Stock Code: 603605 Short Name: PROYA
Proya Cosmetics Co., Ltd.
2021 Semi-annual Report
Important NoteI. The Board of Directors, Board of Supervisors, directors, supervisors and officers of theCompany warrant that the contents of the Semi-annual Report are true, accurate andcomplete without any misrepresentations, misleading statements or material omissions, andthat they will be jointly and severally liable therefor.
II. All directors of the Company have attended the board meeting.
III. The Semi-annual Report has not been audited.
IV. HOU Juncheng, the person in charge of the Company, and WANG Li, the chief financial
officer and the head of the accounting organization (the person in charge of accounting)warrant that the financial report herein is true, accurate and complete.
V. Proposals for profit distribution or reserve capitalization during the Reporting Period
adopted by the Board of DirectorsThere is no proposal for profit distribution or reserve capitalization during the Reporting Period.
VI. Risk disclosure on forward-looking statements
√ Applicable ? N/A
The future plans, development strategies and other forward-looking statements herein shall in noevent constitute the Company’s substantive commitments to its investors. The investors should keep aneye on investment risks.
VII. Whether there is any non-operational occupation of funds by the controlling shareholders
and their affiliatesNo
VIII. Whether there is any external guarantee provided in violation of the specified
decision-making procedures?No
IX. Whether there is a majority of the directors that cannot undertake the truthfulness, accuracy
and completeness of the Semi-annual Report disclosed by the CompanyNo
X. Disclosure of material risks
The Company has elaborated the existing risks in this Report. For details, please refer to “(I)Possible Risks” in “V. Other Disclosures” of “Section III Management Discussion and Analysis” herein.
XI. Others? Applicable √ N/A
Table of Contents
Section I Definitions ...... 5
Section II Company Profile and Main Financial Indicators ...... 5
Section III Management Discussion and Analysis ...... 9
Section IV Corporate Governance ...... 21
Section V Environmental and Social Responsibilities ...... 23
Section VI Important Events ...... 24
Section VII Share Changes and Shareholders ...... 49
Section VIII Preferred Stock ...... 54
Section IX Bonds ...... 54
Section X Financial Report ...... 55
Documents forreference
| Documents for reference | Financial statements signed and sealed by the legal representative, the chief financial officer and the head of the accounting organization |
| Originals of all documents and announcements concerning the Company publicly disclosed in newspapers designated by the CSRC during the Reporting Period |
Section I Definitions
In this Report, unless the context otherwise requires, the following terms shall be defined as below:
Definitions of frequently-used terms
| Definitions of frequently-used terms | ||
| PROYA Co., Ltd., PROYA Co., the Company, or We | means | Proya Cosmetics Co., Ltd. |
| CSRC | means | China Securities Regulatory Commission |
| SSE | means | Shanghai Stock Exchange |
| Articles of Association | means | Articles of Association of Proya Cosmetics Co., Ltd. |
| RMB/RMB0,000 | means | Renminbi Yuan/Renminbi 10,000 Yuan |
Section II Company Profile and Main Financial Indicators
I. Company Information
| Chinese name | 珀莱雅化妆品股份有限公司 |
| Short name in Chinese | 珀莱雅 |
| English name | Proya Cosmetics Co.,Ltd. |
| Short name in English | Proya |
| Legal representative | HOU Juncheng |
II. Contact Person and Contact Information
| Secretary of the Board | Representative of Security Affairs | |
| Name | ZHANG Yefeng | WANG Xiaoyan |
| Address | 9/F, Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province | 9/F, Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
| Telephone | 0571-87352850 | 0571-87352850 |
| Fax | 0571-87352813 | 0571-87352813 |
| proyazq@proya.com | proyazq@proya.com |
III. Basic Information Change
| Registered address | No. 588 Xixi Road, Liuxia Street, Xihu District, Hangzhou City, Zhejiang Province |
| Historical changes of the registered address | For details, see the Announcement on the Amendment of the Articles of Association and the Registration of Industrial and Commercial Change (Announcement No.: 2019-008) disclosed by the Company on the designated media for information disclosure on February 27, 2019 |
| Office address | Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
| Postal code of the office address | 310023 |
Website
| Website | http://www.proya-group.com |
| proyazq@proya.com | |
| Query index of changes during the Reporting Period | N/A |
IV. Information Disclosure and Location Change
| Selected newspapers for information disclosure | Shanghai Securities News and Securities Times |
| Website for publication of the Semi-annual Report | http://www.sse.com.cn |
| The Company’s Semi-annual Report is available at | Board Office of Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
| Query index of changes during the Reporting Period | N/A |
V. Company Stock Overview
| Stock Type | Stock Exchange | Stock Abbreviation | Stock Code | Stock Abbreviation before Change |
| A Share | Shanghai Stock Exchange | Proya | 603605 | None |
VI. Other Relevant Information? Applicable √ N/A
VII. Main Accounting Data and Financial Indicators of the Company
(I) Main Accounting Data
Unit: Yuan Currency: RMB
| Main accounting data | The Reporting Period (Jan. - Jun.) | Same period of prior year | YOY increase or decrease in the Reporting Period (%) |
| Operating income | 1,917,718,497.60 | 1,384,323,848.88 | 38.53 |
| Net profit attributable to shareholders of the listed company | 226,101,313.86 | 178,767,020.76 | 26.48 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profits or losses | 220,280,393.28 | 182,466,394.19 | 20.72 |
| Net cash flows from operating activities | 266,175,578.82 | 36,564,378.88 | 627.96 |
| Main accounting data | End of the Reporting Period | End of prior year | Increase or decrease at the end of the Reporting Period over the end of prior year (%) |
| Net asset attributable to shareholders of the listed company | 2,481,725,253.59 | 2,391,535,435.94 | 3.77 |
Total assets
| Total assets | 3,377,752,471.47 | 3,636,882,185.29 | -7.13 |
| Net profit margin attributable to shareholders of the listed company | 11.79% | 12.91% | |
| Net profit margin attributable to shareholders of the listed company after deducting non-recurring profits or losses | 11.49% | 13.18% |
(II) Main Financial Indicators
| Main financial indicators | The Reporting Period (Jan. - Jun.) | Same period of prior year | YOY increase or decrease in the Reporting Period (%) |
| Basic earnings per share (RMB/share) | 1.13 | 0.89 | 26.97 |
| Diluted earnings per share (RMB/share) | 1.12 | 0.89 | 25.84 |
| Basic earnings per share after deducting non-recurring profits or losses (RMB/share) | 1.10 | 0.91 | 20.88 |
| Weighted average return on equity (%) | 9.10 | 8.51 | Increase by 0.59 percentage points |
| Weighted average return on equity after deducting non-recurring profits or losses (%) | 8.86 | 8.68 | Increase by 0.18 percentage points |
| Turnover rate of accounts receivable (times/year) | 16.71 | 15.74 | 6.16 |
| Turnover rate of inventories (times/year) | 3.37 | 3.12 | 8.01 |
Description of the main accounting data and financial indicators of the Company? Applicable √ N/A
VIII. Differences Between Accounting Data under Domestic and Foreign Accounting Standards? Applicable √ N/A
IX. Items and Amounts of Non-recurring Profits or Losses
√ Applicable ? N/A
Unit: Yuan Currency: RMB
| Item of non-recurring profits or losses | Amount | Note (if applicable) |
| Profit or loss from disposal of non-current assets | -1,416.28 | |
| Tax relief with ultra vires approval, or without formal approval, or on an occasional basis | ||
| Governmental grants included in the current profit or loss, except for those closely related to the normal operation of the Company and gained at a fixed amount or quantity according to certain standards based on the | 9,370,319.81 |
national policies
| national policies | ||
| Capital occupation fees charged to non-financial enterprises included in the current profit or loss | ||
| Profits from the difference in the lower investment cost of acquiring subsidiaries, associates and joint ventures by the enterprise and the fair value of the identifiable net assets of the investees at the time of investment | ||
| Profit or loss on exchange of non-monetary assets | ||
| Profit or loss from entrusting others with investment or asset management | ||
| Provisions for impairment of various assets due to natural disasters and other force majeure events | ||
| Profit or loss on debt restructuring | ||
| Enterprise’s reorganization fees, such as staffing expenses and integration fees | ||
| Profits or losses exceeding the fair value arising from transactions in which the transaction price is obviously unfair | ||
| Current net profit or loss of the subsidiaries established by business combination involving enterprises under common control from the opening of the accounting period to the date of consolidation | ||
| Profit or loss from contingencies unrelated to the normal operation of the Company | ||
| Profit or loss from changes in fair value arising from the holding of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, as well as the investment income from disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other debt investments, except the effective hedging | -3,545.22 |
business related to the normalbusiness of the Company
| business related to the normal business of the Company | ||
| Reversal of impairment provisions of accounts receivable and contract assets that have been tested for impairment separately | ||
| Profit or loss from external entrusted loans | ||
| Profit or loss from changes in the fair value of investment properties subsequently measured at fair value | ||
| Impact from one-time adjustment of the current profit or loss as required by tax, accounting and other laws and regulations on the current profit or loss | ||
| Entrusted fee income from entrusted operation | ||
| Other non-operating incomes and expenses besides the above items | 521,323.29 | |
| Other profit or loss items conforming to the definition of non-recurring profits or losses | ||
| Affected minority interests | -1,842,828.78 | |
| Affected income tax amount | -2,222,932.24 | |
| Total | 5,820,920.58 |
X. Others? Applicable √ N/A
Section III Management Discussion and Analysis
I. Description of the Company’s Industry and Primary Business during the Reporting Period(I) Primary Business
The Company is committed to building a new domestic cosmetics industry platform, primarilyengaged in the R&D, production and sales of cosmetics products, having its main brands that include,among others, “PROYA”, “HAPSODE”, “TIMAGE”, “INSBAHA” and “CORRECTORS”. TheCompany’s own brands have covered the consumer delicate skincare products, makeup products,high-efficacy skincare products and other beauty products fields:
1. Popular exquisite skincare products brands
（1）PROYA, focusing on sci-tech skincare products for young white-collar women, has its generalprice ranging from RMB100 to RMB300, sold through all channels collaboratively both online andoffline.
（2）HAPSODE, specially customized for young skin aiming at students and young women inlower-tire cities, has its general price ranging from RMB50 to RMB100, sold mainly through onlinechannels.
2. Makeup products brands
（1） TIMAGE, a new Chinese style makeup products brand, has its general price ranging from
RMB150 to 200, sold through online channels.
（2） INSBAHA, a punk-style niche makeup products brand, has its general price ranging fromRMB50 to RMB150, sold through online channels.
3. High-efficacy skincare products brand
CORRECTORS, a high-efficacy skincare products brand, has its general price ranging fromRMB260 to RMB600, sold through online channels.
(II) Business Models
1. Sales models
Products are mainly sold through online channels, concurrently with offline channels.
Online channels are primarily operated by direct selling and distribution, of which direct selling iscarried out mainly via Tmall and JD.com, among other platforms, while expanding to some emergingplatforms such as TikTok Shop, and distribution is mainly carried out via Taobao, JD.com and Vipshop,etc..Offline channels are primarily operated by dealers, including cosmetics specialty stores, supermarketsand single brand stores, etc..
2. Production/R&D models
The Company focuses on independent production, supplemented by OEM processing, and has itsown skincare products/other personal care factories and makeup products factories.The Company mainly commits to independent R&D, supplemented by industry-university-researchcooperation, maintaining its R&D cooperation with global industry-leading raw material suppliers suchas BASF China, Ashland China and LIPOTRUE S.L. in Spain.
(III) Industry
The Company is in the industry of chemical raw materials and chemicals manufacturing(Classification Code: C26) under the Guidelines for the Industrial Classification of Listed Companiespromulgated by CSRC; and in the industry of daily chemicals manufacturing (C268), subdivided intocosmetics manufacturing (C2682) under the Industrial Classification for National Economic Activities(GB/T4754-2011).
According to the National Bureau of Statistics of China, from January to June 2021, the total retailsales of consumer goods amount to RMB21,190.4 billion, with a YOY increase of 23.0%, includingRMB191.7 billion of cosmetics, with a YOY increase of 26.6% (retail sales value from the businessesabove certain size).
Based on the analysis of various industry data, the Company has occupied a certain share in thedomestic cosmetics market.
II. Analysis of Core Competitiveness During the Reporting Period
√ Applicable ? N/A
The core competitiveness of the Company is mainly embodied in: creating a self drivenorganization with efficient coordination among the front, middle and back offices with “product, contentand operation” as the mainline, building a consistent operation management system integrating “culture,strategy, mechanism and talent” taking culture as the traction, strategy as the guidance, and mechanismand talent as the two wings, so as to ensure the proper implementation of the strategic objectives.
III. Discussion and Analysis of Business(I) Financial Analysis
1. YOY growth of operating income
The operating income was RMB1.918 billion, with a YOY increase of 38.53%
Of which: the primary operating income was RMB1.911 billion, with a YOY increase of 38.28%
and other operating income was RMB6.438 millionPrimary operating income:
（1）By channel
Channel
| Channel | Amount (RMB100 million) | Increase or decrease in 2021 H1 over the same period (%) | YOY increase or decrease in 2020 (%) | YOY increase or decrease in 2019 (%) | YOY increase or decrease in 2018 (%) | Proportion of 2021H1 (%) | Proportion of 2020 (%) | Proportion of 2019 (%) | Proportion of 2018 (%) | |
| Online | Direct selling | 10.91 | 135.28 | 79.63 | 88.25 | 90.19 | 57.08 | 42.45 | 28.42 | 19.94 |
| Distribution | 4.54 | 9.41 | 34.36 | 37.95 | 40.97 | 23.74 | 27.56 | 24.67 | 23.63 | |
| Sub-total | 15.45 | 75.85 | 58.59 | 60.97 | 59.91 | 80.82 | 70.01 | 53.09 | 43.57 | |
| Offline | Cosmetics stores | 2.68 | -21.46 | -19.28 | 4.42 | 7.45 | 14.02 | 22.56 | 33.61 | 42.52 |
| Other | 0.99 | -39.33 | -32.81 | 26.33 | 59.72 | 5.16 | 7.43 | 13.30 | 13.91 | |
| Sub-total | 3.67 | -27.23 | -23.12 | 9.82 | 16.88 | 19.18 | 29.99 | 46.91 | 56.43 | |
| Total | 19.11 | 38.28 | 20.26 | 32.11 | 32.41 | 100.00 | 100.00 | 100.00 | 100.00 | |
Note: The proportion of each sub-channel is the proportion of the main business income. The mantissa of partial totals may be inconsistent with the sum ofindividual data due to rounding, the same below.
（2）By brand
Brand
| Brand | Amount (RMB100 million) | Increase or decrease in 2021 H1 over the same period (%) | YOY increase or decrease in 2020 (%) | YOY increase or decrease in 2019 (%) | YOY increase or decrease in 2018 (%) | Proportion of 2021H1 (%) | Proportion of 2020 (%) | Proportion of 2019 (%) | Proportion of 2018 (%) | |
| Own brands | PROYA | 14.87 | 31.44 | 12.43 | 26.81 | 32.38 | 77.81 | 79.66 | 85.21 | 88.77 |
| Other brands | 3.67 | 169.36 | 75.08 | 19.74 | 32.65 | 19.17 | 14.82 | 10.18 | 11.23 | |
| Sub-total | 18.54 | 46.24 | 19.11 | 26.02 | 32.41 | 96.98 | 94.48 | 95.39 | 100.00 | |
| Agent brands | Cross-border agent brands | 0.58 | -49.68 | 44.09 | - | - | 3.02 | 5.52 | 4.61 | - |
| Total | 19.11 | 38.28 | 20.26 | 32.11 | 32.41 | 100.00 | 100.00 | 100.00 | 100.00 | |
Note: Among which, the operating income from TIMAGE was RMB111 million.
（3）By category
| Category | Amount (RMB100 million) | Increase or decrease in 2021 H1 over the same period (%) | YOY increase or decrease in 2020 (%) | YOY increase or decrease in 2019 (%) | YOY increase or decrease in 2018 (%) | Proportion of 2021H1 (%) | Proportion of 2020 (%) | Proportion of 2019 (%) | Proportion of 2018 (%) |
| Skincare (including cleansing) | 16.30 | 33.91 | 11.38 | 24.89 | 32.29 | 85.27 | 86.50 | 93.40 | 98.80 |
| Make-up | 2.71 | 97.45 | 181.91 | 482.43 | 42.59 | 14.17 | 12.41 | 5.29 | 1.20 |
| Others | 0.11 | -61.56 | 0.47 | - | - | 0.56 | 1.09 | 1.31 | - |
| Total | 19.11 | 38.28 | 20.26 | 32.11 | 32.41 | 100.00 | 100.00 | 100.00 | 100.00 |
2. YOY growth in net profit
The net profit attributable to shareholders of the listed company was RMB226 million, with a YOYincrease of 26.48%
The net profit attributable to shareholders of the listed company after deducting non-recurringprofits or losses was RMB220 million, with a YOY increase of 20.72%
Indicators
| Indicators | 2021 H1 | 2021 Q1 | 2020 | 2020H1 | 2019 | 2018 |
| 1. Net profit margin on sales | 10.88% | 11.80% | 12.04% | 12.55% | 11.73% | 12.14% |
| 2. Gross profit margin on sales | 63.73% | 64.41% | 63.55% | 59.90% | 63.96% | 64.03% |
| 3. Sales expense ratio | 42.09% | 41.72% | 39.90% | 33.04% | 39.16% | 37.52% |
| Including: Image promotion fee ratio | 33.95% | 33.06% | 32.68% | 24.18% | 26.86% | 21.19% |
| 4. General and administrative expense ratio | 6.06% | 5.78% | 5.44% | 7.24% | 6.25% | 7.26% |
| 5. R&D expense ratio | 1.64% | 1.95% | 1.92% | 2.30% | 2.39% | 2.17% |
| 6. Turnover rate of accounts receivable (times) | 16.71 | 14.75 | 15.53 | 15.74 | 21.74 | 36.04 |
| 7. Turnover interval of accounts receivable (days) | 21.54 | 24.41 | 23.18 | 22.87 | 16.56 | 9.99 |
| 8. Turnover rate of inventories (times) | 3.37 | 2.92 | 3.50 | 3.12 | 4.12 | 4.04 |
| 9. Turnover interval of inventories (days) | 106.82 | 123.40 | 102.86 | 115.55 | 87.38 | 89.11 |
(II) Business Analysis
1. New product strategy
During the Reporting Period, the Company upgraded the product-driven strategy and continued toimplement the “hero product strategy”.
（1）Based on the increasingly mature digital management of product lifecycle, the DoubleAnti-Aging Essence and Ruby Essence were upgraded as to the composition, formula and packagedesign for the brand of PROYA, with a more perfect Version 2.0 formed for PROYA to further promotethe shaping of the sense of technology and youth.
（2）The hero products portfolio has been perfected by extending the categories from essences toface and eye creams and the effect from age defying to repair, to attract users, thereby improving the percustomer transaction and repeat purchases, and enhancing the brand adherence. A series of new heroproducts skincare products, such as the Ruby Face Cream, Advanced Original Repair Essence and RubyEye Cream of PROYA.
（3）Further efforts have been made on improving the promotion efficiency of hero products, forfull-link optimization intervention from consumer experience, attraction and trust building to finaltransaction. With a cost-effective and efficient launching model and excellent products that meet theneeds of consumers, the Company changed the customers’ feeling about PROYA from “Proya is reallydifferent now” last year to “Proya is a brand that can represent China and compete internationally”,whiling continuing to step into a higher level.
2. New marketing strategy
During the Reporting Period, PROYA has always put focus on the current life and state of youngpeople with the spirit of discovery, and encouraged consumers to be brave, courageous and optimistic fromtheir respective story, to convey the brand spirit of “discovering while young”. Marketing events for thebrand are as follows:
（1）In January, with “come to the new world in the first year of graduation”, PROYA kept a closeeye on the living conditions of new employees in the workplace and gave understanding, encouragementand care to the young groups.
（2）On the Women’s Day in March, with “prejudice rather than gender - the boundary line”,PROYA work with China Women’s News to actively speak up for women with the brand power basedon its detailed insight into “gender bias” and deep thought about “gender equality”.
（3）In May, PROYA officially announced its cooperation with China Aerospace IP to pay tributeto the 65th anniversary of China Aerospace by “flying from China to the universe”. The joint productswere widely loved and praised by consumers.
In the same month, on May 20, a special day to express love among lovers, PROYA launched adiscussion on love with OWSPACE and Shanghai Translation proposing “Dare to love, and dare to besingle”. The brand not only output the love proposition with emotional resonance, but also created awarm and healing brand image.
（4）In June, PROYA launched a concentrated film clip of “paying tribute to everyone who goes todiscover”, inviting HAO Jingfang, a well-known writer, and people. cn to pay tribute to the discoverersof each era. The short film stimulated the national pride of the audience, while conveying the “spirit ofdiscovery”, the core of the brand.
3. New channel strategy
Online:
（1）Tmall Flagship Store:
During the Reporting Period, we have continued the “branding + fine operation” reform byadjusting the category structure, optimizing the product content, relying on the big data marketingstrategy, and strengthening the prominent KOL cooperation, thus greatly improving the launchingefficiency, so as to give effect to the objectives of “vast customer orders, high gross profit and massrepurchases”, and render a sustainable and quality business development.
（2）TikTok Shop & Kwai Shop:
During the Reporting Period, we have seized the popularity of live streaming, combining selfbroadcasting with talent broadcasting. Attention has been paid to the operation through self broadcastingby improving the proportion thereof, and annual frame cooperation has been improved with high-qualitystreamers covering both general streamers and non-vertical streamers, to optimize the commoditystructure and improve the gross and net profit.
（3）JD.com, Vipshop and Tmall Supermarket:
We have further optimized the platform operation, strengthened the member marketing, adjustedthe product structure, optimized the rhythm of launching expenses, and strengthened the sales of heroproducts and new products.
Offline:
（1）Cosmetics stores: We have adjusted and upgraded the existing outlets, modified the productstructure, optimized the training system and improved the terminal service awareness.
（2）Supermarkets: Focusing on building department store systems such as Intime, Chongqing andRainbow, while expanding to other high-quality department stores, we have strengthened inventorymanagement, customized product portfolio suitable for supermarket channels, and enhanced BA’sinitiative.
4. New organizational strategy
（1）Organization: We have focused on the building of digital middle office by deepening thestrategy relating to hero products and popular products, and the strategy concerning precise launch withmiddle office to improve ROI. The virtual project organization form was adopted with products andlaunching as the mainline to create an end-to-end, efficient and self-driven process-orientedorganization.
（2）Talent: We have further promoted the talent supply chain mechanism matching with business,to select, identify and use talents in an accurate, quick and efficient manner, thereby to gradually build ayoung team with strong combat effectiveness, learning ability, self drive and entrepreneurial passion.
（3）Mechanism: By advocating the “three heights” performance culture of “high investment, highperformance and high return”, we have established a performance management system of “setting goalsand attaching importance to the process for achievement”. Around the business strategy, every effortwas made to build a diversified business incentive system covering a short term (for quarterlyperformance and project incentive), a medium term (for annual additional dividend) and a long term (for
equity incentive and partners).
Material changes in the Company’s business during the Reporting Period, as well as events thathave a significant impact on the Company’s business during such period and are expected to havea significant impact thereon in the future? Applicable √ N/A
IV. Main Business Conditions during the Reporting Period(I) Primary Business Analysis1 Analysis of changes in related items in financial statements
Unit: Yuan Currency: RMB
Item
| Item | Current period | Same period of prior year | Change ratio (%) |
| Operating income | 1,917,718,497.60 | 1,384,323,848.88 | 38.53 |
| Operating cost | 695,558,289.19 | 555,120,455.16 | 25.30 |
| Selling expense | 807,204,631.76 | 457,414,432.20 | 76.47 |
| General and administrative expense | 116,191,173.05 | 100,182,355.15 | 15.98 |
| Financial expense | -1,864,128.79 | -7,374,480.76 | N/A |
| R&D expense | 31,371,344.46 | 31,865,144.96 | -1.55 |
| Net cash flow from operating activities | 266,175,578.82 | 36,564,378.88 | 627.96 |
| Net cash flow from investing activities | -190,628,459.71 | 104,618,006.73 | -282.21 |
| Net cash flow from financing activities | -248,631,053.62 | -31,140,550.44 | N/A |
Reasons for changes in operating income: Mainly due to the growth of operating income fromonline sales.Reasons for changes in operating cost: Mainly due to the growth of operating income driving thecorresponding growth of operating cost.
Reasons for changes in selling expense:
In the first half of 2021, the selling expense amounted to RMB807 million, accounting for 42.09%of the operating income (33.04% in the same period of prior year), representing a YOY increase byRMB350 million or 76.47% , mainly due to the YOY increase by RMB316 million or 94.47% in theimage publicity and promotion expense in the current period, including: 1. the YOY increase ofpromotion expense for the new brands (such as TIMAGE); 2. the YOY increase of online sales andimage publicity and promotion expense.
Reasons for changes in general and administrative expense:
In the first half of 2021, the general and administrative expense amounted to RMB116 million,accounting for 6.06% of the operating income (7.24% in the same period of prior year), representing aYOY increase by RMB16.01 million or 15.98%, mainly due to the YOY increase in employee benefitsand labor costs.
Reasons for changes in financial expense: Mainly due to the YOY increase in exchange gains andlosses in the current period.
Reasons for changes in R&D expense:
In the first half of 2021, the R&D expense amounted to RMB31.37 million, accounting for 1.64%of the operating income (2.30% in the same period of prior year), which was basically the same as thatin the same period of prior year. The parent company’s R&D expense ratio in the first half of 2021 was
3.76% (4.31% in the same period of prior year).
Reasons for changes in net cash flow from operating activities:
The net cash flow from operating increased by RMB230 million on a YOY basis, mainly due to:
1. Factors relating to increase in cash: the sales receipts increased by RMB740 million YOY(corresponding to YOY increase in sales and decrease in accounts receivable);
2. Factors relating to decrease in cash: the payment for goods increased by RMB71 million YOY,and the cash paid for other operating activities increased by RMB378 million (mainly due to the YOYincrease in image publicity and promotion expense).
Reasons for changes in net cash flow from investing activities:
The net cash flow from investment decreased by RMB295 million on a YOY basis, mainly due to:
1. Factors relating to increase in cash: the cash paid for investing in associates and other equitiesduring the period had an amount of RMB31 million, with a YOY decrease by RMB35 million fromRMB67 million in the same period of prior year;
2. Factors relating to decrease in cash: the cash inflow from recovering the principal and income ofwealth management products in the same period prior year had an amount of RMB216 million; the cashpaid for acquisition of fixed assets, construction in progress and other investing activities increasedYOY during the current period.
Reasons for changes in net cash flow from financing activities:
The net cash flow from financing decreased by RMB217 million on a YOY basis, mainly due to:
1. The short-term loans received from banks decreased by RMB99 million, and the debt repaymentexpenditure increased by RMB87 million YOY, with the total net cash outflow from both itemsincreased by RMB186 million YOY;
2. The dividend distribution and interest expenses increased by RMB31 million YOY.
2 Detailed descriptions of significant changes in business type, profit composition or profitsource of the Company in the current period? Applicable √ N/A
(II) Descriptions of significant changes in profits caused by non-primary business? Applicable √ N/A
(III) Analysis of Assets and Liabilities
√ Applicable ? N/A
1. Assets and liabilities
Unit: Yuan Currency: RMB
Item
| Item | Closing balance of current period | Proportion of closing balance of current period to total assets (%) | Closing balance of prior year | Proportion of closing balance of prior year to total assets (%) | Proportion of changes in the closing balance of current period over the closing balance of prior year (%) | Description |
Currency funds
| Currency funds | 1,236,337,706.75 | 36.60 | 1,416,654,640.93 | 38.95 | -12.73 | |
| Accounts receivable | 174,316,681.46 | 5.16 | 284,878,419.58 | 7.83 | -38.81 | Mainly due to the collection of accounts receivable upon the maturity of credit for some customers |
| Inventories | 356,282,644.43 | 10.55 | 468,641,017.75 | 12.89 | -23.98 | |
| Contract assets | 0.00 | 0.00 | N/A | |||
| Investment properties | 71,819,415.95 | 2.13 | 72,237,610.10 | 1.99 | -0.58 | |
| Long-term equity investment | 186,592,634.00 | 5.52 | 58,220,059.60 | 1.60 | 220.50 | Mainly due to : 1. see the note below for details; 2. the additional investment of RMB28.21 million made to Jiaxing Woyong |
| Fixed assets | 553,956,322.47 | 16.40 | 565,864,152.62 | 15.56 | -2.10 | |
| Construction in progress | 115,081,293.14 | 3.41 | 47,324,523.36 | 1.30 | 143.17 | Mainly due to the investment in construction in progress for Huzhou expanded production base construction project (phase I) and Longwu R&D center construction project during this period |
| Right-of-use assets | 0.00 | 0.00 | N/A | |||
| Short-term borrowings | 200,000,000.00 | 5.92 | 299,280,435.09 | 8.23 | -33.17 | Mainly due to the net repayment |
of bankloans ofRMB99millionduring thisperiod
| of bank loans of RMB99 million during this period | ||||||
| Contract liabilities | 52,820,185.37 | 1.56 | 30,618,778.99 | 0.84 | 72.51 | Mainly due to the increase of more than RMB18 million in receipts in advance |
| Long-term borrowings | 0.00 | 0.00 | N/A | |||
| Lease liabilities | 0.00 | 0.00 | N/A | |||
| Goodwill | 0.00 | 0.00 | 31,034,161.20 | 0.85 | -100.00 | See the note below for details |
| Other non-current assets | 5,731,163.01 | 0.17 | 87,322,780.03 | 2.40 | -93.44 | Mainly due to the payment for purchasing the plot in Longwu, Hangzhou at the beginning of the year; the closing procedures for the plot and the properties thereon had been completed with obtainment of relevant title certificate during this period, which was included into the intangible assets and construction in progress accordingly |
| Accounts payable | 346,738,059.11 | 10.27 | 515,832,031.27 | 14.18 | -32.78 | Mainly due to the maturity of the accounts payable in this period |
Note:
In April 2021, the Company entered into a capital increase and share exchange agreement withZhuhai Healthlong Biotechnology Co., Ltd., among other parties, under which the Company increasedits capital to Zhuhai Healthlong Biotechnology Co., Ltd. with its 52% equity in Shanghai HealthlongBiochemical Technology Co., Ltd.. After the capital increase and share exchange, Shanghai HealthlongBiochemical Technology Co., Ltd., the former majority-owned subsidiary of the Company, became awholly-owned subsidiary of Zhuhai Healthlong Biotechnology Co., Ltd. and was excluded from theconsolidation scope of the Company. The Company holds 10% equity of, and appoints a director to,Zhuhai Healthlong Biotechnology Co., Ltd..For the above reasons, the Company’s investment in Zhuhai Healthlong Biotechnology Co., Ltd.was accounted for as “long-term equity investment”, which had a carrying amount of RMB97.19million by the end of June. The originally recognized goodwill was reduced simultaneously (that is, thepart by which the investment made by the Company in Shanghai Healthlong in the early stage exceededthe fair value of identifiable net assets calculated according to the shareholding ratio).
Other descriptionsNone
2. Overseas assets
? Applicable √ N/A
3. Restrictions on major assets by the end of the Reporting Period
√ Applicable ? N/A
Unit: Yuan
Item
| Item | Closing carrying amount | Reasons for restriction |
| Cash and bank balances | 7,967,481.72 | Transformer margin, letter of credit deposit, Tmall deposit and |
| Other current liabilities | 2,149,196.85 | 0.06 | 1,439,262.02 | 0.04 | 49.33 | Mainly due to the increase of advance payment for goods in contract liabilities and the corresponding increase of pending output VAT |
| Estimated liabilities | 6,052,681.88 | 0.18 | 10,190,099.22 | 0.28 | -40.60 | Mainly due to the estimated decrease in returns sales revenue |
Alipay deposit, etc.
| Alipay deposit, etc. | ||
| Total | 7,967,481.72 |
4. Other descriptions
? Applicable √ N/A
(IV) Investment Analysis
1. Overall analysis of external equity investment
√Applicable ? N/A
Unit: Yuan
| Item | Closing balance | Opening balance | ||||
| Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
| Investment in associates | 183,291,583.06 | 183,291,583.06 | 54,913,429.03 | 54,913,429.03 | ||
| Investment in joint ventures | 3,301,050.94 | 3,301,050.94 | 3,306,630.57 | 3,306,630.57 | ||
| Total | 186,592,634.00 | 186,592,634.00 | 58,220,059.60 | 58,220,059.60 | ||
See “VII. 17 Long-term equity investment” in “Section X Financial Report” hereof for details.
(1) Significant equity investment
? Applicable √ N/A
(2) Significant non-equity investment
? Applicable √ N/A
(3) Financial assets measured at fair value
? Applicable √ N/A
(V) Disposal of major assets and equities? Applicable √ N/A
(VI) Analysis of major majority-owned and non-majority-owned companies
√ Applicable ? N/A
Unit: RMB0’000 Currency: RMB
| Primary subsidiary | Business nature | Major products or services | Registered capital | Total assets | Net assets | Net profit | Majority-owned or non-majority-owned |
| Zhejiang Meili Valley E-commerce Co., Ltd. | Cosmetics sales | Cosmetics | 1,000.00 | 34,208.50 | 17,051.83 | 7,470.13 | Majority-owned |
| Hangzhou Proya Trade Co., Ltd. | Cosmetics sales | Cosmetics | 5,000.00 | 45,346.96 | 9,794.36 | -3,271.18 | Majority-owned |
| Hapsode (Hangzhou) Cosmetics Co., Ltd. | Cosmetics sales | Cosmetics | 5,000.00 | 11,830.14 | -20,560.50 | -711.84 | Majority-owned |
(VII) Structured entities controlled by the Company? Applicable √ N/A
V. Other Disclosures(I) Possible Risks
√ Applicable ? N/A
1. Industry competition risk
(1) Given the intensified competition among brands in the industry, the Company’s brand upgradingstrategy and hero product strategy may fail to reach the expected goal;
(2) Given the intensified competition for marketing investment, the control of digital and refinedinvestment costs may fail to reach the expected goal.
2. Project incubation risk
(1) Risk of new brand incubation: the performance may fail to reach the expected goal after heavymarketing investment;
(2) Risk of new category development: as the operation modes for different categories differ greatly,the team may be unable to meet the requirements and the performance may fail to meet theexpected goal.
3. The COVID-19 outbreak may have an uncertain impact on the operation.
(II) Other Disclosures? Applicable √ N/A
Section IV Corporate GovernanceI. Brief Introduction to the General Meeting of Shareholders
Session
| Session | Date of convening | Query index of the designated website where the resolution is published | Disclosure date of resolution | Resolution |
| 2020 annual general meeting | May 13, 2021 | Announcement No. 2021-029 on the website of SSE (www.sse. com. cn) | May 14, 2021 | The meeting reviewed and approved the Company’s 2020 Annual Report and its Summary, the Company’s 2020 Annual Profit Distribution Plan and other proposals. For details, please see the Announcement on Resolution of the Company’s 2020 Annual General Meeting (Announcement No.: 2021-029) disclosed by the Company on the website of SSE (http://www.sse.com.cn) and relevant information disclosure media on May 14, 2021. |
Extraordinary general meetings of shareholders required by preferred shareholders with votingrights? Applicable √ N/A
Description of general meetings of shareholders? Applicable √ N/A
II. Changes in directors, supervisors and officers of the Company
√ Applicable ? N/A
Name
| Name | Position | Changes |
| CHEN Yan | Independent director | Left office |
| MA Dongming | Independent director | Elected |
Description of changes in directors, supervisors and officers of the Company? Applicable √ N/A
III. Profit Distribution or Capital Reserve Capitalization PlansSemi-annual profit distribution plans and capital reserve capitalization plans
| Whether there is any profit distribution or capital reserve capitalization | No |
| Number of bonus shares distributed per 10 shares (share) | 0 |
| Amount of dividends paid per 10 shares (RMB) (including tax) | 0 |
| Number of shares converted from capital reserves per 10 shares (share) | 0 |
| Description of profit distribution or capital reserve capitalization plans | |
| N/A | |
IV. The Company’s equity incentive plans, employee stock ownership plans or other employeeincentives and their impact
(I) Relevant equity incentives that have been disclosed in the interim announcement withoutprogress or change in the follow-up implementation? Applicable √ N/A
(II) Incentives not disclosed in the interim announcement or with follow-up progress
Equity incentives? Applicable √ N/A
Other descriptions? Applicable √ N/A
Employee stock ownership plans? Applicable √ N/A
Other incentives? Applicable √ N/A
Section V Environmental and Social ResponsibilitiesI. Environmental Information
(I) Description on environmental protection of the company and its primary subsidiaries which
are in high pollution industries regulated by the environmental protection authority? Applicable √ N/A
(II) Description on environmental protection of the company not in high pollution industries? Applicable √ N/A
(III) Description of follow-up progress or changes in the contents of the environmental information
disclosed during the Reporting Period? Applicable √ N/A
(IV) Relevant information conducive to protecting ecology, preventing pollution and fulfilling
environmental responsibilities
√ Applicable ? N/A
1. During the Reporting Period, the Company actively responded to the call of the nation by conductingmacro management of solid waste. Having applied to register in the National Solid Waste and ChemicalManagement Information System Platform, Huzhou Plant made an annual pre-declaration of the amountof hazardous waste generated, conducted a public bidding for hazardous waste disposal units through theplatform, and applied for treatment of hazardous waste on the platform, being able to track data of solidwaste and anticipate risks thereof in the whole process.
2. During the Reporting Period, Huzhou Plant continued to carry out reasonable energy conservation andemission reduction as suggested, and to practice as a resource-saving and environment-friendly greenfactory.
