无锡威孚高科技集团股份有限公司Weifu High-Technology Group Co., Ltd.
ANNUAL REPORT 2018
April 2019
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives ofWeifu High-Technology Group Co., Ltd. (hereinafter referred to as the Company) herebyconfirm that there are no any fictitious statements, misleading statements, or importantomissions carried in this report, and shall take all responsibilities, individual and/or joint, forthe reality, accuracy and completion of the whole contents.Chen Xuejun, Principal of the Company, Ou Jianbin, person in charger of accounting worksand Ou Jianbin, person in charge of accounting organ (accounting principal) hereby confirmthat the Financial Report of 2018 Annual Report is authentic, accurate and complete.Other directors attending the Meeting for annual report deliberation except for the followed
Name of director absent | Title for absent director | Reasons for absent | Attorney |
Zhang Xiaogeng | Director | Travel for business | Hua Wanrong |
Concerning the forward-looking statements with future planning involved in the Report, theydo not constitute a substantial commitment for investors. Investors should be cautious withinvestment risks. The Company described the risks that might occurred in the operation inthe report “IX- The Company’s future development prospects” of “Section IV- Discussion andAnalysis of the Operation” and “X. Risks with financial instrument concerned” in Section XI.Financial Report, as well as the risk management policy the Company will take in order toreduce those risks. Investors should pay attention to relevant content.The China Securities Journal, Securities Times, Hong Kong Commercial Daily and JuchaoWebsite are the information disclosure media appointed by the Company, all informationshould be prevail on the above mentioned media, investors are advice to pay attention oninvestment risks.The profit distribution plan that deliberated and approved by the Board is: based on totalstock issue of 1,008,950,570, distributed 12.00 Yuan (tax included) bonus in cash for every10-share hold by all shareholders, 0 shares bonus issued (tax included) and no capitalizing ofcommon reserves carried out.
Contents
Section I Important Notice, Contents and Paraphrase ...... 2
Section II Company Profile and Main Finnaical Indexes ...... 5
Section III Summary of Business ...... 9
Section IV Discussion and Analysis of Operation ...... 12
Section V Important Events ...... 26
Section VI Changes in shares and particular about shareholders ...... 40Section VII Preferred Stock ………………………………………………………………………25Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 46Section IX Corporate Governance ...... 56
Section X Corporate Bond ...... 62
Section XI Financial Report ...... 63
Section XII Documents Available for Reference ...... 194
Paraphrase
Items | Refers to | Contents |
Company, The Company, Weifu High-technology | Refers to | Weifu High-Technology Group Co., Ltd. |
Weifu Group | Refers to | Wuxi Weifu Group Co., Ltd. |
Industry Group | Refers to | Wuxi Industry Development Group Co., Ltd. |
Robert Bosch, Robert Bosch Company | Refers to | Robert Bosch Co., Ltd., ROBERT BOSCH GMBH |
Bosch Automobile Diesel, Bosch Diesel System | Refers to | Bosch Automobile Diesel System Co., Ltd. |
Weifu Leader | Refers to | Wuxi Weifu Leader Catalytic Converter Co., Ltd. |
Weifu Jinning | Refers to | Nanjing Weifu Jinning Co., Ltd. |
Weifu Chang’an | Refers to | Wuxi Weifu Chang’an Co., Ltd. |
Weifu Mashan | Refers to | Weifu Mashan Pump Glib Co., Ltd. |
Weifu ITM | Refers to | Wuxi Weifu ITM Supercharging Technique Co., Ltd. |
Weifu Tianli | Refers to | Ningbo Weifu Tianli Supercharging Technique Co., Ltd. |
Weifu Schmidt | Refers to | Wuxi Weifu Schmidt Power System Spare Parts Co., Ltd. |
Weifu International Trade | Refers to | Wuxi Weifu International Trade Co. Ltd. |
Weifu Autocam | Refers to | Wuxi Weifu-Autocam Fine Machinery Co. Ltd. |
Weifu Environment | Refers to | Wuxi Weifu Environment Catalyst Co., Ltd. |
Weifu Precision Machinery | Refers to | Weifu Precision Machinery Manufacturing Co., Ltd. |
Zhonglian Electronic | Refers to | Zhonglian Automobile Electronic Co., Ltd. |
Taiji Industry | Refers to | Wuxi Taiji Industry Corporation Limited |
CSRC | Refers to | China Securities Regulatory Commission |
SZ Stock Exchange | Refers to | Shenzhen Stock Exchange |
Jiangsu Gongzheng | Refers to | Jiangsu Gongzheng Tianye Certified Public Accountants (Special General Partnership) |
