,090.00
Cangzhou Yunhe Offcn Training
School
Joint school
running
30,000.00 N 74,982.00
Chengdu Wuhou Offcn Training
School
Joint school
running
40,000.00 N 50,000.00
Handan Congtai Offcn Training
School
Joint school
running
30,000.00 N 40,100.00
Hegang Offcn Training School
Joint school
running
0.00 N 15,000.00
Heihe Aihui Offcn Training Center
Joint school
running
36,998.00 N 15,000.00
Kiamusze Offcn Training School
Joint school
running
24,000.00 N 10,000.00
Leshan Shizhong Offcn Training
School
Joint school
running
35,000.00 N 70,000.00
Mudanjiang Offcn Training School
Joint school
running
22,800.00 N 10,000.00
Qiqihar Tiefeng Offcn Training
School
Joint school
running
47,800.00 N 42,000.00
Shaoyang Shuangqing Offcn
Training School
Joint school
running
0.00 N 20,000.00
Tangshan Lunan Offcn Training
School
Joint school
running
30,000.00 N 50,375.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
201
Weifang Offcn Training School
Joint school
running
71,100.00 N 138,015.00
Yiyang Heshan Offcn Training
School
Joint school
running
50,000.00 N 15,000.00
Haikou Meilan Offcn Training
School
Joint school
running
20,000.00 N 0.00
Sales of goods/ Table of provision of services
Unit: RMB
Related parties
Content of related party
transaction
Amount for the current period
Amount for the previous
period
Beijing Qianqiu Intelligence Book &
Media Co., Ltd.
Exhibition services 1,179,245.28 1,132,075.47
Explanations for the procurement and sales of goods and rendering and receiving service:
None.
(2) Related fiduciary management / contracting and entrusted management / outsourcing
The table of the Company’s fiduciary management / contracting:
Unit: RMB
Name of entruster
/outsourcer
Name of trustee /
contractor
Type Start date Termination Date
The pricing basis
of custody
income /
contracting
income
Recognized
custody income /
contracting
income for the
current period
Li Yongxin Offcn Ltd. 33 private schools
November 19,
2018
All reasonable
returns on the
entrusted assets
Explanations for related entrustment and contracting:
None.
The table of the Company’s entrusted management and outsourcing
Unit: RMB
Name of
entruster
/outsourcer
Name of
trustee /
contractor
Type Start date
Termination
Date
Pricing basis
for
custody/outsou
Custody/outso
urcing fee
confirmed in
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
202
rcing fee this period
Explanations for related management and outsourcing
None.
(3) Related lease
The Company as the lessor:
Unit: RMB
Name of lessee Category
Rental income recognized for
the current period
Rental income recognized for
the previous period
Anhui Yaxia Industrial Group
Co., Ltd.
Operating lease 9,854,967.65 9,385,683.40
The Company as the lessee:
Unit: RMB
Name of lessor Category
Rental fee recognized for the
current period
Rental fee recognized for the
previous period
Shenyang Lijing Pearl Hotel
Management Co., Ltd.
Operating lease 25,030,700.00 11,918,000.00
Explanations of related lease
None.
(4) Related guarantees
The Company as the guarantor
Unit: RMB
Guaranteed party Guarantee amount Guarantee start date
Guarantee expiration
date
Whether the
guarantee has been
fulfilled
The Company as the guaranteed party
Unit: RMB
Guarantor Guarantee amount Guarantee start date
Guarantee expiration
date
Whether the
guarantee has been
fulfilled
Li Yongxin 360,000,000.00 January 9, 2019 January 9, 2020 Yes
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
203
Explanations of related guarantees:
On January 9, 2019, Offcn Ltd.signed a borrowing agreement of 360,000,000.00 with Huaxia Bank Sidaokou
Sub-branch, with the contract number YYB7610120180014, and the borrowing period was from January 9, 2019
to January 9, 2020. The loan was settled on January 9, 2020.