(V) Measures taken to reduce carbon emissions during the Reporting Period and the effect
thereof? Applicable √ N/A
II. Efforts to Consolidate and Expand the Achievements in Poverty Alleviation and Rural
Revitalization? Applicable √ N/A
Section VI Important Events
I. Performance of Commitments(I) Commitments of the Company and Its De Facto Controllers, Shareholders, Related Parties and Acquirers, etc., During or as of the Reporting Period
√ Applicable ? N/A
Background
| Background | Type | Promiser | Content | Date and Term | Is there a term for performance | Whether it is performed timely and strictly | Reasons for failure of timely performance (if applicable) | Next step in case of failure of timely performance (if applicable) |
Commitmentson the IPO
| Commitments on the IPO | Restricted sale of shares | Controlling shareholders and de facto controllers: HOU Juncheng and FANG Aiqin (a couple) | (1) Within 36 months from the date of listing of the Company’s shares, I will not transfer or entrust others with management of the shares in the Company directly or indirectly held by me, nor will I have such shares repurchased by the Company; (2) If the closing price of the Company’s shares has been lower than the offering price for 20 consecutive trading days within 6 months after the listing of the Company, or the closing price at the end of 6 months after the listing is lower than the offering price, the lock-up period of the Company’s shares held by me shall be automatically extended for 6 months; (3) If the Company’s shares held by me are reduced within two years after the expiration of the lock-up period, the reduction price shall not be lower than the offering price; (4) The lock-up period of the Company’s shares held by me/us shall be automatically extended for 6 months in case I/we violate the above commitments on share locking. | Made on: November 15, 2017; Term: November 15, 2017 to November 14, 2020 | Yes | Yes | N/A | N/A |
| Restricted sale of shares | Director and general manager: FANG Yuyou | (1) Within 36 months from the date of listing of the Company’s shares, I will not transfer or entrust others with management of the shares in the Company directly or indirectly held by me, nor will I have such shares repurchased by the Company; (2) If the closing price of the Company’s shares has been lower than the offering price for 20 consecutive trading days within 6 months after the listing of the Company, or the closing price at the end of 6 months after the listing is lower than the offering price, the lock-up period of the Company’s shares held by me shall be | Made on: November 15, 2017; Term: November 15, 2017 to November 14, 2020 | Yes | Yes | N/A | N/A |
automatically extended for 6 months; (3) Ifthe Company’s shares held by me are reducedwithin two years after the expiration of thelock-up period, the reduction price shall notbe lower than the offering price; (4) Thelock-up period of the Company’s shares heldby me/us shall be automatically extended for6 months in case I/we violate the abovecommitments on share locking.
| automatically extended for 6 months; (3) If the Company’s shares held by me are reduced within two years after the expiration of the lock-up period, the reduction price shall not be lower than the offering price; (4) The lock-up period of the Company’s shares held by me/us shall be automatically extended for 6 months in case I/we violate the above commitments on share locking. | |||||||
| Restricted sale of shares | 12 natural person shareholders: LI Xiaolin, XU Junqing, FANG Aifen, YE Caifu, LI Jianqing, CHEN Dongfang, LI Wenqing, XU Dongkui, BAO Qingfang, FANG Jiaqin, FANG Shanming, YE Hong | (1) Within 36 months from the date of listing of the Company’s shares, I will not transfer or entrust others with management of the shares in the Company directly or indirectly held by me, nor will I have such shares repurchased by the Company; (2) If the closing price of the Company’s shares has been lower than the offering price for 20 consecutive trading days within 6 months after the listing of the Company, or the closing price at the end of 6 months after the listing is lower than the offering price, the lock-up period of the Company’s shares held by me shall be automatically extended for 6 months; (3) If the Company’s shares held by me are reduced within two years after the expiration of the lock-up period, the reduction price shall not be lower than the offering price; (4) The lock-up period of the Company’s shares held by me/us shall be automatically extended for 6 months in case I/we violate the above commitments on share locking. | Made on: November 15, 2017; Term: November 15, 2017 to November 14, 2020 | Yes | Yes | N/A | N/A |
Restrictedsale ofshares
| Restricted sale of shares | Directors and officers: HOU Juncheng, FANG Yuyou, CAO Liangguo | (1) During my tenure as a director/officer of the Company, the shares transferred each year shall not exceed 25% of the total shares in the Company held directly or indirectly by me; Within six months after my leaving office, I will not transfer the shares of the Company directly or indirectly held by me; (2) If the Company’s shares held by me are reduced within two years after the expiration of the lock-up period, the reduction price shall not be lower than the offering price; If the closing price of the Company’s shares has been lower than the offering price for 20 consecutive trading days within 6 months after the listing of the Company, or the closing price at the end of 6 months after the listing is lower than the offering price, the lock-up period of the Company’s shares held by me shall be automatically extended for 6 months, which shall not be terminated due to my job change, resignation, etc.; (3) The lock-up period of the Company’s shares held by me/us shall be automatically extended for 6 months in case I/we violate the above commitments on share locking. | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
| Restricted sale of shares | Officers: ZHANG Yefeng and ZHANG Minhua | (1) Within 12 months from the date of listing of the Company’s shares, I will not transfer or entrust others with management of the shares in the Company directly or indirectly held by me, nor will I have such shares repurchased by the Company; (2) During my tenure as an officer of the Company, the shares transferred each year shall not exceed 25% of the total shares in the Company held directly or indirectly by me; Within six months after my | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
leaving office, I will not transfer the shares ofthe Company directly or indirectly held byme; (3) If the Company’s shares held by meare reduced within two years after theexpiration of the lock-up period, the reductionprice shall not be lower than the offeringprice; If the closing price of the Company’sshares has been lower than the offering pricefor 20 consecutive trading days within 6months after the listing of the Company, orthe closing price at the end of 6 months afterthe listing is lower than the offering price, thelock-up period of the Company’s shares heldby me shall be automatically extended for 6months, which shall not be terminated due tomy job change, resignation, etc.; (4) Thelock-up period of the Company’s shares heldby me/us shall be automatically extended for6 months in case I/we violate the abovecommitments on share locking.
| leaving office, I will not transfer the shares of the Company directly or indirectly held by me; (3) If the Company’s shares held by me are reduced within two years after the expiration of the lock-up period, the reduction price shall not be lower than the offering price; If the closing price of the Company’s shares has been lower than the offering price for 20 consecutive trading days within 6 months after the listing of the Company, or the closing price at the end of 6 months after the listing is lower than the offering price, the lock-up period of the Company’s shares held by me shall be automatically extended for 6 months, which shall not be terminated due to my job change, resignation, etc.; (4) The lock-up period of the Company’s shares held by me/us shall be automatically extended for 6 months in case I/we violate the above commitments on share locking. | |||||||
| Restricted sale of shares | Officer: JIN Yanhua | (1) Within 12 months from the date of listing of the Company’s shares, I will not transfer or entrust others with management of the shares in the Company directly or indirectly held by me, nor will I have such shares repurchased by the Company; (2) During my tenure as an officer of the Company, the shares transferred each year shall not exceed 25% of the total shares in the Company held directly or indirectly by me; Within six months after my leaving office, I will not transfer the shares of the Company directly or indirectly held by me; (3) If the Company’s shares held by me are reduced within two years after the expiration of the lock-up period, the reduction | Made on: April 16, 2018; Term: Indefinite term from April 16, 2018 | No | Yes | N/A | N/A |
price shall not be lower than the offeringprice; If the closing price of the Company’sshares has been lower than the offering pricefor 20 consecutive trading days within 6months after the listing of the Company, orthe closing price at the end of 6 months afterthe listing is lower than the offering price, thelock-up period of the Company’s shares heldby me shall be automatically extended for 6months, which shall not be terminated due tomy job change, resignation, etc.; (4) Thelock-up period of the Company’s shares heldby me/us shall be automatically extended for6 months in case I/we violate the abovecommitments on share locking.
| price shall not be lower than the offering price; If the closing price of the Company’s shares has been lower than the offering price for 20 consecutive trading days within 6 months after the listing of the Company, or the closing price at the end of 6 months after the listing is lower than the offering price, the lock-up period of the Company’s shares held by me shall be automatically extended for 6 months, which shall not be terminated due to my job change, resignation, etc.; (4) The lock-up period of the Company’s shares held by me/us shall be automatically extended for 6 months in case I/we violate the above commitments on share locking. | |||||||
| Restricted sale of shares | Officer: WANG Li | (1) Within 12 months from the date of listing of the Company’s shares, I will not transfer or entrust others with management of the shares in the Company directly or indirectly held by me, nor will I have such shares repurchased by the Company; (2) During my tenure as an officer of the Company, the shares transferred each year shall not exceed 25% of the total shares in the Company held directly or indirectly by me; Within six months after my leaving office, I will not transfer the shares of the Company directly or indirectly held by me; (3) If the Company’s shares held by me are reduced within two years after the expiration of the lock-up period, the reduction price shall not be lower than the offering price; If the closing price of the Company’s shares has been lower than the offering price for 20 consecutive trading days within 6 months after the listing of the Company, or | Made on: September 3, 2018; Term: Indefinite term from September 3, 2018 | No | Yes | N/A | N/A |
the closing price at the end of 6 months afterthe listing is lower than the offering price, thelock-up period of the Company’s shares heldby me shall be automatically extended for 6months, which shall not be terminated due tomy job change, resignation, etc.; (4) Thelock-up period of the Company’s shares heldby me/us shall be automatically extended for6 months in case I/we violate the abovecommitments on share locking.
| the closing price at the end of 6 months after the listing is lower than the offering price, the lock-up period of the Company’s shares held by me shall be automatically extended for 6 months, which shall not be terminated due to my job change, resignation, etc.; (4) The lock-up period of the Company’s shares held by me/us shall be automatically extended for 6 months in case I/we violate the above commitments on share locking. | |||||||
| Restricted sale of shares | Controlling shareholders and de facto controllers: HOU Juncheng and FANG Aiqin | (1) The number of shares in the Issuer directly or indirectly reduced by me within 24 months after the expiration of the lock-up period shall not exceed 6% of the total number of shares therein before this Offering; (2) My reduction of shareholding in the Company shall be conducted through centralized bidding at a stock exchange, block trading or transfer by agreement, among other ways, in compliance with the provisions of relevant laws, regulations and rules; (3) I will, before reducing the Company’s shares, make an announcement three trading days in advance, and perform the obligation of information disclosure in a timely and accurate manner pursuant to the rules of the stock exchange, unless my shareholding in the Company falls below 5%; (4) I will, in case of failing to fulfill the above commitments on shareholding reduction, publicly explain the specific reasons for my non-fulfillment at the Company’s general meeting of shareholders and the media for disclosure designated by the CSRC, while apologizing to the Company’s shareholders | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
and public investors.
| and public investors. | |||||||
| Restricted sale of shares | Shareholders with direct shareholding of more than 5%: FANG Yuyou and LI Xiaolin | (1) I will, in case of an intention to reduce my shareholding after the expiration of the lock-up period, carefully abide by relevant provisions of the CSRC and the stock exchange on reduction by shareholders, prudently formulate the shareholding reduction plan in light of the needs for the Company with respect to share price stabilization, operation and capital management, and gradually reduce my shares after the expiration of the lock-up period; (2) My reduction of shareholding in the Company shall be conducted through centralized bidding at a stock exchange, block trading or transfer by agreement, among other ways, in compliance with the provisions of relevant laws, regulations and rules; (3) I will, before reducing the Company’s shares, make an announcement three trading days in advance, and perform the obligation of information disclosure in a timely and accurate manner pursuant to the rules of the stock exchange, unless my shareholding in the Company falls below 5%; (4) I will, in case of failing to fulfill the above commitments on shareholding reduction, publicly explain the specific reasons for my non-fulfillment at the Company’s general meeting of shareholders and the media for disclosure designated by CSRC, while apologizing to the Company’s shareholders and public investors. | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
| Other | The Company | We will, in case of failure to take specific measures to stabilize the share price when the | Made on: November | No | Yes | N/A | N/A |
preconditions for initiating the share pricestabilization plan are met, publicly explainthe specific reasons for the failure to takesuch measures at the general meeting ofshareholders and the media for disclosuredesignated by the CSRC, while apologizingto the shareholders and public investors. Iflosses are caused to investors for reasonsother than force majeure, we will be liable forcompensation to the investors according tolaw and bear corresponding responsibilities inaccordance with laws, regulations andrequirements of relevant regulatoryauthorities; If the losses are caused by forcemajeure, a treatment scheme to minimize thedamages to the investors’ interests shall bestudied as soon as possible and submitted tothe general meeting of shareholders fordeliberation, so as to best protect ourinvestors’ interests. If we newly appointsdirectors and officers within three years fromthe date of listing of our shares, we willrequire the newly appointed directors andofficers to fulfill the correspondingcommitments made by the directors andofficers when we are listed.
| preconditions for initiating the share price stabilization plan are met, publicly explain the specific reasons for the failure to take such measures at the general meeting of shareholders and the media for disclosure designated by the CSRC, while apologizing to the shareholders and public investors. If losses are caused to investors for reasons other than force majeure, we will be liable for compensation to the investors according to law and bear corresponding responsibilities in accordance with laws, regulations and requirements of relevant regulatory authorities; If the losses are caused by force majeure, a treatment scheme to minimize the damages to the investors’ interests shall be studied as soon as possible and submitted to the general meeting of shareholders for deliberation, so as to best protect our investors’ interests. If we newly appoints directors and officers within three years from the date of listing of our shares, we will require the newly appointed directors and officers to fulfill the corresponding commitments made by the directors and officers when we are listed. | 15, 2017; Term: Indefinite term from November 15, 2017 | ||||||
| Other | Controlling shareholders and de facto controllers of the Company | If I fail to take specific measures to stabilize the price price in accordance with the share price stabilization plan when the preconditions for initiating such plan are met, I will publicly explain the specific reasons for the failure at the Issuer’s general meeting of shareholders and the media for disclosure designated by the CSRC, while apologizing to the Issuer’s shareholders and public | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
investors; To the extent of non-fulfillment ofthe above commitments, I will stop receivingshareholder dividends from the Issuer within5 working days from the date of the aboveevent, and my shares in the Issuer will not betransferred until I take correspondingmeasures to stabilize the share price and theimplementation thereof is completed inaccordance with the provisions of the aboveplan.
| investors; To the extent of non-fulfillment of the above commitments, I will stop receiving shareholder dividends from the Issuer within 5 working days from the date of the above event, and my shares in the Issuer will not be transferred until I take corresponding measures to stabilize the share price and the implementation thereof is completed in accordance with the provisions of the above plan. | |||||||
| Other | Directors (excluding independent directors) and officers of the Company | If I fail to take specific measures to stabilize the price price in accordance with the share price stabilization plan when the preconditions for initiating such plan are met, I will publicly explain the specific reasons for the failure at the Issuer’s general meeting of shareholders and the media for disclosure designated by the CSRC, while apologizing to the Issuer’s shareholders and public investors; To the extent of non-fulfillment of the above commitments, I will stop receiving remunerations and shareholder dividends (if any) from the Issuer within 5 working days from the date of the above event, and my shares in the Issuer (if any) will not be transferred until I take corresponding measures to stabilize the share price and the implementation thereof is completed in accordance with the provisions of the above plan. | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
| Other | The Company | If our Prospectus contains any misrepresentation, misleading statement or major omission, resulting in losses to investors in the securities trading, we will compensate the investors for the losses | Made on: November 15, 2017; Term: Indefinite | No | Yes | N/A | N/A |
according to law. After such act is held by theCSRC, the stock exchange where we arelisted or the judicial authority to be illegal, wewill, based on the principles of simplifyingprocedures, active negotiation, compensationin advance and effectively protecting theinterests of investors, especially minorityinvestors, and according to the measurableeconomic losses directly suffered by theinvestors, actively compensate the investorsfor their direct economic losses throughsettlement, mediation by a third party andestablishment of Investor CompensationFund, etc.. Insofar as we violate the abovecommitments, we will publicly apologize tothe shareholders and public investors forfailing to perform the above compensationmeasures at the general meeting ofshareholders and the media for disclosuredesignated by the CSRC, and compensate theinvestors according to such actual losses asrecognized by the CSRC and relevant judicialauthorities.
| according to law. After such act is held by the CSRC, the stock exchange where we are listed or the judicial authority to be illegal, we will, based on the principles of simplifying procedures, active negotiation, compensation in advance and effectively protecting the interests of investors, especially minority investors, and according to the measurable economic losses directly suffered by the investors, actively compensate the investors for their direct economic losses through settlement, mediation by a third party and establishment of Investor Compensation Fund, etc.. Insofar as we violate the above commitments, we will publicly apologize to the shareholders and public investors for failing to perform the above compensation measures at the general meeting of shareholders and the media for disclosure designated by the CSRC, and compensate the investors according to such actual losses as recognized by the CSRC and relevant judicial authorities. | term from November 15, 2017 | ||||||
| Other | Controlling shareholders and de facto controllers of the Issuer | If the Issuer’s Prospectus contains any misrepresentation, misleading statement or major omission, resulting in losses to investors in the securities trading, I will compensate the investors for the losses according to law. After such act is held by the CSRC, the stock exchange where the Company is listed or the judicial authority to be illegal, I will, based on the principles of simplifying procedures, active negotiation, compensation in advance and effectively protecting the interests of investors, | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
especially minority investors, and accordingto the measurable economic losses directlysuffered by the investors, actively compensatethe investors for their direct economic lossesthrough settlement, mediation by a third partyand establishment of Investor CompensationFund, etc.. Insofar as I violate the abovecommitments, I will publicly apologize to theshareholders and public investors for failingto perform the above compensation measuresat the general meeting of shareholders and themedia for disclosure designated by the CSRC,stop receiving shareholder dividends from theIssuer within 5 working days from the date ofviolation of the above commitments, andmeanwhile, my shares in the Issuer shall notbe transferred until I take correspondingcompensation measures as per the abovecommitments and the implementation thereofis completed.
| especially minority investors, and according to the measurable economic losses directly suffered by the investors, actively compensate the investors for their direct economic losses through settlement, mediation by a third party and establishment of Investor Compensation Fund, etc.. Insofar as I violate the above commitments, I will publicly apologize to the shareholders and public investors for failing to perform the above compensation measures at the general meeting of shareholders and the media for disclosure designated by the CSRC, stop receiving shareholder dividends from the Issuer within 5 working days from the date of violation of the above commitments, and meanwhile, my shares in the Issuer shall not be transferred until I take corresponding compensation measures as per the above commitments and the implementation thereof is completed. | |||||||
| Directors, supervisors and officers | If the Issuer’s Prospectus contains any misrepresentation, misleading statement or major omission, resulting in losses to investors in the securities trading, I will compensate the investors for the losses according to law. After such act is held by the CSRC, the stock exchange where the Company is listed or the judicial authority to be illegal, I will, based on the principles of simplifying procedures, active negotiation, compensation in advance and effectively protecting the interests of investors, especially minority investors, and according to the measurable economic losses directly suffered by the investors, actively compensate | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
the investors for their direct economic lossesthrough settlement, mediation by a third partyand establishment of Investor CompensationFund, etc.. Insofar as I violate the abovecommitments, I will publicly apologize to theshareholders and public investors for failingto perform the above compensation measuresat the general meeting of shareholders and themedia for disclosure designated by the CSRC,stop receiving remunerations (or allowances)and shareholder dividends (if any) from theIssuer within 5 working days from the date ofviolation of the above commitments, andmeanwhile, my shares in the Issuer (if any)shall not be transferred until I takecorresponding compensation measures as perthe above commitments and theimplementation thereof is completed.
| the investors for their direct economic losses through settlement, mediation by a third party and establishment of Investor Compensation Fund, etc.. Insofar as I violate the above commitments, I will publicly apologize to the shareholders and public investors for failing to perform the above compensation measures at the general meeting of shareholders and the media for disclosure designated by the CSRC, stop receiving remunerations (or allowances) and shareholder dividends (if any) from the Issuer within 5 working days from the date of violation of the above commitments, and meanwhile, my shares in the Issuer (if any) shall not be transferred until I take corresponding compensation measures as per the above commitments and the implementation thereof is completed. | |||||||
| Other | The Company | In order to ensure the effective use of the proceeds from this Offering, effectively prevent the risk of dilution on immediate return and improve the ability of future return, we plan to improve the quality of assets, as well as increase the operating income and future income for sustainable development by strengthening the operation management and internal control, accelerating the construction progress of investment projects and improving the investor return mechanism, to recover the diluted immediate return. We undertake to continuously improve various recovery measures against dilution on immediate return in accordance with the implementation rules subsequently issued by the CSRC and | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
the SSE. In case of violating the abovecommitments, we will promptly announce thefacts and reasons for the violation, and will,unless the violation is caused by forcemajeure or other reasons not attributable tous, apologize to our shareholders and publicinvestors, while making supplementary oralternative commitments to the investors forthe purposes of protecting their interests asmuch as possible, and implementing suchsupplementary or alternative commitmentsafter the same being reviewed and approvedby our general meeting of shareholders.
| the SSE. In case of violating the above commitments, we will promptly announce the facts and reasons for the violation, and will, unless the violation is caused by force majeure or other reasons not attributable to us, apologize to our shareholders and public investors, while making supplementary or alternative commitments to the investors for the purposes of protecting their interests as much as possible, and implementing such supplementary or alternative commitments after the same being reviewed and approved by our general meeting of shareholders. | |||||||
| Other | Controlling shareholders and de facto controllers: HOU Juncheng and FANG Aiqin | In order to give effect to the Company’s recovery measures against dilution on immediate return, as the controlling shareholder and de facto controller of the Company, I undertake that: (1) in no event will I abuse my position as a controlling shareholder and de facto controller, or interfere with the operation and management activities of the Company beyond my authority, or encroach on the interests of the Company; (2) I will, in case relevant provisions of the Company and my commitments are inconsistent with relevant opinions and implementation rules on recovery measures against dilution on immediate return separately issued by the CSRC and the SSE, make supplementary commitments promptly in accordance with the provisions of the CSRC and the SSE, and actively procure the Company to make new commitments or adopt new measures as required thereby; (3) I will fully, completely | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
and timely fulfill the recovery measuresagainst dilution on immediate returnformulated by the Company and any of mycommitments on this regard. If I violate suchcommitments, thereby causing losses to theCompany or its shareholders, I will be willingto: ① make a public explanation and apologyat the general meeting of shareholders and themedia for disclosure designated by the CSRC;
② undertake the liability for compensation to
the Company and/or the shareholdersaccording to law; ③ unconditionally acceptthe punishment or relevant regulatorymeasures imposed on me by the securitiesregulatory authorities such as the CSRCand/or the SSE in accordance with therelevant regulations and rules formulated orpromulgated thereby. Nevertheless, in no wayshall the above recovery measures beconstrued as a guarantee as to the Company’sfuture profits.
| and timely fulfill the recovery measures against dilution on immediate return formulated by the Company and any of my commitments on this regard. If I violate such commitments, thereby causing losses to the Company or its shareholders, I will be willing to: ① make a public explanation and apology at the general meeting of shareholders and the media for disclosure designated by the CSRC; ② undertake the liability for compensation to the Company and/or the shareholders according to law; ③ unconditionally accept the punishment or relevant regulatory measures imposed on me by the securities regulatory authorities such as the CSRC and/or the SSE in accordance with the relevant regulations and rules formulated or promulgated thereby. Nevertheless, in no way shall the above recovery measures be construed as a guarantee as to the Company’s future profits. | |||||||
| Other | Directors and officers | In order to give effect to the Company’s recovery measures against dilution on immediate return, as a director/officer of the Company, I undertake that: (1) I will not transfer interests to other entities or individuals free of charge or on unfair conditions, or otherwise damage the interests of the Company; (2) I will strictly abide by the budget management of the Company, and refrain from incur any post-related consumption unless it is necessary to perform my duties, and strictly accept the supervision and management of the Company to avoid waste or excessive consumption; (3) I will not | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
use the Company’s assets to engage ininvestment and consumption activitiesunrelated to my performance of duties; (4) Iwill actively promote the improvement of theCompany’s remuneration system to make itconsistent with the recovery requirements ondiluted immediate return; support theCompany’s Board of Directors orremuneration committee to link theformulation, modification and supplement ofthe Company’s remuneration system with theimplementation of the Company’s recoverymeasures against dilution on immediatereturn; and commit to link the exerciseconditions of the Company’s equityincentives to be announced with theimplementation of the Company’s recoverymeasures; (5) I will, in case relevantprovisions of the Company and mycommitments are inconsistent with relevantopinions and implementation rules onrecovery measures against dilution onimmediate return separately issued by theCSRC and the SSE, make supplementarycommitments promptly in accordance withthe provisions of the CSRC and the SSE, andactively procure the Company to make newcommitments or adopt new measures asrequired thereby; (6) I will fully, completelyand timely fulfill the recovery measuresagainst dilution on immediate returnformulated by the Company and any of mycommitments on this regard. If I violate suchcommitments, thereby causing losses to theCompany or its shareholders, I will be willing
to: ① make a public explanation and apologyat the general meeting of shareholders and themedia for disclosure designated by the CSRC;
② undertake the liability for compensation to
the Company and/or the shareholdersaccording to law; ③ unconditionally acceptthe punishment or relevant regulatorymeasures imposed on me by the securitiesregulatory authorities such as the CSRCand/or the SSE in accordance with therelevant regulations and rules formulated orpromulgated thereby. Nevertheless, in no wayshall the above recovery measures beconstrued as a guarantee as to the Issuer’sfuture profits.
| to: ① make a public explanation and apology at the general meeting of shareholders and the media for disclosure designated by the CSRC; ② undertake the liability for compensation to the Company and/or the shareholders according to law; ③ unconditionally accept the punishment or relevant regulatory measures imposed on me by the securities regulatory authorities such as the CSRC and/or the SSE in accordance with the relevant regulations and rules formulated or promulgated thereby. Nevertheless, in no way shall the above recovery measures be construed as a guarantee as to the Issuer’s future profits. | |||||||
| Avoiding horizontal competition | Controlling shareholders and de facto controller: HOU Juncheng and FANG Aiqin | 1. I do not, and will not, directly or indirectly engage in any activities that constitute horizontal competition with the existing and future businesses of the Company and its majority-owned subsidiaries, including but not limited to the research and development, production and sales of any products that are the same as or similar to the products developed, produced and sold by the Company and its majority-owned subsidiaries, and am willing to be liable for the economic losses caused by violating the above commitments to the Company; 2. For the enterprises under my control, I will perform my obligations under these commitments through my local offices and personnel (including but not limited to directors and managers) in such enterprises, and am willing to bear the liability for compensation for the economic losses caused | Made on: November 15, 2017; Term: Indefinite term from November 15, 2017 | No | Yes | N/A | N/A |
to the Company due to the violation of theabove commitments; 3. From the date ofsigning this letter of commitment, if theCompany further expands its products andbusiness scope, I and the enterprises undermy control will refrain from competing withthe expanded products or business of theCompany, or will, in case of competing withthe same, withdraw from the competition by
(1) stopping producing products that
constitute or may constitute the competition,
(2) ceasing to operate such business as
constitutes or may constitute the competition,
(3) incorporating the competitive business
into the Company for operation, or (4)transferring the competitive business tounrelated third parties; 4. HangzhouHuazhuang Industrial Investment Co., Ltd.,Huzhou Mogan Wangshu Cosmetics IndustryPhase I Venture Capital Partnership (L.P.)and their investees engage in no cosmeticsbusiness or upstream and downstreambusiness thereof, and if they engage in suchbusinesses in the future, I undertake that Iwill withdraw my investment in them throughequity transfer and other means, and that theCompany will be given priority to decidewhether to invest in the said enterprisessubject to the legal provisions and the consentof other shareholders of such enterprises.
| to the Company due to the violation of the above commitments; 3. From the date of signing this letter of commitment, if the Company further expands its products and business scope, I and the enterprises under my control will refrain from competing with the expanded products or business of the Company, or will, in case of competing with the same, withdraw from the competition by (1) stopping producing products that constitute or may constitute the competition, (2) ceasing to operate such business as constitutes or may constitute the competition, (3) incorporating the competitive business into the Company for operation, or (4) transferring the competitive business to unrelated third parties; 4. Hangzhou Huazhuang Industrial Investment Co., Ltd., Huzhou Mogan Wangshu Cosmetics Industry Phase I Venture Capital Partnership (L.P.) and their investees engage in no cosmetics business or upstream and downstream business thereof, and if they engage in such businesses in the future, I undertake that I will withdraw my investment in them through equity transfer and other means, and that the Company will be given priority to decide whether to invest in the said enterprises subject to the legal provisions and the consent of other shareholders of such enterprises. | ||||||||
| Commitments on refinancing | Other | Controlling shareholders and de facto controllers: HOU | In order to give effect to the Company’s recovery measures against dilution on immediate return, I undertake that: 1. I will not interfere with the Company’s operation and management activities beyond my | Made on: April 21, 2021; Term: Indefinite | No | Yes | N/A | N/A |
Junchengand FANGAiqin
| Juncheng and FANG Aiqin | authority or encroach on the interests of the Company; 2. From the date of making these commitments to the completion of the implementation of this public offering by the Company of A-share convertible corporate bonds, to the extent the CSRC makes new regulatory provisions concerning the recovery measures against dilution on immediate return, etc., rendering the above commitments non-conforming to the provisions, I will make supplementary commitments in accordance with the latest provisions of the CSRC at that time; 3. I will earnestly fulfill the Company’s relevant recovery measures against dilution on immediate return and any of my commitments on this regard, or, will, in case of violating the said commitments thus causing losses to the Company or its investors, be willing to bear the liability for compensation to the Company or the investors according to law. As one of the parties responsible for the recovery measures, I will, to the extent I violate or refuse to fulfil the above commitments, accept the punishment or relevant regulatory measures imposed on me by the securities regulatory authorities such as the CSRC and the SSE in accordance with the relevant regulations and rules formulated or promulgated thereby. | term from April 21, 2021 | |||||
| Other | Directors and officers | In order to give effect to the Company’s recovery measures against dilution on immediate return, I undertake that: 1. I will not transfer interests to other entities or individuals free of charge or on unfair conditions, or otherwise damage the interests | Made on: April 21, 2021; Term: Indefinite term from | No | Yes | N/A | N/A |
of the Company; 2. I will restrict mypost-related consumption behavior; 3. I willnot use the Company’s assets to engage ininvestment and consumption activitiesunrelated to my performance of duties; 4. Theremuneration system formulated by the Boardof Directors or the remuneration andassessment committee will be linked to theimplementation of the Company’s recoverymeasures on return; 5. The exerciseconditions of the Company’s equity incentive,if the same is implemented in the future, to beannounced will be linked to theimplementation of the Company’s recoverymeasures on return; 6. From the date ofmaking these commitments to the completionof the implementation of this public offeringby the Company of A-share convertiblecorporate bonds, to the extent the CSRCmakes new regulatory provisions concerningthe recovery measures against dilution onimmediate return, etc., rendering the abovecommitments non-conforming to theprovisions, I will make supplementarycommitments in accordance with the latestprovisions of the CSRC at that time. As oneof the parties responsible for the recoverymeasures, I will, to the extent I violate orrefuse to fulfil the above commitments,accept the punishment or relevant regulatorymeasures imposed on me by the securitiesregulatory authorities such as the CSRC andthe SSE in accordance with the relevantregulations and rules formulated orpromulgated thereby.
| of the Company; 2. I will restrict my post-related consumption behavior; 3. I will not use the Company’s assets to engage in investment and consumption activities unrelated to my performance of duties; 4. The remuneration system formulated by the Board of Directors or the remuneration and assessment committee will be linked to the implementation of the Company’s recovery measures on return; 5. The exercise conditions of the Company’s equity incentive, if the same is implemented in the future, to be announced will be linked to the implementation of the Company’s recovery measures on return; 6. From the date of making these commitments to the completion of the implementation of this public offering by the Company of A-share convertible corporate bonds, to the extent the CSRC makes new regulatory provisions concerning the recovery measures against dilution on immediate return, etc., rendering the above commitments non-conforming to the provisions, I will make supplementary commitments in accordance with the latest provisions of the CSRC at that time. As one of the parties responsible for the recovery measures, I will, to the extent I violate or refuse to fulfil the above commitments, accept the punishment or relevant regulatory measures imposed on me by the securities regulatory authorities such as the CSRC and the SSE in accordance with the relevant regulations and rules formulated or promulgated thereby. | April 21, 2021 |
II. Non-operational Occupation of Funds by the Controlling Shareholders and Other Related Parties during the Reporting Period? Applicable √ N/A
III. Illegal Guarantee? Applicable √ N/A
IV. Audit of Semi-annual Report? Applicable √ N/A
V. Changes and Treatment of Matters Involved in Modified Audit Opinions in the Annual Reportof Prior Year? Applicable √ N/A
VI. Matters Related to Bankruptcy and Reorganization? Applicable √ N/A
VII. Material Litigation and Arbitration? There are material litigation and arbitration during the Reporting Period √ There are no materiallitigation and arbitration during the Reporting Period
VIII. Suspected Violations, Penalties and Rectifications of the Listed Company and Its Directors,
Supervisors, Officers, Controlling Shareholders and De Facto Controllers? Applicable √ N/A
IX. Integrity of the Company, Its Controlling Shareholders and De Facto Controllers during the
Reporting Period
√ Applicable ? N/A
During the Reporting Period, the Company, its controlling shareholders and de facto controllers were ingood faith.
X. Significant Related-party Transactions(I) Related-party Transactions Pertaining to Daily Operation
1. Matters that have been disclosed in the interim announcement without progress or change inthe follow-up implementation? Applicable √ N/A
2. Matters that have been disclosed in the interim announcement with progress or changes in thefollow-up implementation
√ Applicable ? N/A
The 19th meeting of the second Board of Directors and the 2020 annual general meeting ofshareholders were held by the Company on April 21, 2021 and May 13, 2021 respectively, at which theProposal on the Estimated Amount of Daily Related-party Transactions in 2021 was reviewed andapproved. For details, please refer to the Announcement on the Estimated Amount of Daily Related-partyTransactions in 2021 (Announcement No.: 2021-018) disclosed on the website of the SSE (www.sse.com. cn) on April 23, 2021. In the first half of 2021, the daily related-party transactions of the Companydid not exceed the estimated amount at the beginning of the year.
The estimated and actual amounts of the Company’s daily related-party transactions in 2021 are asfollows:
Category ofrelated-party
transaction
| Category of related-party transaction | Related party | Estimated amount in 2021 | Actual amount in 2021 H1 |
Deposits inbank accountsopened with therelated party
| Deposits in bank accounts opened with the related party | Zhejiang Leqing Rural Commercial Bank Co., Ltd. | No more than RMB150 million for daily amount | RMB149.2961 million |
| Related lease | Huzhou Beauty Town Technology Incubation Park Co., Ltd. | RMB800,000 | RMB484,000 |
Note: The “actual amount in 2021” of Zhejiang Leqing Rural Commercial Bank Co., Ltd. represents thebalance in the accounts as of June 30, 2021. In the first half of 2021, the Company obtained depositinterest of RMB3.1784 million from Zhejiang Leqing Rural Commercial Bank Co., Ltd..
3. Matters not disclosed in the interim announcement
? Applicable √ N/A
(II) Related-party Transactions Arising from Acquisition or Disposal of Assets or Equities
1. Matters that have been disclosed in the interim announcement without progress or change inthe follow-up implementation? Applicable √ N/A
2. Matters that have been disclosed in the interim announcement with progress or change in thefollow-up implementation? Applicable √ N/A
3. Matters not disclosed in the interim announcement
? Applicable √ N/A
4. The performance realization during the Reporting Period where the performance agreementis involved? Applicable √ N/A
(III) Significant related-party transactions pertaining to joint external investment
1. Matters that have been disclosed in the interim announcement without progress or change inthe follow-up implementation? Applicable √ N/A
2. Matters that have been disclosed in the interim announcement with progress or change in thefollow-up implementation? Applicable √ N/A
3. Matters not disclosed in the interim announcement
? Applicable √ N/A
(IV) Credits and Debits with Related Parties
1. Matters that have been disclosed in the interim announcement without progress or change inthe follow-up implementation? Applicable √ N/A
2. Matters that have been disclosed in the interim announcement with progress or change in thefollow-up implementation? Applicable √ N/A
3. Matters not disclosed in the interim announcement
? Applicable √ N/A
(V) Financial Businesses between the Company and Its Related Financial Companies,Majority-owned Financial Companies and Related Parties? Applicable √ N/A
(VI) Other Significant Related-party Transactions? Applicable √ N/A
(VII) Others? Applicable √ N/A
XI. Significant Contracts and Performances Thereof1 Trusteeship, contracting and leasing? Applicable √ N/A
2 Significant guarantees performed and outstanding during the Reporting Period
√ Applicable ? N/A
Unit: RMB0’000 Currency: RMB
External guarantees of the Company (excluding guarantees for subsidiaries)
| External guarantees of the Company (excluding guarantees for subsidiaries) | |||||||||||||||
| Guarantor | Relationship between guarantor and listed company | Guaranteed party | Guarantee amount | Date of guarantee (date of agreement) | Guarantee start date | Guarantee due date | Guarantee type | Main debt | Collateral (if any) | Has the guarantee been fulfilled | Is the guarantee overdue | Overdue amount under guarantee | Counter guarantee | Related-party guarantee or not | Association relationship |
| Total amount of guarantee during the Reporting Period (excluding guarantee for subsidiaries) | 0 | ||||||||||||||
| Total guarantee balance at the end of the Reporting Period (A) (excluding guarantee for subsidiaries) | 0 | ||||||||||||||
| Guarantees of the Company for its subsidiaries | |||||||||||||||
| Total amount of guarantee for subsidiaries during the Reporting Period | 9,900 | ||||||||||||||
| Total guarantee balance to subsidiaries at the end of the Reporting Period (B) | 0 | ||||||||||||||
| Total amount of the Company’s guarantee (including guarantee for subsidiaries) | |||||||||||||||
| Total guarantee amount (A + B) | 0 | ||||||||||||||
| Proportion of total guarantee amount to the Company’s net assets (%) | 0 | ||||||||||||||
| Of which: | |||||||||||||||
| Amount of guarantee provided for shareholders, de facto controllers and their related parties (C) | 0 | ||||||||||||||
| Amount of debt-related guarantee provided directly or indirectly for the guaranteed parties with asset-liability ratio exceeding 70% (D) | 0 | ||||||||||||||
| Amount of total guarantee exceeding 50% of net assets (E) | 0 | ||||||||||||||
| Total amount of guarantees in the above three items (C + D + E) | 0 | ||||||||||||||
| Descriptions of possible joint and several liability for repayment under ongoing guarantee | N/A | ||||||||||||||
| Descriptions of guarantee | N/A | ||||||||||||||
3 Other significant contracts? Applicable √ N/A
XII. Description of Other Significant Events? Applicable √ N/A
Section VII Share Changes and ShareholdersI. Changes in Share Capital(I) Statement of Changes in Shares
1. Statement of changes in shares
Unit: share
| Before this change | Increase or decrease this time (+,-) | After this change | |||||||
| Quantity | Ratio (%) | New shares | Bonus shares | Capitalization of capital reserve | Others | Sub-total | Quantity | Ratio (%) | |
| I. Restricted share | 747,425 | 0.37 | -293,265 | -293,265 | 454,160 | 0.23 | |||
| 1. Shareholdings by the State | |||||||||
| 2. Shareholdings by the State-owned legal persons | |||||||||
| 3. Other shareholdings by domestic investors | 747,425 | 0.37 | -293,265 | -293,265 | 454,160 | 0.23 | |||
| Including: shareholdings by domestic legal persons | |||||||||
| Shareholdings by domestic natural persons | 747,425 | 0.37 | -293,265 | -293,265 | 454,160 | 0.23 | |||
| 4. Shareholdings by foreign investors | |||||||||
| Including: Shareholdings by overseas legal persons | |||||||||
| Shareholdings by overseas natural persons | |||||||||
| II. Unrestricted | 200,369, | 99.63 | +293,2 | +293,26 | 200,662, | 99.77 | |||
outstandingshare
| outstanding share | 500 | 65 | 5 | 765 | |||||
| 1. RMB common stock | 200,369,500 | 99.63 | +293,265 | +293,265 | 200,662,765 | 99.77 | |||
| 2. Domestic listed foreign share | |||||||||
| 3. Overseas listed foreign share | |||||||||
| 4. Others | |||||||||
| III. Total | 201,116,925 | 100.00 | 0 | 0 | 201,116,925 | 100.00 |
2. Description of changes in shares
√ Applicable ? N/A
On January 5, 2021, the Company held the 18th meeting of the second Board of Directors and the17th meeting of the second Board of Supervisors, deliberating and approving the Proposal on theSatisfaction of Restrictions Release Conditions for the Second Release Period of the Restricted SharesGranted Initially and with Reserve under the 2018 Restricted Share Incentive Plan, and agreeing tohandle the release procedures for the grantees who meet the conditions for releasing the restrictions. Atotal of 293,265 restricted shares were released, which were allowed to be listed and circulated onJanuary 14, 2021. The number of the unrestricted outstanding shares in the Company increased from200,369,500 before the Listing to 200,662,765, while that of the restricted outstanding shares decreasedfrom 747,425 before the Listing to 454,160.