The reporting period | Refers to | From 1 Jan. 2018 to 31 Dec. 2018 |
Section II Company Profile and Main Financial Indexes
I. Company information
Short form of the stock | Weifu High- Tech, Su Weifu-B | Stock code | 000581, 200581 |
Stock exchange for listing | Shenzhen Stock Exchange | ||
Name of the Company (in Chinese) | 无锡威孚高科技集团股份有限公司 | ||
Short form of the Company (in Chinese) | 威孚高科 | ||
Foreign name of the Company (if applicable) | WEIFU HIGH-TECHNOLOGY GROUP CO.,LTD. | ||
Short form of foreign name of the Company (if applicable) | WFHT | ||
Legal representative | Chen Xuejun | ||
Registrations add. | No.5 Huashan Rd. New District, Wuxi City | ||
Code for registrations add | 214028 | ||
Offices add. | No.5 Huashan Rd. New District, Wuxi City | ||
Codes for office add. | 214028 | ||
Company’s Internet Web Site | http://www.weifu.com.cn | ||
Web @ weifu.com.cn |
II. Person/Way to contact
Secretary of the Board | Rep. of security affairs | |
Name | Zhou Weixing | Yan Guohong |
Contact add. | No.5, Huashan Road, New District, Wuxi City | No.5, Huashan Road, New District, Wuxi City |
Tel. | 0510-80505999 | 0510-80505999 |
Fax. | 0510-80505199 | 0510-80505199 |
wfjt@public1.wx.js.cn | wfjt@public1.wx.js.cn |
III. Information disclosure and preparation place
Newspaper appointed for information disclosure | China Securities Journal; Securities Times; Hong Kong Commercial Daily |
Website for annual report publish appointed by CSRC | http://www.cninfo.com.cn |
Preparation place for annual report | Office of the Board of Directors |
IV. Registration changes of the Company
Organization code | 91320200250456967N |
Changes of main business since listing (if applicable) | No change |
Previous changes for controlling shareholders (if applicable) | Controlling shareholder of the Company was Weifu Group before 2009. and in 2019, controlling shareholder changed to Industry Group since 31 May 2009 due to the merged of Industry Group and Weifu Group. Weifu Group and Industry Group were wholly state-owned companies of Wuxi State-owned Assets Supervision & Administration Commission of State Council, therefore, actual controller of the Company turns to Wuxi State-owned Assets Supervision & Administration Commission of State Council. |
V. Other relevant information
CPA engaged by the Company
Name of CPA | Jiangsu Gongzheng Tianye Certified Public Accountants (Special General Partnership) |
Offices add. for CPA | 10/F, No.5 Building, Jiakaicheng Fortune Center, Jingrong 3rd Street, Taihu Xincheng, Binghu District, Wuxi, Jiangsu Province |
Signing Accountants | Bo Lingjing, Meng Yin |
Sponsor engaged by the Company for performing continuous supervision duties in reporting period□ Applicable √ Not applicableFinancial consultant engaged by the Company for performing continuous supervision duties in reporting period□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not□ Yes √ No
2018 | 2017 | Changes over last year | 2016 | |
Operating income (RMB) | 8,721,674,671.18 | 9,017,280,159.80 | -3.28% | 6,422,700,399.27 |
Net profit attributable to shareholders of the listed company(RMB) | 2,396,077,415.21 | 2,571,339,490.04 | -6.82% | 1,672,224,317.05 |
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses(RMB) | 2,014,800,714.20 | 2,322,218,596.99 | -13.24% | 1,435,963,836.76 |
Net cash flows arising from operating activities (RMB) | 874,381,526.63 | 957,697,901.07 | -8.70% | 527,344,364.04 |
Basic earnings per share (RMB/Share) | 2.37 | 2.55 | -7.06% | 1.66 |
Diluted earnings per share (RMB/Share) | 2.37 | 2.55 | -7.06% | 1.66 |
Weighted average ROE | 15.48% | 18.52% | -3.04% | 13.53% |
End of 2018 | End of 2017 | Changes over end of last year | End of 2016 | |
Total assets (RMB) | 20,892,041,460.30 | 20,231,006,224.36 | 3.27% | 17,263,771,897.78 |
Net assets attributable to shareholder of listed company (RMB) | 15,913,828,778.82 | 14,835,673,669.75 | 7.27% | 12,927,344,292.47 |
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicableThe Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (InternationalAccounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicableThe Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules orChinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
1st Q | 2nd Q | 3rd Q | 4th Q | |
Operating income | 2,391,982,640.39 | 2,568,819,250.60 | 1,898,914,219.62 | 1,861,958,560.57 |
Net profit attributable to shareholders of the listed company | 784,228,178.43 | 761,014,526.49 | 510,387,493.91 | 340,447,216.38 |