(5) Borrowing from related parties
Unit: RMB
Related party Amount Start date Expiration date Description
(6) Assets transfer and debt restructuring related party
Unit: RMB
Related party
related-party
transactioncontent
Amount for the current
period
Amount for the prior
period
(7) Remuneration for key management personnel
Unit: RMB
Item Amount for the current period Amount for the prior period
Remuneration for key management
personnel
8,350,871.73
(8) Other related transactions
None.
6. Receivables and payables of related parties
(1) Receivables
Unit: RMB
Item Related party
Closing balance Opening balance
Book balance
Bad debt
provision
Book balance
Bad debt
provision
Accounts receivable
Beijing Qianqiu Intelligence Book &
Media Co., Ltd.
1,250,000.00 0.00
Other receivables
Shenyang Lijing Mingzhu Hotel
Management Co., Ltd.
5,675,200.00 5,675,200.00
(2) Payables
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
204
Unit: RMB
Item Related party Closing book balance Opening book balance
Accounts payables
Yiyang Heshan Offcn
Training School
50,000.00 0.00
7. Related party commitments
For details of the commitments of related parties, please refer to Note XIV (1) “Important commitments”.
8. Others
None.
Section XIII. Share-based payment
1. Overview of share-based payment
√ Applicable □ Not applicable
Unit: RMB
Total equity instruments granted by the Company in the current period 0.00
Total equity instruments exercised by the Company in the current period 0.00
Total equity instruments invalidated by the Company in the current period 0.00
Scope of the exercise price of the stock options issued by the Company at the
end of the period and the remaining period of the contract
0
Scope of the exercise price of other equity instruments issued by the
Company at the end of the period and the remaining period of the contract
0
Other statement
On May 22, 2015, Offcn Ltd. held a shareholders’ meeting and agreed that Lu Zhongfang, the actual controller of
Offcn Ltd., would transfer her RMB 700,000.00 of capital contribution to the shareholder, Wang Zhendong
(general manager and legal representative of Offcn Ltd.) at the price of RMB 700,000.00. Shareholders Liu Bin,
Zhang Yongsheng and Guo Shihong respectively transferred RMB 100,000.00 of capital contribution held by
them to the shareholder Wang Zhendong at the price of RMB 100,000.00.
On August 11, 2015, according to the Company’s shareholders’ committee resolution, the Company registered
capital was increased from RMB 10,000,000.00 to RMB 11,111,111.11, and the newly-added registered capital of
RMB 1,111,111.11 shall be contributed by Beijing Aerospace Industry Investment Fund (limited partnership),
Beijing Guangyin Venture Capital Investment Center (limited partnership) and Beijing Jirui Technology
Innovation Investment Center (limited partnership) in a totally RMB 300,000,000.00, with the corresponding
consideration at RMB 270 per share.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
205
From May to August 2015, the Company’s business model and operating did not change significantly, so the
investment price of RMB 270 per share mentioned above could be regarded as the market fair value.
According to the relevant provisions of the CASs, the administrative expenses at RMB 26,900,000.00, RMB
53,800,000.00, RMB 53,800,000.00, RMB 53,800,000.00, RMB 53,800,000.00 and RMB 26,900,000.00 are
respectively recognized according to the limitation years of equity incentive of 2015, 2016, 2017, 2018, 2019 and
first half of 2020. The administrative expenses of RMB 269,000,000.00 are accumulatively recognized and the
capital reserves of RMB 269,000,000.00 are increased correspondingly.
2. Equity-settled share payments
√ Applicable □ Not applicable
Unit: RMB
Determination of the fair value of equity instruments on
the grant date
Based on the latest issue of new shares, it is
determined to
be RMB 270 per share.