3. Impact of share changes on financial indicators such as earnings per share and net assets pershare during the period after the Reporting Period to the disclosure date of the Semi-annualReport (if any)? Applicable √ N/A
4. Other contents deemed necessary by the Company for disclosure or required to be disclosedby the securities regulatory authority? Applicable √ N/A
(II) Changes in Restricted Shares
√ Applicable ? N/A
Unit: share
| Name of shareholder | Number of restricted shares at the opening of the period | Number of restricted shares released during the Reporting Period | Increase in the number of restricted shares in the Reporting Period | Number of restricted shares at the end of the Reporting Period | Reasons for restriction | Release date |
| JIN Yanhua | 68,810 | 29,490 | 0 | 39,320 | Initial grant under the 2018 Restricted Share Incentive Plan | January 14, 2021 |
ZHANGYefeng
| ZHANG Yefeng | 34,020 | 14,580 | 0 | 19,440 | Initial grant under the 2018 Restricted Share Incentive Plan | January 14, 2021 |
| WANG Li | 41,230 | 17,670 | 0 | 23,560 | Grant with reserve under the 2018 Restricted Share Incentive Plan | January 14, 2021 |
| 18 grantees being granted initially under the 2018 Restricted Share Incentive Plan | 461,645 | 172,685 | 0 | 288,960 | Initial grant under the 2018 Restricted Share Incentive Plan | January 14, 2021 |
| 10 grantees being granted with reserve under the 2018 Restricted Share Incentive Plan | 141,720 | 58,840 | 0 | 82,880 | Grant with reserve under the 2018 Restricted Share Incentive Plan | January 14, 2021 |
| Total | 747,425 | 293,265 | 0 | 454,160 | / | / |
II. Shareholders(I) Total Number of Shareholders:
| Total number of common shareholders by the end of the Reporting Period (person) | 17,050 |
| Total number of preferred shareholders with voting rights by the end of the Reporting Period (person) | 0 |
(II) Shareholding of Top Ten Shareholders and Top Ten Outstanding Shareholders (orUnrestricted Shareholders) by the End of the Reporting Period
Unit: share
| Shareholding of top ten shareholders | |||||||
| Name of shareholder (full name) | Increase or decrease during the Reporting Period | Number of shares held at the closing of the period | Ratio (%) | Number of restricted shares | Pledge, marking or freezing | Nature of shareholder | |
| Share status | Number | ||||||
HOU Juncheng
| HOU Juncheng | -764,869 | 71,875,631 | 35.74 | 0 | / | Domestic natural person | ||
| FANG Yuyou | -2,607,427 | 42,211,691 | 20.99 | 0 | Pledged | 11,920,000 | Domestic natural person | |
| Hong Kong Securities Clearing Company Limited | 13,759,263 | 30,518,946 | 15.17 | 0 | / | Other | ||
| CAO Liangguo | -81,000 | 4,043,938 | 2.01 | 0 | / | Domestic natural person | ||
| XU Junqing | -2,111,591 | 3,832,210 | 1.91 | 0 | / | Domestic natural person | ||
| LI Xiaolin | -2,741,312 | 3,502,910 | 1.74 | 0 | / | Domestic natural person | ||
| Industrial and Commercial Bank of China Limited - Jingshun Changcheng Emerging Growth Hybrid Securities Investment Fund | -799,766 | 1,700,000 | 0.85 | 0 | / | Other | ||
| Aberdeen Standard Investment Management (Asia) Co., Ltd. - Aberdeen Standard - China A-share Equity Fund | 1,069,326 | 1,069,326 | 0.53 | 0 | / | Other | ||
| Abu Dhabi Investment Authority | 997,598 | 0.50 | 0 | / | Other | |||
| China CITIC Bank Co., Ltd. - ABC Huili Strategy Selected Hybrid Securities Investment Fund | -93,400 | 935,541 | 0.47 | 0 | / | Other | ||
| Shareholding of top ten unrestricted shareholders | ||||||||
| Name of shareholder | Number of unrestricted shares held | Type and number of shares | ||||||
| Type | Number | |||||||
| HOU Juncheng | 71,875,631 | RMB common stock | 71,875,631 | |||||
FANG Yuyou
| FANG Yuyou | 42,211,691 | RMB common stock | 42,211,691 |
| Hong Kong Securities Clearing Company Limited | 30,518,946 | RMB common stock | 30,518,946 |
| CAO Liangguo | 4,043,938 | RMB common stock | 4,043,938 |
| XU Junqing | 3,832,210 | RMB common stock | 3,832,210 |
| LI Xiaolin | 3,502,910 | RMB common stock | 3,502,910 |
| Industrial and Commercial Bank of China Limited - Jingshun Changcheng Emerging Growth Hybrid Securities Investment Fund | 1,700,000 | RMB common stock | 1,700,000 |
| Aberdeen Standard Investment Management (Asia) Co., Ltd. - Aberdeen Standard - China A-share Equity Fund | 1,069,326 | RMB common stock | 1,069,326 |
| Abu Dhabi Investment Authority | 997,598 | RMB common stock | 997,598 |
| China CITIC Bank Co., Ltd. - ABC Huili Strategy Selected Hybrid Securities Investment Fund | 935,541 | RMB common stock | 935,541 |
| Description of special accounts for repurchase among top ten shareholders | None | ||
| Description of the above shareholders delegating, being delegated and waiving voting rights | None | ||
| Description of the association relationship or concerted action of the above shareholders | FANG Yuyou is the younger brother of HOU Juncheng’s spouse FANG Aiqin, so HOU Juncheng and FANG Yuyou are related. | ||
| Description of preferred shareholders with voting rights and the number of shares held thereby | None | ||
Number of shares held by the top ten restricted shareholders and the restrictions
√ Applicable ? N/A
Unit: share
| S/N | Name of restricted shareholder | Number of restricted shares held | Listing and trading of restricted shares | Restrictions | |
| Tradable time | Number of new tradable shares | ||||
| 1 | Grantees of equity incentives | 454,160 | See the note for details | ||
| Description of the association relationship or concerted action of the above shareholders | None | ||||
Note: The restricted shares held by the grantees of equity incentives refer to the shares granted initiallyand with reserve under the Company’s 2018 Restricted Share Incentive Plan, of which, the sharesinitially granted shall be subject to a restriction period of 36 months from completion of the registrationof such shares in Shanghai Branch of China Securities Depository and Clearing Corporation Limited(September 10, 2018), and the shares granted with reserve shall be subject to a restriction period of 37months from completion the registration thereof in Shanghai Branch of China Securities Depository andClearing Corporation Limited (September 10, 2018).
(III) Strategic Investors or General Legal Persons Becoming the Top Ten Shareholders due to
Placement of New Shares? Applicable √ N/A
III. Directors, Supervisors and Officers(I) Changes in Shareholding of Current Directors, Supervisors and Officers, Including ThoseLeaving Office, During the Reporting Period
√ Applicable ? N/A
Unit: share
Name
| Name | Position | Number of shares held at the opening of the period | Number of shares held at the closing of the period | Increase and decrease of shares during the Reporting Period | Reasons for increase or decrease |
| HOU Juncheng | Director | 72,640,500 | 71,875,631 | -764,869 | Reduction in response to personal capital demand |
| FANG Yuyou | Director | 44,819,118 | 42,211,691 | -2,607,427 | Reduction in response to personal capital demand |
| CAO Liangguo | Director | 4,124,938 | 4,043,938 | -81,000 | Reduction in response to personal capital demand |
Other descriptions? Applicable √ N/A
(II) Equity Incentives Granted to Directors, Supervisors and Officers during the Reporting Period? Applicable √ N/A
(III) Other Descriptions? Applicable √ N/A
IV. Changes in Controlling Shareholders or De Facto Controllers? Applicable √ N/A
Section VIII Preferred Stock
? Applicable √ N/A
Section IX Bonds
I. Debentures, Corporate Bonds and Non-financial Business Debt Financing Instruments? Applicable √ N/A
II. Convertible Corporate Bonds? Applicable √ N/A
Section X Financial ReportI. Auditor’s Report? Applicable √ N/A
II. Financial Statements
Consolidated Balance Sheet
June 30, 2021
Prepared by: Proya Cosmetics Co., Ltd
Unit: Yuan Currency: RMB
Item
| Item | Note | June 30, 2021 | December 31, 2020 |
| Current assets: | |||
| Cash and bank balances | VII.1 | 1,236,337,706.75 | 1,416,654,640.93 |
| Balances with clearing agencies | |||
| Placements with banks and other financial institutions | |||
| Held-for-trading financial assets | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | VII.5 | 174,316,681.46 | 284,878,419.58 |
| Receivable financing | VII.6 | 5,263,729.60 | 5,531,997.32 |
| Prepayments | VII.7 | 89,183,962.68 | 82,742,815.92 |
| Premiums receivable | |||
| Amounts receivable under reinsurance contracts | |||
| Reinsurer’s share of insurance contract reserves | |||
| Other receivables | VII.8 | 47,275,902.55 | 48,733,527.35 |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventories | VII.9 | 356,282,644.43 | 468,641,017.75 |
| Contract assets | |||
| Held-for-sale assets | |||
| Non-current assets due within one year | |||
| Other current assets | VII.13 | 45,267,333.55 | 35,235,811.27 |
| Total current assets | 1,953,927,961.02 | 2,342,418,230.12 | |
| Non-current assets: | |||
| Loans and advances to customers | |||
| Debt investments | |||
| Other debt investments |
Long-term receivables
| Long-term receivables | |||
| Long-term equity investments | VII.17 | 186,592,634.00 | 58,220,059.60 |
| Other investments in equity instruments | VII.18 | 20,580,000.00 | 20,580,000.00 |
| Other non-current financial assets | |||
| Investment properties | VII.20 | 71,819,415.95 | 72,237,610.10 |
| Fixed assets | VII.21 | 553,956,322.47 | 565,864,152.62 |
| Construction in progress | VII.22 | 115,081,293.14 | 47,324,523.36 |
| Bearer biological assets | |||
| Oil and gas assets | |||
| Right of use assets | |||
| Intangible assets | VII.26 | 380,925,301.67 | 314,643,323.97 |
| Development expenditure | |||
| Goodwill | 31,034,161.20 | ||
| Long-term prepaid expenses | VII.29 | 38,161,082.81 | 50,576,793.53 |
| Deferred income tax assets | VII.30 | 50,977,297.40 | 46,660,550.76 |
| Other non-current Assets | VII.31 | 5,731,163.01 | 87,322,780.03 |
| Total non-current assets | 1,423,824,510.45 | 1,294,463,955.17 | |
| Total assets | 3,377,752,471.47 | 3,636,882,185.29 | |
| Current liabilities: | |||
| Short-term borrowings | VII.32 | 200,000,000.00 | 299,280,435.09 |
| Loans from the central bank | |||
| Taking from banks and other financial institutions | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | VII.35 | 63,672,739.08 | 64,580,000.00 |
| Accounts payable | VII.36 | 346,738,059.11 | 515,832,031.27 |
| Receipts in advance | |||
| Contract liabilities | VII.38 | 52,820,185.37 | 30,618,778.99 |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and deposits from banks and other financial institutions | |||
| Funds from securities trading agency | |||
| Funds from underwriting securities agency | |||
| Employee benefits payable | VII.39 | 52,909,015.47 | 70,828,239.70 |
| Taxes payable | VII.40 | 73,837,489.98 | 71,335,290.77 |
| Other payables | VII.41 | 73,609,323.68 | 75,546,323.32 |
| Including: Interest payable | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Amounts payable under |
reinsurance contracts
| reinsurance contracts | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within one years | |||
| Other current liabilities | VII.44 | 2,149,196.85 | 1,439,262.02 |
| Total current liabilities | 865,736,009.54 | 1,129,460,361.16 | |
| Non-current liabilities: | |||
| Insurance contract reserves | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preferred stock | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | VII.50 | 6,052,681.88 | 10,190,099.22 |
| Deferred income | VII.51 | 7,455,808.33 | 8,495,353.33 |
| Deferred income tax liabilities | VII.30 | 6,141,332.95 | 6,874,105.45 |
| Other non-current liabilities | |||
| Total non-current liabilities | 19,649,823.16 | 25,559,558.00 | |
| Total liabilities | 885,385,832.70 | 1,155,019,919.16 | |
| Owner’s equity (or shareholders’ equity ): | |||
| Paid-in capital (or share capital) | VII.53 | 201,116,925.00 | 201,116,925.00 |
| Other equity instruments | |||
| Including: Preferred stock | |||
| Perpetual bonds | |||
| Capital reserve | VII.55 | 841,032,150.17 | 837,034,836.69 |
| Less: Treasury shares | VII.56 | 7,361,933.60 | 12,653,905.25 |
| Other comprehensive income | VII.57 | -665,661.47 | -269,066.13 |
| Special reserve | |||
| Surplus reserve | VII.59 | 100,634,780.00 | 100,634,780.00 |
| General risk reserve | |||
| Retained profits | VII.60 | 1,346,968,993.49 | 1,265,671,865.63 |
| Total owners’ equity (or shareholders’ equity) attributable to equity holders of the parent company | 2,481,725,253.59 | 2,391,535,435.94 | |
| Minority interests | 10,641,385.18 | 90,326,830.19 | |
| Total owners’ equity (or shareholders’ equity) | 2,492,366,638.77 | 2,481,862,266.13 | |
| Total liabilities and owners’ equity (shareholders’ equity) | 3,377,752,471.47 | 3,636,882,185.29 |
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of theAccounting Organization: WANG Li
Balance Sheet of the Parent Company
June 30, 2021
Prepared by: Proya Cosmetics Co., Ltd
Unit: Yuan Currency: RMB
Item
| Item | Note | June 30, 2021 | December 31, 2020 |
| Current Assets: | |||
| Cash and bank balances | 460,108,856.64 | 498,358,108.55 | |
| Held-for-trading financial assets | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | XVII.1 | 487,476,860.98 | 565,037,411.15 |
| Receivable financing | 3,391,723.00 | ||
| Prepayments | 28,408,424.58 | 9,389,481.27 | |
| Other receivables | XVII.2 | 233,121,481.53 | 236,585,409.48 |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventories | 176,120,027.88 | 227,126,018.70 | |
| Contract assets | |||
| Held-for-sale assets | |||
| Non-current assets due within one year | |||
| Other current assets | 36,361,283.47 | 15,543,206.01 | |
| Total current assets | 1,424,988,658.08 | 1,552,039,635.16 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | XVII.3 | 378,673,104.59 | 347,372,956.06 |
| Other investments in equity instruments | 20,580,000.00 | 20,580,000.00 | |
| Other non-current financial assets | |||
| Investment properties | 337,269,798.16 | 339,018,465.70 | |
| Fixed assets | 283,280,852.93 | 291,193,420.67 | |
| Construction in progress | 110,818,849.59 | 46,993,562.96 | |
| Bearer biological assets | |||
| Oil and gas assets | |||
| Right of use assets | |||
| Intangible assets | 377,215,032.72 | 308,401,627.24 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | 27,410,563.79 | 34,817,495.54 | |
| Deferred income tax assets | 13,453,027.69 | 15,889,636.90 | |
| Other non-current Assets | 5,995,408.95 | 87,545,799.42 |
Total non-current assets
| Total non-current assets | 1,554,696,638.42 | 1,491,812,964.49 | |
| Total assets | 2,979,685,296.50 | 3,043,852,599.65 | |
| Current liabilities: | |||
| Short-term borrowings | 200,000,000.00 | 200,163,972.59 | |
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 63,672,739.08 | 64,580,000.00 | |
| Accounts payable | 254,020,691.00 | 403,605,887.84 | |
| Receipts in advance | |||
| Contract liabilities | 59,127,134.06 | 10,212,194.96 | |
| Employee benefits payable | 26,187,595.81 | 29,624,549.78 | |
| Taxes payable | 52,346,310.37 | 34,953,057.88 | |
| Other payables | 19,378,091.27 | 24,771,086.23 | |
| Including: Interest payable | |||
| Dividends payable | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 674,732,561.59 | 767,910,749.28 | |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preferred stock | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | 7,455,808.33 | 8,495,353.33 | |
| Deferred income tax liabilities | 5,627,540.89 | 6,283,428.68 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 13,083,349.22 | 14,778,782.01 | |
| Total liabilities | 687,815,910.81 | 782,689,531.29 | |
| Owner’s equity (or shareholders’ equity): | |||
| Paid-in capital (or share capital) | 201,116,925.00 | 201,116,925.00 | |
| Other equity instruments | |||
| Including: Preferred stock | |||
| Perpetual bonds | |||
| Capital reserve | 838,006,964.60 | 837,075,425.32 | |
| Less: Treasury shares | 7,361,933.60 | 12,653,905.25 | |
| Other comprehensive income | |||
| Special reserve |
Surplus reserve
| Surplus reserve | 100,634,780.00 | 100,634,780.00 | |
| Retained profits | 1,159,472,649.69 | 1,134,989,843.29 | |
| Total owners’ equity (or shareholders’ equity) | 2,291,869,385.69 | 2,261,163,068.36 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 2,979,685,296.50 | 3,043,852,599.65 |
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of theAccounting Organization: WANG Li
Consolidated Income Statement
January to June, 2021
Unit: Yuan Currency: RMB
| Item | Note | First half of 2021 | First half of 2020 |
| I. Total operating income | VII.61 | 1,917,718,497.60 | 1,384,323,848.88 |
| Including: Operating income | VII.61 | 1,917,718,497.60 | 1,384,323,848.88 |
| Interest income | |||
| Premiums earned | |||
| Fee and commission income | |||
| II. Total operating costs | 1,667,751,364.94 | 1,148,706,930.06 | |
| Including: Operating costs | VII.61 | 695,558,289.19 | 555,120,455.16 |
| Interest expenses | |||
| Fee and commission expenses | |||
| Surrenders | |||
| Claims and policyholder benefits (net of mounts recoverable from reinsurers) | |||
| Charges in insurance contract reserves (net of reinsurers’ share) | |||
| Insurance policyholder dividends | |||
| Expenses for reinsurance accepted | |||
| Taxes and levies | VII.62 | 19,290,055.27 | 11,499,023.35 |
| Selling expenses | VII.63 | 807,204,631.76 | 457,414,432.20 |
| General and administrative expenses | VII.64 | 116,191,173.05 | 100,182,355.15 |
| Research and development expenses | VII.65 | 31,371,344.46 | 31,865,144.96 |
| Financial expenses | VII.66 | -1,864,128.79 | -7,374,480.76 |
| Including: Interest expenses | 5,082,866.57 | 2,502,979.38 | |
| Interest income | 11,723,066.05 | 8,171,010.26 | |
| Add: Other income | VII.67 | 10,159,807.90 | 8,526,648.97 |
| Investment income (Loss is indicated by “-”) | VII.68 | -2,378,652.94 | 2,318,347.17 |
| Including: Income from | -2,375,106.70 | -208,988.41 |
investments in associates and jointventures
| investments in associates and joint ventures | |||
| Income from derecognition of financial assets measured at amortized cost | |||
| Foreign exchange gains (Loss is indicated by “-”) | |||
| Net exposure hedging income (Loss is indicated by “-”) | |||
| Income from changes in fair value (Loss is indicated by “-”) | |||
| Impairment losses of credit (Loss is indicated by “-”) | VII.71 | 2,955,792.59 | -1,142,266.22 |
| Impairment losses of assets (Loss is indicated by “-”) | VII.72 | -8,625,168.59 | -9,651,315.34 |
| Income from disposal of assets (Loss is indicated by “-”) | VII.73 | -1,416.28 | |
| III. Operating profit (Loss is indicated by “-”) | 252,077,495.34 | 235,668,333.40 | |
| Add: Non-operating income | VII.74 | 114,443.12 | 405,868.31 |
| Less: Non-operating expenses | VII.75 | 60,174.49 | 15,505,794.81 |
| IV. Total profit (Total losses are indicated by “-”) | 252,131,763.97 | 220,568,406.90 | |
| Less: Income tax expenses | VII.77 | 43,482,270.58 | 46,884,003.64 |
| V. Net profit (Net loss is indicated by “-”) | 208,649,493.39 | 173,684,403.26 | |
| (I) Categorized by the nature of continuing operation | |||
| 1. Net profit from continuing operations (Net loss is indicated by “-”) | 208,649,493.39 | 173,684,403.26 | |
| 2. Net profit from discontinued operations (Net loss is indicated by “-”) | |||
| (II) Categorized by ownership | |||
| 1. Net profit attributable to shareholders of the parent company (Net loss is indicated by “-”) | 226,101,313.86 | 178,767,020.76 | |
| 2. Profit or loss attributable to minority interests (Net loss is indicated by “-”) | -17,451,820.47 | -5,082,617.50 | |
| VI. Other comprehensive income, net of tax | -396,595.34 | -136,681.49 | |
| (I) Other comprehensive income attributable to owners of the parent company, net of tax | -396,595.34 | -136,681.49 | |
| 1. Other comprehensive income that cannot be subsequently reclassified to profit or loss | |||
| (1) Changes from re-measurement of defined benefit plans | |||
| (2) Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||
| (3) Changes in fair value of other investments in equity instruments | |||
| (4) Changes in fair value of | |||
enterprises’ own credit risks
| enterprises’ own credit risks | |||
| 2. Other comprehensive income that will be reclassified to profit or loss | -396,595.34 | -136,681.49 | |
| (1) Other comprehensive income that will be reclassified to profit or loss under the equity method | |||
| (2) Changes in fair value of other debt investments | |||
| (3) Amounts of financial assets reclassified into other comprehensive income | |||
| (4) Provision for credit impairment of other debt investments | |||
| (5) Reserve for cash flow hedges | |||
| (6) Translation differences of financial statements denominated in foreign currencies | -396,595.34 | -136,681.49 | |
| (7) Others | |||
| (II) Other comprehensive income attributable to minority interests, net of tax | |||
| VII. Total comprehensive income | 208,252,898.05 | 173,547,721.77 | |
| (I) Total comprehensive income attributable to owners of the parent company | 225,704,718.52 | 178,630,339.27 | |
| (II) Total comprehensive income attributable to minority interests | -17,451,820.47 | -5,082,617.50 | |
| VIII. Earnings per share | |||
| (I) Basic earnings per share (RMB/share) | 1.13 | 0.89 | |
| (II) Diluted earnings per share (RMB/share) | 1.12 | 0.89 |
For business combination involving enterprises under common control in the current period, the netprofit realized by the acquirees before the combination is: RMB0, and the net profit realized thereby inthe prior period is: RMB0.
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of theAccounting Organization: WANG Li
Income Statement of the Parent Company
January to June, 2021
Unit: Yuan Currency: RMB
| Item | Note | First half of 2021 | First half of 2020 |
| I. Total operating income | XVII.4 | 896,751,013.59 | 793,053,800.28 |
| Less: Operating costs | XVII.4 | 456,588,246.62 | 364,806,553.96 |
| Taxes and levies | 9,582,635.63 | 6,466,005.47 | |
| Selling expenses | 81,296,635.42 | 91,431,939.35 | |
| General and administrative expenses | 93,298,483.53 | 73,330,062.18 |
Research and developmentexpenses
| Research and development expenses | 33,738,875.24 | 34,152,355.31 | |
| Financial expenses | -5,242,699.84 | -9,282,936.64 | |
| Including: Interest expenses | 3,673,688.51 | 1,536,524.31 | |
| Interest income | 11,002,950.08 | 6,719,468.13 | |
| Add: Other income | XVII.5 | 2,487,852.60 | 7,155,816.18 |
| Investment income (Loss is indicated by “-”) | -2,511,473.64 | 1,995,502.53 | |
| Including: Income from investments in associates and joint ventures | -2,511,473.64 | -270,798.84 | |
| Income from derecognition of financial assets measured at amortized cost (Loss is indicated by “-”) | |||
| Net exposure hedging income (Loss is indicated by “-”) | |||
| Income from changes in fair value (Loss is indicated by “-”) | |||
| Impairment losses of credit (Loss is indicated by “-”) | -29,471,176.41 | -10,545,554.20 | |
| Impairment losses of assets (Loss is indicated by “-”) | -1,596,258.57 | -4,475,027.17 | |
| Income from disposal of assets (Loss is indicated by “-”) | |||
| II. Operating profit (Loss is indicated by “-”) | 196,397,780.97 | 226,280,557.99 | |
| Add: Non-operating income | 5,363.22 | 6,666.00 | |
| Less: Non-operating expenses | 9,975.00 | 15,071,217.24 | |
| III. Total profit (Total losses are indicated by “-”) | 196,393,169.19 | 211,216,006.75 | |
| Less: Income tax expenses | 27,106,176.79 | 33,677,060.59 | |
| IV. Net profit (Net loss is indicated by “-”) | 169,286,992.40 | 177,538,946.16 | |
| (I) Net profit from continuing operation (Net loss is indicated by “-”) | 169,286,992.40 | 177,538,946.16 | |
| (II) Net profit from discontinued operations (Net loss is indicated by “-”) | |||
| V. Other comprehensive income, net of tax | |||
| (I) Other comprehensive income that cannot be subsequently reclassified to profit or loss | |||
| 1. Changes from re-measurement of defined benefit plans | |||
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||
| 3. Changes in fair value of other investments in equity instruments | |||
| 4. Changes in fair value of enterprises’ own credit risks | |||
| (II) Other comprehensive income |
that will be reclassified to profit orloss
| that will be reclassified to profit or loss | |||
| 1. Other comprehensive income that will be reclassified to profit or loss under the equity method | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Amounts of financial assets reclassified into other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Reserve for cash flow hedges | |||
| 6. Translation differences of financial statements denominated in foreign currencies | |||
| 7. Others | |||
| VI. Total comprehensive income | 169,286,992.40 | 177,538,946.16 | |
| VII. Earnings per share: | |||
| (I) Basic earnings per share (RMB/share) | |||
| (II) Diluted earnings per share (RMB/share) |
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of theAccounting Organization: WANG Li
Consolidated Cash Flow Statement
January to June 2021
Unit: Yuan Currency: RMB
| Item | Note | First half of 2021 | First half of 2020 |
| I. Cash flows from operating activities: | |||
| Cash receipts from the sale of goods and the rendering of services | 2,222,119,171.48 | 1,482,166,082.91 | |
| Net increase in customer deposits and deposits from banks and other financial institutions | |||
| Net increase in loans from the central bank | |||
| Net increase in taking from other financial institutions | |||
| Cash payments for claims and policyholders’ benefits under direct insurance contracts | |||
| Net cash receipts from reinsurance business | |||
| Net cash receipts from policyholders’ deposits and investment contract liabilities |
Cash receipts from interest,fees and commissions
| Cash receipts from interest, fees and commissions | |||
| Net increase in taking from banks and other financial institutions | |||
| Net increase in financial assets sold under repurchase arrangements | |||
| Net cash received from securities trading agency | |||
| Receipts of tax refunds | 8,644,521.51 | 3,862,697.97 | |
| Other cash receipts relating to operating activities | VII.78 (1) | 41,759,657.98 | 27,345,841.54 |
| Sub-total of cash inflows from operating activities | 2,272,523,350.97 | 1,513,374,622.42 | |
| Cash payments for goods purchased and services received | 715,847,620.70 | 644,518,449.15 | |
| Net increase in loans and advances to customers | |||
| Net increase in balance with the central bank and due from banks and other financial institution | |||
| Cash payments for claims and policyholders’ benefits under direct insurance contracts | |||
| Net increase in placements with banks and other financial institutions | |||
| Cash payments for interest, fees and commissions | |||
| Cash payments for insurance policyholder dividends | |||
| Cash payments to and on behalf of employees | 237,264,313.77 | 185,549,039.74 | |
| Payments of various types of taxes | 208,417,814.87 | 179,671,843.97 | |
| Other cash payments relating to operating activities | VII.78 (2) | 844,818,022.81 | 467,070,910.68 |
| Sub-total of cash outflows from operating activities | 2,006,347,772.15 | 1,476,810,243.54 | |
| Net cash flow from operating activities | 266,175,578.82 | 36,564,378.88 | |
| II. Cash flows from investing activities: | |||
| Cash receipts from disposals and recovery of investments | 211,450,000.00 | ||
| Cash receipts from investment income | 4,145,309.14 | ||
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 1,000.00 | ||
| Net cash receipts from disposals of subsidiaries and other business entities |
Other cash receipts relatingto investing activities
| Other cash receipts relating to investing activities | |||
| Sub-total of cash inflows from investing activities | 1,000.00 | 215,595,309.14 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 98,334,802.52 | 42,817,591.52 | |
| Cash payments to acquire investments | 31,206,800.00 | 66,580,000.00 | |
| Net increase in pledged loans receivables | |||
| Net cash payments for acquisitions of subsidiaries and other business units | |||
| Other cash payments relating to investing activities. | VII.78 (4) | 61,087,857.19 | 1,579,710.89 |
| Sub-total of cash outflows from investing activities | 190,629,459.71 | 110,977,302.41 | |
| Net cash flow from investing activities | -190,628,459.71 | 104,618,006.73 | |
| III. Cash flows from financing activities: | |||
| Cash receipts from capital contributions | 450,000.00 | 976,300.00 | |
| Including: cash receipts from capital contributions from minority owners of subsidiaries | 450,000.00 | 976,300.00 | |
| Cash receipts from borrowings | 200,000,000.00 | 299,000,000.00 | |
| Other cash receipts relating to financing activities | |||
| Sub-total of cash inflows from financing activities | 200,450,000.00 | 299,976,300.00 | |
| Cash repayments of borrowings | 299,000,000.00 | 212,186,065.10 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 149,594,422.10 | 118,930,785.34 | |
| Including: payments for distribution of dividends or profits to minority owners of subsidiaries | |||
| Other cash payments relating to financing activities | VII.78 (6) | 486,631.52 | |
| Sub-total of cash outflows from financing activities | 449,081,053.62 | 331,116,850.44 | |
| Net cash flow from financing activities | -248,631,053.62 | -31,140,550.44 | |
| IV. Impact of foreign exchange rate changes on cash and cash equivalents | -396,595.34 | -1,139,318.32 | |
| V. Net increase in cash and cash equivalents | -173,480,529.85 | 108,902,516.85 | |
| Add: Opening balance of cash and cash equivalents | 1,401,850,754.88 | 1,099,092,785.07 | |
| VI. Closing balance of cash and cash equivalents | 1,228,370,225.03 | 1,207,995,301.92 |
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of theAccounting Organization: WANG Li
Cash Flow Statement of the Parent Company
January to June, 2021
Unit: Yuan Currency: RMB
Item
| Item | Note | First half of 2021 | First half of 2020 |
| I. Cash flows from operating activities: | |||
| Cash receipts from the sale of goods and the rendering of services | 1,080,660,581.18 | 1,077,057,503.42 | |
| Receipts of tax refunds | 2,938,756.09 | 3,677,812.11 | |
| Other cash receipts relating to operating activities | 68,370,736.09 | 34,759,684.89 | |
| Sub-total of cash inflows from operating activities | 1,151,970,073.36 | 1,115,495,000.42 | |
| Cash payments for goods purchased and services received | 553,972,561.93 | 436,078,293.13 | |
| Cash payments to and on behalf of employees | 94,985,032.15 | 64,111,165.24 | |
| Payments of various types of taxes | 88,642,861.24 | 119,952,712.41 | |
| Other cash payments relating to operating activities | 172,843,455.28 | 368,745,462.06 | |
| Sub-total of cash outflows from operating activities | 910,443,910.60 | 988,887,632.84 | |
| Net cash flow from operating activities | 241,526,162.76 | 126,607,367.58 | |
| II. Cash flows from investing activities: | |||
| Cash receipts from disposals and recovery of investments | 506,383.08 | 210,000,000.00 | |
| Cash receipts from investment income | 4,145,309.14 | ||
| 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 entities | |||
| Other cash receipts relating to investing activities | |||
| Sub-total of cash inflows from investing activities | 506,383.08 | 214,145,309.14 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 92,347,046.32 | 42,775,628.79 | |
| Cash payments to acquire investments | 32,256,800.00 | 68,130,000.00 | |
| Net cash payments for |
acquisitions of subsidiaries andother business units
| acquisitions of subsidiaries and other business units | |||
| Other cash payments relating to investing activities. | |||
| Sub-total of cash outflows from investing activities | 124,603,846.32 | 110,905,628.79 | |
| Net cash flow from investing activities | -124,097,463.24 | 103,239,680.35 | |
| III. Cash flows from financing activities: | |||
| Cash receipts from capital contributions | |||
| Cash receipts from borrowings | 200,000,000.00 | 200,000,000.00 | |
| Other cash receipts relating to financing activities | |||
| Sub-total of cash inflows from financing activities | 200,000,000.00 | 200,000,000.00 | |
| Cash repayments of borrowings | 200,000,000.00 | 85,130,289.87 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 148,641,547.10 | 117,856,762.75 | |
| Other cash payments relating to financing activities | |||
| Sub-total of cash outflows from financing activities | 348,641,547.10 | 202,987,052.62 | |
| Net cash flow from financing activities | -148,641,547.10 | -2,987,052.62 | |
| IV. Impact of foreign exchange rate changes on cash and cash equivalents | |||
| V. Net increase in cash and cash equivalents | -31,212,847.58 | 226,859,995.31 | |
| Add: Opening balance of cash and cash equivalents | 484,019,222.50 | 255,868,964.43 | |
| VI. Closing balance of cash and cash equivalents | 452,806,374.92 | 482,728,959.74 |
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of theAccounting Organization: WANG Li
Consolidated Statement of Changes in Owners’ Equity
January to June, 2021
Unit: Yuan Currency: RMB
Item
| Item | First half of 2021 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owners’ equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Retained profit | Others | Sub-total | |||||
| Preferred stock | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the preceding year | 201,116,925.00 | 837,034,836.69 | 12,653,905.25 | -269,066.13 | 100,634,780.00 | 1,265,671,865.63 | 2,391,535,435.94 | 90,326,830.19 | 2,481,862,266.13 | ||||||
| Add: Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 201,116,925.00 | 837,034,836.69 | 12,653,905.25 | -269,066.13 | 100,634,780.00 | 1,265,671,865.63 | 2,391,535,435.94 | 90,326,830.19 | 2,481,862,266.13 | ||||||
| III. Changes for the period (decrease is indicated by “-”) | 3,997,313.48 | -5,291,971.65 | -396,595.34 | 81,297,127.86 | 90,189,817.65 | -79,685,445.01 | 10,504,372.64 | ||||||||
| (I) Total | -396,595.34 | 226,101,3 | 225,704,7 | -17,451,8 | 208,252 | ||||||||||
comprehensiveincome
| comprehensive income | 13.86 | 18.52 | 20.47 | ,898.05 | |||||||||||
| (II) Owners’ contributions and reduction in capital | 2,262,118.91 | -5,291,971.65 | 7,554,090.56 | 700,000.00 | 8,254,090.56 | ||||||||||
| 1. Common stock contributed by owners | -5,291,971.65 | 5,291,971.65 | 700,000.00 | 5,991,971.65 | |||||||||||
| 2. Capital contribution from holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in owners’ equity | 2,262,118.91 | 2,262,118.91 | 2,262,118.91 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -144,804,186.00 | -144,804,186.00 | -144,804,186.00 | ||||||||||||
| 1. Transfer to surplus reserve | |||||||||||||||
| 2. Transfer to general risk reserve | |||||||||||||||
| 3. Distributions to owners (or shareholders) | -144,804,186.00 | -144,804,186.00 | -144,804,186.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within owners’ equity | |||||||||||||||
| 1. Capitalization of capital reserve | |||||||||||||||
| 2. |
Capitalizationof surplusreserve
| Capitalization of surplus reserve | |||||||||||||||
| 3. Loss offset by surplus reserve | |||||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Transfer to special reserve in the current period | |||||||||||||||
| 2. Amount utilized in the current period | |||||||||||||||
| (VI) Others | 1,735,194.57 | 1,735,194.57 | -62,933,624.54 | -61,198,429.97 | |||||||||||
| VI. Closing balance of the current period | 201,116,925.00 | 841,032,150.17 | 7,361,933.60 | -665,661.47 | 100,634,780.00 | 1,346,968,993.49 | 2,481,725,253.59 | 10,641,385.18 | 2,492,366,638.77 |
| Item | First half of 2020 |
Equity attributable to owners of the parent company
| Equity attributable to owners of the parent company | Minority interests | Total owners’ equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Retained profit | Others | Sub-total | |||||
| Preferred stock | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the preceding year | 201,269,560.00 | 835,353,615.48 | 15,769,051.20 | -212,628.22 | 100,634,780.00 | 908,411,607.62 | 2,029,687,883.68 | 40,370,159.89 | 2,070,058,043.57 | ||||||
| Add: Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 201,269,560.00 | 835,353,615.48 | 15,769,051.20 | -212,628.22 | 100,634,780.00 | 908,411,607.62 | 2,029,687,883.68 | 40,370,159.89 | 2,070,058,043.57 | ||||||
| III. Changes for the period (decrease is indicated by “-”) | 13,104,738.35 | -136,681.49 | 60,017,980.36 | 72,986,037.22 | -4,857,970.57 | 68,128,066.65 | |||||||||
| (I) Total comprehensive income | -136,681.49 | 178,767,020.76 | 178,630,339.27 | -5,082,617.50 | 173,547,721.77 | ||||||||||
| (II) Owners’ contributions and reduction in capital | 5,103,364.67 | 5,103,364.67 | 5,103,364.67 | ||||||||||||
| 1. Common stock | |||||||||||||||
contributed byowners
| contributed by owners | |||||||||||||||
| 2. Capital contribution from holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in owners’ equity | 5,103,364.67 | 5,103,364.67 | 5,103,364.67 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -118,749,040.40 | -118,749,040.40 | -118,749,040.40 | ||||||||||||
| 1. Transfer to surplus reserve | |||||||||||||||
| 2. Transfer to general risk reserve | |||||||||||||||
| 3. Distributions to owners (or shareholders) | -118,749,040.40 | -118,749,040.40 | -118,749,040.40 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within owners’ equity | |||||||||||||||
| 1. Capitalization of capital reserve | |||||||||||||||
| 2. Capitalization of surplus reserve | |||||||||||||||
| 3. Loss offset by surplus reserve | |||||||||||||||
| 4. Retained earnings carried forward |
from changesin definedbenefit plans
| from changes in defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Transfer to special reserve in the current period | |||||||||||||||
| 2. Amount utilized in the current period | |||||||||||||||
| (VI) Others | 8,001,373.68 | 8,001,373.68 | 224,646.93 | 8,226,020.61 | |||||||||||
| VI. Closing balance of the current period | 201,269,560.00 | 848,458,353.83 | 15,769,051.20 | -349,309.71 | 100,634,780.00 | 968,429,587.98 | 2,102,673,920.90 | 35,512,189.32 | 2,138,186,110.22 |
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of the Accounting Organization: WANG Li
Statement of Changes in Owners Equity of the Parent Company
January to June, 2021
Unit: Yuan Currency: RMB
| Item | First half of 2021 | ||||||||||
| Paid-in capital (or share | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profit | Total owners’ equity | |||
| Preferred stock | Perpetual bonds | Others | |||||||||
capital)
| capital) | |||||||||||
| I. Closing balance of the preceding year | 201,116,925.00 | 837,075,425.32 | 12,653,905.25 | 100,634,780.00 | 1,134,989,843.29 | 2,261,163,068.36 | |||||
| Add: Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 201,116,925.00 | 837,075,425.32 | 12,653,905.25 | 100,634,780.00 | 1,134,989,843.29 | 2,261,163,068.36 | |||||
| III. Changes for the period (decrease is indicated by “-”) | 931,539.28 | -5,291,971.65 | 24,482,806.40 | 30,706,317.33 | |||||||
| (I) Total comprehensive income | 169,286,992.40 | 169,286,992.40 | |||||||||
| (II) Owners’ contributions and reduction in capital | 707,296.73 | -5,291,971.65 | 5,999,268.38 | ||||||||
| 1. Common stock contributed by owners | -5,291,971.65 | 5,291,971.65 | |||||||||
| 2. Capital contribution from holders of other equity instruments | |||||||||||
| 3. Share-based payment recognized in owners’ equity | 707,296.73 | 707,296.73 | |||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | -144,804,186.00 | -144,804,186.00 | |||||||||
| 1. Transfer to surplus reserve | |||||||||||
| 2. Distributions to owners (or shareholders) | -144,804,186.00 | -144,804,186.00 | |||||||||
| 3. Others | |||||||||||
| (IV) Transfers within owners’ equity | |||||||||||
| 1. Capitalization of capital reserve | |||||||||||
| 2. Capitalization of surplus reserve | |||||||||||
| 3. Loss offset by surplus reserve | |||||||||||
| 4. Retained earnings carried forward from changes in |
defined benefit plans
| defined benefit plans | |||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Transfer to special reserve in the current period | |||||||||||
| 2. Amount utilized in the current period | |||||||||||
| (VI) Others | 224,242.55 | 224,242.55 | |||||||||
| VI. Closing balance of the current period | 201,116,925.00 | 838,006,964.60 | 7,361,933.60 | 100,634,780.00 | 1,159,472,649.69 | 2,291,869,385.69 |
| Item | First Half of 2020 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profit | Total owners’ equity | |||
| Preferred stock | Perpetual bonds | Others | |||||||||
| I. Closing balance of the preceding year | 201,269,560.00 | 834,592,133.74 | 15,769,051.20 | 100,634,780.00 | 778,293,340.18 | 1,899,020,762.72 | |||||
| Add: Changes in accounting policies | |||||||||||
| Corrections of prior period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 201,269,560.00 | 834,592,133.74 | 15,769,051.20 | 100,634,780.00 | 778,293,340.18 | 1,899,020,762.72 | |||||
| III. Changes for the period (decrease is indicated by “-”) | 16,147,546.14 | 58,789,905.76 | 74,937,451.90 | ||||||||
| (I) Total comprehensive income | 177,538,946.16 | 177,538,946.16 | |||||||||
| (II) Owners’ contributions and reduction in capital | 5,103,364.67 | 5,103,364.67 | |||||||||
| 1. Common stock contributed by owners | |||||||||||
2. Capital contribution from
holders of other equityinstruments
| 2. Capital contribution from holders of other equity instruments | |||||||||||
| 3. Share-based payment recognized in owners’ equity | 5,103,364.67 | 5,103,364.67 | |||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | -118,749,040.40 | -118,749,040.40 | |||||||||
| 1. Transfer to surplus reserve | |||||||||||
| 2. Distributions to owners (or shareholders) | -118,749,040.40 | -118,749,040.40 | |||||||||
| 3. Others | |||||||||||
| (IV) Transfers within owners’ equity | |||||||||||
| 1. Capitalization of capital reserve | |||||||||||
| 2. Capitalization of surplus reserve | |||||||||||
| 3. Loss offset by surplus reserve | |||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Transfer to special reserve in the current period | |||||||||||
| 2. Amount utilized in the current period | |||||||||||
| (VI) Others | 11,044,181.47 | 11,044,181.47 | |||||||||
| VI. Closing balance of the current period | 201,269,560.00 | 850,739,679.88 | 15,769,051.20 | 100,634,780.00 | 837,083,245.94 | 1,973,958,214.62 |
Person in charge of the Company: HOU Juncheng Chief Financial Officer: WANG Li Head of the Accounting Organization: WANG Li
III. Basic Information of the Company
1. Company profile
√ Applicable ? N/A
Proya Cosmetics Co., Ltd. (the “Company”), formerly known as Proya (Huzhou) Cosmetics Co.,Ltd., was registered in Wuxing Branch of Huzhou Municipal Administration for Industry and Commerceon May 24, 2006. Headquartered in Hangzhou, Zhejiang Province, the Company now holds its businesslicense with the Unified Social Credit Code being 91330100789665033F, having its current registeredcapital amounting to RMB201.1169 million, and 201,116,925 shares (par value of RMB1 per share) inaggregate, comprising 454,160 A shares as restricted outstanding shares, and 200,662,765 A shares asunrestricted outstanding shares, which were listed for trading on SSE on November 15, 2017.The Company is in the industry of Cosmetics stores, primarily engaged in R&D, production andsales of cosmetics, the main products:. Cosmetics.The financial statements herein have been approved for disclosure by the 20th meeting of thesecond Board of Directors on August 24, 2021.