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses | 691,078,505.55 | 687,786,996.02 | 452,953,425.86 | 182,981,786.77 |
Net cash flows arising from operating activities | 86,416,705.11 | 292,506,985.37 | 127,146,119.98 | 368,311,716.17 |
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financialindex disclosed in the company’s quarterly report and semi-annual report□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item | 2018 | 2017 | 2016 | Note |
Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 96,162,222.57 | -3,233,320.26 | -6,229,604.16 | Including gains from the compensation of expropriation of housing and land of Weifu Jinning |
Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 48,811,314.99 | 48,162,140.65 | 43,963,942.28 | |
Profit and loss of assets delegation on others’ investment or management | 311,261,918.65 | 221,705,034.02 | 205,047,032.68 | |
Held transaction financial asset, gains/losses of changes of fair values from transaction financial liabilities, and investment gains from disposal of transaction financial asset, transaction financial liabilities and financial asset available for sales, exclude the effective hedging business relevant with normal operations of the Company | 16,880,487.62 | 24,625,516.88 | 31,650,057.18 | Including the gain/loss of fair value changes from derivative financial liability |
Switch back of provision for depreciation of account receivable which was singly taken depreciation test | 466,200.00 | 1,756,052.60 | 2,338,453.69 | |
Other non-operating income and expenditure except for the aforementioned items | -597,126.12 | 4,479,807.85 | 4,481,317.09 | |
Other gain/loss qualify the definition of non-recurring gains/losses | 353,111.39 | The amount collected in the period while has been charged-off previous | ||
Relocation expenses | -57,116.41 | |||
Less: Impact on income tax | 70,234,077.14 | 43,481,221.93 | 42,191,376.78 | |
Impact on minority shareholders’ equity (post-tax) | 21,827,350.95 | 4,893,116.76 | 2,742,225.28 | |
Total | 381,276,701.01 | 249,120,893.05 | 236,260,480.29 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons□ Applicable √ Not applicableIn reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss
Section III Summary of Business
I. Main businesses of the company in the reporting period
(i) Main business of the Company1. The Company belongs to auto parts industry, and its main business products include diesel fuel injection systemproducts, exhaust after-treatment system products and air management system products.2. Main uses of the Company's products(1) The diesel fuel injection system products are widely used in different power diesel engines supporting all typesof trucks, passenger cars, buses, construction machinery, marine, and generator sets. The company not only makesproducts matching with the main engines used at home but also exports some products to the Americas, SoutheastAsia, and the Middle East. The products meet the needs of national emission standards.(2) The auto exhaust after-treatment system products: mainly support the major manufacturers of automobile,motorcycle and general machinery at home which meet the national emission standards.(3) The Air management system products (supercharger): matches with most of the domestic small-bore dieselengine plants and some six-cylinder diesel engine manufacturers, and meet the needs of the light and heavycommercial vehicles and some passenger cars, and meets the national emission standards.3. Business model of the CompanyThe Company follows the operating philosophy of making competitive products, creating famous brands, strivingfor first choices, and creating value for the users, implements the business model that parent company unifies themanagement and subsidiaries decentralize the production. Namely, the group company is responsible for makingstrategic development planning and operation targets, and making the unified management, instruction andassessment for the finance, significant personnel management, core raw materials, quality control, and technologyof the subsidiaries. The subsidiaries arrange production based on the order management model of market, whichmakes the subsidiaries keep the consistent quality with the company, helps keep abreast of customer needs andsaving logistics costs, maintain the timeliness of products production and supply, and improve the company’seconomic benefits.During the reporting period, the Company’s main business and business model have no significant changes.