Basis for determining the number of vested equity
instruments
Estimate the number of restricted stocks that can be
unlocked based on the turnover rate
Reasons for significant differences between the current
period’s estimates and the previous period’s estimates
None
Accumulated amount of equity-settled share-based
payments included in capital reserve
269,000,000.00
Total expenses recognized for equity-settled share-based
payments in the current period
26,900,000.00
Other statement
Equity-settled share-based payments: The granting date of the equity incentive plan was after the shareholders’
meeting reviewed and approved the incentive plan (May 22, 2015), the incentive share agreement was transferred
to Wang Zhendong, and the grant was completed when Offcn Ltd. completed the changes of industrial and
commercial registration (July 23, 2015). The equity incentive requires Wang Zhendong to commit to working in
the Company for a continuous period of five years from the date of the grant. If Wang Zhendong transfers his
share in Offcn Ltd. within five years, it shall be transferred to Lu Zhongfang and the person designated by Lu
Zhongfang. If Wang Zhendong resigns or transfers his share in Offcn Ltd during the above period, the price shall
be based on the original cost of Wang Zhendong’s acquisition of the share in Offcn Ltd., plus the interest at the
rate of 6% per year, excluding all dividends accumulated over the years (calculated as the amount excluding tax).
Prior to the release of the restriction, Wang Zhendong shall not have the right to vote or dispose of the Company’s
shares indirectly held by him (including the right to mortgage, pledge and transfer); if the voting right is
irrevocable, it shall entrust Offcn Ltd. to exercise it; the part of the dividend in its income shall be paid by Offcn
Ltd. to Wang Zhendong at an appropriate time.
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
206
After the major asset restructuring of the Company, all shareholders of Offcn Ltd. became shareholders of the
Company, and Wang Zhendong also became the shareholder of the Company. Therefore, Wang Zhendong, Lu
Zhongfang and Offcn Ltd. in the supplementary agreement after completion of the reorganization, agreed, after
the completion of the transaction Wang Zhendong would become a shareholder of the Company. In the next five
years after June 1, 2015, Wang Zhendong shall continue to serve the Offcn Ltd., shall not resign, and shall not
transfer in the meantime its holdings of shares of the Company to the public. If Wang Zhendong leaves during that
period, he shall still have to pay a total of RMB 269 million as the equity transfer difference to Lu Zhongfang, Liu
Bin, Zhang Yongsheng and Guo Shihong.
3. Share-based payment through cash settlements
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
None
5. Others
None
Section XIV. Commitments and contingencies
1. Important commitments
Important commitments on balance sheet date
Pursuant to the Profit Forecast Compensation Agreement signed by the Company and the eight natural person
shareholders of Offcn Ltd. (Lu Zhongfang, Li Yongxin, Wang Zhendong, Guo Shihong, Liu Bin, Zhang
Yongsheng, Yang Shaofeng, Zhang Zhian) on May 4, 2018, the compensation obligors confirmed and promised
that after the completion of the major assets restructuring, the net profits attributable to the owner of the parent
company after deducting non-recurring profits and losses under the consolidated statements of Offcn Ltd. shall not
be less than RMB 930 million, RMB1.3 billion and RMB1.65 billion in years of 2018, 2019 and 2020 respectively.
If the certified public accountant confirms that the actual net profits accumulated by Offcn Ltd. fall beneath the
aggregate committed net profits as of the end of any of the three fiscal years, each compensation obligor shall
assume the compensation obligation according to the proportion of the shares to the total shares of Offcn Ltd. held
by all the compensation obligors before the transaction. All compensation obligors are given priority to conduct
compensation with shares. When the total amount of share compensation reaches 90% of the total number of
shares issued to purchase assets, all compensation obligors shall conduct compensation in cash.
2. Contingencies
(1) Important contingencies on balance sheet date
None
(2) Whether the Company has important contingencies that need to be disclosed and the explanations:
The Company has no important contingencies that need to be disclosed.
3. Others
None.
Section XV. Matters subsequent to the balance sheet date
1. Significant unadjusted matters
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
207
Unit: RMB
Item Content
Cumulative impacts
on the financial
status and operating results
Cause of failure in
measuring cumulative
impacts
2. Profit distribution
Unit: RMB
Profits or dividends to be distributed
3. Sales return
None
4. Other matters subsequent to the balance sheet date
None
Section XVI. Other important matters
1. Corrections of accounting errors of previous period
(1) Retrospective restatement
Unit: RMB
Corrections of accounting
errors
Processing procedures
statements item of the
affected comparison
period
Cumulative impact
(2) Prospective application
Corrections of accounting errors Approval procedure
Reasons for adopting prospective
application
2. Debt restructuring
None
3. Assets exchange
(1) Non-monetary asset exchange
None
(2) Other assets exchange
None
4. Pension plan
None
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
208
5. Discontinued operations
Unit: RMB
Item Revenue Expense Total profit
Income tax
expenses
Net profit
Profit of
discontinued
operations
attributable to
the owner of
the parent
company
6. Information of segments
(1) Basis for determination of report segment and accounting policy
The Company’s main production and operation activities are decided by the Company, which is mainly engaged
in education and training business. Therefore, the Company is managed as an operating segment. For accounting
policies, please refer to Note V of this report — The Company’s Significant Accounting Policies and Accounting
Estimates.