2. Scope of consolidated financial statements
√ Applicable ? N/A
42 subsidiaries including Hangzhou Proya Trade Co., Ltd., Hanya (Huzhou) Cosmetics Co., Ltd.,Zhejiang Meili Valley E-commerce Co., Ltd., Huzhou Chuangdai E-commerce Co., Ltd., Leqing LaiyaTrading Co., Ltd. and Hapsode (Hangzhou) Cosmetics Co., Ltd. have been included by the Companyinto the scope of consolidated financial statements in the Reporting Period. For details, please refer tothe descriptions of VIII “Changes in the Consolidation Scope” and IX “Interests in Other Entities” inSection X Financial Report hereof.
IV. Basis of Preparation of Financial Statements
1. Basis of preparation
The Company’s financial statements are prepared on a going-concern basis.
2. Going concern
√ Applicable ? N/A
The Company has involved in no events or circumstances that may cast significant doubt upon itsability to continue as a going concern within 12 months from the end of the Reporting Period.
V. Significant Accounting Policies and Accounting EstimatesPrompts on specific accounting policies and accounting estimates:
√ Applicable ? N/A
Please refer to “44. Changes in significant accounting policies and accounting estimates” in “V.Significant Accounting Policies and Accounting Estimates” in “Section X Financial Report” hereof.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of theAccounting Standards for Business Enterprises, truly and completely reflecting the Company’s financialposition, operating results, and cash flows, among others.
2. Accounting period
The accounting year of the Company commences from January 1 and ends on December 31 in eachcalendar year.
3. Operating cycle
√ Applicable ? N/A
The Company has a relatively short operating cycle, and determines the liquidity of assets andliabilities on the basis of 12 months.
4. Functional currency
The Company adopts RMB as its functional currency.
5. Accounting treatment of business combinations involving enterprises under common controland business combinations involving enterprises not under common control
√ Applicable ? N/A
1. Accounting treatment of business combinations involving entities under common control
Assets and liabilities that are obtained by the Company in a business combination shall bemeasured at their carrying amounts in the consolidated financial statements of the ultimate controller atthe combination date as recorded by the acquiree. The difference between the carrying amount of theowners’ equity of the acquiree as stated in the consolidated financial statements of the ultimatecontroller and the carrying amount of the total consideration paid or total par value of the shares issuedin connection with the combination is treated as an adjustment to the capital reserve. In case the capitalreserve is insufficient to absorb the difference, the remaining balance is adjusted against the retainedearnings.
2. Accounting treatment of business combinations involving entities not under common control
Where the cost of the combination exceeds the Company’s share of the fair value of the acquiree’sidentifiable net assets, the difference is recognized as goodwill on the date of acquisition. Where the costof combination is lower than the Company’s share of the fair value of the acquiree’s identifiable net
assets, the Company reviews the measurement of the fair value of each of the identifiable assets,liabilities and contingent liabilities acquired from the acquiree and the cost of combination, and if thecost of combination as reviewed is still lower than the Company’s share of the fair value of theacquiree’s identifiable net assets, the difference is recognized in profit or loss for the current period.
6. Method for preparation of financial statements
√ Applicable ? N/A
The parent company includes all of its controlled subsidiaries in its consolidated financialstatements. The consolidated financial statements are prepared by the parent company in accordancewith the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements, onthe basis of the respective financial statements of the parent company and its subsidiaries, by referenceto other relevant data.
7. Classification of joint arrangements and accounting treatment of joint operations
√ Applicable ? N/A
1. Joint arrangements are classified into joint operations and joint ventures.
2. When the Company is a party to a joint operation, it recognizes the following items relating to itsinterest in the joint operation:
(1) The assets individually held by the Company, and the Company’s share of the assets heldjointly;
(2) The liabilities incurred individually by the Company, and the Company’s share of the liabilitiesincurred jointly;
(3)The Company’s revenue from the sale of its share of output of the joint operation;
(4) The Company’s share of revenue from the sale of assets by the joint operation; and
(5) The expenses incurred individually by the Company, and the Company’s share of the expensesincurred jointly.
8. Recognition of cash and cash equivalents
The cash listed in the cash flow statement refers to the cash on hand and deposits that are availablefor payment at any time. The cash equivalents refer to the short-term and highly liquid investments heldby the enterprise that are readily convertible to known amounts of cash and subject to an insignificantrisk of changes in value.
9. Foreign currency transactions and translation of foreign currency financial statements
√ Applicable ? N/A
1. Translation of foreign currency transactions
Upon initial recognition, foreign currency transactions are translated into RMB at the approximaterate of spot rate on the transaction dates. On the balance sheet date, monetary items denominated inforeign currencies are translated into RMB using the spot exchange rates on the balance sheet date.Exchange differences arising from such translations are recognized in profit or loss for the current period,except for those attributable to foreign currency borrowings that have been taken out specifically for theacquisition or construction of qualifying assets and accrued interest. Non-monetary items denominatedin foreign currencies that are measured at historical cost are translated at the approximate rate of spotrate on the transaction dates, without adjusting the amounts in RMB. Non-monetary items denominatedin foreign currencies that are measured at fair value are translated using the foreign exchange ratesprevailing on the dates the fair value was determined, and exchange differences arising from suchtranslations are recognized in profit or loss for the current period or other comprehensive income.
2. Translation of foreign currency financial statements
The asset and liability items in the balance sheet are translated at the spot exchange rates on thebalance sheet date. The owners’ equity items other than “retained profits” are translated at the spotexchange rates on the transaction dates. The income and expense items in the income statements aretranslated at the approximate spot exchange rates on the transaction dates. Exchange differences arisingfrom such translations are recognized in other comprehensive income.
10. Financial instruments
√ Applicable ? N/A
1. Classification of financial assets and financial liabilities
Upon initial recognition, financial assets are classified into: (1) financial assets at amortized cost; (2)financial assets at fair value through other comprehensive income; and (3) financial assets at fair valuethrough profit or loss.
Upon initial recognition, financial liabilities are classified into: (1) financial liabilities at fair valuethrough profit or loss; (2) financial liabilities arising from the transfer of financial assets not meeting thecriteria for derecognition or continuing involvement in the financial assets transferred; (3) financialguarantee contracts not falling under items (1) and (2), and loan commitments not falling under item (1)at interest rate below the market level; and (4) financial liabilities at amortized cost.
2.Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liabilityis recognized. Financial assets and liabilities are initially measured at fair value. Transaction costsrelating to financial assets or liabilities at fair value through profit or loss are directly recognized inprofit or loss for the current period. Transaction costs relating to other kinds of financial assets orliabilities are included in their initially recognized amount. However, where the accounts that do notcontain any significant financing component or are recognized by the Company without taking intoconsideration the significant financing components under the contracts with a term of less than one year
upon initial recognition are initially measured at transaction price defined in the Accounting Standard forBusiness Enterprises No. 14 —Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effectiveinterest method. Gains or losses on financial assets at amortized cost that do not belong to any hedgingrelationship are recognized in profit or loss for the current period upon derecognition, reclassification,amortization using the effective interest method or recognition of impairment.
2)Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequentlymeasured at fair value. Interest, impairment losses or gains and exchange gains or losses calculatedusing the effective interest method are recognized in profit or loss for the current period, and other gainsor losses are recognized in other comprehensive income. On derecognition, the cumulative gain or losspreviously included in other comprehensive income is removed out from other comprehensive incomeand included in profit or loss for the current period.
3)Investments in equity instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequentlymeasured at fair value. Dividends received (other than those received as recovery of investment cost) arerecognized in profit or loss for the current period, and other gains or losses are recognized in othercomprehensive income. On derecognition, the cumulative gain or loss previously included in othercomprehensive income is removed out from other comprehensive income and included in retainedearnings.
4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are subsequently measured at fair value. Gains orlosses thereon, including interest and dividend income, are recognized in profit or loss for the currentperiod, except the financial assets belonging to any hedging relationship.
(3)Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading(including derivatives classified as financial liabilities), and financial liabilities directly designated as atfair value through profit or loss. Such financial liabilities are subsequently measured at fair value.Changes in the fair value of financial liabilities designated as at fair value through profit or loss arisingout of changes in the Company’s credit risk are recognized in other comprehensive income, unless suchtreatment will result in or increase any accounting mismatch in profit or loss. Other gains or losses onsuch financial liabilities, including interest expenses and changes in fair value not arising out of changesin the Company’s credit risk, are recognized in profit or loss for the current period, except the financialliabilities belonging to any hedging relationship. Upon derecognition, the aggregate gains or lossespreviously recognized in other comprehensive income are transferred to retained earnings.
2)Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria forderecognition or continuing involvement in the financial assets transferredSuch financial liabilities are measured in accordance with the Accounting Standards for BusinessEnterprises No. 23 - Transfer of Financial Assets.
3) Financial guarantee contracts not falling under items 1) and 2) above, and loan commitments notfalling under item 1) above at below-market interest rate
Such financial liabilities are subsequently measured at the higher of ① provision for impairmentlosses determined according to the policy for impairment of financial instruments; and ② balance of theinitially recognized amount after deduction of the accumulated amortization determined in accordancewith Accounting Standard for Business Enterprises No. 14 - Revenue.
4) Financial liabilities at amortized cost
Such financial liabilities are measured at amortized cost using the effective interest method. Gainsor losses on financial liabilities at amortized cost that do not belong to any hedging relationship arerecognized in profit or loss for the current period upon derecognition or amortization using the effectiveinterest method.
(4) Derecognition of financial assets and financial liabilities
1)Financial assets are derecognized when:
①The contractual right to receive cash flows from the financial assets has expired; or
② The financial assets have been transferred and such transfer meets the criteria for derecognitionof financial assets as set forth in the Accounting Standards for Business Enterprises No. 23 - Transfer ofFinancial Assets.
2) A financial liability (or part thereof) is derecognized when all or part of the outstandingobligations thereon have been discharged.
3. Determination and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewardsincidental to the ownership of the financial asset have been transferred, the financial asset isderecognized, and the rights and obligations incurred or retained in such transfer are separatelyrecognized as assets or liabilities. If the Company retains substantially all the risks and rewards ofownership of a financial asset, the Company shall not derecognize the financial asset. If the Companyneither transferred nor retained a substantial portion of all risks and rewards incidental to the ownershipof the financial asset, then: (1) if the Company does not retain control over the financial asset, thefinancial asset is derecognized, and the rights and obligations incurred or retained in such transfer areseparately recognized as assets or liabilities; and (2) if the Company retains control over the financialasset, the financial asset continues to be recognized to the extent of the Company’s continuinginvolvement in the financial asset transferred, and a corresponding liability is recognized.
If an entire transfer of a financial asset meets the criteria for derecognition, the difference between
(1) the carrying amount of the financial asset transferred on the date of derecognition; and (2) the sum ofthe consideration received from the transfer and the portion of the cumulative amount of changes in fair
value directly recorded as other comprehensive income originally that corresponds to the partderecognized (where the financial asset transferred is an investment in debt instruments at fair valuethrough other comprehensive income) is recognized in profit or loss for the current period. If part of afinancial asset is transferred and the part transferred entirely meets the criteria for derecognition, thetotal carrying amount of the financial asset immediately prior to the transfer is allocated between the partderecognized and the part not derecognized in proportion to their relative fair value on the date oftransfer, and the difference between (1) the carrying amount of the part derecognized and (2) the sum ofthe consideration received from the transfer of the part derecognized and the portion of the cumulativeamount of changes in fair value directly recorded as other comprehensive income originally thatcorresponds to the part derecognized (where the financial asset transferred is an investment in debtinstruments at fair value through other comprehensive income) is recognized in profit or loss for thecurrent period.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and withsufficient data available and support of other information to determine the fair value of financial assetsand financial liabilities. The Company classifies the inputs used by the valuation techniques in thefollowing levels and uses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset orliability available on the date of measurement;
(2) Level 2 inputs: inputs other than those included within Level 1 that are observable directly orindirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices foridentical or similar assets or liabilities in inactive markets, observable inputs other than quoted prices(such as interest rate and yield curves observable during regular intervals of quotation), and inputsvalidated by the market;
(3) Level 3 inputs: inputs that are unobservable, including interest rate or stock volatility thatcannot be directly observed or validated by observable market data, future cash flows from retirementobligation incurred in business combinations, and financial forecasts made using own data.
5. Impairment of financial instruments
(1) Measurement and accounting treatment of impairment of financial instruments
The Company determines the impairment and assesses provision for impairment losses of financialassets at amortized cost, investments in debt instruments at fair value through other comprehensiveincome, lease receivable, loan commitments other than financial liabilities designated at fair valuethrough profit or loss, and financial guarantee contracts other than financial liabilities designated at fairvalue through profit or loss and financial liabilities arising as a result of the transfer of financial assetsnot meeting the criteria for derecognition or continuing involvement in the financial assets transferred,on the basis of expected credit losses.
Expected credit loss is the weighted average of credit losses on financial instruments taking intoaccount the possibility of default. Credit loss is the present value of the difference between all
contractual cash flows receivable under the contract and estimated future cash flows discounted at theoriginal effective interest rate, i.e., the present value of all cash shortage, wherein the Company’spurchased or originated financial assets that have become credit impaired are discounted at theircredit-adjusted effective interest rate.
With respect to purchased or originated financial assets that have become credit impaired, on thebalance sheet date, the Company recognizes a loss allowance equal to the cumulative amount of changesin lifetime expected credit losses since initial recognition.
With respect to accounts receivable and contract assets that arise from the transactions regulatedunder the Accounting Standard for Business Enterprises No. 14 - Revenue and do not contain anysignificant financing component or are recognized by the Company without taking into account thesignificant financing components under the contracts with a term of less than one year, the Companyuses the simple measurement method and recognizes a loss allowance equal to the lifetime expectedcredit losses.
With respect to lease receivable, as well as accounts receivable and contract assets that arise fromthe transactions regulated under the Accounting Standard for Business Enterprises No. 14 - Revenuecontaining significant financing components, the Company uses the simple measurement method andrecognizes a loss allowance equal to the lifetime expected credit losses.
With respect to financial assets not using the measurement methods stated above, on each balancesheet date, the Company assesses whether the credit risk has increased significantly since initialrecognition, and recognizes a loss allowance equal to the lifetime expected credit losses if the credit riskhas increased significantly since initial recognition, or to the expected credit losses within the next 12months if the credit risk has not increased significantly since initial recognition.
The Company uses reasonable and supportable information, including forward-looking information,and compares the possibility of default on the balance sheet date with the possibility of default uponinitial recognition, to determine whether the credit risk of the financial instruments has increasedsignificantly since initial recognition.
On the balance sheet date, if the Company determines that a financial instrument has low credit risk,the Company assumes that its credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risk and measures expected credit losses of financialinstruments individually or by portfolio. When assessing the financial instruments by portfolio, theCompany divides the financial instruments into different portfolio according to their common riskcharacteristics.
At each balance sheet date, the Company re-assesses the expected credit losses, with the amount ofincrease in or reversal of loss allowance recognized in profit or loss for the current period as impairmentlosses or gains. With respect to a financial asset at amortized cost, its carrying amount recorded in thebalance sheet is written off against the loss allowance. With respect to an investment in debt instrumentsat fair value through other comprehensive income, the Company recognizes the loss allowance in othercomprehensive income, without reducing its carrying amount.
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are notoffset. However, a financial asset and a financial liability shall be offset, and the net amount presented inthe balance sheet when both of the following conditions are satisfied: (1) the Company has a legal rightto set off the recognized amounts and the legal right is currently enforceable; and (2) the Companyintends either to settle on a net basis, or to realize the financial asset and settle the financial liabilitysimultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition, theCompany do not offset the transferred financial asset and the associated liability.
11. Notes receivable
Determination and accounting treatment of expected credit losses for notes receivable? Applicable √ N/A
12. Accounts receivable
Determination and accounting treatment of expected credit losses for accounts receivable
√ Applicable ? N/A
1) Measurement of expected credit losses by portfolio: the expected credit losses are calculated byreference to historic credit loss experience, and preparation of the comparison table of the age ofaccounts receivable and rate of lifetime expected credit loss, taking into account the current situationsand prediction of future economic conditions.
2) Accounts receivable - comparison table of the age of accounts receivable and rate of lifetimeexpected credit loss
Aging
| Aging | Accounts receivable Rate of expected credit loss (%) |
| Within 1 year (inclusive, the same below) | 5 |
| 1-2 years | 30 |
| 2-3 years | 50 |
| More than 3 years | 100 |
13. Receivables financing
√ Applicable ? N/A
Measurement of expected credit losses by portfolio: the expected credit losses are calculatedaccording to the default risk exposure and rate of lifetime expected credit loss by reference to historiccredit loss experience, and taking into account the current situations and prediction of future economicconditions.
14. Other receivables
Determination and accounting treatment of expected credit losses for other receivables
√ Applicable ? N/A
Evaluation of expected credit risks and measurement of expected credit losses by portfolio: theexpected credit losses are calculated according to the default risk exposure and the expected credit lossrate of the period within the future 12 months or the lifetime by reference to historic credit lossexperience, and taking into account the current situations and prediction of future economic conditions.
15. Inventories
√ Applicable ? N/A
1. Classification of inventories
Inventories include finished goods or merchandise held by the Company for sale in the ordinarycourse of business, or work in progress in the process of production for such sale, or materials orsupplies to be consumed in the production process or in the rendering of services.
2. Pricing methods of inventories in transit
Inventories in transit are priced using the moving weighted average method.
3. Determination basis of net realizable value of inventories
On the balance sheet date, inventories are measured at the lower of cost and net realizable value,and the provision for decline in value of inventories is determined by the difference between the highercost and the net realizable value of a single inventory. For inventories available for sales, in the ordinaryproduction and operation process, their realizable net value is determined at the estimated selling priceof these inventories less the estimated costs necessary to make the sale and relevant taxes; for theinventories that need to be processed, in the ordinary production and operation process, their realizablenet value is determined at the estimated selling price of finished products less the estimated costs ofcompletion and the estimated costs necessary to make the sale and relevant taxes. On the balance sheetdate, where a part of an inventory is subject to the contract price agreement and other parts of the sameinventory has no such agreement, their realizable net value is determined separately, and by comparingthem with their corresponding cost, the amount made for or reversal of the provision for decline in valueof inventories is determined separately.
4. Inventory systems for inventories
A perpetual inventory system is adopted for the inventories.
5. Amortization of low-value consumables and packing materials
(1)Low-value consumables
The low-value consumables are amortized using immediate write-off method.
(2) Packing materials
The packing materials are amortized using immediate write-off method.
16. Contract assets
(1). Methods and standards for recognizing contract assets
√ Applicable ? N/A
The Company presents contract assets or liabilities in the balance sheet based on the relationshipbetween performance obligations and customer payments. The Company shall set off the contract assetsand contract liabilities under the same contract and present them on a net basis.The Company presents its owned right to unconditionally (that is, only depending on the passage oftime) receive consideration from customers as the accounts receivable, and the right to receive theconsideration for which the goods that have been transferred to customers (that is, depending on factorsother than the passage of time) as the contract assets.
(2). Determination and accounting treatment of expected credit losses for contract assets? Applicable √ N/A
17. Held-for-sale assets
? Applicable √ N/A
18. Debt investments
Determination and accounting treatment of expected credit losses for debt investments? Applicable √ N/A
19. Other debt investments
Determination and accounting treatment of expected credit losses for other debt investments? Applicable √ N/A
20. Long-term receivables
Determination and accounting treatment of expected credit losses for long-term receivables? Applicable √ N/A
21. Long-term equity investments
√ Applicable ? N/A
1. Judgment criteria of joint control and significant influence
Joint control is the agreed sharing of control over an arrangement, and the relevant activities ofsuch arrangement must be decided upon the unanimous consent of the parties sharing control.Significant influence is the power of the investing enterprise to participate in the financial and operating
policy decisions of an investee, but is not control or joint control with other parties over theestablishment of those policies.
2.Determination of investment cost
(1) In case of an equity investment acquired through a business combination involving entitiesunder common control, if the acquirer pays consideration for the business combination by cash, transferof non-monetary assets, assumption of liabilities or issuance of equity securities, the initial investmentcost of the long-term equity investment is the Company’s share of the carrying amount of the owners’equity of the acquiree in the consolidated financial statements of the ultimate controller on the date ofcombination. The difference between the initial investment cost of the long-term equity investment andthe carrying amount of the consideration paid for the combination or the total par value of the sharesissued (as applicable) is treated as an adjustment to the capital reserve. In case the capital reserve isinsufficient to absorb the difference, the remaining balance is adjusted against the retained earnings.In case of a long-term equity investment acquired through a business combination involving entitiesunder common control and through multiple transactions by steps, the Company judges whether theyconstitute a “package deal” or not. If they belong to a “package deal”, the Company accounts for alltransactions as one transaction to acquire control. If such transactions do not constitute a “package deal”,the initial investment cost is the Company’s post-combination share of the carrying amount of theowners’ equity of the acquiree in the consolidated financial statements of the ultimate controller on thedate of combination; The difference between the initial investment cost of the long-term equityinvestment on the date of combination and the sum of the carrying amount of long-term equityinvestment before the combination and the carrying amount of the consideration paid for acquisition ofthe additional shares on the date of combination is adjusted against the capital reserve. In case the capitalreserve is insufficient to absorb the difference, the remaining balance is adjusted against the retainedearnings.
(2) In case of an equity investment acquired through a business combination not involvingenterprises under common control, the initial investment cost is the fair value of the carrying amount ofthe consideration paid for the combination on the date of acquisition.
With respect to a long-term equity investment acquired through a business combination notinvolving enterprises under common control that is achieved through multiple transactions by steps, theaccounting treatment thereof in the separate financial statements is different from that in theconsolidated financial statements as stated below:
1) In the separate financial statements, the initial investment cost for which the Company changesto the cost method is the sum of the carrying amount of the long-term equity investment originally heldand the new investment cost.
2) In the consolidated financial statements, the Company judges whether the transactions constitutea “package deal” or not. If they belong to a “package deal”, the Company accounts for all transactions asone transaction to acquire control. If such transactions do not constitute a “package deal”, the Companyre-measures the fair value of the equity held in the acquiree prior to the date of acquisition, and records
the difference between the fair value and the carrying amount as investment income for the currentperiod; if the equity held in the acquiree prior to the date of acquisition involves other comprehensiveincome under equity method, such other comprehensive income is transferred to the income of theperiod in which the date of acquisition falls, except for other comprehensive income arising fromre-measurement by the investee of changes in net liabilities or net assets of defined benefit plans.
(3) In case of an equity investment not acquired through business combination, the initialinvestment cost is the purchase price actually paid if it is acquired by cash, or the fair value of the equitysecurities issued if it is acquired through issuance of equity securities, or is determined in accordancewith the Accounting Standards for Business Enterprises No. 12 - Debt Restructuring if it is acquiredthrough debt restructuring, or in accordance with the Accounting Standards for Business Enterprises No.7 - Exchange of Non-monetary Assets if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit of loss
Long-term equity investments in investees are measured using the cost method. Long-term equityinvestments in associates and joint ventures are measured using the equity method.
4. Disposal of investment in a subsidiary through multiple transactions by steps until loss of controlover the subsidiary
(1) Separate financial statements
The difference between the carrying amount of the equity disposed of and the proceeds of disposalactually received is recognized in profit or loss for the current period. If the remaining equity empowersthe Company to exercise significant influence or joint control over the investees, the remaining equity isaccounted for using the equity method; if the remaining equity does not empower the Company toexercise control, joint control or significant influence over the investees, the remaining equity isaccounted for in accordance with the Accounting Standards for Business Enterprises No. 22 -Recognition and Measurement of Financial Instruments.
(2)Consolidated financial statements
1)Disposal of investment in a subsidiary through multiple transactions by steps until loss of controlover the subsidiary which do not constitute a “package deal”
Prior to the loss of control, the difference between the proceeds from disposal and the share ownedby the Company in the net assets of the subsidiary in relation to the long-term equity investmentdisposed of that is calculated continuously from the date of acquisition or combination is adjustedagainst the capital reserve (capital premium). In case the capital premium is insufficient to absorb thedifference, the remaining balance is adjusted against the retained earnings.
When losing control over an original subsidiary, the remaining equity is re-measured at its fairvalue on the date of loss of control. The sum of the consideration received from the disposal of theequity and the fair value of the remaining equity, net of the share owned by the Company in the netassets of the subsidiary in relation to the long-term equity investment disposed of as calculatedcontinuously from the date of acquisition or combination according to the previous shareholding ratio, isrecognized in the investment income for the period in which the control is lost, and the goodwill is
reduced accordingly. Other comprehensive income relating to the equity investment in the originalsubsidiary should be transferred to the investment income for the period in which the control is lost.
2)Disposal of investment in a subsidiary through multiple transactions by steps until loss of controlover the subsidiary which constitute a “package deal”
The Company accounts for such transactions as one transaction to dispose of and lose its controlover the subsidiary. However, the difference between the proceeds from each disposal before loss ofcontrol and the share owned by the Company in the net assets of the subsidiary in relation to theinvestment disposed of is recognized in other comprehensive income in the consolidated financialstatements, which is wholly transferred to the profit or loss in the period in which the control is lost.
22. Investment properties
(1). Measured at cost
1. The investment properties include land use rights that have been leased out, land use rights thatare held and read to be transferred after appreciation and buildings that have been leased out.
2. Investment properties are initially measured at cost, subsequently measured using the cost model,and depreciated or amortized by following the same policies as those of fixed assets and intangibleassets.
23. Fixed assets
(1). Criteria for recognition
√Applicable □N/A
Fixed assets are tangible assets held for production of goods, rendering of service, lease oroperation and management with a useful life of more than one accounting year. A fixed asset isrecognized if the economic benefits relating to it are very likely to flow to the Company and its cost canbe reliably measured.
(2). Method of depreciation
√Applicable □N/A
Category
| Category | Depreciation methods | Depreciation periods (years) | Residual value rate | Annual depreciation rate |
| Housing and buildings | Straight-line depreciation | 10 or 30 | 5% | 9.50% or 3.17% |
| General equipment | Straight-line depreciation | 3-10 | 5% | 31.67%-9.50% |
| Special equipment | Straight-line depreciation | 5-10 | 5% | 19.00%-9.50% |
| Transportation facility | Straight-line depreciation | 5 | 5% | 19.00% |
(3). Identification basis, pricing and depreciation methods of fixed assets leased in underfinancing leases
□Applicable √N/A
24. Construction in progress
√Applicable □N/A
1. A construction in progress is recognized if the economic benefits relating to it are very likely toflow to the Company and its cost can be reliably measured. A construction in progress is measured at theactual cost incurred for bringing the asset to working condition for its intended use.
2. The construction in progress is transferred to fixed assets at its actual construction cost whenmeeting working conditions for its intended use. If a project under construction has not undergone finalaccounts for completion when the project meets the working condition for its intended use, the project istransferred to fixed assets at the estimated value, and after final accounts for completion are handled, theoriginal value provisionally estimated is adjusted at the actual cost, but no adjustment is made tooriginally provided depreciation.
25. Borrowing costs
√Applicable □N/A
1. Recognition of capitalization of borrowing costs
Borrowing costs incurred by the Company that are directly attributable to the acquisition,construction or production of a qualifying asset are capitalized as part of the cost of the relevant asset.The amounts of other borrowing costs incurred are expensed when incurred and included in profit or lossfor the current period.
2. Period of capitalization of borrowing costs
(1) A borrowing cost is capitalized when all of the following conditions are satisfied: 1) theexpenditures on the asset have already been incurred; 2) the borrowing cost has already been incurred;and 3) the acquisition, construction or production activities necessary to prepare the asset for its intendeduse or sale have already commenced.
(2) Capitalization of borrowing costs is suspended during periods in which the acquisition,construction or production of a qualifying asset is interrupted abnormally, when the interruption is for acontinuous period of more than 3 months. The borrowing costs incurred during these periods arerecognized as an expense for the current period until the acquisition, construction or production isresumed.
(3) When the qualifying asset being acquired, constructed or produced has become ready for itsintended use or sale, the capitalization ceases.
3. Rate and amount of capitalization of borrowing costs
If funds are borrowed under a specific-purpose borrowing for the acquisition, construction orproduction of a qualifying asset, the amount of interest to be capitalized is the actual interest expenseincurred on that borrowing for the period (including amortized discount or premium determined usingthe effective interest 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 of those funds. If fundsare borrowed under general-purpose borrowings and are utilized for the acquisition, construction orproduction of a qualifying asset, the Company determines the amount of interest to be capitalized onsuch borrowings by multiplying a capitalization rate of the utilized general-purpose borrowings by theweighted average of the excess amounts of cumulative expenditures on the asset over and above theamounts of specific-purpose borrowings.
26. Biological assets
□Applicable √N/A
27. Oil and gas assets
□Applicable √N/A
28. Use of right assets
□Applicable √N/A
29. Intangible assets
(1). Pricing methods, useful lives and impairment tests
√Applicable □N/A
1. Intangible assets include land use rights, patent rights and nonpatented technology, which areinitially measured at cost.
2. The depreciable amount of an intangible asset with a finite useful life is allocated on a systematicand rational basis over its useful life in the pattern in which the asset’s economic benefits are expected tobe realized. If that pattern cannot be determined reliably, the straight-line method is used. The specificlife is shown as follows:
Item
| Item | Amortization periods (years) |
| Land use rights | 40 or 50 |
| Nonpatented technology | 5 |
| Office software | 3-10 |
| Patent rights | 5 |
| Customer resources | 3 |
| Trademark rights | 10 |
(2). Accounting policies for internal research and development expenditure
√Applicable □N/A
Expenditure on the research phase of an internal research and development project is recognized inprofit or loss in the period in which it is incurred. Expenditure on the development phase of an internalresearch and development project is recognized as an intangible asset only when the Companydemonstrates all of the following: (1) the technical feasibility of completing the intangible asset so that it
will be available for use or sale; (2) the intention to complete the intangible asset and use or sell it; (3)how the intangible asset will generate economic benefits. Among other things, the Company candemonstrate the existence of a market for the output of the intangible asset or the intangible asset itselfor, if it is to be used internally, the usefulness of the intangible asset; (4) the availability of adequatetechnical, financial and other resources to complete the development and the ability to use or sell theintangible asset; and (5) its ability to measure reliably the expenditure attributable to the intangible assetduring its development phase.
30. Impairment of long-term assets
√Applicable □N/A
With respect to long-term equity investments, investment properties measured at the cost model,fixed assets, construction in progress, intangible assets with a finite useful life and other long-term assets,if there’s an indication of impairment at the balance sheet date, the Company assesses their recoverableamount. Goodwill arising in a business combination and an intangible asset with an indefinite useful lifeare tested for impairment annually, irrespective of whether there is any indication that the asset may beimpaired. For the purpose of impairment testing, goodwill is considered together with the related assetportfolio or sets of asset portfolio.The the recoverable amount of the long-term asset above is lower than its carrying amount, thedifference is measured as impairment loss of the asset and recognized in profit or loss for the currentperiod.
31. Long-term prepaid expenses
√Applicable □N/A
Long-term prepaid expenses that have already been incurred but should be amortized over a periodof more than one year (exclusive) are accounted for. Long-term prepaid expenses are stated as theamount actually incurred and are amortized evenly by stages within the benefit period or specifiedperiod. If an item of long-term deferred expenses will not benefit the subsequent periods, the amortizedvalue of the item that has not yet been amortized is wholly transferred to profit or loss in the period inwhich it is actually incurred.
32. Contract liabilities
Recognition methods of contract liabilities
√Applicable □N/A
The Company presents the obligations to transfer goods to customers for the consideration receivedor receivable from customers as the contract liabilities.
33. Employee benefits
(1). Accounting for short-term benefits
√Applicable □N/A
The Company recognizes the short-term benefits actually incurred during the accounting periodwhen the employees provide services for the Company as liabilities, and includes same in profit or loss
for the current period or the cost of related assets.
(2). Accounting for post-employment benefits
√Applicable □N/A
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
(1) During the accounting period in which the employees serve the Company, the amounts payableunder the defined contribution plan are recognized as liabilities, and charged to profit or loss for thecurrent period or the cost of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use the unbiased and consistent actuarialassumptions to estimate demographic variables and financial variables, measure the obligations arisingfrom the defined benefit plan and determine the period to which the relevant obligations belong.Meanwhile, discount the obligations arising from the defined benefit plan, in order to determine thepresent value of the benefit plan obligations and the current service cost;
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the presentvalue of the defined benefit plan obligation by the fair value of the defined benefit plan is recognized asa net liability or asset of the defined benefit plan. If the defined benefit plan has a surplus, the net assetsof the defined benefit plan are measured at the lower of surplus in the defined benefit plan and assetceiling;
3) At the end of the reporting period, the cost of employee benefits arising from the defined benefitplan is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan,and changes arising from re-measurement of the net liabilities or net assets of the defined benefit plan,wherein the service cost and the net interest on the net liabilities or net assets of the defined benefit planare included in profit or loss for the current period or the cost of related assets, and the changes arisingfrom re-measurement of the net liabilities or net assets of the defined benefit plan are included in othercomprehensive income, which will not be converted back to profit or loss in subsequent periods, butmay be transferred within the scope of equity.
(3). Accounting for termination benefits
√Applicable □N/A
The employee benefit liabilities arising from recognition of termination benefits offered toemployees are recognized in profit or loss for the current period on the earlier of: (1) when the Companycan no longer withdraw the offer of termination benefits as a result of termination of employment orredundancy; or (2) when the Company recognizes the restructuring costs or expenses relating to paymentof termination benefits.
(4). Accounting for other long-term employee benefits
√Applicable □N/A
Other long-term employee benefits offered to employees are accounted for in accordance with theprovisions applicable to defined contribution plans if they are qualified as defined contribution plans,
otherwise, they are accounted for in accordance with the provisions applicable to defined benefit plans.In order to simplify the accounting treatment, the total net amount of the cost of employee benefitsarising from the defined benefit plans that is recorded as service cost, net interest on the net liabilities ornet assets of other long-term employee benefits, changes arising from re-measurement of the netliabilities or net assets of other long-term employee benefits and other components is included in profitor loss for the current period or the cost of related assets.