(ii) Development stage and periodic characteristics of the industry the Company involves and the Company'sIn the past 40 years of reform and opening up, China’s economy has shifted from a high-speed growth stage to ahigh-quality development stage. Although the market may continue to show unexpected changes in the future, webelieve that the fundamentals of China’s healthy and stable economic development will not change, and theChinese economy is fully capable of maintaining a reasonable growth range. At the same time, the Chineseautomobile market has entered a period of steady growth since 2010, in order to solve the increasingly severetraffic jams, environmental pollution, energy conservation and consumption reduction, the automobile industryhas accelerated the technology upgrades, and the automobile new energy applications are rapidly advancing,
nowadays the artificial intelligence, internet of things and other technologies develop rapidly and accelerate thepenetration into various fields, it has reached a consensus on the development of intelligent networkedautomobiles which promotes the development environment of intelligent networked automobiles to becomeincreasingly perfect.After 60 years of hard work, the company has become a backbone enterprise of core parts of domestic auto(power engineering), 80% products of the existing Automobile components core business are matched with theelectronic control systems and electronically controlled. The company will actively respond to the national newenergy and intelligent network strategy, take the Automobile components industry chain as the core and otherrelated fields as supplements, lay out new energy auto drive technology, and promote the hydrogen fuel celltechnology and intelligent network technology research and development capacity building. Market objectives:
consolidate the existing business market position and take a position in the new business potential market.Technical objectives: strengthen the technical strength of the pillar business, lay out the new business frontiertechnology, and actively expand new areas based on the existing business. Strive to achieve the goal of becominga leader in the auto core parts enterprises.
II. Major changes in main assets
1. Major changes in main assets
Major assets | Note of major changes |
Equity assets | No major change |
Fixed assets | No major change |
Intangible assets | No major change |
Construction in progress | Construction in progress at period-end has major growth over that of year-begin, mainly because the equipment for technical innovation and expansion increased |
2. Main overseas assets
√Applicable □Not applicable
Content of assets | Reason for the formation | Asset size | Location | Operation mode | Control measure to ensure the security of assets | Income (RMB) | Foreign assets accounted for net assets of the Company | Whether exist significant impairment risk (Y/N) |
The Company paid investment of 24 million US dollars on May 21, 2018 to become a shareholder of Protean E-round | For the overall arrangement of the company’s future development, the 15th meeting of the eighth board of directors of the company reviewed and approved the Proposal on Foreign Investment. The company will invest 30 | The Company invested US$24 million and obtained the stock right of subscribing 10,212,765 shares of E-round preferred stock | the United States | Equity of preferred stock | The Company will pay full attention to changes in the industry and the market, give play to its own advantages, and actively prevent and resolve | No | 0.04% | Yes |
preferred stock. | million US dollars in the E-round preferred stock issued by Protean and the two parties will establish a Sino-foreign joint venture in China. According to the investment cooperation agreement, the company paid the initial investment of 24 million US dollars on May 21, 2018. The company obtained the equity certificate of subscribing 10,212,765 shares of E-round preferred stock issued by Protean and became a shareholder of the Protean E-round preferred stock with the equity certificate number of Number E-1. | issued by Protean. | various risks. |
III. Core Competitiveness Analysis
The Company is a high technology enterprise with a number of patented technologies. For years, based on thescientific research as National Enterprise Technical Center, Post-doctor Scientific Research Station, JiangsuProvincial Engineering and Technology Research Center and Industrialization Base of National Hi-Tech Researchand Development Achievement, we have became the backbone enterprise of the core parts of domesticautomobile (power engineering) after 60 years of cultivation. 80% of the current core business of auto parts arematching with electronic control system and with electronic control realized, which owes a leading position inself-owned brand.