(2) Financial information of the reporting segment
Unit: RMB
Item Inter-segment offset Total
(3) If the Company has no reporting segment, or cannot disclose the total assets and liabilities of each
segment, the reasons shall be clarified.
(4) Other statements
① Revenue from external transactions for each product and service or each similar product and service.
Item Amount for the current period
Amount for the prior
period
Main business 2,788,186,999.66 3,612,344,963.59
Including: Education and
training
2,788,186,999.66 3,612,344,963.59
Other businesses 19,793,480.94 25,074,551.89
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
209
Total 2,807,980,480.60 3,637,419,515.48
② Total foreign transaction income obtained by the Company from its own country and from other countries or
regions.
Area
Amount for the current period
Amount for
the prior
period
Domestic area
2,807,980,480.60 3,637,419,515.48
Total 2,807,980,480.60 3,637,419,515.48
7. Other important transactions and events having impacts on decisions of investors
None
8. Others
None
Section XVII. Notes to the parent company’s financial statements
1. Receivables
(1) Classified disclosure of receivables
Unit: RMB
Item
Closing balance Opening balance
Book balance
Bad debt
provision
Book value
Book balance
Bad debt
provision
Book
value
Amount
Proportio
n
Amount
Propo
rtion
Amoun
t
Proport
ion
Amoun
t
Proport
ion
Accounts
receivables for
which bad
debt provision has
been assessed by
single credit risk
Including
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
210
Accounts
receivable for
which bad
debt provision has
been assessed by
credit risk
portfolios
7,640,399.4
1
100.00%
382,019.
97
5.00
%
7,258,379.4
4
Including:
Combination 3
7,640,399.4
1
100.00%
382,019.
97
5.00
%
7,258,379.4
4
Total
7,640,399.4
1
100.00%
382,019.
97
7,258,379.4
4
Bad debts provision on a single item basis:
Unit: RMB
Item
Closing balance
Book balance Bad debt provision Proportion Reasons
Bad debt provision assessed by credit risk portfolios: 382,019.97
Unit: RMB
Item
Closing balance
Book balance Bad debt provision Proportion
Provision for bad debts of
accounts receivable
7,640,399.41 382,019.97 5.00%
Total 7,640,399.41 382,019.97 --
Explanations for the determining basis of the portfolios:
None
Bad debt provision assessed by credit risk portfolios:
Unit: RMB
Item
Closing balance
Book balance Bad debt provision Proportion
Explanations of the basis for determining the portfolios
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
211
If the bad debt provision of accounts receivable is based on the general model of expected credit loss, please refer
to the disclosure methods of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (inclusive) 7,640,399.41
1-2 years
2-3 years
Over 3 years
3-4 years
4-5 years
Over 5 years
Total 7,640,399.41
(2) Provision, recovery or reversal of bad debts in current period
Provision of bad debts in current period:
Unit: RMB
Category
Opening
balance
Changes in the current period
Closing
balance Provision
Recovery or
reversal
Written-off
Others
Provision for
bad debts of
accounts
receivable
382,019.97 382,019.97
Total 382,019.97 382,019.97
Significant amount of provision, recovery or reversal of bad debts in current period:
Unit: RMB
Name of institutions Amount of recovery or Recovery method
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
212
reversal
None
(3) Receivables written-off in current period
Unit: RMB
Item Written-off amount
Important receivables written-off:
Unit: RMB
Creditor
Nature of
receivables
Written-off
amount
Reasons for
written-off
Implemented
written-off
procedure
Whether
generated from
related
transactions
Statement of receivables written-off:
None
(4) Accounts receivables of the top five debtors based on the ending balance
Unit: RMB