34. Lease liabilities
□Applicable √N/A
35. Provisions
√Applicable □N/A
1. An obligation arising from any external guarantee, litigations, product quality warranty, onerouscontract or other contingencies is recognized as a provision if it is a present obligation assumed by theCompany, and it is probable that an outflow of resources embodying economic benefits will be requiredto settle the obligation, and the amount of the obligation can be reliably measured.
2. Provisions are initially measured according to the best estimates of the expenditures required tosettle the related present obligations. The carrying amount of estimated liabilities is reviewed at thebalance sheet date.
36. Share-based payments
√Applicable □N/A
1. Category of share-based payment
A share-based payment is classified as either an equity-settled share-based payment or acash-settled share-based payment.
2. Accounting for implementation, modification and termination of share-based payment plans
(1) Equity-settled share-based payment
If the equity instruments granted under an equity-settled share-based payment for services receivedfrom employees vest immediately following the grant, the Company shall, on grant date, recognizerelated costs or expenses at an amount equal to the fair value of the equity instruments, with acorresponding increase in capital reserve. If the rights under a share-based payment for services receivedfrom employees do not vest until the completion of services for a vesting period, or until theachievement of a specified performance condition, at each balance sheet date during the vesting period,the Company makes the best estimate of the number of equity instruments expected to vest, and basedon this, recognizes the services received in the current period in the related costs or expenses at anamount equal to the fair value on the grant date, with a corresponding increase in capital reserve.
For the equity instruments granted under an equity-settled share-based payment for services fromother parties, if the fair value of services received from other parties can be measured reliably, the fairvalue of the equity instruments is measured at the fair value of services from other parties on the grantdate; if the fair value of services received from other parties cannot be measured reliably but the fair
value of the equity instruments can be measured reliably, the fair value of the equity instruments on thedate on which services are received shall be recognized as related costs or expenses, with acorresponding increase in owners' equity.
(2) Cash-settled share-based Payment
If the right under the the cash-settled share-based payment for services from employees vestsimmediately following the grant, the Company, on grant date, recognizes related costs or expenses at anamount equal to the fair value of the liability assumed by the Company, with a corresponding increase inliability. If the rights under a cash-settled share-based payment for services from employees do not vestuntil the completion of services for a vesting period, or until the achievement of a specified performancecondition, the Company, at each balance sheet date during the vesting period, recognize the servicesreceived for the current period as related costs or expenses, with a corresponding increase in liability, atan amount equal to the fair value of the liability based on the best estimate of the outcome of vesting.
(3) Modification and termination of share-based payment plans
If the modification increases the fair value of the equity instruments granted, the Companyrecognizes the increase in services received based on the increase in the fair value of the equityinstruments; if the modification increases the number of equity instruments granted, the Companyrecognizes the fair value of the increased equity instruments as the increase in services correspondingly;if the Company modifies the vesting conditions in a way that is beneficial to employees, the Companyconsiders the revised vesting conditions when dealing with the vesting conditions.
If the modification reduces the fair value of the equity instruments granted, the Company continuesto use the fair value of the equity instruments on the grant date as the basis to recognize the amounts ofthe service received, regardless of the decrease in the fair value of the equity instruments; if themodification reduces the number of equity instruments granted, the Company treats the reduced portionas the cancellation of the granted equity instruments; if the exercising conditions are modified in a waythat is not conducive to the employees, the Company does not consider the revised vesting conditionswhen dealing with the exercising conditions.
If the Company cancels or settles the equity instruments granted during the vesting period (exceptas cancelled because vesting conditions are not satisfied), the Company treats the cancellation orsettlement as the accelerated exercise, and the amount to be recognized during the remaining vestingperiod is immediately recognized.
37. Preferred shares, perpetual bonds and others financial instruments
□Applicable √N/A
38. Revenue
(1). The accounting policies adopted for the recognition and measurement of revenue
√Applicable □N/A
1. Revenue recognition
On the commence date of a contract, the Company evaluates the contract, identifies each individualperformance obligation contained therein and determine whether each individual performance obligation
is performed over time or at a point in time.When meeting one of the following criteria, it belongs to the obligation performed over time,otherwise it constitutes the obligation performed at a point in time: (1) the customer obtains andconsumes the economic benefits generated by the Company’s performance when the Company performsthe contract; (2) the customer can control the products under construction in the process of theCompany’s performance; (3) the products produced in the process of the Company’s performance haveirreplaceable uses, and the Company has the right to collect payment for the cumulative performancethat has been completed up to date throughout the term of the contract.For the obligation performed over time, the Company recognizes the revenue based on theperformance progress over time. When the performance progress cannot be reasonably determined, andthe costs incurred are expected to be recoverable, revenue is recognized to the extent of costs incurreduntil the performance progress can be reasonably determined. For the obligation performed at a point intime, the revenue is recognized at the time point when the customer obtains the control of the relatedgoods and services. When judging whether the customer has obtained the control of goods, the Companyconsiders the followings signs: (1) the Company has the current right to receive payment for such goods,that is, the customer has the current obligation to make payment for such goods; (2) the Company hastransferred the legal ownership of such goods to the customer, that is, the customer has the legalownership of such goods; (3) the Company has transferred such goods to the customer physically, that is,the customer has taken possession of such goods physically; (4) the Company has transferred materialrisks and rewards of such goods to the customer, that is, the customer has obtained material risks andrewards of such goods; (5) the customer has accepted such goods; and (6) other signs that the customerhas obtained control of such goods.
2. Revenue measurement
(1) The Company measures revenue based on the transaction price allocated to each individualperformance obligation. The transaction price is the amount of consideration to which the Company isentitled arising from the transfer of goods or services to the customer, excluding the amount collected onbehalf of a third party and expected to be returned to the customer.
(2) If there is variable consideration in the contract, the Company determines the best estimate ofthe variable consideration based on the expected value or the most likely amount. However, variableconsideration is included in the transaction price if, and to the extent that, it is highly probable that itsinclusion will not result in a significant revenue reversal of accumulatively recognized revenue in thefuture when the uncertainty has been subsequently resolved.
(3) If there is a major financing component in the contract, the Company determines the transactionprice based on the presumed amount payable in cash when the customer obtains the control of goods orservices. The difference between such transaction price and the contract consideration is amortized overthe period of the contract using the effective interest method. If on the commence date of a contract, theCompany expects that the customer’s acquisition of control of goods or services is not more than oneyear from the customer’s payment therefor, the major financing component in the contract will not be
considered.
(4) If the contract has two or multiple performance obligations, the Company, on the commencedate of a contract, allocates the transaction price to each individual performance obligation in thecontract by reference to relative standalone selling prices of goods promised thereby.
(2). Difference in the accounting policy for revenue recognition arising from adoption of different
modes of operation for the same kind of business
√Applicable □N/A
The Company mainly engages in sales of cosmetics. The Company adopts such methods asdistribution, direct sales and agency sales.
(1) Distribution
The Company recognizes the sales revenue after delivering the products to a purchaser as agreed inthe contract and upon inspection by the purchaser.
(2) Direct sales
The Company recognizes the sales revenue after it delivers the products to a customer and thecustomer confirms the acceptance and pays for the products.
(3)Agency sales
The Company recognizes the sales revenue after it delivers the products to an entrusted party andthe entrust party realizes the sales and issues the list of agency sales to the Company.
39. Contract costs
√Applicable □N/A
Assets related to contract costs include contract acquisition costs and contract performance costs.
If the incremental cost incurred by the Company to obtain a contract is expected to be recovered, itis recognized as an asset as the cost of obtaining a contract. If the amortization period of the cost ofobtaining a contract does not exceed one year, such cost is directly included in the profit or loss for thecurrent period.
The cost incurred by the Company to perform a contract is not be governed by the standards oninventories, fixed assets or intangible assets, and if meeting the following criteria, is recognized as anasset as the contract performance cost:
1. Such cost is directly related to an existing or expected contract, including expenses for directlabor, direct materials and manufacturing (or similar expenses), costs to be clearly borne by the customerand other costs incurred only due to the contract;
2. Such cost increases the the Company’s future resources for fulfilling its performance obligations;and
3. Such cost is expected to be recovered.
The Company amortizes the asset related to the contract cost on the same basis as the recognition ofthe revenue of the goods or services related to the asset, and includes it into the profit or cost for thecurrent period.
If the carrying amount of the asset related to the contract cost is higher than the remaining
consideration expected to be obtained due to the transfer of the goods or services related to the asset lessthe estimated cost, then the Company makes the provision for impairment of the excess and recognizes itas an impairment loss for the asset. If the impairment factors for prior periods have changed afterwardsso that the remaining consideration expected to be obtained due to the transfer of the goods or servicesrelated to the asset less the estimated cost is higher than the carrying amount of the asset, then theCompany reverses the provision for impairment originally made and includes it in the profit or loss forthe current period, provided that the carrying amount after reverse shall not exceed the carrying amountthe asset would have reached on the date of reverse had the provision for impairment been not made.
40. Government grants
√Applicable □N/A
1. Government grants are recognized if (1) the Company meets the conditions attaching to thegovernment grants; and (2) the Company will receive the government grants. If a government grant is inthe form of a transfer of a monetary asset, the item is measured at the amount received or receivable. If agovernment grant is in the form of a transfer of a non-monetary asset, the item is measured at fair value.If fair value is not reliably determinable, the item is measured at a nominal amount.
2. Determination of and accounting for government grants related to assets
Government grants related to assets are government grants which are offered for purchasing,constructing or otherwise acquiring long-term assets as provided by the applicable governmentdocuments, or or in the absence of such express provision in the applicable government documents,government grants whose basic condition is that such grants judged to be offered for purchasing,constructing or otherwise acquiring long-term assets on the basis of basic conditions that must be met foracquisition of such grants. The government grants related to assets are offset against the carrying amountof the related assets or recognized as deferred income. Government grants related to assets, if recognizedas deferred income, are included in profit or loss over the service life of the relevant assets on areasonable and systemic basis. Government grants measured at nominal amount are directly recognizedin profit or loss for the current period. In case of sale, transfer, retirement or damage of the relevantassets before the end of intended service life, the balance of the unallocated deferred income istransferred to profit or loss for the period in which the assets are disposed of.
3. Determination of and accounting for government grants related to income
Government grants related to income are government grants other than those related to assets.Government grants related to both assets and income in which it is difficult to make a distinctionbetween the portion related to assets and the portion related to income are wholly classified asgovernment grants related to income. Government grants related to income as compensation forexpenses or losses to be incurred in subsequent periods are recognized as deferred income and in theperiod for recognizing the relevant costs, expenses or losses, included in profit or loss for the currentperiod or offset against the relevant costs. Government grants related to income as compensation forexpenses or losses already incurred are directly included in profit or loss for the current period or offsetagainst the relevant costs.
4. Government grants related to day-to-day operations of the Company are recognized in otherincome or offset against the relevant costs and expenses depending on the nature of economic business.Government grants not related to day-to-day operations of the Company are recognized in non-operatingrevenues or expenses.
41. Deferred tax assets / deferred tax liabilities
√Applicable □N/A
1. The difference between the carrying amount of an asset or liability and the tax base (or in case ofan item not recognized as asset or liability whose tax base can be determined according to the applicabletax law, the difference between the tax base and the carrying amount) is recognized as a deferred taxasset or deferred tax liability according to the tax rate applicable to the period in which the asset orliability is expected to be recovered or settled.
2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will beavailable in future periods against which deductible temporary differences are deductible. At the balancesheet date, deferred tax assets not recognized in prior periods are recognized if there’s conclusiveevidence that it is probable that sufficient taxable income will be available in future periods againstwhich the deductible temporary differences are deductible.
3. At the balance sheet date, the carrying amount of a deferred tax asset is reviewed. The Companyreduces the carrying amount of a deferred tax asset to the extent that it is no longer probable thatsufficient taxable profits will be available in future periods to allow the benefit of the deferred tax assetto be utilized. Any such reduction in amount is reversed to the extent that it becomes probable thatsufficient taxable profits will be available.
4. Current and deferred tax of the Company is recognized as income or an expense and included inprofit or loss for the current period, except to the extent that the tax arises from: (1) businesscombination; or (2) a transaction or event which is recognized directly in owner’s equity.
42. Leases
(1). Accounting for operating leases
□Applicable √N/A
(2). Accounting for financing leases
□Applicable √N/A
(3). Determination of and accounting for leases under new lease standards
√Applicable □N/A
1. Identification of leases
On the commencement date of a contract, the Company assesses whether the contract is a lease orincludes a lease. Where a party to a contract transfers the right to control the use of one or moreidentified assets for a certain period of time in return for consideration, the contract is a lease or includesa lease. To determine whether the right to control the use of identified assets within a certain period oftime under a contract has been transferred, the Company assesses whether a client in the contract has the
right to use almost all of the economic benefits arising from the use of the identified assets during theperiod of use, and has the right to control the use of identified assets during this period of use.
2. Identification of separate leases
Where a contract concurrently contains multiple separate leases, the Company splits the contractand conduct accounting treatment respectively for all separate leases. Where the following conditionsare concurrently met, use of the rights of identified assets constitutes a separate lease in a contract: (1) alessee may earn profits from separate use of the assets or joint use with other resources readily available;and (2) there is no high dependence or high correlation between the assets and other assets in thecontract.
3. Accounting for leases to which the Company acts as a lessee
On the lease inception date, the Company considers a lease with a term of not more than 12 monthsand excluding the purchase option as a short-term lease, and a lease of a single leased asset withrelatively low value when the single leased assets is a new asset as a low-value asset lease.
For all the short-term leases and low-value asset leases, the Company includes lease payments inthe cost of related assets or profit or loss for the current period on a straight-line basis for each periodduring the lease term.
On the lease inception date, the Company recognizes the right-of-use assets and the lease liabilityfor the lease, except for the short-term lease and low-value asset lease that are subject to simplifiedtreatment.
On the lease inception date, the Company recognizes the present value of the lease payments thathave not been paid as a lease liability. When calculating the present value of the lease payments, theCompany adopts the interest rate implicit in the lease as the discount rate, and adopts its incrementalborrowing rate of the Company as the discount rate where it is unable to determine the interest rateimplicit in the lease. The difference between the lease payment and its present value is regarded as anunrecognized financing expense. For each period during the lease term, the interest expense isrecognized at the discount rate of the present value of the recognized lease payments and included inprofit and loss for the current period. Variable lease payments not included in the measurement of leaseliability are included in profit or loss in the period in which it is incurred.
On the lease inception date, in case of changes in substantial fixed payments, the residual value ofthe guarantee, the index or ratio used for determining the lease payments, the evaluation results andactual exercise of the purchase option, renewal option or termination of the lease option, the Companyre-measures the lease liability at the present value of changed lease payments.
4. Accounting for the changed leases to which the Company acts as a lessee
1)Lease change as a separate lease
Where the lease changes and meets the following conditions, the Company conducts accountingtreatment for the lease change as a separate lease: ① the lease change expands the lease scope byincreasing the right to use one or more leased assets; ② the increased consideration is equivalent to theindividual price of the expanded lease scope adjusted as per the contract.
2) Lease change not as a separate lease
On the effective date of the lease change, the Company re-determines the lease term andre-calculates the lease liability on the basis of the present value calculated as per the changed leasepayments or revised discount rate. When calculating the present value of the lease payments after change,the Company adopts the interest rate implicit in the lease during the residual lease term as the discountrate, and its incremental borrowing rate on the effective date of the lease change as the discount rate,where it is unable to determine the interest rate implicit in the lease during the lease term.The above effects of adjustment to the lease liability are accounted for separately by the Companyaccording to the following circumstances:
①Where the lease change results in a narrower lease scope or a shorter lease term, the Companyaccordingly reduces the carrying amount of the right-of-use assets and includes the relevant gain orloss of the partially or fully terminated lease in profit and loss for the current period.
②Where other lease changes result in re-measurement of the lease liability, the Companyaccordingly adjusts the book value of the right-of-use assets.
5. Accounting for leases to which the Company acts as a lessor
The Company recognizes the receipts of leases in current profit or loss on a straight-line basis foreach period during the lease term. The initial direct cost incurred by the Company is capitalized andapportioned on the same basis for the recognition of rental income, and be included in the current lossand profit in installments. Variable lease payments obtained by the Company in relation to operatingleases but not included in the lease receipts are included in profit or loss in the period in which they areincurred.
6. Accounting for changed leases to which the Company acts as a lessor
In the event of any change in an operating lease, the Company regards it as a new lease foraccounting treatment from the effective date of the change, and the advance or receivable lease receiptsrelated to the lease prior to the change are regarded as receipts of a new lease.
43. Other significant accounting policies and accounting estimates
□Applicable √N/A
44. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√Applicable □N/A
Changes in accounting policies
and related reasons
| Changes in accounting policies and related reasons | Approval procedure | Note (name and amount of materially affected items of the statements) |
| The Company implements the revised Accounting Standard for Business Enterprises No. 21 - Lease (“New Lease Standard”) from January 1, 2021. | The Company held the 19th meeting of the second board of directors and the 18th meeting of the second board of supervisors on April 21, 2021, reviewing and approving the Proposal on | 1.The Company has not assessed whether or not it is a lease or includes a lease for contracts that existed prior to January 1, 2021. 2. As the lessee, the Company shall not adjust the information |
Change of Accounting Policies,and the independent directors ofthe Company gave theindependent opinions on consent.The Company’s changes ofaccounting policy do not need tobe submitted to the generalmeeting of shareholders forreview. For details, please referto No. 2021-012, No. 2021-013and 2021-016 Announcements ofthe Company.
| Change of Accounting Policies, and the independent directors of the Company gave the independent opinions on consent. The Company’s changes of accounting policy do not need to be submitted to the general meeting of shareholders for review. For details, please refer to No. 2021-012, No. 2021-013 and 2021-016 Announcements of the Company. | for the comparable period in accordance with the relevant regulations on the convergence of old and new standards, and the differences arising from the implementation of new lease standard on the first implementation date is retrospectively adjusted to the amount of retained earnings and other related items in the financial statements at the beginning of the reporting period. |
Other descriptions:
(1) The implementation of new lease standards has no impact on the financial statements onJanuary 1, 2021.
(2)The operating leases prior to January 1, 2021 are accounted for in a simplified manner.
The Company regards the leases completed within 12 months from the date of first implementationas short-terms for accounting treatment, include the lease payments in the cost of related assets or profitor loss for the current period on a straight-line basis for each period during the lease term.
(3)The Company does not retrospectively adjust the leases to which the Company acts as a lessor.
(2). Changes in significant accounting estimates
□Applicable √N/A
(3). Description of adjustments in opening balances of line items in financial statements of the
current year due to first implementation of new lease standard since 2021
□Applicable √N/A
(4). Description of retrospective adjustments in comparative data in prior periods due to first
implementation of new lease standard in 2021
□Applicable √N/A
45. Others
□Applicable √N/A
VI. Tax
1. Major categories of taxes and tax rates
Major categories of taxes and tax rates
√Applicable □N/A
| Tax category | Taxation basis | Tax rate |
| VAT | VAT payable is the output tax based on the sales of goods and taxable labor income calculated pursuant to the tax law, net of the input tax that is allowed to be | 13%, 9%, 6% |
deducted in the current period
| deducted in the current period | ||
| Consumption tax | Taxable sales turnover (volume) | 15% |
| Business tax | ||
| Urban maintenance and construction tax | Actually paid turnover tax | 7%, 5% |
| Enterprise income tax | Taxable income | |
| Property tax | If it is levied on an ad valorem basis, the tax is calculated as 1.2% of the remaining value after being deducted 30% of the original value of the property; if it is levied subject to rent, the tax is calculated as 12% of the rental income. | 1.2%, 12% |
| Education surcharges | Actually paid turnover tax | 3% |
| Local education surcharges | Actually paid turnover tax | 2% |
Disclosure of taxpayers (if any) with different rates of enterprise income tax
√Applicable □N/A
| Taxpayer | Rate of enterprise income tax (%) |
| Proya Cosmetics Co., Ltd. | 15% |
| Y.N.M. Cosmetics Co., Ltd. | |
| HANNA COSMETICS CO., LTD. | |
| HAPSODE Co., Ltd. | |
| Hongkong Keshi Trading Limited | |
| Hongkong Xinghuo Industry Limited | |
| Hongkong Wanyan Electronic Commerce Co., Limited | |
| Hong Kong Zhongwen Electronic Commerce Co., Limited | |
| Hongkong Xuchen Trading Limited | |
| BOYA (Hong Kong) Investment Management Co., Limited | |
| Proya Europe SARL | |
| Off & Relax Co., Ltd. | |
| Tax payers other than those mentioned above [Note] | 25% |
[Note]: Y.N.M. Cosmetics Co., Ltd., HANNA COSMETICS CO., LTD. and HAPSODE Co., Ltd. paythe relevant taxes and fees in accordance with local tax regulations of South Korea; Hongkong KeshiTrading Limited, Hongkong Xinghuo Industry Limited, Hongkong Wanyan Electronic Commerce Co.,Limited, Hong Kong Zhongwen Electronic Commerce Co., Limited, Hongkong Xuchen TradingLimited and BOYA (Hong Kong) Investment Management Co., Limited pay the relevant taxes and feesin accordance with local tax regulations of Hong Kong; Proya Europe SARL pays the relevant taxes andfees in accordance with local tax regulations of Luxembourg; Off & Relax Co., Ltd. pays the relevanttaxes and fees in accordance with local tax regulations of Japan.
2. Tax incentives
√Applicable □N/A
The Company passed the high-tech enterprise review on December 1, 2020, obtained the High-techEnterprise Certificate which is valid for three years, and enjoys tax preferences from 2020 to 2022. TheCompany paid the enterprise income tax at the reduced tax rate of 15% in 2021.In accordance with the Notice of the Ministry of Finance and the State Administration of Taxationon Implementing the Inclusive Tax Deduction and Exemption Policies for Micro and Small Enterprises(C.S. [2019] No. 13) and the Announcement of the State Administration of Taxation on Issues
Concerning the Implementation of the Inclusive Income Tax Deduction and Exemption Policies for SmallLow-Profit Enterprises (Announcement No. 2 [2019] of the State Administration of Taxation), thesubsidiaries including Chaozhao Niuke Technology Co., Ltd. meet the tax payment standards as a microand small enterprise, and the annual taxable income of a small low-profit enterprise that is not more thanRMB 1 million shall be included in its taxable income at the reduced rate of 25%, with the applicableenterprise income tax rate of 20%; and the annual taxable income that is not less than RMB 1 millionnor more than RMB 3 million shall be included in its taxable income at the reduced rate of 50%, withthe applicable enterprise income tax rate of 20%.In accordance with the Announcement on Relevant Policies for Deepening the Value-Added TaxReform (Announcement No. 39 by the Ministry of Finance, the State Taxation Administration and theGeneral Administration of Customs in 2019) jointly issued by the Ministry of Finance, the State TaxationAdministration and the General Administration of Customs, Hangzhou Proya Commercial ManagementCo., Ltd. as the subsidiary meets the conditions of general taxpayers in production and life serviceindustry and thus is allowed to credit the amount of input tax deductible in the current period plus 10%thereof against the amount of taxes payable from April 1, 2019 to December 31, 2021.
3. Others
□Application √N/A
VII. Notes to consolidated financial statements
1. Cash
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance | Opening balance |
| Cash on hand | 4,920.44 | 26,853.58 |
| Deposits | 1,211,789,299.48 | 1,368,800,012.77 |
| Other currency funds | 24,543,486.83 | 47,827,774.58 |
| Total | 1,236,337,706.75 | 1,416,654,640.93 |
| Including: Total amount deposited aboard | 95,782,171.06 | 83,771,568.02 |
Other descriptions:
Among the bank deposits at the end of the period, the security deposit of fixed time deposit for thetransformer amounting to RMB 293,481.72, and the other currency funds including L/C security depositof RMB 7,000,000.00, and Tmall and Alipay security deposit of RMB 674,000.00 are restricted in theiruse.Among the bank deposits at the opening of the period, the security deposit of fixed time deposit forthe transformer amounting to RMB 293,481.72, and other currency funds including land constructionsecurity deposit of RMB 7,036,404.33, L/C security deposit of RMB 7,000,000.00, ETC vehicle securitydeposit of RMB 69,000.00, and Tmall and Alipay security deposit of RMB 405,000.00 are restricted intheir use.
2. Held-for-trading financial assets
□Application √N/A
3. Derivative financial assets
□Application √N/A
4. Notes receivable
(1). Notes receivable by category
□Application √N/A
(2). Notes receivable that have been pledged at the closing of the period
□Application √N/A
(3). Notes receivable endorsed or discounted by the Company that are not matured at the balance
sheet date
□Application √N/A
(4). Notes that are reclassified into accounts receivable by the Company at the closing of the
period due to the default of the drawer
□Application √N/A
(5). Disclosure by category based on methods of determination of provision for bad debts
□Application √N/A
(6). Provision for debt debts
□Application √N/A
(7). Notes receivable actually written off for the current period
□Application √N/A
Other descriptions:
□Application √N/A
5. Accounts receivable
(1). Disclosure by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging
| Aging | Gross carrying amount at the end of the period |
| Within 1 year | |
| Including: Subdivision within 1 year | |
| Sub-total within 1 year | 180,297,431.50 |
| 1-2 years | 16,855,014.19 |
| 2-3 years | 4,806,673.54 |
| Over 3 years | 3,227,933.65 |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 205,187,052.88 |
(2). Disclosure by category based on methods of determination of provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Provision for bad debts made individually:
√Applicable □N/A
Unit: Yuan Currency: RMB
Name
| Name | Closing balance | |||
| Gross carrying amount | Provision for bad debts | Proportion (%) | Reasons for provisions | |
| Provision for bad debts made individually | 17,721,155.26 | 17,721,155.26 | 100.00 | Expected to uncollectible |
| Total | 17,721,155.26 | 17,721,155.26 | 100.00 | / |
Descriptions of provision for bad debts made individually:
□Applicable √N/A
Provision for bad debts made by portfolio:
√Applicable □N/A
Items of portfolio provision: aging portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Proportion (%) | |
| Aging portfolio | 187,465,897.62 | 13,149,216.16 | 7.01 |
| Total | 187,465,897.62 | 13,149,216.16 | 7.01 |
Standards of provision for bad debts made by portfolio and descriptions thereof:
√Applicable □N/A
Accounts receivable for which the provide for bad debts is made by aging portfolio
| Aging | Closing balance | ||
| Gross carrying amount | Provision for bad debts | Provision (%) | |
| Within 1 year | 180,159,562.31 | 9,007,978.10 | 5.00 |
| 1-2 years | 4,360,229.05 | 1,308,068.72 | 30.00 |
| 2-3 years | 225,873.85 | 112,936.93 | 50.00 |
| Over 3 years | 2,720,232.41 | 2,720,232.41 | 100.00 |
| Category | Closing balance | Opening balance | ||||||||
| Gross carrying amount | Provision for bad debts | Carrying amount | Gross carrying amount | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | |||
| Provision for bad debts made individually: | 17,721,15 5.26 | 8.64 | 17,721,1 55.26 | 100.00 | 16,916,21 0.88 | 5.29 | 16,916,21 0.88 | 100.00 | ||
| Including: | ||||||||||
| Provision for bad debts made by portfolio: | 187,465,89 7.62 | 91.36 | 13,149,21 6.16 | 7.01 | 174,316,68 1.46 | 303,007,48 7.69 | 94.71 | 18,129,06 8.11 | 5.98 | 284,878,41 9.58 |
| Including: | ||||||||||
| Total | 205,187,05 2.88 | / | 30,870,37 1.42 | / | 174,316,68 1.46 | 319,923,69 8.57 | / | 35,045,27 8.99 | / | 284,878,41 9.58 |
Sub-total
| Sub-total | 187,465,897.62 | 13,149,216.16 | 7.01 |
If the provision for bad debts is made in accordance with the general model of expected credit losses,please refer to other receivables disclosure:
□Applicable √N/A
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Removal/write-off | Other changes | |||
| Provision for bad debts made individually | 16,916,210.88 | 804,944.38 | 17,721,155.26 | |||
| Provision for bad debts made by portfolio | 18,129,068.11 | -4,590,040.14 | 2,488.18 | 387,323.63 | 13,149,216.16 | |
| Total | 35,045,278.99 | -3,785,095.76 | 2,488.18 | 387,323.63 | 30,870,371.42 | |
Other decrease of RMB387,323.63 in the current period on provision for bad debts made byportfolio is attributable to the disposal of the equity of Shanghai Healthlong Biochemical TechnologyCo., Ltd. (hereinafter referred to as Shanghai Healthlong Company), and the provision for bad debts ofaccounts receivable were transferred out accordingly.Significant recovery or reversal of bad debt provision for the current period:
□Applicable √N/A
(4). Accounts receivable actually written off for the current period
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Write-off amount |
| Accounts receivable actually written off | 2,488.18 |
Descriptions of significant accounts receivable that are written off:
□Applicable √N/A
Descriptions of write-off of accounts receivable:
□Applicable √N/A
(5). Top five closing balances of accounts receivable categorized by debtor
√Applicable □N/A
| Entity | Gross carrying amount | Proportion to the balance of accounts receivable (%) | Provision for bad debts |
| Beijing Jingdong Century Trade Co., Ltd. | 48,927,371.11 | 23.85 | 2,446,368.56 |
| Zhejiang Youcaihua Network | 28,000,003.20 | 13.65 | 1,400,000.16 |
Technology Co., Ltd.
| Technology Co., Ltd. | |||
| Vipshop (China) Co., Ltd. | 17,522,428.20 | 8.54 | 876,121.42 |
| Zhejiang Tmall Network Technology Co., Ltd. | 12,935,983.66 | 6.30 | 646,799.19 |
| Jinhua Zhuangmei Cosmetics Co., Ltd. | 6,703,225.88 | 3.27 | 335,161.29 |
| Sub-total | 114,089,012.05 | 55.61 | 5,704,450.62 |
(6). Accounts receivable derecognized due to the transfer of financial assets
□Applicable √N/A
(7). Assets and liabilities generated by the transfer of accounts receivable and continuing
involvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
6. Receivable financing
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 5,263,729.60 | 5,531,997.32 |
| Total | 5,263,729.60 | 5,531,997.32 |
Increase or decrease of receivable financing for the current period and changes in its fair value
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses,please refer to other receivables disclosure:
□Applicable √N/A
Other descriptions:
√Applicable □N/A
Notes receivable endorsed or discounted at the end of the period by the Company that are not matured atthe balance sheet date
| Item | Balance derecognized at the end of the period |
| Bank acceptance bills | 10,003,394.98 |
| Sub-total | 10,003,394.98 |
The acceptor of bank acceptance bills is a commercial bank with high credit, and the possibility thatbank acceptance bills fail to be paid at maturity is low. Therefore, the Company derecognized theendorsed or discounted bank acceptance bills. However, if such notes fail to be paid when they are due,the Company will still be jointly and severally liable to the holders in accordance with the provisions ofthe Negotiable Instruments Law.
7. Prepayments
(1). Prepayments by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 88,000,110.35 | 98.67 | 81,149,897.32 | 98.07 |
| 1-2 years | 250,958.21 | 0.28 | 802,393.47 | 0.97 |
| 2-3 years | 932,894.12 | 1.05 | 790,525.13 | 0.96 |
| Over 3 years | ||||
| Total | 89,183,962.68 | 100.00 | 82,742,815.92 | 100.00 |
Reasons for overdue settlement of prepayments with significant amounts and aged more than 1 year:
None
(2). Top five closing balances of prepayments categorized by receivers
√Applicable □N/A
| Entity | Gross carrying amount | Proportion to the balance of prepayments (%) |
| Beijing Linkworld Network Technology Co., Ltd. | 14,906,011.57 | 16.71 |
| Alipay (China) Network Technology Co., Ltd. | 11,712,263.48 | 13.13 |
| Guangxi Jingdong Xinjie E-commerce Co., Ltd. | 11,034,497.87 | 12.37 |
| Beauty Hi-tech Innovation Co., Ltd. | 9,239,419.07 | 10.36 |
| MEDICOS CO., LTD. | 2,963,918.24 | 3.32 |
| Sub-total | 49,856,110.23 | 55.89 |
Other descriptions
□Applicable √N/A
8. Other receivables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 47,275,902.55 | 48,733,527.35 |
| Total | 47,275,902.55 | 48,733,527.35 |
Other descriptions:
□Applicable √N/A
Interest receivable
(1). Classification of interest receivable
□Applicable √N/A
(2). Significant overdue interest
□Applicable √N/A
(3). Provision for bad debts
□Applicable √N/A
Other descriptions:
□Applicable √N/A
Dividends receivable
(1). Dividends receivable
□Applicable √N/A
(2). Significant dividends receivable aged more than 1 year
□Applicable √N/A
(3). Provision for bad debts
□Applicable √N/A
Other descriptions:
□Applicable √N/A
Other receivables
(1). Disclosure by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging
| Aging | Gross carrying amount at the closing of the period |
| Within 1 year | |
| Including: Subdivision within 1 year | |
| Sub-total within 1 year | 44,708,548.69 |
| 1-2 years | 6,391,816.19 |
| 2-3 years | 657,020.04 |
| Over 3 years | 1,126,431.27 |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 52,883,816.19 |
(2). Classification of other receivables by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
| Nature | Gross carrying amount at the closing of the period | Gross carrying amount at the opening of the period |
| Security deposit | 23,068,954.00 | 15,177,436.77 |
| Temporary payments receivable | 27,640,452.53 | 39,073,769.81 |
| Revolving fund | 1,092,552.47 | 712,751.90 |
| Others | 1,081,857.19 | 744,011.86 |
| Total | 52,883,816.19 | 55,707,970.34 |
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Provision for bad debts | Stage I | Stage II | Stage III | Total |
| Future 12-month ECL | Lifetime ECL (without credit impairment) | Lifetime ECL (with credit impairment) | ||
| Balance as of January 1, 2021 | 2,141,110.96 | 3,171,320.29 | 1,662,011.74 | 6,974,442.99 |
| In the current period, balance as |
at January 1, 2021
| at January 1, 2021 | ||||
| -- transferred to Stage II | -528,624.19 | 528,624.19 | ||
| --transferred to Stage III | -970,286.21 | 970,286.21 | ||
| -- transferred back to Stage II | ||||
| -- transferred back to Stage I | ||||
| Provisions for the current period | 1,240,174.06 | 442,086.89 | -852,957.78 | 829,303.17 |
| Reversal for the current period | ||||
| Removal for the current period | ||||
| Write-off for the current period | ||||
| Other changes | -617,233.34 | -1,254,200.30 | -324,398.88 | -2,195,832.52 |
| Balance as of June 30, 2021 | 2,235,427.49 | 1,917,544.86 | 1,454,941.29 | 5,607,913.64 |
Descriptions of the significant changes in the gross carrying amount of other receivables for which thechanges in loss allowance occur for the current period:
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk offinancial instruments has increased significantly:
□Applicable √N/A
(4). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Removal/write-off | Other changes | |||
| Aging portfolio | 6,974,442.99 | 829,303.17 | -2,195,832.52 | 5,607,913.64 | ||
| Total | 6,974,442.99 | 829,303.17 | -2,195,832.52 | 5,607,913.64 | ||
Other changes of RMB -2,195,832.52 related to the disposal of the equity of Shanghai HealthlongCompany, and the provision for bad debts of other receivables were transferred out accordingly.Significant recovery or reversal of provision for bad debts for the current period:
□Applicable √N/A
(5). Other receivables actually written off for the period
□Applicable √N/A
(6). Top five closing balances of other receivables categorized by debtor
√Applicable □N/A
Unit: Yuan Currency: RMB
Entity
| Entity | Nature | Closing balance | Aging | Proportion to total closing balance of other receivables (%) | Closing balance of provision for bad debts |
| People’s Government of Taixi Town, Wuxing District, Huzhou City | Security deposit | 13,493,392.00 | Within 1 year | 25.52 | 674,669.60 |
| EURL PHARMATICA [Note] | Temporary payments receivable | 12,001,399.00 | Within 1 year | 22.69 | 600,069.95 |
| SIKEROM EUROPE GMBH | Temporary payments receivable | 7,857,909.71 | Within 1 year | 14.86 | 392,895.49 |
| Hangzhou Property Maintenance Fund Management Center | Security deposit | 4,708,614.72 | 1-2 years | 8.90 | 1,412,584.42 |
| Vipshop (China) Co., Ltd. | Security deposit | 500,000.00 | Within 1 year | 0.95 | 25,000.00 |
| Total | / | 38,561,315.43 | / | 72.92 | 3,105,219.46 |
[Note] The amounts in the line of EURL PHARMATICA are combined amounts of EURLPHARMATICA, PARISEZHAN HK LIMITED, SARL ORTUS and S.A.S AREDIS, which arecontrolled by the same person.
(7). Receivables involving government grants
□Applicable √N/A
(8). Other receivables derecognized due to the transfer of financial assets
□Applicable √N/A
(9). Assets and liabilities generated by the transfer of other receivables and continuing
involvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
9. Inventory
(1). Classification of inventories
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
Gross carryingamount
| Gross carrying amount | Provision for decline in value of inventories/ provision for decline in value of contract performance costs | Carrying amount | Gross carrying amount | Provision for decline in value of inventories/ provision for decline in value of contract performance costs | Carrying amount | |
| Raw materials | 16,756,263.44 | 930,262.55 | 15,826,000.89 | 25,023,198.10 | 790,191.51 | 24,233,006.59 |
| Goods in process | 13,068,407.69 | 279,667.64 | 12,788,740.05 | 19,699,809.41 | 333,215.45 | 19,366,593.96 |
| Goods on hand | 304,227,868.16 | 25,731,578.58 | 278,496,289.58 | 402,419,036.40 | 21,221,419.14 | 381,197,617.26 |
| Revolving materials | ||||||
| Consumable biological assets | ||||||
| Contract performance costs | ||||||
| Packing materials | 39,795,929.46 | 1,789,866.25 | 38,006,063.21 | 32,988,469.32 | 1,383,453.99 | 31,605,015.33 |
| Low-value consumables | 1,350,048.61 | 209,956.27 | 1,140,092.34 | 2,643,028.64 | 268,617.88 | 2,374,410.76 |
| Outsourcing gifts | 11,858,116.84 | 1,832,658.48 | 10,025,458.36 | 11,494,429.58 | 1,630,055.73 | 9,864,373.85 |
| Total | 387,056,634.20 | 30,773,989.77 | 356,282,644.43 | 494,267,971.45 | 25,626,953.70 | 468,641,017.75 |
(2). Provision for decline in value of inventories and provision for decline in value of contract
performance costs
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase for the current period | Decrease for the current period | Closing balance | ||
| Provision | Others | Recovery or reversal | Others | |||
| Raw materials | 790,191.51 | 140,198.05 | 127.01 | 930,262.55 | ||
| Goods in process | 333,215.45 | 38,845.85 | 92,393.66 | 279,667.64 | ||
| Goods on hand | 21,221,419.14 | 7,122,040.90 | 2,173,222.75 | 438,658.71 | 25,731,578.58 | |
| Revolving materials | ||||||
| Consumable biological assets | ||||||
| Contract performance costs | ||||||
| Packing | 1,383,453.99 | 947,035.84 | 540,623.58 | 1,789,866.25 | ||
materials
| materials | ||||||
| Low-value consumables | 268,617.88 | 17,763.19 | 59,081.59 | 17,343.21 | 209,956.27 | |
| Outsourcing gifts | 1,630,055.73 | 359,284.76 | 156,682.01 | 1,832,658.48 | ||
| Total | 25,626,953.70 | 8,625,168.59 | 3,022,003.59 | 456,128.93 | 30,773,989.77 |
The other decrease in the provision for decline in value of inventories for the period is RMB 456,128.93in the current period because the equity of Shanghai Healthlong Company was disposed and provisionfor decline in value of inventories was reversed.