The company lays emphasis on the manufacturing quality management, relies on WPS (Weifu production system)and manufacturing information platform with Weifu characteristics to continuously improve the productionsystem structure, personnel organization, operation mode and market supply and demand relationship, andcontinues to carry out the process quality indicator quantitative management and process management, andimprove production efficiency, product quality and product delivery capabilities, and the company’smanufacturing quality control capabilities are further improved.The company pays attention to the business operation quality of and lays emphasis on the resource integration. Atpresent, the company has established a high-speed, stable and reliable network environment and an efficient datacenter, successfully built the ERP platform, opened up the value chain, and realized the integration of financialservices, which made the information resources fully shared, and the company’s comprehensive operationalmanagement level has been further improved.The company pays attention to the construction of core talent system. At present, it has built a relatively completehuman resource management platform to strive to build a high-quality core talent team, which provides a stronghuman resource guarantee for the long-term development of the company.During the reporting period, the company’s core competitiveness (in terms of product manufacturing, qualityimprovement, personnel quality improvement, resource utilization, etc.) has been improved.
Section IV Discussion and Analysis of the Operation
1. Introduction
(i) Overall situationIn 2018, the macroeconomic growth rate declined. China’s automobile production and sales growth rate waslower than that estimated at the beginning of the year, the total quantity showed the first negative growth in 28years. According to the data released by the China Association of Automobile Manufacturers, the annualproduction and sales volume of automobiles were 27.809 million and 28.081 million, respectively declined by4.2% and 2.8% on a year-on-year basis, and the annual production and sales volume of passenger vehicles wererespectively 23.529 million and 23.71 million, respectively declined by 5.2% and 4.1% over the same period ofthe previous year, while the annual production and sales volume of commercial vehicles were respectively 4.28million and 4.371 million, respectively increased by 1.7% and 5.1% over the same period of the previous year,and the growth rate declined.Facing the complicated market environment, the company worked hard to overcome difficulties and maintain theoverall stability of comprehensive economic operation. During the reporting period, the company achievedoperating income of 8.722 billion yuan, a decline of 3.28% on a year-on-year basis, realized total profit of 2.602billion yuan, a decline of 8.06% on a year-on-year basis; total assets were 20.892 billion yuan, an increase of3.27% on a year-on-year basis; the owner’s equity attributable to the parent company was 15.914 billion yuan, anincrease of 7.27% on a year-on-year basis.
(ii) Main work carried out1. Actively responded to the severe market challenges and fully guaranteed the stability of main businessUnder the influence of the decline in automobile market and engine market, the company responded positively,focused on the core market, continuously improved the manufacturing system, strengthened the process controlcapability, improved the delivery capability of leading products, improved the physical quality of key products,and ensured the total amount of main business products. The market share of fuel injection system relatedproducts and supercharger products remained relatively stable and had a certain growth throughout the year, theproduction and sales volume of multiple-piston pumps for fuel injection systems still exceeded 2 million units,and the sales of supercharger products increased by 10% on a year-on-year basis. Due to market fluctuations, themarket share of post-processing system business has slightly declined.
2. Took advantage of information technology means to gradually establish an operation management system tofurther enhance the company’s operating efficiencyThe company continuously promoted the optimization and upgrading of management, actively sorted out themanagement duties, standardized and optimized the existing system processes, planned and designed thecompany’s financial reform and transformation, built the company’s financial sharing center, established thecompany’s procurement and sharing platform project, further improved the human resource management system,strengthened the security construction of the Group’s information system, thus the comprehensive management
capability of the enterprise has been further improved.
3. Started the future layout, established the “double-engine-driven” strategic model of “new business becomes along-term new engine, and traditional businesses guarantee the enterprise forward again”, and took the auto partsindustry chain as the core and other related fields as supplements to further improve the R&D system, promote theresearch and development of platform products, quickly deploy the forward-looking projects, and activelypromote the investment cooperation of new business.