Creditor
Closing balance
receivables
Proportion in total closing
balance receivables
Closing balance of bad
debt provision
Client 1 7,640,399.41 100.00% 382,019.97
Total 7,640,399.41 100.00%
(5) Receivables derecognized due to the transfer of financial assets
None
(6) Assets or liabilities arising from transferring receivables and continuing to be involved
None
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Interest receivables
Dividends receivables 1,700,000,000.00
Other receivables 688,067,588.44 17,949,520.99
Total 688,067,588.44 1,717,949,520.99
(1) Interest receivables
1.1 Classification of interest receivables
Unit: RMB
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
213
Item Closing balance Opening balance
1.2 Important overdue interest
Borrower Closing balance Time Reason
Whether impairment
occurs and the
judgment basis
1.3 Bad debt provision
□Applicable √ Not applicable
(2) Dividends receivables
2.1 Classification of dividends receivables
Unit: RMB
Project (or investee) Closing balance Opening balance
Offcn Ltd. 1,700,000,000.00
Total 1,700,000,000.00
2.2 Important dividend receivable aged over 1 year
Unit: RMB
Project (or investee) Closing balance Aging
Cause of recovery
failure
Whether impairment
occurs and the
judgment basis
Total -- -- --
2.3 Bad debt provision
□Applicable √ Not applicable
(3) Other receivables
3.1 Classification of other receivables by nature
Unit: RMB
Item Closing balance Opening balance
Current payment 688,061,988.44 17,943,920.99
Deposits and guarantees 5,600.00 5,600.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
214
Total 688,067,588.44 17,949,520.99
3.2 Bad debt provision
Unit: RMB
Bad debt provision
First stage Second stage Third stage
Total Expected credit
loss in the next 12
months
Expected credit loss in
the whole duration
(no credit impairment ).
Expected credit loss in
the whole duration
(credit impairment has
occurred)
Changes in the book balance with significant changes in the loss provision for the current period
□Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (inclusive) 679,680,406.08
1 to 2 years 8,387,182.36
2 to 3 years
Over 3 years
3 to 4 years
4 to 5 years
Over 5 years
Total 688,067,588.44
3.3 Provision, recovery or reversal of bad debt in current period
Bad debt provision in current period
Unit: RMB
Item
Opening
balance
Changes in the current period
Closing
balance Provision
Recovery or
reversal
Written-off Others
Important recovery or reversal of bad debt provision in current period:
Unit: RMB
Creditor
Amount of recovery or
reversal
Recovery method
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
215
3.4 Other receivables written off in current period
Unit: RMB
Item Written-off amount
Important other receivables written-off:
Unit: RMB
Creditor
Nature of other
receivables
Written-off
amount
Reason for
Written-off
Implemented
written-off
procedure
Whether
generated from
related
transactions
Explanation of other receivables written-off:
None
3.5 Other receivables of the top five debtors based on the ending balance
Unit: RMB
Creditor
Nature of
receivable
Closing balance Aging
Proportion in total
closing balance of
other receivables
Closing balance
of bad debt
provision
Offcn Ltd. Current payment 669,605,862.61
Within 1 year
(including 1
year)
97.32%
Yaxia Automobile
Bozhou Driver
Training
School
Current payment 9,962,596.36
Within 2 years
(including 2
years)
1.45%
Yaxia Automobile
Wuhu Yawei
Services
Co., Ltd.
Current payment 3,264,701.52
Within 1 year
(including 1
year)
0.47%
Yaxia Automobile
Suzhou Bokai
Services
Co., Ltd.
Current payment 3,065,491.82
Within 1 year
(including 1
year)
0.45%
Yaxia Automobile Current payment 1,907,374.50 Within 2 years 0.28%
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
216
Huangshan Fudi
Services
Co., Ltd.