At the end of the period, the net realizable value of some products is lower than the corresponding cost,so the provision for decline in value of inventories is made based on the excess of the cost over the netrealizable value.
(3). Descriptions of the closing balance of inventories including capitalized amount of
borrowing costs
□Applicable √N/A
(4). Descriptions of amortization of contract performance costs for the current period
□Applicable √N/A
Other descriptions:
□Applicable √N/A
10. Contract assets
(1). Descriptions of contract assets
□Applicable √N/A
(2). Significant changes in the carrying amount during the reporting period and reasons therefor:
□Applicable √N/A
(3). Descriptions of the provision for impairment made for contract assets for the current period
□Applicable √N/A
Other descriptions:
□Applicable √N/A
11. Held-for-sale assets
□Applicable √N/A
12. Non-current assets due within 1 year
□Applicable √N/A
13. Other current assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Contract acquisition cost | ||
| Cost of returns receivable | 2,401,805.37 | 4,434,684.01 |
| VAT input tax to be deducted | 42,865,528.18 | 24,162,220.64 |
Pre-paid taxes
| Pre-paid taxes | 6,638,906.62 | |
| Total | 45,267,333.55 | 35,235,811.27 |
Other descriptions:
None
14. Debt investments
(1). Descriptions of debt investments
□Applicable √N/A
(2). Other significant debt investments at the closing of the period
□Applicable √N/A
(3). Provisions for impairment
□Applicable √N/A
15. Other debt investments
(1). Descriptions of other debt investments
□Applicable √N/A
(2). Other significant debt investments at the closing of the period
□Applicable √N/A
(3). Provision for impairment
□Applicable √N/A
Other descriptions:
□Applicable √N/A
16. Long-term receivables
(1) Descriptions of long-term receivables
□Applicable √N/A
(2) Provision for bad debts
□Applicable √N/A
(3) Long-term receivables derecognized due to the transfer of financial assets
□Applicable √N/A
(4) Assets and liabilities generated by the transfer of long-term receivables and continuinginvolvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
17. Long-term equity investments
√Applicable □N/A
Unit: Yuan Currency: RMB
| Investee | Beginni- | Increase or Current decrease | Closing | Closing |
Other descriptions[Note] In April 2021, the Company increased the capital contribution to Zhuhai HealthlongBiotechnology Co., Ltd. in the form of 52% of equity held by it in Shanghai Healthlong Company. Afterthe increase in capital contribution completes, Shanghai Healthlong Company becomes a wholly-ownedsubsidiary of Zhuhai Healthlong Biotechnology Co., Ltd., and the Company holds 10.00% of equity inZhuhai Healthlong Biotechnology Co., Ltd. and has the right to appoint one director to ZhuhaiHealthlong Biotechnology Co., Ltd..
18. Other equity investment
(1). Descriptions of other equity investment
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance | Opening balance |
| Regenovo Biotechnology Co., Ltd. | 20,580,000.00 | 20,580,000.00 |
| ng balance | Additional investment | Decreased investment | Investm-ent gains or losses under equity method | Adjustme-nt in other comprehensive income | Other equity changes | Declared cash dividends or profits | Provisions for impairment | Others | balance | balance of provisions for impairment | |
| I. Joint ventures | |||||||||||
| Huzhou Panrui Industrial Investment Partnership (LP) | 3,306,630.57 | -5,579.63 | 3,301,050.94 | ||||||||
| Sub-total | 3,306,630.57 | -5,579.63 | 3,301,050.94 | ||||||||
| II. Associates | |||||||||||
| Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,985,511.35 | -53,464.43 | 2,932,046.92 | ||||||||
| Metis Information Technology (Guangzhou) Co., Ltd. | 6,304,430.78 | 136,366.94 | 6,440,797.72 | ||||||||
| Jiaxing Woyong Investment Partnership (LP) | 45,623,486.90 | 28,206,800.00 | -24,953.93 | 73,805,332.97 | |||||||
| Zhuhai Healthlong Biotechnology Co., Ltd. [Note] | 99,540,881.10 | -2,349,263.38 | 97,191,617.72 | ||||||||
| Beijing Xiushi Culture Development Co., Ltd. | 3,000,000.00 | -78,212.27 | 2,921,787.73 | ||||||||
| Sub-total | 54,913,429.03 | 130,747,681.10 | -2,369,527.07 | 183,291,583.06 | |||||||
| Total | 58,220,059.60 | 130,747,681.10 | -2,375,106.70 | 186,592,634.00 |
Total
| Total | 20,580,000.00 | 20,580,000.00 |
(2). Descriptions of investments in non-trading equity instruments
□Applicable √N/A
Other descriptions:
√Applicable □N/A
The Company makes external equity investments based on its strategic investment purposes, andthe investee will regard such investments made by the Company as an equity instrument. Therefore, theCompany designates the aforesaid equity instrument as financial assets at fair value through othercomprehensive income.
19. Other non-current financial assets
□Applicable √N/A
20. Investment property
Measurement of investment properties
(1). Investment properties measured at cost
Unit: Yuan Currency: RMB
| Item | Housing and buildings | Land use rights | Construction in progress | Total |
| I. Original costs: | ||||
| 1. Opening balance | 76,860,032.10 | 76,860,032.10 | ||
| 2. Current increase | 954,717.67 | 954,717.67 | ||
| (1) Outsourcing | ||||
| (2) Transfer from inventories/fixed assets/ construction in progress | 954,717.67 | 954,717.67 | ||
| (3) Increase due to business combinations | ||||
| 3. Current decrease | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | 77,814,749.77 | 77,814,749.77 | ||
| II. Accumulated depreciation and amortization | ||||
| 1. Opening balance | 4,622,422.00 | 4,622,422.00 | ||
| 2. Current increase | 1,372,911.82 | 1,372,911.82 | ||
| (1) Provision or amortization | 1,372,911.82 | 1,372,911.82 | ||
| 3. Current decrease | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | 5,995,333.82 | 5,995,333.82 | ||
| III. Provisions for impairment | ||||
| 1. Opening balance | ||||
| 2. Current increase | ||||
| (1) Provision |
3. Current decrease
| 3. Current decrease | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | ||||
| VI. Carrying Amount | ||||
| 1. Closing carrying amount | 71,819,415.95 | 71,819,415.95 | ||
| 2. Opening carrying amount | 72,237,610.10 | 72,237,610.10 |
(2). Investment properties whose title certificate has not completed：
□Applicable √N/A
Other descriptions:
□Applicable √N/A
21. Fixed assets
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 553,956,322.47 | 565,864,152.62 |
| Disposal of fixed assets | ||
| Total | 553,956,322.47 | 565,864,152.62 |
Other descriptions:
None
Fixed assets
(1). Descriptions of fixed assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Houses and buildings | Special equipment | Transportation facility | Total | |
| I. Original costs: | |||||
| 1. Opening balance | 533,689,138.34 | 177,652,603.03 | 21,224,973.25 | 62,250,935.84 | 794,817,650.46 |
| 2. Current increase | 4,729,102.52 | 4,584,670.52 | 51,327.43 | 3,314,473.03 | 12,679,573.50 |
| (1) Purchase | 1,111,363.72 | 4,584,670.52 | 51,327.43 | 3,314,473.03 | 9,061,834.70 |
| (2) Transfer from construction in progress | 3,617,738.80 | 3,617,738.80 | |||
| (3) Increase due to business combinations | |||||
| 3. Current decrease | 1,612,387.59 | 2,459,613.77 | 4,072,001.36 | ||
| (1) Disposal or retirement | 88,459.72 | 88,459.72 | |||
| (2) Other transfer-out [note] | 1,612,387.59 | 2,371,154.05 | 3,983,541.64 | ||
| 4. Closing balance | 538,418,240.86 | 182,237,273.55 | 19,663,913.09 | 63,105,795.10 | 803,425,222.60 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 89,221,072.09 | 101,568,423.97 | 12,505,940.35 | 25,658,061.43 | 228,953,497.84 |
2. Current increase
| 2. Current increase | 9,747,892.79 | 6,479,920.33 | 960,417.13 | 4,801,042.96 | 21,989,273.21 |
| (1) Provision | 9,747,892.79 | 6,479,920.33 | 960,417.13 | 4,801,042.96 | 21,989,273.21 |
| 3. Current decrease | 425,968.71 | 1,047,902.21 | 1,473,870.92 | ||
| (1) Disposal or retirement | 71,332.84 | 71,332.84 | |||
| (2) Other transfer-out | 425,968.71 | 976,569.37 | 1,402,538.08 | ||
| 4. Closing balance | 98,968,964.88 | 108,048,344.30 | 13,040,388.77 | 29,411,202.18 | 249,468,900.13 |
| III. Provisions for impairment | |||||
| 1. Opening balance | |||||
| 2. Current increase | |||||
| (1) Provision | |||||
| 3. Current decrease | |||||
| (1) Disposal or retirement | |||||
| (2) Other transfer-out | |||||
| 4. Closing balance | |||||
| VI. Carrying Amount | |||||
| 1. Closing carrying amount | 439,449,275.98 | 74,188,929.25 | 6,623,524.32 | 33,694,592.92 | 553,956,322.47 |
| 2. Opening carrying amount | 444,468,066.25 | 76,084,179.06 | 8,719,032.90 | 36,592,874.41 | 565,864,152.62 |
[Note] Other transfer-out in the original costs of fixed assets amounts to RMB 3,983,541.64 and othertransfer-out in the accumulated depreciation amounts to RMB 1,402,538.08 because the equity inShanghai Healthlong Company was disposed, and the original costs and accumulated depreciation offixed assets were transferred out correspondingly.
(2). Temporarily idle fixed assets
□Applicable √N/A
(3). Fixed assets leased in under financing leases
□Applicable √N/A
(4). Fixed assets leased out under operating leases
□Applicable √N/A
(5). Fixed assets whose title certificate has not completed
□Applicable √N/A
Other descriptions:
□Applicable √N/A
Disposal of fixed assets
□Applicable √N/A
22. Construction in progress
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance | Opening balance |
| Construction in progress | 115,081,293.14 | 47,324,523.36 |
| Project material | ||
| Total | 115,081,293.14 | 47,324,523.36 |
Other descriptions:
None
Construction in progress
(1). Descriptions of construction in progress
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
| Decoration project | 1,544,747.89 | 1,544,747.89 | 1,725,308.02 | 1,725,308.02 | ||
| Makeup factory | 27,281,335.63 | 27,281,335.63 | 28,236,822.35 | 28,236,822.35 | ||
| Proya building | ||||||
| Longwu R&D center construction project | 9,009,078.59 | 9,009,078.59 | ||||
| Huzhou production base expansion construction project (phase I) | 53,035,577.18 | 53,035,577.18 | ||||
| Other sporadic projects | 24,210,553.85 | 24,210,553.85 | 17,362,392.99 | 17,362,392.99 | ||
| Total | 115,081,293.14 | 115,081,293.14 | 47,324,523.36 | 47,324,523.36 | ||
(2). Changes in significant construction in progress for the period
√Applicable □N/A
Unit: Yuan Currency: RMB
(3). Provision for decline in value of construction in progress for the period
□Applicable √N/A
Other descriptions
□Applicable √N/A
Items
| Items | Expected amount | Opening balance | Current increase | Amount reclassified into fixed assets for the period | Other decreases for the period | Closing balance | Proportion of accumulated project investments to the budget (%) | Project progress | Accumulated amount of interest capitalization | Including: Accumulated amount of interest capitalization for the period | Rate of interest capitalization for the current period (%) | Funding source |
| Makeup factory | 66,110, 000 | 28,236,82 2.35 | 405,57 5.23 | 1,361,06 1.95 | 27,281,33 5.63 | 90.70 | 97.31 | Self- collected | ||||
| Proya building | 458,936, 300 | 4,572,45 6.47 | 3,617,73 8.80 | 954,71 7.67 | 83.22 | 100.00 | 9,206,1 86.05 | Self- collected | ||||
| Longwu R&D center construction project | 217,744, 500 | 9,009,07 8.59 | 9,009,07 8.59 | 4.14 | 4.14 | Self- collected | ||||||
| Huzhou expansion production base construction project (phase I) | 437,525, 400 | 53,035,57 7.18 | 53,035,57 7.18 | 12.12 | 12.12 | Self- collected | ||||||
| Total | 1,180,316, 200 | 28,236,82 2.35 | 67,022,68 7.47 | 4,978,80 0.75 | 954,71 7.67 | 89,325,99 1.40 | / | / | 9,206,1 86.05 | / |
Project materials
□Applicable √N/A
23. Bearer biological assets
(1). Bearer biological assets measured at cost
□Applicable √N/A
(2). Bearer biological assets measured at fair value
□Applicable √N/A
Other descriptions
□Applicable √N/A
24. Oil and gas assets
□Applicable √N/A
25. Use of right assets
□Applicable √N/A
26. Intangible assets
(1). Descriptions of intangible assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Land use rights | Software | Patent rights | Nonpatented technology | Customer recourses | Trademark right | Total |
| I. Original costs: | |||||||
| 1. Opening balance | 376,212,928.47 | 19,559,130.84 | 420,000.00 | 659,500.00 | 12,833,684.00 | 137,131.75 | 409,822,375.06 |
| 2. Current increase | 71,073,394.50 | 4,199,366.07 | 75,272,760.57 | ||||
| (1) Purchase | 71,073,394.50 | 4,115,295.27 | 75,188,689.77 | ||||
| (2) Internal research and development | |||||||
| (3) Increase due to business combinations | |||||||
| (4) Transfer-in from construction in progress | 84,070.80 | 84,070.80 | |||||
| 3. Current decrease | 427,966.61 | 126,900.00 | 554,866.61 | ||||
| (1) Disposal | |||||||
| (2) Other transfer-out [note] | 427,966.61 | 126,900.00 | 554,866.61 | ||||
| 4. Closing | 447,286,3 | 23,330,5 | 420,000 | 532,600.00 | 12,833,6 | 137,131. | 484,540, |
balance
| balance | 22.97 | 30.30 | .00 | 84.00 | 75 | 269.02 | |
| II. Accumulated amortization | |||||||
| 1. Opening balance | 68,955,031.99 | 17,764,824.37 | 420,000.00 | 528,525.00 | 7,486,315.67 | 24,354.06 | 95,179,051.09 |
| 2. Current increase | 5,633,846.55 | 935,930.62 | 1,630.00 | 2,138,947.33 | 13,637.37 | 8,723,991.87 | |
| (1) Provision | 5,633,846.55 | 935,930.62 | 1,630.00 | 2,138,947.33 | 13,637.37 | 8,723,991.87 | |
| 3. Current decrease | 288,075.61 | 288,075.61 | |||||
| (1) Disposal | |||||||
| (2) Other transfer-out [Note] | 288,075.61 | 288,075.61 | |||||
| 4. Closing balance | 74,588,878.54 | 18,412,679.38 | 420,000.00 | 530,155.00 | 9,625,263.00 | 37,991.43 | 103,614,967.35 |
| III. Provisions for impairment | |||||||
| 1. Opening balance | |||||||
| 2. Current increase | |||||||
| (1) Provision | |||||||
| 3. Current decrease | |||||||
| (1) Disposal | |||||||
| 4. Closing balance | |||||||
| VI. Carrying Amount | |||||||
| 1. Closing carrying amount | 372,697,444.43 | 4,917,850.92 | 2,445.00 | 3,208,421.00 | 99,140.32 | 380,925,301.67 | |
| 2. Opening carrying amount | 307,257,896.48 | 1,794,306.47 | 130,975.00 | 5,347,368.33 | 112,777.69 | 314,643,323.97 |
[Note] Other transfer-out in the original costs of fixed assets amounts to RMB 554,866.61 and othertransfer-out in the accumulated depreciation amounts to RMB 288,075.61 because the equity inShanghai Healthlong Company was disposed, and the original costs and accumulated depreciation offixed assets were transferred out correspondingly.
Proportion of intangible assets generated from the Company’s internal research and development to thebalance of intangible assets at the closing of the period: 0.00%
(2). The right to use the land whose title certificate has not completed
□Applicable √N/A
Other descriptions: none
□Applicable √N/A
27. Development expenditure
□Applicable √N/A
28. Goodwill
(1). Original costs of goodwill
√Applicable □N/A
Unit: Yuan Currency: RMB
Investee or eventforming goodwill
| Investee or event forming goodwill | Opening balance | Current increase | Current decrease | Closing balance | ||
| Formed by business combinations | Disposal | |||||
| Shanghai Healthlong Biochemical Technology Co., Ltd. | 31,034,161.20 | 31,034,161.20 | ||||
| Total | 31,034,161.20 | 31,034,161.20 | ||||
(2). Provision for impairment of goodwill
□Applicable √N/A
Unit: Yuan Currency: RMB
| Investee or event forming goodwill | Opening balance | Current increase | Current decrease | Closing balance | ||
| Provision | Disposal | |||||
| Shanghai Healthlong Biochemical Technology Co., Ltd. | ||||||
| Total | ||||||
(3). Relevant information regarding the asset portfolio and set of asset portfolios to which thegoodwill belongs
□Applicable √N/A
(4). Descriptions of the process of goodwill impairment testing, key parameters (such as the
growth rate of the forecast period, the growth rate of the stable period, the profit rate, thediscount rate and the forecast period, etc. when the present value of future cash flows areexpected, if applicable) and the recognition method of the impairment losses on goodwill:
□Applicable √N/A
(5). Impacts of goodwill impairment testing
□Applicable √N/A
Other descriptions:
□Applicable √N/A
29. Long-term prepaid expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase | Amortization | Other decreases | Closing balance |
| Decoration and rental fee | 33,212,097.20 | 5,128,945.23 | 8,511,189.18 | 1,038,383.80 | 28,791,469.45 |
| Endorsement fee | 16,863,206.70 | 7,783,018.86 | 9,080,187.84 | ||
| Garage usage fee | 385,900.48 | 96,474.96 | 289,425.52 | ||
| Software service fee | 115,589.15 | 50,068.15 | 26,543.16 | 139,114.14 |
Total
| Total | 50,576,793.53 | 5,179,013.38 | 16,417,226.16 | 1,177,497.94 | 38,161,082.81 |
Other descriptions:
Other decreases amount to RMB 1,177,497.94 because the equity in Shanghai Healthlong Company wasdisposed, and other long-term prepaid expenses were transferred out correspondingly.
30. Deferred tax assets / deferred tax liabilities
(1). Deferred income tax assets that are not offset
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income taxes Assets | Deductible temporary differences | Deferred income taxes Assets | |
| Provision for impairment of assets | ||||
| Unrealized profits of in-house transactions | 34,777,937.02 | 7,384,724.22 | 28,021,116.50 | 7,005,279.12 |
| Deductible losses | 54,823,543.17 | 13,705,885.79 | 14,342,610.24 | 3,585,652.56 |
| Provision for bad debts of accounts receivable | 22,958,476.78 | 5,739,196.02 | 27,188,715.77 | 6,796,972.50 |
| Provision for decline in value of inventories | 15,841,244.67 | 2,537,346.55 | 15,796,150.28 | 2,634,264.73 |
| Effect of share-based payment | 76,964,315.53 | 16,807,484.60 | 103,953,760.07 | 22,803,327.25 |
| Government grants related to assets | 7,455,808.33 | 1,118,371.25 | 8,495,353.33 | 1,274,303.00 |
| Member credits not exchanged | 8,836,723.45 | 2,209,180.86 | 4,487,591.14 | 1,121,897.79 |
| Expected losses on return | 5,900,432.41 | 1,475,108.11 | 5,755,415.21 | 1,438,853.81 |
| Total | 227,558,481.36 | 50,977,297.40 | 208,040,712.54 | 46,660,550.76 |
(2). Deferred tax liabilities that are not offset
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred income taxes Liabilities | Taxable temporary differences | Deferred income taxes Liabilities | |
| Value-added valuation of business combination not involving enterprises under common control | ||||
| Changes in fair value of other debt investments | ||||
| Changes in fair value of other investments in equity instruments | ||||
| One-time deduction of depreciation of fixed assets | 39,572,107.58 | 6,141,332.95 | 44,252,231.66 | 6,874,105.45 |
| Total | 39,572,107.58 | 6,141,332.95 | 44,252,231.66 | 6,874,105.45 |
(3). Deferred income tax assets or liabilities listed as net amount after offset
□Applicable √N/A
(4). Details of unrecognized deferred tax assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 28,452,553.38 | 25,362,258.78 |
| Deductible losses | 409,443,960.15 | 379,300,493.32 |
| Total | 437,896,513.53 | 404,662,752.10 |
(5). Deductible losses, for which no deferred tax assets are recognized, will expire in the
following year
√Applicable □N/A
Unit: Yuan Currency: RMB
| Year | Closing balance | Opening balance | Note: |
| 2021 | 48,418,743.43 | 48,812,246.22 | |
| 2022 | 62,924,802.76 | 62,924,802.76 | |
| 2023 | 63,485,783.30 | 63,485,783.30 | |
| 2024 | 99,748,285.21 | 99,748,285.21 | |
| 2025 | 104,329,375.83 | 104,329,375.83 | |
| 2026 | 30,536,969.62 | ||
| Total | 409,443,960.15 | 379,300,493.32 |
Other descriptions:
□Applicable √N/A
31. Other non-current assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
| Contract acquisition cost | ||||||
| Contract performance cost | ||||||
| Cost of returns receivable | ||||||
| Contract assets | ||||||
| Prepayment for long-term asset purchase | 5,731,163.01 | 5,731,163.01 | 87,322,780.03 | 87,322,780.03 | ||
| Total | 5,731,163.01 | 5,731,163.01 | 87,322,780.03 | 87,322,780.03 | ||
Other descriptions:
None
32. Short-term borrowings
(1). Classification of short-term borrowings
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance | Opening balance |
| Pledged borrowings | ||
| Mortgaged borrowings | ||
| Guaranteed borrowings | 99,116,462.50 | |
| Credit borrowings | 200,000,000.00 | 200,163,972.59 |
| Total | 200,000,000.00 | 299,280,435.09 |
Descriptions of classification of short-term borrowings:
None
(2). Descriptions of overdue short-term borrowings
□Applicable √N/A
Other descriptions:
□Applicable √N/A
33. Held-for-trading financial liabilities
□Applicable √N/A
34. Derivative financial liabilities
□Applicable √N/A
35. Notes payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance |
| Commercial acceptance bills | ||
| Bank acceptance bills | 63,672,739.08 | 64,580,000.00 |
| Total | 63,672,739.08 | 64,580,000.00 |
The total of notes payable due but not yet paid at the closing of the period is RMB 0.00.
36. Accounts payable
(1). Presentations of accounts payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Loan | 277,661,939.49 | 428,697,891.17 |
| Expenses payable | 56,545,217.33 | 69,493,675.06 |
| Engineering equipment payment | 12,530,902.29 | 17,640,465.04 |
| Total | 346,738,059.11 | 515,832,031.27 |
(2). Significant accounts payable aged more than one year
□Applicable √N/A
Other descriptions:
□Applicable √N/A
37. Advances from customers
(1). Presentation of advances from customers
□Applicable √N/A
(2). Significant advances from customers aged more than one year
□Applicable √N/A
Other descriptions:
□Applicable √N/A
38. Contract liabilities
(1). Descriptions of contract liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance | Opening balance |
| Advances from customers | 43,983,461.92 | 25,430,738.70 |
| Member credits not exchanged | 8,836,723.45 | 5,188,040.29 |
| Total | 52,820,185.37 | 30,618,778.99 |
(2). Significant changes in the carrying amount during the reporting period and reasons therefor
□Applicable √N/A
Other descriptions:
□Applicable √N/A
39. Employee benefits payable
(1). Presentation of employee benefits payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Current increase | Current decrease | Closing balance |
| 1. Short-term benefits | 70,254,622.82 | 210,468,522.10 | 228,089,801.82 | 52,633,343.10 |
| II. Post-employment benefits - defined contribution plans | 573,616.88 | 10,309,869.38 | 10,607,813.89 | 275,672.37 |
| III. Termination benefits | ||||
| IV. Other benefits due within 1 year | ||||
| Total | 70,828,239.70 | 220,778,391.48 | 238,697,615.71 | 52,909,015.47 |
(2). Presentation of short-term benefits
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Current increase | Current decrease | Closing balance |
| I. Wages or salaries, bonuses, allowances and subsidies | 68,643,838.60 | 191,612,938.58 | 208,338,101.90 | 51,918,675.28 |
| II. Staff welfare | 6,815.56 | 5,858,508.97 | 5,855,932.97 | 9,391.56 |
| III. Social insurance; | 882,228.00 | 7,172,419.81 | 7,638,847.11 | 415,800.70 |
Including: Medical care
| Including: Medical care | 776,190.95 | 6,812,844.77 | 7,207,183.76 | 381,851.96 |
| Work-related injury | 57,859.33 | 203,411.07 | 257,095.72 | 4,174.68 |
| Maternity | 48,177.72 | 156,163.97 | 174,567.63 | 29,774.06 |
| IV. Housing funds; | 721,740.66 | 5,425,796.06 | 5,858,061.16 | 289,475.56 |
| V. Union running costs and employee education costs; | 398,858.68 | 398,858.68 | ||
| VI. Short-term paid absences | ||||
| VII. Short-term profit share plan | ||||
| Total | 70,254,622.82 | 210,468,522.10 | 228,089,801.82 | 52,633,343.10 |
(3). Presentation of defined benefit plan
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Current increase | Current decrease | Closing balance |
| 1. Basic endowment | 546,117.72 | 9,957,166.67 | 10,237,307.78 | 265,976.61 |
| 2. Unemployment | 27,499.16 | 352,702.71 | 370,506.11 | 9,695.76 |
| 3. Enterprise pension fund | ||||
| Total | 573,616.88 | 10,309,869.38 | 10,607,813.89 | 275,672.37 |
Other descriptions:
□Applicable √N/A
40. Taxes payable
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| VAT | 37,072,212.41 | 25,557,167.53 |
| Consumption tax | 465.21 | 359.31 |
| Business tax | ||
| Enterprise income tax | 27,853,623.09 | 32,994,016.76 |
| Individual Income Tax | 1,143,757.11 | 1,193,830.42 |
| Urban maintenance and construction tax | 1,998,938.64 | 2,971,080.02 |
| Property tax | 4,052,264.13 | 5,822,344.89 |
| Education surcharges | 975,674.47 | 1,469,430.26 |
| Local education surcharges | 650,449.65 | 979,620.14 |
| Stamp tax | 84,218.47 | 330,703.60 |
| Disability security fund | 5,886.80 | 16,737.84 |
| Total | 73,837,489.98 | 71,335,290.77 |
Other descriptions:
None
41. Other payables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest payable | ||
| Dividends payable |
Other payables
| Other payables | 73,609,323.68 | 75,546,323.32 |
| Total | 73,609,323.68 | 75,546,323.32 |
Other descriptions:
None
Interest payable
□Applicable √N/A
Dividends payable
□Applicable √N/A
Other payables
(1). Other payables by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Security deposit | 54,254,673.00 | 54,289,062.52 |
| Repurchase obligations of restricted shares | 7,361,933.60 | 12,653,905.25 |
| Others | 11,992,717.08 | 8,603,355.55 |
| Total | 73,609,323.68 | 75,546,323.32 |
(2). Other significant payables aged more than one year
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Reasons for failure to be repaid or carried forward |
| Repurchase obligations of restricted shares | 7,361,933.60 | Repurchase obligations of restricted shares have not been fulfilled fully |
| Total | 7,361,933.60 | / |
Other descriptions:
□Applicable √N/A
42. Held-for-sale liabilities
□Applicable √N/A
43. Non-current liabilities due within one year
□Applicable √N/A
44. Other current liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Short-term bonds payable | ||
| Returns payable |
Pending output VAT
| Pending output VAT | 2,149,196.85 | 1,439,262.02 |
| Total | 2,149,196.85 | 1,439,262.02 |
Changes in short-term bonds payable:
□Applicable √N/A
Other descriptions: None
□Applicable √N/A
45. Long-term borrowings
(1). Classification of long-term borrowings
□Applicable √N/A
Other explanations, including interest rate range:
□Applicable √N/A
46. Bonds payable
(1). Bonds payable
□Applicable √N/A
(2). Changes in bonds payable (excluding preferred stocks, perpetual bonds and other financial
instruments classified as financial liabilities)
□Applicable √N/A
(3). Descriptions of conversion condition and time for convertible corporate bonds
□Applicable √N/A
(4). Descriptions of other financial instruments classified as financial liabilitiesBasic information of outstanding preferred shares, perpetual bonds and others financial instruments atthe closing of the period
□Applicable √N/A
Table of changes in outstanding preferred shares, perpetual bonds and others financial instruments at theclosing of the period
□Applicable √N/A
Basis for other financial instruments classified as financial liabilities
□Applicable √N/A
Other descriptions:
□Applicable √N/A
47. Lease liabilities
□Applicable √N/A
48. Long-term payables
Line items
□Applicable √N/A
Long-term payables
□Applicable √N/A
Special payables
□Applicable √N/A
49. Long-term employee benefits payable
□Applicable √N/A
50. Estimated liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Opening balance | Closing balance | Reason |
| Guarantees provided to outsiders | |||
| Pending lawsuits | |||
| Quality assurance | |||
| Restructuring obligations | |||
| Onerous contract to be performed | |||
| Returns payable | 10,190,099.22 | 6,052,681.88 | Possible future losses on return expected |
| Others | |||
| Total | 10,190,099.22 | 6,052,681.88 | / |
Other descriptions, including those of important assumptions and estimation related to significantestimated liabilities:
None
51. Deferred income
Deferred income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Current increase | Current decrease | Closing balance | Reason |
| Government grants | 8,495,353.33 | 1,039,545.00 | 7,455,808.33 | Allocated by the government | |
| Total | 8,495,353.33 | 1,039,545.00 | 7,455,808.33 | / |
Projects involving government grants
√Applicable □N/A
Unit: Yuan Currency: RMB
| Liabilities | Opening balance | Additional government grants for the current period | Amount recognized in non-operating income for the current period | Amount recognized in other comprehensive income for the current period | Other changes | Closing balance | Related to assets/income |
| Subsidy for | 8,495,353.33 | 1,039,545.00 | 7,455,808.33 | Related to |
technologicalinnovation ofcosmetics
| technological innovation of cosmetics | assets |
Other descriptions:
√Applicable □N/A
The government subsidies recognized in profit or loss for the current period are seen in the VII. 84Descriptions of government grants in Section X Financial Report for details.
52. Other non-current liabilities
□Applicable √N/A
53. Share capital
√Applicable □N/A
Unit: Yuan Currency: RMB
| Opening balance | Changes this time (+ or -) | Closing balance | |||||
| Issue of new shares | Bonus shares | Reserves Conversion of shares | Others | Sub-total | |||
| Total shares | 201,116,925 | 201,116,925 | |||||
Other descriptions:
Descriptions of share pledgeAs of June 30, 2021, the details of the frozen shares of majority shareholders of the Company are asfollows:
| Shareholder | Total number of shares held (share) | Number of frozen shares (share) | Freeze type |
| Fang Yuyou | 42,211,691 | 11,920,000 | Pledge |
| Sub-total | 42,211,691 | 11,920,000 |
54. Other equity instruments
(1) Basic information of outstanding preferred shares, perpetual bonds and others financialinstruments at the closing of the period
□Applicable √N/A
(2) Table of changes in outstanding preferred shares, perpetual bonds and others financialinstruments at the closing of the period
□Applicable √N/A
Changes in other equity instruments, reasons therefor and basis for relevant accounting treatment:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
55. Capital reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Opening balance | Current increase | Current decrease | Closing balance |
| Capital premium (share premium) | 794,285,959.20 | 8,816,160.85 | 790,675.05 | 802,311,445.00 |
| Other capital reserves | 42,748,877.49 | 4,787,988.53 | 8,816,160.85 | 38,720,705.17 |
| Total | 837,034,836.69 | 13,604,149.38 | 9,606,835.90 | 841,032,150.17 |
Other descriptions, including changes for the current period and reasons therefor:
1) Changes in capital premium
The capital premium (share premium) for the period increased by RMB 8,816,160.85, becauseother capital reserves recognized during the vesting period for the vested portion of restricted sharesissued under share incentive plan were transferred to the share premium.The capital premium (share premium) for the period decreased by RMB 790,675.05, because: ①the decrease by RMB 706,570.34 was caused by purchase of the minority shareholders’ equity of thesubsidiary Shanghai Zhongwen Electronic Commerce Co., Limited, and was the difference between thepayment and the share of the subsidiary’s identifiable net assets calculated according to thenewly-increased shareholding ratio; ② the decrease by RMB 84,104.71 was caused by purchase of theminority shareholders’ equity of Hongkong Zhongwen Electronic Commerce Co., Limited by thesubsidiary Hongkong Xinghuo Industry Limited, and was the difference between the payment and theshare of the subsidiary’s identifiable net assets calculated according to the newly-increased shareholdingratio.
2) Changes in other capital reserves
Other capital reserves for the period increased by RMB 4,787,988.53 because: ① the increase byRMB 3,763,087.45 included RMB 2,262,118.91 of the restricted share incentive expenses from Januaryto June 2021 recognized pursuant to the Company’s share incentive plan, which was charged to othercapital reserves; and included RMB 1,500,968.54 of the deferred tax assets for the excess of the amountexpected to be deductible before tax in the future periods over the recognized restricted share incentiveexpenses, which was charged to other capital reserves; ② the increase by RMB 1,024,901.08 was thedifference between the actual deductible amount of the vested portion and the amount previouslyrecognized, which was treated an adjustment to the capital reserve.
Other capital reserves for the period decreased by RMB 8,816,160.85, because the other capitalreserves recognized during the vesting period for the vested portion of restricted shares issued undershare incentive plan were transferred to the share premium.
56. Treasury stock
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Current increase | Current decrease | Closing balance |
| Restricted shares with repurchase obligations | 12,653,905.25 | 5,291,971.65 | 7,361,933.60 | |
| Total | 12,653,905.25 | 5,291,971.65 | 7,361,933.60 |
Other descriptions, including changes for the current period and reasons therefor:
The reason for the current decrease by RMB 5,291,971.65 was that: 1) the decrease by RMB4,964,976.45 was caused by the release of 293,265 restricted shares (the grant price of RMB 17.95/shareless RMB 1.02/share for accumulated dividends) by the Company pursuant to the Proposal on theSatisfaction of Vesting Conditions for the Second Release Period of the Initially Granted RestrictedShares and the Granted Reserved Portion under the 2018 Restricted Share Incentive Plan reviewed andapproved by the 18th meeting of the second board of directors dated January 5, 2021; 2) the decrease byRMB 326,995.20 was caused by the distributed dividends of 454,160 restricted shares that have not beenvested being offset against treasury shares and the corresponding adjustments to other payables.
57. Other comprehensive income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Opening balance | Amount for the current period | Closing balance | |||||
| Amounts before income tax for the current period | less: Amounts included in other comprehensive income for prior periods and transferred to the profit or loss for the current period | less: Amounts included in other comprehensive income for prior periods and transferred to the retained earnings for the current period | less: Income tax expenses | Attributable to the parent company after tax | Attributable to minority interests after tax | |||
| (I) Other comprehensive income that cannot be subsequently reclassified to profit or loss | ||||||||
| Including: Changes from re-measurement of defined benefit plans | ||||||||
| Other comprehensive income that cannot be reclassified to profit or loss under the equity method | ||||||||
| Changes in fair value of other investments in equity instruments | ||||||||
| Changes in fair value of enterprises’ own credit risks | ||||||||
| II. Other comprehensive income that will be reclassified to profit or loss | -269,066.13 | -396,595.34 | -396,595.34 | -665,661.47 | ||||
| Including: Other comprehensive income that will be reclassified to profit or loss under the equity method | ||||||||
| Changes in fair value of other debt investments | ||||||||
| Amounts of financial assets reclassified into other comprehensive income | ||||||||
| Provision for credit impairment of other debt investments | ||||||||
| Reserve for cash flow | ||||||||
hedges
| hedges | ||||||||
| Translation differences of financial statements denominated in foreign currencies | -269,066.13 | -396,595.34 | -396,595.34 | -665,661.47 | ||||
| Total of other comprehensive income | -269,066.13 | -396,595.34 | -396,595.34 | -665,661.47 |
Other descriptions, including adjustment of the effective part of the cash flow hedge gains and lossestransferred to initially recognized amount of hedged items:
None
58. Special reserve
□Applicable √N/A
59. Surplus reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Current increase | Current decrease | Closing balance |
| Statutory surplus reserve | 100,634,780.00 | 100,634,780.00 | ||
| Discretionary surplus reserve | ||||
| Reserve funds | ||||
| Enterprise development fund | ||||
| Others | ||||
| Total | 100,634,780.00 | 100,634,780.00 |
Descriptions of surplus reserve, including changes for the current period and reason therefor:
In accordance with the provisions of the Company Law, where the accumulated amount of the statutorysurplus fund of the Company exceeds 50 percent of its registered capital, further allocation may bedispensed with.
60. Unappropriated profit
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Repayment for the period | Previous year |
| Adjustments to unappropriated profit at the closing of the period period | 1,265,671,865.63 | 908,411,607.62 |
| Total adjustments to unappropriated profits at the opening of the period (increase indicated by “+”, or decrease indicated by “-”) | ||
| Unappropriated profit at the opening of the period after adjustment | 1,265,671,865.63 | 908,411,607.62 |
| Add: Net profit attributable to owners of the parent company for the current period | 226,101,313.86 | 476,009,298.41 |
| less: Appropriation to statutory surplus reserve | ||
| Appropriation to discretionary surplus reserve |
Appropriation to general riskreserve
| Appropriation to general risk reserve | ||
| Common stock dividends payable | 144,804,186.00 | 118,749,040.40 |
| Common stock dividends transferred to share capital | ||
| Closing unappropriated profit | 1,346,968,993.49 | 1,265,671,865.63 |
Details of adjustments to unappropriated profit at the opening of the period:
1. As a result of the retrospective adjustment under the Accounting Standards for Business Enterprisesand related new regulations, unappropriated profit at the opening of the period were affected byRMB0.00.
2. Unappropriated profit at the opening of the period was affected by RMB0.00 due to changes inaccounting policies.
3. Unappropriated profit at the opening of the period was affected by RMB0.00 due to the correction ofsignificant accounting errors.
4. Unappropriated profit at the opening of the period was affected by RMB0.00 due to changes in thescope of consolidation resulting from business combination involving enterprises under commoncontrol.