II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2. Revenue and cost(1) Constitute of operation revenue
In RMB
2018 | 2017 | Increase/decrease y-o-y | |||
Amount | Ratio in operation revenue | Amount | Ratio in operation revenue | ||
Total operation revenue | 8,721,674,671.18 | 100% | 9,017,280,159.80 | 100% | -3.28% |
According to industries | |||||
Automobile components | 8,262,954,878.87 | 94.74% | 8,535,599,504.73 | 94.66% | -3.19% |
Other business | 458,719,792.31 | 5.26% | 481,680,655.07 | 5.34% | -4.77% |
According to products | |||||
Automobile fuel injection system | 5,027,966,298.51 | 57.65% | 5,588,110,745.38 | 61.97% | -10.02% |
Air management system | 440,331,903.61 | 5.05% | 380,600,452.78 | 4.22% | 15.69% |
Automotive post processing system | 2,794,656,676.75 | 32.04% | 2,566,888,306.57 | 28.47% | 8.87% |
Other business | 458,719,792.31 | 5.26% | 481,680,655.07 | 5.34% | -4.77% |
According to region | |||||
Domestic sales | 8,337,832,868.65 | 95.60% | 8,698,826,555.01 | 96.47% | -4.15% |
Foreign sales | 383,841,802.53 | 4.40% | 318,453,604.79 | 3.53% | 20.53% |
(2) The industries, products, or regions accounting for over 10% of the company’s operating income oroperating profit
√Applicable □ Not applicable
In RMB
Operating revenue | Operating cost | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
According to industries | ||||||
Automobile components | 8,262,954,878.87 | 6,334,140,163.43 | 23.34% | -3.19% | -1.35% | -1.43% |
According to products | ||||||
Automobile fuel injection system | 5,027,966,298.51 | 3,558,735,397.17 | 29.22% | -10.02% | -8.36% | -1.29% |
Air management system | 440,331,903.61 | 316,694,283.37 | 28.08% | 15.69% | 10.93% | 3.09% |
Automotive post processing system | 2,794,656,676.75 | 2,458,710,482.89 | 12.02% | 8.87% | 9.17% | -0.24% |
According to region | ||||||
Domestic sales | 8,337,832,868.65 | 5,968,730,399.02 | 28.41% | -4.15% | -2.40% | -1.28% |
Foreign sales | 383,841,802.53 | 365,409,764.41 | 4.80% | 20.53% | 19.71% | 0.66% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Industries | Item | Unit | 2018 | 2017 | Increase/decrease y-o-y |
Fuel injection system—multiple-piston pump | Sales volume | In 10 thousand units | 244 | 266 | -8.27% |
Output | In 10 thousand units | 245 | 262 | -6.49% | |
Storage | In 10 thousand units | 17 | 16 | 6.25% | |
Fuel injection system—injector | Sales volume | In 10 thousand sets | 227 | 227 | |
Output | In 10 thousand sets | 223 | 209 | 6.70% | |
Storage | In 10 thousand sets | 12 | 16 | -25.00% | |
After-treatment system—purifier | Sales volume | In 10 thousand pieces | 270 | 293 | -7.85% |
Output | In 10 thousand pieces | 220 | 286 | -23.08% | |
Storage | In 10 thousand pieces | 28 | 78 | -64.10% |
Air management system—turbocharger | Sales volume | In 10 thousand units | 72 | 65 | 10.77% |
Output | In 10 thousand units | 73 | 68 | 7.35% | |
Storage | In 10 thousand units | 14 | 13 | 7.69% |
Reasons for y-o-y relevant data with over 30% changes□Applicable √Not applicable
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Classification of industries and products
In RMB
Industries | Item | 2018 | 2017 | Increase/decrease y-o-y | ||
Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
Automobile components | Direct material | 4,879,991,330.39 | 77.04% | 5,014,924,816.81 | 78.10% | -2.69% |
Automobile components | Labor cost | 601,322,359.87 | 9.49% | 548,188,077.87 | 8.54% | 9.69% |
Automobile components | Depreciation | 171,085,221.37 | 2.70% | 165,645,016.82 | 2.58% | 3.28% |
Automobile components | Varieties of consumption | 681,741,251.80 | 10.76% | 692,224,373.76 | 10.78% | -1.51% |