(including 2
years)
Total -- 687,806,026.81 -- 99.97%
3.6 Receivables related to government subsidies
Unit: RMB
Name of institutions
Government
subsidies
Closing balance Closing aging
Time, amount and
basis of expected
collection
3.7 Other receivables derecognized due to the transfer of financial assets
None
3.8 Assets and liabilities arising from transferring other receivables and continuing to be involved
None
3. Long-term equity investment
Unit: RMB
Item
Closing balance Opening balance
Book balance
Provisio
n for
impairm
ent
Book value Book balance
Provision
for
impairme
nt
Book value
Investment in
subsidiaries
18,582,307,907.
14
18,582,307,907
.14
18,582,307,907.14 18,582,307,907.14
Investment in
associated
enterprises and
joint ventures
Total 18,582,307,907. 18,582,307,907 18,582,307,907.14 18,582,307,907.14
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
217
14 .14
(1) Investment in subsidiaries
Unit: RMB
Investee
Opening balance
(Book value)
Increase and decrease in current period
Closing balance
(Book value)
Closing
balance
of
provision
for
impairme
nt
Addition
al
investme
nt
Investmen
t
reduction
Provision for
impairment
Others
Offcn Ltd.
18,500,000,000.0
0
18,500,000,000.
00
Yaxia Automobile
Wufu Yawei Services
Co., Ltd.
23,000,000.00 23,000,000.00
Yaxia Automobile
Ningguo Driver
Training
School
17,474,782.14 17,474,782.14
Yaxia Automobile
Huangshan Fudi
Services
Co., Ltd.
5,000,000.00 5,000,000.00
Yaxia Automobile
Chaohu Kaixuan
Services
Co., Ltd
5,000,000.00 5,000,000.00
Yaxia Automobile
Bozhou Driver
Training
School
20,000,000.00 20,000,000.00
Yaxia Automobile
Suzhou Bokai
Services
Co., Ltd.
11,833,125.00 11,833,125.00
Shaanxi Offcn 0.00
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
218
Education
Tech. Co. Ltd.
Beijing Offcn Future
Education Tech. Co.
Ltd.
0.00
Total
18,582,307,907.1
4
18,582,307,907.
14
（2）Investment in associated enterprises and joint ventures
Unit: RMB
Investor
Opening
balance
(Book
value)
Increase and decrease in current period
Closing
balance
(Book
value)
Closing
balan
ce of
provis
ion
for
impairm
ent
Addition
al
investme
nt
Investme
nt
reduction
Invest
ment
gains
and
losses
recog
nized
under
the
equity
metho
d
Other
Compreh
ensive
income
adjustme
nt
Other
Equity
changes
Declare
d cash
dividend
s or
profits
Provisio
n
for
impairm
ent
Others
(3) Other statements
None
4. Revenue and cost of revenue
Unit: RMB
Item
Amount for the current period Amount for the prior period
Revenue Cost of revenue Revenue Cost of revenue
Main business
Other businesses 7,276,570.86 5,667,932.11 7,276,570.86 5,668,813.35
Total 7,276,570.86 5,667,932.11 7,276,570.86 5,668,813.35
Income related information:
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
219
Unit: RMB
Contract
Classification
Segment 1 Segment 2 Total
Obligation performance related information:
None
Information related to the transaction price allocated to the remaining performance obligations:
The income from the unfulfilled or uncompleted obligation with signed contracts at the end of the reporting period:
RMB0.00 .