5. Unappropriated profit at the opening of the period was affected by RMB0.00 in total due to otheradjustments.
61. Revenue and cost of revenue
(1). Descriptions of revenue and cost of revenue
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 1,911,280,464.91 | 690,938,535.18 | 1,382,135,112.85 | 552,948,536.81 |
| Other operations | 6,438,032.69 | 4,619,754.01 | 2,188,736.03 | 2,171,918.35 |
| Total | 1,917,718,497.60 | 695,558,289.19 | 1,384,323,848.88 | 555,120,455.16 |
(2). Descriptions of revenue generated from contacts
□Applicable √N/A
(3). Descriptions of performance obligations
□Applicable √N/A
(4). Descriptions of allocation to remaining performance obligations
□Applicable √N/A
Other descriptions:
None
62. Taxes and surcharges
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Consumption tax | 56,425.63 | 19,373.48 |
| Business tax |
Urban maintenance andconstruction tax
| Urban maintenance and construction tax | 7,913,902.31 | 4,642,273.84 |
| Education surcharges | 3,977,896.25 | 2,391,100.89 |
| Resource tax | ||
| Property tax | 4,052,644.03 | 2,136,089.34 |
| Land use taxes | ||
| Vehicle and vessel use tax | 2,670.00 | 3,210.00 |
| Stamp Tax | 634,586.22 | 712,908.54 |
| Local education surcharges | 2,651,930.83 | 1,594,067.26 |
| Total | 19,290,055.27 | 11,499,023.35 |
Other descriptions:
None
63. Selling expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Image publicity and promotion | 651,005,247.16 | 334,763,800.09 |
| Employee benefits | 127,270,225.97 | 97,805,241.40 |
| Travel | 6,519,683.82 | 6,426,413.51 |
| Conference | 5,684,285.16 | 2,382,019.59 |
| Office | 14,176,924.87 | 8,889,179.33 |
| Investigation and consulting | 513,801.62 | 5,697,435.22 |
| Others | 2,034,463.16 | 1,450,343.06 |
| Total | 807,204,631.76 | 457,414,432.20 |
Other descriptions:
None
64. General and administrative expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Employee benefits and labor costs | 64,177,881.74 | 47,708,602.55 |
| Share-based payments | 2,262,118.91 | 5,103,364.67 |
| Depreciation, amortization and lease | 22,632,216.20 | 23,380,666.23 |
| Office and business entertainment | 16,334,487.33 | 10,813,515.29 |
| Consulting and intermediary agency | 4,861,065.35 | 9,116,773.89 |
| Travel, transportation and conference | 996,613.03 | 956,944.85 |
| Others | 4,926,790.49 | 3,102,487.67 |
| Total | 116,191,173.05 | 100,182,355.15 |
Other descriptions:
None
65. Research and development expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
Labor costs
| Labor costs | 20,466,648.49 | 21,620,983.90 |
| Entrusted research and development fees | 8,826,262.44 | 5,508,591.48 |
| Depreciation, amortization and lease fees | 1,053,552.11 | 1,985,453.64 |
| Direct investments | 785,036.60 | 1,202,200.16 |
| Others | 239,844.82 | 1,547,915.78 |
| Total | 31,371,344.46 | 31,865,144.96 |
Other descriptions:
None
66. Financial expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Other descriptions:
None
67. Other income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Government grants | 9,370,319.81 | 8,020,757.76 |
| Return of handling costs | 467,054.66 | 394,975.03 |
| Additional VAT input tax credit | 322,433.43 | 110,916.18 |
| Total | 10,159,807.90 | 8,526,648.97 |
Other descriptions:
The government subsidies recognized in profit or loss for the current period are seen in the VII. 84Descriptions of government grants in Section X Financial Report for details.
68. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Income from long-term equity investment accounted for using the equity method | -2,375,106.70 | -208,988.41 |
| Income from disposal of long-term equity investments | -3,546.24 | 261,034.21 |
| Investment income from held-for-trading financial assets during the holding period | ||
| Dividend income from other equity investment instruments during the holding period | ||
| Interest income from debt investment |
| Item | Amount for the current period | Amount for the prior period |
| Interest expenses | 5,082,866.57 | 2,502,979.38 |
| Interest income | -11,723,066.05 | -8,171,010.26 |
| Handling costs | 406,429.79 | 458,089.60 |
| Foreign exchange gains or losses | 4,369,640.90 | -2,164,539.48 |
| Total | -1,864,128.79 | -7,374,480.76 |
during the holding period
| during the holding period | ||
| Interest income from other debt investments during the holding period | ||
| Investment income from disposal of held-for-trading financial assets | ||
| Investment income from disposal of other investments in equity instruments | ||
| Investment income from disposal of debt investments | ||
| Investment income from disposal of other debt investments | ||
| Income from wealth management products | 2,266,301.37 | |
| Total | -2,378,652.94 | 2,318,347.17 |
Other descriptions:
None
69. Net exposure hedging income
□Applicable √N/A
70. Income from changes in fair values
□Applicable √N/A
71. Impairment losses of credit
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Losses on bad debts of notes receivable | ||
| Losses on bad debts of accounts receivable | 3,785,095.76 | 3,700,637.96 |
| Losses on bad debts of other receivables | -829,303.17 | -4,842,904.18 |
| Losses on impairment of debt investments | ||
| Losses on impairment of other debt investments | ||
| Losses on bad debts of long-term receivables | ||
| Losses on impairment of contract assets | ||
| Total | 2,955,792.59 | -1,142,266.22 |
Other descriptions:
None
72. Asset impairment losses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| I. Losses on bad debts | -8,625,168.59 | |
| II. Losses on decline in value of | -9,651,315.34 |
inventories and on impairment ofcontract performance costs
| inventories and on impairment of contract performance costs | ||
| III. Losses on impairment of long-term equity investments | ||
| IV. Losses on impairment of property | ||
| V. Losses on impairment of fixed assets | ||
| VI. Losses on impairment of project materials | ||
| VII. Losses on impairment of construction in progress | ||
| VIII. Losses on impairment of bearer biological assets | ||
| IX. Losses on impairment on oil and gas assets | ||
| X. Losses on impairment of intangible assets | ||
| XI. Losses on impairment of goodwill | ||
| XII. Others | ||
| Total | -8,625,168.59 | -9,651,315.34 |
Other descriptions:
None
73. Income from disposal of assets
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Income from disposal of fixed assets | -1,416.28 | |
| Total | -1,416.28 |
Other descriptions:
□Applicable √N/A
74. Non-operating income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period | Amount included in the non-recurring profit or loss for the current period |
| Total gains or losses from disposal of non-current assets; | |||
| Including: Gains from disposal of fixed assets | |||
| Gain from disposal of intangible assets | |||
| Gains from debt restructuring |
Gains from exchangeof non-monetaryassets
| Gains from exchange of non-monetary assets | |||
| Acceptance of donations | |||
| Government grants | |||
| Payments that do not need to be paid | 258,167.68 | ||
| Income from confiscation and liquidated damages | 54,435.00 | 54,435.00 | |
| Others | 60,008.12 | 147,700.63 | 60,008.12 |
| Total | 114,443.12 | 405,868.31 | 114,443.12 |
Government grants included in current profit or loss
□Applicable √N/A
Other descriptions:
□Applicable √N/A
75. Non-operating expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period | Amount included in the non-recurring profit or loss for the current period |
| Total losses on disposal of non-current assets; | 2,541.25 | ||
| Including: Losses on disposal of fixed assets | |||
| Losses on disposal of assets | |||
| Losses on debt restructuring | |||
| Losses on exchange of non-monetary assets | |||
| Offer of donations | 15,106,421.65 | ||
| Others | 60,174.49 | 396,831.91 | 60,174.49 |
| Total | 60,174.49 | 15,505,794.81 | 60,174.49 |
Other descriptions:
None
76. Income tax expenses
(1) Table of income tax expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Amount for the current period | Amount for the prior period |
| Current income tax | 46,005,920.10 | 48,977,958.94 |
| Deferred income tax | -2,523,649.52 | -2,093,955.30 |
| Total | 43,482,270.58 | 46,884,003.64 |
(2) Reconciliation of income tax expenses to the accounting profit
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period |
| Total profit | 252,131,763.97 |
| Income tax expenses calculated at legal/applicable tax rate | 63,032,940.99 |
| Effect of different tax rates among different subsidiaries on income tax expenses | -19,639,316.92 |
| Effect of adjustments to income tax in prior periods | 301,443.10 |
| Effect of nontaxable income | |
| Effect of non-deductible costs, expenses and losses | 269,390.94 |
| Effect of deductible tax losses for which no deferred tax assets were recognized in prior periods | -1,024,901.08 |
| Effect of deductible tax losses or deductible temporary differences for which no deferred tax asset was recognized in the current period | 4,591,378.58 |
| Additional deduction of R&D expense | -4,048,665.03 |
| Income tax expenses | 43,482,270.58 |
Other descriptions:
□Applicable √N/A
77. Other comprehensive income
√Applicable □N/A
For details, please see the Note VII 57 of Section X Financial Report.
78. Items in the cash flow statement
(1). Other cash receipts relating to operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Bank deposit interest income | 11,723,066.05 | 6,293,169.16 |
| Government grants | 2,840,774.81 | 7,066,546.09 |
| Intercourse funds and others | 27,195,817.12 | 13,986,126.29 |
| Total | 41,759,657.98 | 27,345,841.54 |
Descriptions of other cash receipts relating to operating activities:
None
(2). Other cash payments relating to operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
Image publicity and promotion
| Image publicity and promotion | 629,544,186.17 | 339,476,948.33 |
| Other cash payments | 165,528,596.63 | 60,364,118.72 |
| Intercourse funds and others | 49,745,240.01 | 67,229,843.63 |
| Total | 844,818,022.81 | 467,070,910.68 |
Descriptions of other cash payments relating to operating activities:
None
(3). Other cash receipts relating to investing activities
□Applicable √N/A
(4). Other cash payments relating to investing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Net cash payments received from disposal of subsidiaries | 61,087,857.19 | 1,579,710.89 |
| Total | 61,087,857.19 | 1,579,710.89 |
Descriptions of other cash payments relating to investing activities:
None
(5). Other cash receipts relating to financing activities
□Applicable √N/A
(6). Other cash payments relating to financing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Payments for share repurchase | ||
| Payments for minority shareholders’ equity | 486,631.52 | |
| Total | 486,631.52 |
Descriptions of other cash payments relating to financing activities:
None
79. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
√Applicable □N/A
Unit: Yuan Currency: RMB
| Supplementary information | Amount for the current period | Amount for the prior period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 208,649,493.39 | 173,684,403.26 |
| Add: Provision for asset impairment | 8,625,168.59 | 9,651,315.34 |
| Losses on credit impairment | -2,955,792.59 | 1,142,266.22 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of bearer biological assets | 23,362,185.03 | 21,086,926.72 |
| Amortization of use of right assets | ||
| Amortization of intangible assets | 8,723,991.87 | 7,451,720.65 |
Amortization of long-term prepaidexpenses
| Amortization of long-term prepaid expenses | 16,417,226.16 | 15,323,234.42 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gain is indicated by “-”) | 1,416.28 | |
| Losses on retirement of fixed assets (gain is indicated by “-”) | 2,541.25 | |
| Losses on changes in fair values (gain is indicated by “-”) | ||
| Financial expenses (gain is indicated by “-”) | 5,082,866.57 | 2,502,979.38 |
| Investment losses (gain is indicated by “-”) | 2,378,652.94 | -2,318,347.17 |
| Decrease in deferred tax assets (increase is indicated by “-”) | -1,790,877.02 | -9,803,891.20 |
| Increase in deferred tax liabilities (decrease is indicated by “-”) | -732,772.50 | 1,320,203.93 |
| Decrease in inventories (increase is indicated by “-”) | 94,250,565.71 | -95,079,103.25 |
| Decrease in receivables from operating activities (increase is indicated by “-”) | 49,348,525.29 | -42,304,967.59 |
| Increase in payables from operating activities (decrease is indicated by “-”) | -145,185,070.90 | -46,094,903.08 |
| Others | ||
| Net cash flow from operating activities | 266,175,578.82 | 36,564,378.88 |
| 2. Significant investing and financing activities that do not involve cash receipts and payments: | ||
| Conversion of debts into capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets leased in under financing leases | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 1,228,370,225.03 | 1,207,995,301.92 |
| less: Opening balance of cash | 1,401,850,754.88 | 1,099,092,785.07 |
| Add: Closing balance of cash equivalents | ||
| less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -173,480,529.85 | 108,902,516.85 |
(2) Net cash payments paid for acquisitions of subsidiaries for the current period
□Applicable √N/A
(3) Net cash payments received from disposal of subsidiaries for the current period
√Applicable □N/A
Unit: Yuan Currency: RMB
| amount |
Net cash payments received in the current period from currentdisposal of subsidiaries
| Net cash payments received in the current period from current disposal of subsidiaries | |
| Including: Shanghai Healthloog Company | |
| Less: Cash and cash equivalents held by subsidiaries on the date when the control is lost | 61,087,857.19 |
| Including: Shagnhai Healthloog Company | 61,087,857.19 |
| Add: Net cash payments received in the current period from prior disposal of subsidiaries | |
| Net cash payments received from disposal of subsidiaries | -61,087,857.19 |
Other descriptions:
1) In April 2021, the Company increased the capital contribution to Zhuhai Healthlong BiotechnologyCo., Ltd. in the form of 52% of equity held by it in Shanghai Healthlong Company. After the increase incapital contribution completes, Shanghai Healthlong Company becomes a wholly-owned subsidiary ofZhuhai Healthlong Biotechnology Co., Ltd., and the Company holds 10.00% of equity in ZhuhaiHealthlong Biotechnology Co., Ltd. and has the right to appoint one director to Zhuhai HealthlongBiotechnology Co., Ltd..
2) RMB 61,087,857.19 of cash and cash equivalents held by Shanghai Healthlong Company on the datewhen the control is lost is presented in the item “Other cash payments relating to investing activities” inthe statements.
(4) Composition of cash and cash equivalents
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 1,228,370,225.03 | 1,401,850,754.88 |
| Including: Cash on hand | 4,920.44 | 26,853.58 |
| Cash at bank that can be readily drawn on demand | 1,211,495,817.76 | 1,368,515,531.05 |
| Other cash balances that can be readily drawn on demand | 16,869,486.83 | 33,308,370.25 |
| Other cash balances with the central bank that can be readily drawn on demand | ||
| Interbank deposit | ||
| Interbank loans | ||
| II. Cash equivalents | ||
| Including: Debt investments due within three months | ||
| III. Closing balance of cash and cash equivalents | 1,228,370,225.03 | 1,401,850,754.88 |
| Including: Cash and cash equivalent with the limited use of the parent company or subsidiaries within the Group |
Other descriptions:
√Applicable □N/A
Descriptions of supplementary information to the cash flow statement
Unit: Yuan Currency: RMB
| Date | Balance of currency funds | Cash and cash equivalents | Difference | Reason |
June 30,2021
| June 30, 2021 | 1,236,337,706.75 | 1,228,370,225.03 | 7,967,481.72 | Closing bank deposits include RMB 293,481.72 of the security deposit of fixed time deposit for the transformer, and the other currency funds including RMB 7,000,000.00 of L/C security deposit, and RMB 674,000.00 of Tmall and Alipay security deposit |
| December 31, 2020 | 1,416,654,640.93 | 1,401,850,754.88 | 14,803,886.05 | i.e. RMB 293,481.72 of security deposit of fixed time deposit for the transformer, RMB 69,000.00 of ETC vehicle security deposit, and RMB 7,036,404.33 of land construction security deposit, RMB 7,000,000.00 of L/C security deposit and RMB 405,000.00 of Tmall and Alipay security deposit |
80. Notes to statement of changes in owners’ equity
Descriptions of name of the item “Others” and amount adjusted for the balance at the end of the previousyear:
□Applicable √N/A
81. Assets with restrictions in ownership or use right
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Carrying balance at the end of the period | Reasons for restriction |
| Currency funds | 7,967,481.72 | Security deposit for the transformer, L/C security deposit, and Tmall and Alipay security deposit, etc. |
| Notes receivable | ||
| Inventories | ||
| Fixed assets | ||
| Intangible assets | ||
| Total | 7,967,481.72 | / |
Other descriptions:
None
82. Monetary items denominated in foreign currency
(1). Monetary items denominated in foreign currency
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance of foreign currency | Exchange rate | Translated balance in RMB at the closing of the period |
| Currency funds | - | - | 89,218,164.09 |
| Including: USD | 546,815.67 | 6.4601 | 3,532,483.91 |
| EUR | 10,773,685.74 | 7.6862 | 82,808,703.33 |
| HKD | 3,080,390.55 | 0.83208 | 2,563,131.37 |
| JPY | 2,080.00 | 0.058428 | 121.53 |
CHF
| CHF | 22,953.14 | 7.0134 | 160,979.55 |
| KRW | 26,727,215.68 | 0.005714939 | 152,744.40 |
| Accounts receivable | - | - | 10,600,782.49 |
| Including: EUR | 435,991.03 | 7.6862 | 3,351,114.25 |
| HKD | 57,139.03 | 0.83208 | 47,544.24 |
| KRW | 1,260,227,657.83 | 0.005714939 | 7,202,124.00 |
| Long term loans | - | - | |
| Including: USD | |||
| EUR | |||
| HKD | |||
| Other receivables | - | - | 22,478,490.10 |
| Including: USD | 31,473.43 | 6.4601 | 203,321.51 |
| EUR | 2,865,596.08 | 7.6862 | 22,025,544.59 |
| HKD | 300,000.00 | 0.83208 | 249,624.00 |
| Accounts payable | - | - | 14,083,527.34 |
| Including: USD | 92,803.00 | 6.4601 | 599,516.66 |
| EUR | 1,700,134.55 | 7.6862 | 13,067,574.18 |
| HKD | 192,437.43 | 0.83208 | 160,123.34 |
| KRW | 44,849,676.83 | 0.005714939 | 256,313.16 |
| Other payables | - | - | 160,672.30 |
| Including：HKD | 5,975.00 | 0.83208 | 4,971.68 |
| KRW | 27,244,495.00 | 0.005714939 | 155,700.62 |
Other descriptions:
None
(2). Descriptions of overseas operating entities, including disclosure of the main overseasbusiness locations, functional currency and the basis for selection of important overseas operatingentities, and the reasons for changes in functional currency (if any)
√Applicable □N/A
HAPSODE Co., Ltd., HANNA COSMETICS CO., LTD and Y.N.M. Cosmetics Co., Ltd. operate inSouth Korea and their operating income and costs are mainly denominated in KRW, so they use KRWas their functional currency; Hongkong Xinghuo Industry Limited, Hong Kong Zhongwen ElectronicCommerce Co., Limited, Hong Kong Xuchen Trading Limited, Hongkong Keshi Trading Limited,BOYA (Hong Kong) Investment Management Co., Limited and Hongkong Wanyan ElectronicCommerce Co., Limited operate in Hong Kong, with RMB as the accounting currency; Off & Relax Co.,Ltd. is located in Japan, with business income and expenditure dominated by Japanese Yen, which isused as the accounting currency.
83. Hedging
□Applicable √N/A
84. Government grants
1. Basic information of government grants
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Amount | Line item | Amount included in profit or loss for the current period |
| Government subsidies related to assets | 1,039,545.00 | Other income | 1,039,545.00 |
| Government subsidies related to income | 8,330,774.81 | Other income | 8,330,774.81 |
2. Return of government grants
□Applicable √N/A
Other descriptions
1) Government subsidies related to assets
Items
| Items | Opening deferred income | Newly-added grants for the period | Amortization for the period | Closing deferred income | Line items of amortization for the period | Note |
| Subsidy for technological innovation of cosmetics | 8,495,353.33 | 1,039,545.00 | 7,455,808.33 | Other income | ||
| Sub-total | 8,495,353.33 | 1,039,545.00 | 7,455,808.33 |
According to the Decision on Awards for Technological Innovation of Proya Cosmetics Co., Ltd.Huzhou Branch by the People’s Government of Daixi Town, Huzhou City, the Company received atechnological innovation subsidy of RMB 14,561,400.00 from the People’s Government of Daixi Townin 2014, which was apportioned evenly over the useful life of related assets resulted therefrom by theCompany, and RMB 728,070.00 of which was recognized in other income for the current period.According to the Notice on Distributing the 2015 Industry-driven City Construction andDevelopment Funds (First Batch) (Hu Cai Qi [2015] No. 150) by Huzhou Finance Bureau and HuzhouEconomic and Information Technology Commission, the Company received a technological innovationsubsidy of RMB 2,350,000.00 from Huzhou Finance Bureau in 2015, which was apportioned evenlyover the useful life of related assets resulted therefrom by the Company, and RMB 117,500.00 of whichwas recognized in other income for the current period.According to the Notice on Distributing 2014 Special Funds (Second Batch) for District “MachineReplacing People” Project (Wu Fa Gai [2015] No. 18) by the Development Reform and EconomicCommission of Wuxing District, Huzhou City and the Finance Bureau of Wuxing District, the Companyreceived a technological innovation subsidy of RMB 500,000.00 from the Finance Bureau of WuxingDistrict in 2015, which was apportioned evenly over the useful life of related assets resulted therefromby the Company, and RMB 25,000.00 of which was recognized in other income for the current period.According to the Notice on Distributing the 2018 Special Funds for Industrial Development inHuzhao City (Second Batch) (Hu Cai Qi [2018] No. 319) by Huzhou Finance Bureau and HuzhouEconomic and Information Technology Commission, the Company received a technological innovationsubsidy of RMB 1,379,500.00 from Huzhou Finance Bureau in December 2018, which was apportionedevenly over the useful life of related assets resulted therefrom by the Company, and RMB 68,975.00 ofwhich was recognized in other income for the current period.
According to the Notice on Appropriation of Special Subsidy Funds for Demonstration SmartWorkshops in Wuxing District in 2019 (Wu Cai Qi Han [2020] No. 145), issued by the Finance Bureauof Wuxing District and the Development Reform and Economic Commission of Wuxing District, theCompany received a special subsidy for demonstration smart workshops of RMB 2,000,000.00 from theFinance Bureau of Wuxing District in May 2020, which was apportioned evenly over the useful life ofrelated assets resulted therefrom by the Company, and RMB 100,000.00 of which was recognized inother income for the current period.
2) Government grants related to income as compensation for related expenses or losses of theCompany to be incurred in subsequent periods
| Project | Amount | Line item | Description |
| Subsidy for work-based trainings | 294,500.00 | Other income | According to the Notice on Implementing Subsidies for Corporate Work-based Trainings (Hang Ren She Fa [2020] No. 94) by Hangzhou Bureau of Human Resources and Social Security and Hangzhou Finance Bureau, Hangzhou Vocational Ability Building Guidance Service Center caused the special fund account for employment (funds for |
skill improvement actions) to allocate the subsidyto the Company.
| skill improvement actions) to allocate the subsidy to the Company. | |||
| Subsidy for invention patent | 127,160.00 | Other income | According to the Notice of Zhejiang Department of Finance on Early Distributing 2020 Special Funds for Market Supervision and Intellectual Property (Zhe Cai Hang [2019] No. 51), the Market Supervision and Administration of Xihu District, Hangzhou City allocated the subsidy to the Company. |
| Industry support subsidy | 5,490,000.00 | Other income | ,The Finance Bureau of Meishan Free Trade Port Zone, Ningbo allocated the subsidy to the Company. |
| Special funds for scientific and technological development | 250,000.00 | Other income | According to the Notice on Distributing the Second Batch of Special Funds for Scientific and Technological Development in 2021 (Zhe Cai Ke Jiao [2021] No. 11) by Zhejiang Department of Finance and Zhejiang Department of Science and Technology, the Finance Bureau of Wuxing District allocated the subsidy to the Company. |
| Awards for high and new technology enterprises that are supported by the State | 200,000.00 | Other income | According to the Three-year Action Plan for the Cultivation of High-tech Enterprises in Hangzhou (2018-2020) by the General Office of the Hangzhou Municipal People’s Government, the Science and Technology Bureau of Xihu District, Hangzhou City allocated the subsidy to the Company. |
| Special funds for talent development | 180,000.00 | Other income | According to the Notice on Distributing the Fifth Batch of Special Funds for Talent Development in 2020 by the Organization Department of the CPC Huzhou City Committee, the Finance Bureau of Wuxing District, Huzhou City allocated the subsidy to the Company. |
| Job stabilization subsidy, special fund subsidy for service enterprises, intellectual property subsidy, financial support fund from Finance Bureau of Qingpu, etc. | 1,789,114.81 | Other income | The Resources and Social Security Bureau of Wuxing District, Huzhou City, Hangzhou Employment Management Service Center, the Market Supervision and Administration of Xihu District, Hangzhou City, and the Finance Bureau of Qingpu District, Shanghai allocated the subsidy to the Company. |
| Sub-total | 8,330,774.81 |
3) RMB 9,370,319.81 of government grants was recognized in profit or loss for the current period.
85. Others
□Applicable √N/A
VIII. Changes in the Consolidation Scope
1. Business combination not involving enterprises under common control:
□Applicable √N/A
2. Business combination involving enterprises under common control
□Applicable √N/A
3. Reverse purchase
□Applicable √N/A
4. Disposal of subsidiaries
Was there any circumstance under which a single disposal of the investment in subsidiaries will losecontrol?
□Applicable √N/A
Other descriptions:
□Applicable √N/A
5. Changes in scope of consolidation due to other reasons
Descriptions of changes in scope of consolidation caused by other reasons (such as establishment of anew subsidiary and liquidation of a subsidiary, etc.) and their relevant information:
√Applicable □N/A
(I) Increase in the scope of consolidation
Company name
| Company name | Method of equity acquisition | Time of equity acquisition | Capital contribution (RMB) | Contribution ratio |
| Xuzhou Proya Information Technology Co., Ltd. | Newly established subsidiary | January 2021 | 500,000.00 | 100.00% |
| Proya (Hainan) Cosmetics Co., Ltd. | Newly established subsidiary | January 2021 | 100.00% |
(II) Decrease in the scope of consolidation
| Company name | Method of disposal of equity | Time of disposal of equity | Daily net assets disposed (RMB) | Net profit from the opening of the period to the disposal date (RMB) |
| Shanghai Tiyu Cosmetics Co., Ltd. | Cancellation | April 2021 | -2,729,077.89 | -676.18 |
| Shanghai Healthlong Biochemical Technology Co., Ltd. | [Note] | April 2021 | 131,743,692.10 | -14,434,836.72 |
[Note] In April 2021, the Company increased the capital contribution to Zhuhai HealthlongBiotechnology Co., Ltd. in the form of 52% of equity held by it in Shanghai Healthlong Company. Afterthe increase in capital contribution completes, Shanghai Healthlong Company becomes a wholly-ownedsubsidiary of Zhuhai Healthlong Biotechnology Co., Ltd., and the Company holds 10.00% of equity inZhuhai Healthlong Biotechnology Co., Ltd. and has the right to appoint one director to ZhuhaiHealthlong Biotechnology Co., Ltd..
6. Others
□Applicable √N/A
IX. Interests in Other Entities
1. Interests in subsidiaries
(1). Composition of enterprise group
√Applicable □N/A
Name ofsubsidiary
| Name of subsidiary | Main business place | Place of registration | Business nature | Shareholding (%) | Method of acquisition | |
| Direct | Indirect | |||||
| Hangzhou Proya Trading Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
| Zhejiang Meili Valley E-commerce Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
| Huzhou Chuangdai E-commerce Co., Ltd. | Huzhou | Huzhou | Wholesale and retail | 100.00 | Establishment | |
| HAPSODE (Hangzhou) Cosmetics Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
| Huzhou Youzilai Trading Co., Ltd. | Huzhou | Huzhou | Wholesale and retail | 100.00 | Establishment | |
| Hongkong Xinghuo Industry Limited | Hong Kong | Hong Kong | Wholesale and retail | 100.00 | Establishment | |
| Ningbo TIMAGE Cosmetics Co., Ltd. | Ningbo | Ningbo | Wholesale and retail | 61.36 | Establishment | |
Descriptions of the difference between the shareholding ratio and the proportion of voting rights in asubsidiary:
None
Basis for holding half or less of the voting rights but still controlling the investee, and holding majorityof the voting right but having no control over the investee:
None
Basis for control over significant structured entities included in consolidation scope:
None
Basis for determining whether the Company acts as the agent or the principal:
None
Other descriptions:
None
(2). Significant non-wholly subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
Name ofsubsidiary
| Name of subsidiary | Shareholding of minority shareholders (%) | Profit or loss attributable to minority interests for the current period | Dividends declared for distribution to minority shareholders for the current period | Closing balance of minority interests |
| Ningbo TIMAGE Cosmetics Co., Ltd. | 38.64 | -3,270,441.67 | -11,907,069.70 |
Descriptions of the difference between the shareholding ratio of minority shareholders and theirproportion of voting rights in a subsidiary:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
(3). Key financial information of significant non-wholly subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
| Name of subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Ningbo TIMAGE Cosmetics Co., Ltd. | 42,270,95 0.45 | 84,124.14 | 42,355,07 4.59 | 72,556,87 2.37 | 72,556,87 2.37 | 42,477,9 67.12 | 85,01 0.07 | 42,562,97 7.19 | 64,300,89 9.00 | 64,300,89 9.00 | ||
| Name of subsidiary | Amount for the current period | Amount for the prior period | ||||||
| Revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Ningbo TIMAGE CosmetiQcs Co., Ltd. | 116,044,099.29 | -8,463,875.97 | -8,463,875.97 | -2,465,779.00 | 12,124,535.17 | -4,341,954.94 | -4,341,954.94 | 3,280,263.73 |
Other descriptions:
None
(4). Significant restrictions on the use of enterprise group assets and settlement of enterprise
group debts：
□Applicable √N/A
(5). Financial supports or other supports offered for the structured entities included in the
scope of consolidated financial statements：
□Applicable √N/A
Other descriptions:
□Applicable √N/A
2. Transactions through which the share of the owner’s equity in the subsidiary has changed andthe control on the subsidiary is still maintained
√Applicable □N/A
(1). Descriptions of changes in the share of owner’s equity in the subsidiary
√Applicable □N/A
Name of subsidiary
| Name of subsidiary | Change time | Shareholding ratio prior to change | Shareholding ratio after change |
| Shanghai Zhongwen Electronic Commerce Co., Limited | January 2021 | 83.00% | 100.00% |
| Hong Kong Zhongwen Electronic Commerce Co., Limited | January 2021 | 83.00% | 100.00% |
(2). Impacts of transactions on minority interests and equity attributable to owners of the parentcompany
√Applicable □N/A
Unit: Yuan Currency: RMB
| Shanghai Zhongwen Electronic Commerce Co., Limited | Hong Kong Zhongwen Electronic Commerce Co., Limited | |
| Purchase cost/disposal consideration | ||
| --Cash | ||
| -- Fair value of assets other than cash | ||
| Total purchase costs/disposal considerations | ||
| Less: Shares of net assets of the subsidiaries calculated at the acquired/disposed equity proportion | -706,570.34 | -84,104.71 |
| Difference | 706,570.34 | 84,104.71 |
| Including: Adjustments to capital reserve | 706,570.34 | 84,104.71 |
| Adjustments to surplus reserve | ||
| Adjustments to unappropriated profits | ||
Other descriptions
□Applicable √N/A
3. Interests in joint ventures or associates
√Applicable □N/A
(1). Significant joint ventures or associates
□Applicable √N/A
(2). Key financial information of significant joint ventures
□Applicable √N/A
(3). Key financial information of significant associates
□Applicable √N/A
(4). Summary of financial information of insignificant joint ventures and associates
√Applicable □N/A
Unit: Yuan Currency: RMB
| Closing balance / Amount for the current period | Opening balance / Amount for the prior period | |
| Joint ventures: | ||
| Total investment carrying amount | 3,301,050.94 | 3,306,630.57 |
| Total of the following items calculated based on the shareholding ratio | ||
| --Net profit | -5,579.63 | -3,033.40 |
| --Other comprehensive income | ||
| --Total comprehensive income | -5,579.63 | -3,033.40 |
| Associates: | ||
| Total investment carrying amount | 183,291,583.06 | 54,913,429.03 |
| Total of the following items calculated based on the shareholding ratio | ||
| --Net profit | -2,369,527.07 | -205,955.01 |
| --Other comprehensive income | ||
| --Total comprehensive income | -2,369,527.07 | -205,955.01 |
Other descriptionsNone
(5). Descriptions of significant restrictions on the ability of joint ventures or associates to
transfer funds to the Company
□Applicable √N/A
(6). Excess losses incurred by joint ventures or associates
□Applicable √N/A
(7). Unrecognized commitments related to investments in joint ventures
□Applicable √N/A
(8). Contingent liabilities related to investments in joint ventures or associates
□Applicable √N/A
4. Significant joint operations
□Applicable √N/A
5. Interests in structured entities not included in the scope of consolidated financial statementsDescriptions of structured entities not included in the scope of consolidated financial statements:
□Applicable √N/A
6. Others
□Applicable √N/A
X. Risks Related to Financial Instruments
√Applicable □N/A
As the goal of risk management, the Company intends to strike a balance between risks and returns,minimize the negative impact of risks on the Company’s operating performance, and maximize the
interests of shareholders and other equity investors. Based on this risk management goal, the Company’sbasic risk management strategy is to identify and analyze the its exposure to various risks, establish anappropriate maximum tolerance to risk, implement risk management, and monitor regularly andeffectively these exposures to ensure the risks are monitored at a certain level.The Company is exposed to various risks associated with financial instruments in its daily routines,primarily including credit risk, liquidity risk and market risk. The management has reviewed andapproved policies to manage these risks, summarized as below.
(I) Credit RiskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the otherparty by failing to discharge an obligation.
1. Management of credit risk
(1) Evaluation of credit risk
The Company assesses at each balance sheet date whether the credit risk of the underlying financialinstruments has increased significantly since initial recognition. In determining whether the credit riskhas increased significantly since initial recognition, the Company considers reasonable and supportableinformation that is available without undue cost or effort, including quantitative and qualitative analysisbased on historical data, ranking of external credit risks and forward-looking information. The Companycompares the risk of a default occurring on a financial instrument as at the balance sheet date with therisk of a default occurring on the financial instrument as at the date of initial recognition based onindividual financial instrument or financial instruments portfolio with similar credit risk characteristic, todetermine the change of the risk of a default occurring on a financial instrument over the expected life.The Company considers that the credit risk of financial instruments has increased significantlywhen one or more of the following quantitative and qualitative criteria are met:
1) The quantitative criterion primarily refers to a certain percentage of increase in the probability ofdefault over the remaining life of the financial instruments as of the balance sheet date when comparingwith that at initial recognition of the financial instruments;
2) The qualitative criteria include, inter alia, adverse material changes in business or financialconditions that are expected to cause a significant decrease in the debtor's ability to meet its debtobligations, and an actual or expected significant adverse change in the technological, market, economic,or legal environment of the debtor that results in a significant decrease in the debtor’s ability to meet itsdebt obligations.
(2) Definition of defaulted or credit-impaired assets
A financial asset is defined as defaulted when the financial instrument meets one or moreconditions stated as below, and the criteria of defining defaulted asset is consistent with the that ofdefining credit-impaired asset:
1) significant financial difficulty of the debtor;
2) a breach of contract terms with binding force by the debtor;
3) it is becoming probable that the borrower will enter bankruptcy or other financial reorganization;
or/and
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financialdifficulty, has granted to the debtor a concession that the creditor would not otherwise consider.
2. Measurement of expected credit loss (“ECL”)
Key parameters to measure ECL include the probability of default, loss given default and theexposure at default. The Company established models of the probability of default, loss given defaultand the exposure at default on the basis of qualitative analysis on historical statistical data (such ascounterparty ranking, guarantee methods, collateral category, and repayment way) and forward-lookinginformation.
3. Details of reconciliation of the opening balance and the closing balance of provision forimpairment of financial instruments can refer to the Notes VII 5, VII. 6 and VII. 8 of Section XFinancial Report in this report.
4. Credit risk exposure and credit risk concentration
The Company's credit risk is primarily from currency funds and receivables. In order to control therisks associated with aforementioned items, the Company has taken the following measures.
(1) Currency funds
The credit risk of the Company is limited because the Company has deposited bank deposits and
other monetary funds in banks with high credit ratings.
(2) Receivables
The Company continually evaluates the creditworthiness of its customers with deals on credit, andselects to deal with approved and creditworthy customers subject to the results of the credit assessmentwith monitoring the balance of its receivables, so as to ensure that the Company is not exposed tosignificant risk of bad debt.
No collaterals are required since the Company only deals with third parties that are approved andcreditworthy. The concentrated credit risks are managed by customers. As of June 30, 2021, theCompany was exposed to certain concentration of credit risks, as the Company’s accounts receivablefrom top 5 customers have accounted for 55.61% of the total balance of accounts receivable (December31, 2020: 49.92%). The Company held no collaterals or other credit ranking measures for the balance ofaccounts receivable.
The maximum exposure to the Company is the carrying amount of each financial asset in thebalance sheet.
(II) Liquidity Risk
Liquidity risk refer to the risk that the Company is in shortage of funds in performing obligationsthat are settled by delivering cash or another financial asset. Liquidity risk may derive from the inabilityto sell financial assets at fair value as soon as possible, or from the other party’s inability to repay itscontractual debt, or from debt that matures early or from the inability to generate expected cash flows.
In order to control this risk, the Company balances the continuity and flexibility of financing byusing various financing measures such as notes settlement and bank loans comprehensively and adopting
both long-term and short-term financing methods to optimize the financing structure. The Company hasreceived credit facilities from a number of commercial banks to satisfy its working capital requirementsand capital expenditures.Financial liabilities classified by remaining duration
Item
| Item | Closing balance | ||||
| Carrying amount | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 200,000,000.00 | 206,774,520.55 | 206,774,520.55 | ||
| Notes payable | 63,672,739.08 | 63,672,739.08 | 63,672,739.08 | ||
| Accounts payable | 347,238,059.11 | 347,238,059.11 | 347,238,059.11 | ||
| Other payables | 73,609,323.68 | 73,609,323.68 | 73,609,323.68 | ||
| Sub-total | 684,520,121.87 | 691,294,642.42 | 691,294,642.42 | ||
(Continued)
| Item | Closing amount for the prior year | ||||
| Carrying amount | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 299,280,435.09 | 306,965,009.72 | 306,965,009.72 | ||
| Notes payable | 64,580,000.00 | 64,580,000.00 | 64,580,000.00 | ||
| Accounts payable | 515,832,031.27 | 515,832,031.27 | 515,832,031.27 | ||
| Other payables | 75,546,323.32 | 75,546,323.32 | 75,546,323.32 | ||
| Sub-total | 955,238,789.68 | 962,923,364.31 | 962,923,364.31 | ||
(III) Market RiskMarket risk refers to the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in market prices. Market risk mainly includes interest rate risk and currencyrisk.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in market interest rates. Interest-bearing financial instruments with fixedinterest rates expose the Company to fair value interest rate risk, and interest-bearing financial
instruments with floating interest rates expose the company to cash flow interest rate risk. The Companydetermines the ratio of fixed-rate and floating-rate financial instruments based on the marketenvironment, and maintains an appropriate portfolio of financial instruments through regular review andmonitoring.
2. Foreign currency risks
Currency risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value orfuture cash flows of a financial instrument will fluctuate because of changes in market interest rates. TheCompany's exposure to the currency risk is primarily associated with the Company’s monetary assetsand liabilities dominated in foreign currencies. Since the Company mainly operates in Mainland Chinawith its principal activities denominated in RMB, the Company's exposure to the currency risk due tochanges in market is not material.The closing balance of the Company’s monetary assets and liabilities dominated in foreigncurrencies is seen in Note VII 82 of Section X Financial Report in this report.
XI. Disclosure of Fair Value
1. Closing balance of the fair value of assets and liabilities measured at fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance of fair value | |||
| Level 1 | Level 2 | Level 3 | Total | |
| I. Continuous fair value measurement | ||||
| (I) Held-for-trading financial assets | ||||
| 1. Financial assets at fair value through profit or loss | ||||
| (1) Investments in debt instruments | ||||
| (2) Investments in equity instruments | ||||
| (3) Derivative financial assets | ||||
| 2. Financial assets, at fair value through profit or loss | ||||
| (1) Investments in debt instruments | ||||
| (2) Investments in equity instruments | ||||
| (II) Other debt investments | ||||
| (III) Other investments in equity instruments | 20,580,000.00 | 20,580,000.00 | ||
| (IV) Investment properties | ||||
| 1. A land use right that is used to be leased out. | ||||
2. A building that is leased
out.
| 2. A building that is leased out. | ||||
| 3. A land use right held for transfer upon capital appreciation. | ||||
| (V) Biological assets | ||||
| 1. Consumable biological assets | ||||
| 2. Bearer biological assets | ||||
| Receivable financing | 5,263,729.60 | 5,263,729.60 | ||
| Total assets continuously measured at fair value | 25,843,729.60 | 25,843,729.60 | ||
| (VI) Held-for-trading financial liabilities | ||||
| 1. Financial liabilities at fair value through profit or loss | ||||
| Including: Issued tradable bonds | ||||
| Derivative financial liabilities | ||||
| Others | ||||
| 2. Financial liabilities designated as at fair value through profit or loss | ||||
| Total liabilities continuously measured at fair value | ||||
| II. Non-continuous fair value measurement | ||||
| (I) Held-for-sale assets | ||||
| Total assets not continuously measured at fair value | ||||
| Total liabilities not continuously measured at fair value |
2. Basis for determining the market price of continuous and non-continuous level 1 fair valuemeasurement items
□Applicable √N/A
3. Valuation techniques and qualitative and quantitative information of key parameters adoptedfor continuous and non-continuous level 2 fair value measurement items
□Applicable √N/A
4. Valuation techniques and qualitative and quantitative information of key parameters adoptedfor continuous and non-continuous level 3 fair value measurement items
√Applicable □N/A
1. For the held notes receivable, the par value is used to determine their fair value.
2. The fair value of other equity instrument investments of the Company is determined according
to the actual capital contribution.
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis ofunobservable parameters for continuous level 3 fair value measurement items
□Applicable √N/A
6. In case of transfers among levels for the current period, explain the transfer reasons andpolicies for determining transfer time point for continuous fair value measurement items
□Applicable √N/A
7. Changes in valuation techniques for the current period and reasons for changes
□Applicable √N/A
8. Fair value of financial assets and liabilities not measured at fair value
□Applicable √N/A
9. Others
□Applicable √N/A
XII. Related Party and Related Party Transactions
1. Parent company of the Company
□Applicable √N/A
2. Subsidiaries of the Company
For details of the subsidiaries of the Company, please see the notes.
√Applicable □N/A
The details of the subsidiaries of the Company are set out in Note IX of Section X in this report.
3. Joint ventures and associates of the Company
For details of the significant joint ventures or associates of the Company, please see the notes.
□Applicable √N/A
The details of other joint ventures or associates having related party transactions and balances with theCompany in the current period or prior periods are as follows:
□Applicable √N/A
4. Other related parties of the Company
√Applicable □N/A
Name of other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| Zhejiang Leqing Rural Commercial Bank Co., Ltd. | Others |
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Others |
| Xiongke Culture Media (Hangzhou) Co., Ltd. | Others |
| Beijing Mitangpai Cosmetics Co., Ltd. [Note 1] | Others |
| Metis Information Technology (Guangzhou) Co., Ltd. | Others |
| Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | Others |
| Zhuhai Healthlong Biotechnology Co., Ltd. | Others |
| Shaoqing City Keqiao District Qingteng Culture | Others |
Investment Co., Ltd.
| Investment Co., Ltd. | |
| Parisezhan HK Limited | Others |
| EURL PHARMATICA | Others |
| SARL ORTUS | Others |
| S.A.S AREDIS | Others |
| YOKIPLUS Co., Ltd. | Others |
| Shanghai YOKIPLUS Brand Management Co., Ltd. | Others |
| Pan Xiang | Others |
Other descriptions[Note 1] Beijing Mitangpai Cosmetics Co., Ltd. was revoked in August 2020.
[Note 2] Zhuhai Healthlong Biotechnology Co., Ltd. was a minority shareholder of Shanghai HealthloogCompany. In April 2021, the Company increased the capital contribution to Zhuhai HealthlongBiotechnology Co., Ltd. in the form of 52% of equity held by it in Shanghai Healthlong Company. Afterthe increase in capital contribution completes, Shanghai Healthlong Company becomes a wholly-ownedsubsidiary of Zhuhai Healthlong Biotechnology Co., Ltd., and the Company holds 10.00% of equity inZhuhai Healthlong Biotechnology Co., Ltd. and has the right to appoint one director to ZhuhaiHealthlong Biotechnology Co., Ltd..
5. Related party transactions
(1). Sales and purchase of goods, rendering and receipt of servicesTable of purchase of goods/ receipt of services
√Applicable □N/A
Unit: RMB0’000 Currency: RMB
| Related parties | Details of related party transactions | Amount for the current period | Amount for the prior period |
| Zhuhai Healthlong Biotechnology Co., Ltd. | Purchase of goods | 2,456.11 | |
| EURL PHARMATICA | Purchase of goods | 2,991.63 | |
| SARL ORTUS | Purchase of goods | 959.72 | |
| S.A.S AREDIS | Purchase of goods | 117.16 | |
| Metis Information Technology (Guangzhou) Co., Ltd. | Advertising and communication service fee | 117.50 | |
| Xiongke Culture Media (Hangzhou) Co., Ltd. | Video production service | 13.93 |
Table of sales of goods/ rendering of services
√Applicable □N/A
Unit: RMB0’000 Currency: RMB
| Related parties | Details of related party transactions | Amount for the current period | Amount for the prior period |
| Shanghai YOKIPLUS Brand Management Co., Ltd. | Sales of goods | 3,485.85 | 2,425.55 |
| YOKIPLUS Co., Ltd. | Sales of goods | 91.16 | 239.92 |
| Shaoqing City Keqiao District Qingteng Culture Investment Co., Ltd. | Sales of goods | 2.62 | |
| Zhejiang Leqing Rural Commercial Bank Co., Ltd. | Sales of goods | 1.41 |
Cosmetics Industry(Huzhou) InvestmentDevelopment Co., Ltd.
| Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | Sales of goods | 0.30 | |
| Parisezhan HK Limited | Sales of goods | 106.78 | |
| Beijing Mitangpai Cosmetics Co., Ltd. | Sales of goods | 224.95 |
Descriptions of related party transactions with respect to the sales and purchase of goods, rendering andreceipt of services
□Applicable √N/A
(2). Related entrusted management/contracting and entrusting management/outsourcingTable of the entrusted management/contracting of the Company:
□Applicable √N/A
Descriptions of related trusteeship/outsourcing
□Applicable √N/A
Table of the entrusting management/outsourcing of the Company:
□Applicable √N/A
Descriptions of related management/outsourcing
□Applicable √N/A
(3). Related leases
The Company as the lessor:
□Applicable √N/A
The Company as the lessee:
√Applicable □N/A
Unit: RMB0’000 Currency: RMB
| Name of lessors | Category of leased assets | Lease fees recognized in the current period | Lease fees recognized in the prior period |
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Workshop | 48.40 | 50.64 |
| Shanghai YOKIPLUS Brand Management Co., Ltd. | Office premises | 23.49 |
Descriptions of related leases
□Applicable √N/A
(4). Related guarantees
The Company as the guarantor
□Applicable √N/A
The Company as the guaranteed party
□Applicable √N/A
Descriptions of guarantees with related parties
□Applicable √N/A
(5). Lending funds of related parties
□Applicable √N/A
(6). Asset transfer and debt restructuring between related parties
□Applicable √N/A
(7). Compensation for key management
√Applicable □N/A
Unit: RMB0’000 Currency: RMB
Item
| Item | Amount for the current period | Amount for the prior period |
| Compensation for key management | 491.60 | 493.10 |
(8). Other related party transactions
√Applicable □N/A
The Company and its subsidiaries open bank accounts in Zhejiang Leqing Rural Commercial Bank Co.,Ltd. and collect deposit interest according to market interest rates.
(1) Deposit with the related-party banks
Unit: RMB0’000
| Related party | Descriptions of related-party transaction | Closing balance | Opening balance |
| Zhejiang Leqing Rural Commercial Bank Co., Ltd. | Bank deposit | 14,929.61 | 14,390.77 |
(2) Collection of interest from related parties
Unit: RMB0’000
| Related party | Descriptions of related-party transaction | Current amount | Prior amount |
| Zhejiang Leqing Rural Commercial Bank Co., Ltd. | Interest income | 317.84 | 286.55 |
6. Amounts due from / to related parties
(1). Amounts due from related parties
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Related parties | Closing balance | Opening balance | ||
| Gross carrying amount | Provision for bad debts | Gross carrying amount | Provision for bad debts | ||
| Account receivable | |||||
| Shanghai YOKIPLUS Brand Management Co., Ltd. | 1,183,869.84 | 59,193.49 | |||
| Sub-total | 1,183,869.84 | 59,193.49 | |||
Prepayments
| Prepayments | |||||
| Zhuhai Healthlong Biotechnology Co., Ltd. | 21,432,452.28 | ||||
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 43,000.00 | 44,000.00 | |||
| Shanghai YOKIPLUS Brand Management Co., Ltd. | 39,150.95 | ||||
| Sub-total | 43,000.00 | 21,515,603.23 | |||
| Other receivables | |||||
| EURL PHARMATICA [Note] | 12,001,399.00 | 600,069.95 | 24,167,639.75 | 1,208,381.99 | |
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 133,568.20 | 61,820.46 | 132,568.20 | 61,770.46 | |
| Pan Xiang | 75,000.00 | 22,500.00 | 75,000.00 | 22,500.00 | |
| Sub-total | 12,209,967.20 | 684,390.41 | 24,375,207.95 | 1,292,652.45 |
[Note] The amounts in the line of EURL PHARMATICA are combined amounts of EURLPHARMATICA, PARISEZHAN HK LIMITED, SARL ORTUS and S.A.S AREDIS, which arecontrolled by the same person.
(2). Amount due to related parties
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Related parties | Gross carrying amount at the end of the period | Gross carrying amount at the beginning of the period |
| Accounts payable | |||
| Metis Information Technology (Guangzhou) Co., Ltd. | 99,718.88 | ||
| S.A.S AREDIS | 263,358.19 | ||
| Sub-total | 363,077.07 | ||
| Contract liabilities | |||
| Shanghai YOKIPLUS Brand Management Co., Ltd. | 34,200.00 | ||
| Sub-total | 34,200.00 |
7. Commitments of related parties
□Applicable √N/A
8. Others
□Applicable √N/A
XIII. Share-based Payment
1. Overview of shared-based payment
√Applicable □N/A
Unit: Share Currency: RMB
Total amount of each type of equity instrumentsgranted by the Company in the current period
| Total amount of each type of equity instruments granted by the Company in the current period | N/A |
| Total amount of each type of equity instruments of the Company exercised in the current period | 293,265.00 |
| Total amount of each type of equity instruments of the Company lapsed in the current period | |
| Range of exercise prices and remaining contractual life of share options outstanding of the Company at the closing of the period | N/A |
| Range of exercise prices and remaining contractual life of other equity instruments outstanding of the Company at the closing of the period. | The grant price of the restricted shares granted is RMB 17.95 per share, and the term is 60 months from the grant date. |
Other descriptions
On July 12, 2018, in accordance with the Proposal on the Restricted Share Incentive Plan of theCompany in 2018 (Draft) and Its Summary reviewed and approved by the first extraordinary generalmeeting of the Company in 2018, and pursuant to the incentive plan, the Company proposed to grant nomore than 1,467,200 shares of restricted shares to the grantees, of which 1,201,100 shares were grantedfor the first time, and 266,100 shares were reserved. The restricted shares were initially granted on July12, 2018 to 32 persons including senior managers, middle managers and core backbones of theCompany (excluding independent directors, supervisors and shareholders who individually or jointlyhold more than 5% of the Company’s shares, or the de facto controllers and their respective spouse,parents, children) at the price of RMB 17.95/share. The source of the underlying shares involved in thisincentive plan is A-share common stock directionally by the Company to grantees. The effective periodof this incentive plan is from the date when the registration of grant of the restricted shares is completedto the date when all the restricted shares granted to the grantees are vested or repurchased and cancelled,but subject to 60 months at the longest. The restricted shares granted will be vested in three installmentswithin the next 36 months after the expiration of 12 months from the initially granted restricted shares at30%, 30% and 40%. Performance vesting conditions for the first release period: based on the operatingincome and net profit in 2017, the growth rate of operating income and net profit in 2018 shall not beless than 30.8% and 30.1%, respectively; performance vesting conditions for the second release period:
based on the operating income and net profit in 2017, the growth rate of operating income and net profitin 2019 shall not be less than 74.24% and 71.21%, respectively; performance vesting conditions for thethird release period: based on the operating income and net profit in 2017, the growth rate of operatingincome and net profit in 2020 shall not be less than 132.61% and 131.99%, respectively.
On July 12, 2018, the 22nd meeting of the first board of directors of the Company reviewed andapproved the Proposal on the Initial Grant of Restricted Shares to Grantees, determining the date July12, 2018 as the initial grant date. In the actual subscription process, some grantees voluntarily gave upthe subscription, and the Company actually granted 1,096,200 restricted shares.
On December 12, 2018, the 3rd meeting of the second board of directors of the Company reviewedand approved the Proposal on the Grant of Reserved Restricted Shares to Grantees, determining the dateDecember 12, 2018 as the grant date of reserved restricted shares. In the actual subscription process, allthe grantees completed the subscription, and the Company actually granted 266,100 restricted shares.
On December 30, 2019, the 10th meeting of the second board of directors of the Companyreviewed and approved the Proposal on the Satisfaction of Vesting Conditions for the First ReleasePeriod of the Initially Granted Restricted Shares and the Granted Reserved Portion under the 2018Restricted Share Incentive Plan, 369,500 restricted shares held by the grantees who meet the vestingconditions for the first release period were vested and circulated on January 6, 2020.
In accordance with the Proposal on Repurchase and Cancellation of Restricted Shares That HaveBeen Granted but Have Not Vested by Unqualified Grantees reviewed and approved by the 4th meetingof the second board of directors in 2019 and the first extraordinary general meeting of shareholders in2019 and the Proposal on Repurchase and Cancellation of Some Restricted Shares under Share
Incentive Plan reviewed and approved by the 8th meeting of the second board of directors in 2019, theCompany repurchased and cancelled 92,740 restricted shares and paid RMB 1,657,699.80 as repurchasepayments because some grantees left the office or failed to meet all vesting conditions of restrictedshares upon appraisal of performance for that period.On July 6, 2020, in accordance with the Proposal on Adjusting the 2020 Performance AppraisalIndex at the Company Level in the 2018 Restricted Share Incentive Plan and Related Documentsreviewed and approved by the second extraordinary general meeting of shareholders of the Company in2020, the Company revised the performance appraisal appraisal index for the third release period inoriginal incentive plan as the following: based on the operating income in 2017, and the growth rate ofoperating income in 2020 shall not be less than 110.22% and based on net profit in 2017, the growth rateof net profit in 2020 shall not be less than 131.99%.
On August 24, 2020, in accordance with the Proposal on Repurchase of Cancelled RestrictedShares under Share Incentive Plan reviewed and approved by the 15th and 16th meetings of the secondboard of directors in 2020, and the 3rd extraordinary general meeting of shareholders in 2020, theCompany repurchased and cancelled 152,635 restricted shares and paid RMB 2,584,110.55 as therepurchase payment because some grantees left the office or failed to meet all vesting conditions ofrestricted shares upon appraisal of performance for that period.The Company’s various equity instruments exercised for the current period were based on theProposal on the Satisfaction of Vesting Conditions for the Second Release Period of the InitiallyGranted Restricted Shares and the Granted Reserved Portion under the 2018 Restricted Share IncentivePlan reviewed and approved by the 18th meeting of the second board of directors on January 5, 2021,and accordingly 293,265 restricted shares held by the grantees who meet the Vesting Conditions for thesecond release period were vested and circulated on January 14, 2021.
2. Equity-settled share-based payment
√Applicable □N/A
Unit: Yuan Currency: RMB
Method of determining the fair value of equityinstruments on the grant date
| Method of determining the fair value of equity instruments on the grant date | Determined based on the share price on the grant date and grant price of restricted shares |
| Basis for determination of number of exercisable equity instruments | Estimated based on performance conditions of the release periods |
| Reasons for significant differences between estimates in the current period and those in the prior period | N/A |
| Accumulated amount of equity-settled share-based payment included in the capital reserve | 34,211,501.90 |
| Total expense recognized for the current period arising from equity-settled share-based payments. | 2,262,118.91 |
Other descriptionsNone
3. Cash-settled share-based payment
□Applicable √N/A
4. Modifications to and termination of share-based payment
□Applicable √N/A
5. Others
□Applicable √N/A
XIV. Commitments and Contingencies
1. Significant commitments
√Applicable □N/A
Significant commitments to outsiders as of the balance sheet data, and their nature and amount
On May 13, 2021, through being reviewed and approved by the 2020 annual general meeting ofshareholders of the Company, the Company intends to apply for publicly issuing not more than RMB803,500,000 A-share convertible corporate bonds, and the proceeds from issuance of convertiblecorporate bonds net of the issuance expenses will be used for the following projects:
Project
| Project | Total investments (RMB 0’000) | Proceeds to be invested |
| Huzhou production base expansion construction project (phase I) | 43,752.54 | 33,850.00 |
| Longwu R&D center construction project | 21,774.45 | 19,450.00 |
| Information system upgrade construction project | 11,239.50 | 9,050.00 |
| Replenishment of working capital | 18,000.00 | 18,000.00 |
| Total | 94,766.49 | 80,350.00 |
2. Contingencies
(1). Significant contingencies as of the balance sheet date
□Applicable √N/A
(2). Please also make explanations thereof if the Company has no significant contingency to be
disclosed：
□Applicable √N/A
3. Others
□Applicable √N/A
XV. Events After the Balance Sheet Date
1. Significant non-adjustment events
□Applicable √N/A
2. Profit distribution
□Applicable √N/A
3. Sales returns
□Applicable √N/A
4. Descriptions of other events after the balance sheet date
□Applicable √N/A
XVI. Other significant events
1. Corrections of previous accounting errors
(1). Retrospective restatement
□Applicable √N/A
(2). Prospective application
□Applicable √N/A
2. Debt restructuring
□Applicable √N/A
3. Replacement of assets
(1). Exchange of non-monetary assets
□Applicable √N/A
(2). Replacement of other assets
□Applicable √N/A
4. Annuity plan
□Applicable √N/A
5. Discontinued operations
□Applicable √N/A
6. Segment information
(1). Determination basis and accounting policies of reporting segments
√Applicable □N/A
The Company does not have diversified operations or cross-regional operations, so there is no reportingsegment. The Company’s main business income and costs classified by brand are as follows:
From January to June 2021
Brand
| Brand | Main business income | Main business costs | Gross profit |
| Proya | 1,487,120,837.44 | 508,232,715.85 | 978,888,121.59 |
| Other brands | 424,159,627.47 | 182,705,819.33 | 241,453,808.14 |
| Sub-total | 1,911,280,464.91 | 690,938,535.18 | 1,220,341,929.73 |
From January to June 2020
| Brand | Main business income | Main business costs | Gross profit |
| Proya | 1,131,438,646.00 | 393,086,772.23 | 738,351,873.77 |
| Other brands | 250,696,466.85 | 159,861,764.58 | 90,834,702.27 |
| Sub-total | 1,382,135,112.85 | 552,948,536.81 | 829,186,576.04 |
(2). Financial information of reporting segments
□Applicable √N/A
(3). If the Company has no reporting segment or is unable to disclose total assets and liabilities
of each reporting segments, please give the reason therefor
□Applicable √N/A
(4). Other descriptions
□Applicable √N/A
7. Other significant transactions and events affecting the investors’ decisions
□Applicable √N/A
8. Others
□Applicable √N/A
XVII. Notes to Key Items in the Financial Statements of the Parent Company
1. Accounts receivable
(1). Disclosure by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging
| Aging | Gross carrying amount at the end of the period |
| Within 1 year | |
| Including: Subdivision within 1 year | |
| Sub-total within 1 year | 473,628,112.49 |
| 1-2 years | 44,732,356.05 |
| 2-3 years | 12,435,009.76 |
| Over 3 years | 346,836.70 |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 531,142,315.00 |
(2). Disclosure by categories based on methods of determination of provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Gross carrying amount | Provision for bad debts | Carrying amount | Gross carrying amount | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | |||
| Provision for bad debts made individually | ||||||||||
| Including: | ||||||||||
| Provision for bad debts made by portfolio: | ||||||||||
| Including: | ||||||||||
| Aging portfolio | 531,142,315.00 | 100.00 | 43,665,454.02 | 8.22 | 487,476,860.98 | 617,474,114.36 | 100.00 | 52,436,703.21 | 8.49 | 565,037,411.15 |
| Total | 531,142,315.00 | / | 43,665,454.02 | / | 487,476,860.98 | 617,474,114.36 | / | 52,436,703.21 | / | 565,037,411.15 |
Provision for bad debts made individually:
□Applicable √N/A
Provision for bad debts made by portfolio:
√Applicable □N/A
Items of portfolio provision: aging portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Proportion (%) | |
| Within 1 year | 473,628,112.49 | 23,681,405.62 | 5.00 |
| 1-2 years | 44,732,356.05 | 13,419,706.82 | 30.00 |
| 2-3 years | 12,435,009.76 | 6,217,504.88 | 50.00 |
| Over 3 years | 346,836.70 | 346,836.70 | 100.00 |
| Total | 531,142,315.00 | 43,665,454.02 | 8.22 |
Standards of provision for bad debts made by portfolio and descriptions thereof:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses,please refer to other receivables disclosure:
□Applicable √N/A
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Category
| Category | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Removal/write-off | Other changes | |||
| Provision for bad debts made by portfolio | 52,436,703.21 | -8,771,177.49 | 71.70 | 43,665,454.02 | ||
| Total | 52,436,703.21 | -8,771,177.49 | 71.70 | 43,665,454.02 | ||
Significant recovery or reversal of bad debt provision for the current period:
□Applicable √N/A
(4). Accounts receivable actually written off for the current period
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Write-off amount |
| Accounts receivable actually written off | 71.70 |
Descriptions of significant accounts receivable that are written off:
□Applicable √N/A
Descriptions of write-off of accounts receivable:
□Applicable √N/A
(5). Top five closing balances of accounts receivable categorized by debtor
√Applicable □N/A
Unit: Yuan Currency: RMB
| Unit | Gross carrying amount | Proportion to the balance of accounts receivable (%) | Provision for bad debts |
| Hangzhou Proya Trade Co., Ltd. | 257,333,981.88 | 48.45 | 12,866,699.09 |
| Huzhou Youzilai Trade Co., Ltd. | 84,766,828.65 | 15.96 | 10,021,930.53 |
| Zhejiang Meili Valley E-commerce Co., Ltd. | 64,862,788.89 | 12.21 | 3,243,139.44 |
| Hangzhou Proya Business Management Co., Ltd. | 44,351,306.05 | 8.35 | 4,435,130.61 |
| Ningbo TIMAGE Cosmetics Co., Ltd. | 24,017,820.47 | 4.52 | 1,200,891.02 |
| Sub-total | 475,332,725.94 | 89.49 | 31,767,790.69 |
(6). Accounts receivable derecognized due to the transfer of financial assets
□Applicable √N/A
(7). Assets and liabilities generated by the transfer of accounts receivable and continuing
involvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
2. Other receivables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 233,121,481.53 | 236,585,409.48 |
| Total | 233,121,481.53 | 236,585,409.48 |
Other descriptions:
□Applicable √N/A
Interest receivable
(1). Classification of interest receivable
□Applicable √N/A
(2). Significant overdue interest
□Applicable √N/A
(3). Provision for bad debts
□Applicable √N/A
Other descriptions:
□Applicable √N/A
Dividends receivable
(1). Dividends receivable
□Applicable √N/A
(2). Significant dividends receivable aged more than 1 year
□Applicable √N/A
(3). Provision for bad debts
□Applicable √N/A
Other descriptions:
□Applicable √N/A
Other receivables
(1). Disclosure by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging
| Aging | Gross carrying amount at the end of the period |
| Within 1 year | |
| Including: Subdivisions within 1 year | |
| Sub-total within 1 year | 100,446,944.93 |
| 1-2 years | 183,038,555.89 |
| 2-3 years | 35,777,727.67 |
| Over 3 years | 123,559,056.72 |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 442,822,285.21 |
(2). Classification of other receivables by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
| Nature | Gross carrying amount at the end of the period | Gross carrying amount at the beginning of the period |
| Borrowings | 423,287,910.34 | 402,005,709.08 |
| Security deposit | 17,784,706.72 | 5,100,314.72 |
| Revolving funds | 591,388.00 | 932,910.70 |
| Others | 1,158,280.15 | 4,924.76 |
| Total | 442,822,285.21 | 408,043,859.26 |
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Provision for bad debts | Stage I | Stage II | Stage III | Total |
| Future 12-month ECL | Lifetime ECL (without credit impairment) | Lifetime ECL (with credit impairment) | ||
| Balance as of January 1, 2021 | 8,005,556.84 | 2,792,224.42 | 160,660,668.52 | 171,458,449.78 |
| In the current period, balance as at January 1, 2021 | ||||
| -- transferred to Stage II | -7,875,997.27 | 7,875,997.27 | ||
| --transferred to Stage III | -13,879.80 | 13,879.80 | ||
| -- transferred back to Stage II | ||||
| -- transferred back to Stage I | ||||
| Current provision | 1,585,733.49 | 36,601,641.74 | 54,978.67 | 38,242,353.90 |
| Current reversal |
Current removal
| Current removal | ||||
| Current write-off | ||||
| Other changes | ||||
| Balance as of June 30, 2021 | 1,715,293.06 | 47,255,983.63 | 160,729,526.99 | 209,700,803.68 |
Descriptions of the significant changes in the gross carrying amount of other receivables for which thechanges in loss allowance occur for the current period:
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk offinancial instruments has increased significantly:
□Applicable √N/A
(4). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Current changes | Closing balance | |||
| Provision | Recovery or reversal | Removal/write-off | Other changes | |||
| Provisions for bad debts made individually | 160,573,168.52 | 160,573,168.52 | ||||
| Provisions for bad debts by portfolio | 10,885,281.26 | 38,242,353.90 | 49,127,635.16 | |||
| Total | 171,458,449.78 | 38,242,353.90 | 209,700,803.68 | |||
Significant recovery or reversal of provision for bad debts for the current period:
□Applicable √N/A
(5). Other receivables actually written off for the current period
□Applicable √N/A
Descriptions of significant other receivables that are written off:
□Applicable √N/A
(6). Top five closing balances of other receivables categorized by debtors
√Applicable □N/A
Unit: Yuan Currency: RMB
| Entity | Nature | Closing balance | Aging | Proportion to total closing balance of other receivables (%) | Closing balance of provision for bad debts |
| Hapsode (Hangzhou) Cosmetics Co., Ltd. | Borrowings | 249,730,591.44 | [Note 1] | 56.40 | 159,856,503.49 |
HongkongXinghuoIndustryLimited
| Hongkong Xinghuo Industry Limited | Borrowings | 142,545,790.44 | [Note 2] | 32.19 | 41,432,595.43 |
| Ningbo TIMAGE Cosmetics Co., Ltd. | Borrowings | 16,304,983.36 | [Note 3] | 3.68 | 4,661,849.17 |
| People’s Government of Taixi Town, Wuxing District, Huzhou City | Security deposit | 13,493,392.00 | Within 1 year | 3.05 | 674,669.60 |
| Ningbo Keshi Trade Co., Ltd. | Borrowings | 5,170,833.38 | Within 1 year | 1.17 | 258,541.67 |
| Total | / | 427,245,590.62 | / | 96.49 | 206,884,159.36 |
[Note 1] Within 1 year: RMB 66,096,979.69，1-2 years: RMB 24,476,318.83, 2-3 years: RMB35,731,461.67, and over 3 years: RMB 123,425,831.25.[Note 2] Within 1 year: RMB 5,324,566.81, and 1-2 years: RMB 137,221,223.63.[Note 3] Within 1 year: RMB RMB 918,583.36 and 1-2 years: RMB 15,386,400.
(7). Receivables involving government grants
□Applicable √N/A
(8). Other receivables derecognized due to the transfer of financial assets
□Applicable √N/A
(9). Assets and liabilities generated by the transfer of other receivables and continuing
involvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
3. Long-term equity investments
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
| Investments in subsidiaries | 230,062,149.41 | 42,500,000.00 | 187,562,149.41 | 337,957,327.24 | 42,500,000.00 | 295,457,327.24 |
| Investments in associates and joint ventures | 191,110,955.18 | 191,110,955.18 | 51,915,628.82 | 51,915,628.82 | ||
| Total | 421,173,104.59 | 42,500,000.00 | 378,673,104.59 | 389,872,956.06 | 42,500,000.00 | 347,372,956.06 |
(1) Investments in subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
Investee
| Investee | Opening balance | Current increase | Current decrease | Closing balance | Current provision for impairment | Closing balance of provision for impairment |
| Hangzhou Proya Trade Co., Ltd. | 30,875,097.64 | 65,593.30 | 30,940,690.94 | |||
| HANNA COSMETICS CO., LTD. | 2,094,048.00 | 2,094,048.00 | ||||
| Zhejiang Meili Valley E-commerce Co., Ltd. | 16,383,777.51 | 476,445.98 | 16,860,223.49 | |||
| Leqing Laiya Trading Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
| Hapsode (Hangzhou) Cosmetics Co., Ltd. | 42,500,000.00 | 42,500,000.00 | 42,500,000.00 | |||
| Mijing Siyu (Hangzhou) Cosmetics Co., Ltd. | 18,000,000.00 | 18,000,000.00 | ||||
| Huzhou Youzilai Trade Co., LTd. | 5,568,795.63 | 21,727.80 | 5,590,523.43 | |||
| Huzhou Niuke Technology Co., Ltd. | 3,500,000.00 | 3,500,000.00 | ||||
| Hangzhou Proya Business Management Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
| Huzhou Y.N.M. Cosmetics Co., Ltd. | 20,308,163.00 | 20,308,163.00 | ||||
| Shanghai Zhongwen Electronic Commerce Co., Ltd. | 5,400,000.00 | 5,400,000.00 | ||||
| Y.N.M. Cosmetics Co., Ltd. | 5,046,455.61 | 5,046,455.61 | ||||
| Hongkong | 24,736,491.0 | 24,736,491.0 |
KeshiTradingLimited
| Keshi Trading Limited | 0 | 0 | ||||
| Hongkong Xinghuo Industry Limited | 10,185,924.00 | 10,185,924.00 | ||||
| Ningbo TIMAGE Cosmetics Co., Ltd. | 15,902,200.00 | 15,902,200.00 | ||||
| Ningbo Keshi Trading Co., Ltd. | 520,000.00 | 520,000.00 | ||||
| Zhejiang Biyouti Cosmetics Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
| Ningbo Proya Enterprise Consulting Management Co., Ltd. | 4,186,374.85 | 991,055.09 | 5,177,429.94 | |||
| Hangzhou Yizhuo Culture Media Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
| Hangzhou Oumisi Trade Co., Ltd. | 2,000,000.00 | 2,000,000.00 | ||||
| Guangzhou Qianxi Network Technology Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
| Zhejiang Qingya Culture and Art Communication Co., Ltd. | 550,000.00 | 550,000.00 | 1,100,000.00 | |||
| Huzhou Poyun E-commerce Co., Ltd. | 1,200,000.00 | 1,200,000.00 | ||||
| Shanghai Healthlong Biochemical Technology Co., Ltd. | 110,500,000.00 | 110,500,000.00 | ||||
| Hangzhou Weiluoke Cosmetics Co., Ltd. | 500,000.00 | 500,000.00 | ||||
| BOYA (Hong |
Kong)InvestmentManagementCo., Limited
| Kong) Investment Management Co., Limited | ||||||
| Xuzhou Proya Information Technology Co., Ltd. | 500,000.00 | 500,000.00 | ||||
| Proya (Hainan) Cosmetics Co., Ltd. | ||||||
| Total | 337,957,327.24 | 2,604,822.17 | 110,500,000.00 | 230,062,149.41 | 42,500,000.00 |
(2) Investments in associates and joint ventures
√Applicable □N/A
Unit: Yuan Currency: RMBOther descriptions:
□Applicable √N/A
| Investor | Opening balance | Current increase or decrease | Closing balanc-e | Closing balance of provision for impairment | |||||||
| Additional investment | Decrea-sed investment | Investme-nt gain or loss under equity method | Adjust-ment in other comprehensive income | Other equity changes | Declared cash dividend-s or profits | Provision for impairment | Others | ||||
| I. Joint ventures | |||||||||||
| Huzhou Panrui Industrial Investment Partnership (LP) | 3,306,630.57 | -5,579.63 | 3,301,050.94 | ||||||||
| Sub-total | 3,306,630.57 | -5,579.63 | 3,301,050.94 | ||||||||
| II. Associates | |||||||||||
| Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,985,511.35 | -53,464.43 | 2,932,046.92 | ||||||||
| Jiaxing Woyong Investment Partnership (LP) | 45,623,486.90 | 28,206,800.00 | -24,953.93 | 73,805,332.97 | |||||||
| Zhuhai Healthlong Biotechnolo-gy Co., Ltd. | 110,500,000.00 | -2,349,263.38 | 108,150,736.62 | ||||||||
| Beijing Xiushi Culture Developme-nt Co., Ltd. | 3,000,000.00 | -78,212.27 | 2,921,787.73 | ||||||||
| Sub-total | 48,608,998.25 | 141,706,800.00 | -2,505,894.01 | 187,809,904.24 | |||||||
| Total | 51,915,628.82 | 141,706,800.00 | -2,511,473.64 | 191,110,955.18 | |||||||
4. Revenue and cost of revenue
(1). Descriptions of revenue and cost of revenue
√Applicable □N/A
Unit: Yuan Currency: RMB
Item
| Item | Amount for the current period | Amount for the prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 879,711,296.91 | 450,100,842.12 | 776,212,301.93 | 358,574,648.35 |
| Other operations | 17,039,716.68 | 6,487,404.50 | 16,841,498.35 | 6,231,905.61 |
| Total | 896,751,013.59 | 456,588,246.62 | 793,053,800.28 | 364,806,553.96 |
(2). Descriptions of revenue generated from contacts
□Applicable √N/A
(3). Descriptions of performance obligations
□Applicable √N/A
(4). Descriptions of allocation to remaining performance obligations
□Applicable √N/A
Other descriptions:
None
5. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the prior period |
| Long-term equity investments accounted for using the cost method | ||
| Income from long-term equity investment accounted for using the equity method | -2,511,473.64 | -270,798.84 |
| Income from disposal of long-term equity investments | ||
| Investment income from held-for-trading financial assets during the holding period | ||
| Dividend income from other equity investment instruments during the holding period | ||
| Interest income from debt investment during the holding period | ||
| Interest income from other debt investments during the holding period | ||
| Investment income from disposal of held-for-trading financial assets | ||
| Investment income from disposal of other investments in equity instruments | ||
| Investment income from disposal of debt investments |
Investment income from disposal ofother debt investments
| Investment income from disposal of other debt investments | ||
| Income from wealth management products | 2,266,301.37 | |
| Total | -2,511,473.64 | 1,995,502.53 |
Other descriptions:
None
6. Others
□Applicable √N/A
XVIII. Supplementary Information
1. Breakdown of non-recurring profit or loss for the current period
√Applicable □N/A
Unit: Yuan Currency: RMB
| Item | Amount | Note |
| Gains or losses from disposal of non-current assets | -1,416.28 | |
| Unauthorized examination and approval, or lack of official approval documents, or tax revenue return and abatement | ||
| Government grants recognized in profit or loss for the current period (excluding government grants that are closely related to the Company’s business operations and gained at a fixed amount or quantity according to national uniform standards) | 9,370,319.81 | |
| Capital occupation fees charged to the non-financial enterprises and included in profit or loss for the current period | ||
| Gains when the investment cost of acquiring a subsidiary, an associate and a joint venture is less than the fair value of the identifiable net assets of the investee | ||
| Gains or losses from exchange of non-monetary assets | ||
| Gains or losses from entrusting others with investment or asset management | ||
| Asset impairment provision made resulting from force majeure such as natural disasters | ||
| Gains or losses from debt restructuring | ||
| Enterprise restructuring fees, such as staffing expenses and integration fees | ||
| Gains or losses that exceeds the fair value in transaction with unfair price | ||
| Current net gains or losses of subsidiaries established by business combination involving enterprises under common control from the beginning of the period to the combination date | ||
| Gains or losses on contingencies that have no relation with the normal operation of the Company |
Gains or losses from change in fair value byheld-for trading financial assets andliabilities, derivative financial assets,held-for-trading financial liabilities andderivative financial liabilities, andinvestment income from disposal ofheld-for-trading financial assets, derivativefinancial assets, held-for-trading financialliabilities, derivative financial liabilities andother debt investments, excluding theeffective hedging businesses related withnormal operations of the Company
| Gains or losses from change in fair value by held-for trading financial assets and liabilities, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments, excluding the effective hedging businesses related with normal operations of the Company | -3,545.22 | |
| Reversal of impairment provision of accounts receivable and contract assets that have undergone impairment test alone | ||
| Gains or losses from outward entrusted loaning | ||
| Gains or losses from changes in the fair values of investment properties that are subsequently measured using the fair value model | ||
| Impact of a one-time adjustment on current profit and loss according to the requirements of tax and accounting laws and regulations | ||
| Custody fees of entrusted operation | ||
| Other non-operating income and expenses besides the above items | 521,323.29 | |
| Other items that conform to the definition of non-recurring profit or loss | ||
| Effect of income tax | -2,222,932.24 | |
| Effect of minority equity | -1,842,828.78 | |
| Total | 5,820,920.58 |
Provide explanations for classifying non-recurring profit and loss items defined in the ExplanatoryAnnouncement No. 1 for Public Company Information Disclosures – Non-recurring Profits and Losses,and for classifying non-recurring profit and loss items listed in the Explanatory Announcement No. 1 forPublic Company Information Disclosures – Non-recurring Profits and Losses as recurring profit andloss item.
□Applicable √N/A
2. Return on net assets and earnings per share
√Applicable □N/A
| Profit for the reporting period | Weighted average return on equity (%) | Earnings per share | |
| Basic EPS | Diluted EPS | ||
| Net loss attributable to the Company’s ordinary shareholders | 9.10 | 1.13 | 1.12 |
| Net profit attributable to the parent company’s shareholders, excluding non-recurring profit or loss | 8.86 | 1.10 | 1.10 |
3. Differences arising from accounting standard of the PRC and the International AccountingStandards
□Applicable √N/A
4. Others
□Applicable √N/A
Board Chairman：HOU JunchengDate of Submission Approved by the Board：August 24, 2021
Revised information
□Applicable √N/A