5. Investment income
Unit: RMB
Item Amount for the current period Amount for the prior period
Income from long-term equity
investments under cost method
Income from long-term equity
investments under equity method
Investment income from the disposal
of long-term equity investments
Investment income from holding
held-for-trading financial assets
Investment income from disposal of
held-for-trading financial assets
Dividend income from holding other
equity instrument investments
Income from the remeasurement of
the remaining equity at fair value after
loss of control
Interest income obtained during the
holding period of debt investments
Interest income obtained during the
holding period of other debt
investments
Investment income from the disposal
of other debt investments
Financing income 30,534.61
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
220
Total 30,534.61
6. Others
None
Section XVIII. Supplementary information
1. Details of current non-recurring gains and losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount Explanation
Profits or losses from the disposal of non-current assets 162,043.59
Tax refunds, reductions
and exemptions with unauthorized approval or without formal
approval documents
Government subsidies included in the current profit and loss (
except the government subsidies closely related to the business
of the enterprise, and fixed or quantified in accordance with
national unified
standards)
169,304.01
Capital occupation fees charged to non-financial enterprises
included in the current profit and loss
The income from the fair value of the investees’ identifiable
net assets when the investment was obtained less the
investment cost of the enterprise in subsidiaries, associates and
joint ventures
Non-monetary asset exchange gains and losses
Profit or loss from entrusting others to invest or manage assets 90,927,476.86
Impairments provision for assets due to force majeure factors,
such as natural disasters
Debt restructuring gains and losses
Enterprise restructuring costs, such as expenses for relocating
employees, integration costs, etc.
Gains and losses in excess of fair value resulting from
transactions where the transaction price was significantly
unfair
Net profit or loss of the subsidiary for the current period from
the beginning of the period to the date of business combination
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
221
under common control
Gains and losses from contingencies unrelated to the
Company’s normal business operations
In addition to the effective hedging business related to the
Company’s normal business operations, gains and losses from
the changes in the fair value of the holding of financial assets
held for trading, derivative financial assets, financial liabilities
held for trading, and derivative financial liabilities, and the
investment income from the disposal of financial assets held
for trading, derivative financial assets, financial liabilities
held for trading, derivative financial liabilities and other debt
investments
Receivables and reversal of contract asset impairment reserves
that are individually tested for impairment
Gains and losses from external entrusted loans
Gains and losses from changes in the fair value of Investment
properties that are subsequently measured at the fair value
model
Impact of a one-off adjustment to the current profit and loss in
accordance with the requirements of taxation, accounting and
other laws and regulations on the current profit and loss
Custody fee income from entrusted operations
Non-operating income and expenses other than the above -93,154.28
Other profit and loss items in line with the definition of
non-recurring profit and loss
43,350,067.49
Less：Amount impacted by income tax
equity attributable to minority shareholders
Total 134,515,737.67 --
Provide explanations for classifying non-recurring profit and loss items defined or listed in the Explanatory
Announcement No. 1 for
Information Disclosures of the Company Issuing Securities Publicly – Non-recurring Profits and Losses, and for
classifying non-recurring profit and loss items listed in the Explanatory Announcement No. 1 for Information
Disclosures of the Company Issuing Securities Publicly – Non-recurring Profits and Losses as recurring profit and
loss items.
□ Applicable √ Not applicable
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
222
2. Return on equity and earnings per share
Profit in the reporting period
Weighted
average return
on
net assets (%)
Earnings per share
Basic earnings per
share
(RMB/share)
Diluted earnings per
share (RMB/share)
Net profit attributable to common shareholders
of the Company
-9.00% -0.04 -0.04
Net profit attributable to common shareholders of
the Company after deducting non-recurring gains
and losses
-14.20% -0.06 -0.06
3. Differences in accounting data under Domestic and Overseas Accounting Standards
(1) Differences in net profit and net assets in financial reports disclosed in accordance with both
international accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
(2) Differences in the financial report of net profits and net assets disclosed by Overseas Accounting
Standards and China Accounting Standards
□ Applicable √ Not applicable
(3) Explanation of the differences in accounting data under domestic and overseas accounting standards.
Names of overseas institutions shall be indicated if difference adjustments of data from overseas audit
institutions are conducted
None
4. Others
None
Offcn Education Technology Co., Ltd. 2020 Semi-Annual Report
223
Chapter XII Documents Available for Reference
I. The full text of 2020 Semi Annual Report signed by Wang Zhendong, the Company’s legal representative.
II. The financial statement signed and sealed by the legal representative of the Company, the person in charge of
accounting work and the person in charge of accounting department (accounting supervisor).
III. The original copies of all the documents of the Company which have been disclosed in newspapers
designated by the China Securities Regulatory Commission during the reporting period.
IV. Other related documents.
The place where the above-mentioned documents are maintained: the office of the Company’s Secretary
of the Board of Directors.