In RMB
Products | Item | 2018 | 2017 | Increase/decrease y-o-y | ||
Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
Fuel injection system | Direct material | 2,306,305,694.10 | 64.81% | 2,661,656,663.54 | 68.54% | -13.35% |
Fuel injection system | Labor cost | 483,559,687.15 | 13.59% | 459,976,070.97 | 11.84% | 5.13% |
Fuel injection system | Depreciation | 136,068,633.86 | 3.82% | 134,028,364.58 | 3.45% | 1.52% |
Fuel injection system | Varieties of consumption | 632,801,382.06 | 17.78% | 627,703,331.82 | 16.16% | 0.81% |
Air management system | Direct material | 270,908,557.76 | 85.54% | 235,640,433.48 | 82.54% | 14.97% |
Air management system | Labor cost | 20,768,561.86 | 6.56% | 23,813,534.44 | 8.34% | -12.79% |
Air management system | Depreciation | 14,081,316.71 | 4.45% | 13,761,987.24 | 4.82% | 2.32% |
Air management system | Varieties of consumption | 10,935,847.04 | 3.45% | 12,265,632.65 | 4.30% | -10.84% |
Exhaust after-treatment system | Direct material | 2,302,777,078.53 | 93.66% | 2,094,875,783.60 | 93.02% | 9.92% |
Exhaust after-treatment system | Labor cost | 96,994,110.86 | 3.94% | 88,220,371.79 | 3.92% | 9.95% |
Exhaust after-treatment system | Depreciation | 20,935,270.80 | 0.85% | 17,854,665.00 | 0.79% | 17.25% |
Exhaust after-treatment system | Varieties of consumption | 38,004,022.70 | 1.55% | 51,185,446.15 | 2.27% | -25.75% |
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □No
Changes of consolidate scope | Enterprise | Equity obtained method | Time when equity obtained | Contribution ratio |
Consolidate scope increased | Nanchang Weifu Leader Auto Parts & Components Co., Ltd. | Newly established | 2018-3-8 | 100.00% |
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) | 4,671,119,701.53 |
Proportion in total annual sales volume for top five clients | 53.56% |
Ratio of the related sales in total annual sales from top five clients | 39.48% |
Information of top five clients of the Company
Serial | Name | Sales (RMB) | Proportion in total annual sales |
1 | Bosch Diesel System | 2,722,919,316.33 | 31.22% |
2 | Robert Bosch | 720,709,408.92 | 8.26% |
3 | Client III | 692,335,425.30 | 7.94% |
4 | Client IV | 306,289,484.81 | 3.51% |
5 | Client V | 228,866,066.17 | 2.62% |
Total | -- | 4,671,119,701.53 | 53.56% |
Other situation of main clients√Applicable □Not applicable
The Company has association with Bosch Diesel System, and directors, supervisors, senior executives, coretechnicians and actual controller of the Company have no equity in main suppliers directly or indirectly.
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) | 2,105,290,240.20 |
Proportion in total annual purchase amount for top five suppliers | 33.36% |
Ratio of the related purchase in total annual purchase amount from top five suppliers | 26.86% |
Information of top five suppliers of the Company
Serial | Suppliers | Purchasing amount (RMB) | Ratio in annual total purchasing amount |
1 | Weifu Environment | 1,515,266,186.15 | 24.01% |
2 | Robert Bosch | 179,841,237.03 | 2.85% |
3 | Supplier 1 | 145,919,020.67 | 2.31% |
4 | Supplier 2 | 141,439,877.36 | 2.24% |
5 | Supplier 3 | 122,823,918.99 | 1.95% |
Total | -- | 2,105,290,240.20 | 33.36% |
Other notes of main suppliers of the Company√Applicable □Not applicable
The Company has association with Weifu Environment and Robert Bosch Company, and directors, supervisors,senior executives, core technicians and actual controller of the Company have no equity in main suppliers directlyor indirectly.3. Expenses
In RMB
2018 | 2017 | Increase/decrease y-o-y | Note of major changes | |
Sales expenses | 237,839,472.28 | 194,854,780.37 | 22.06% | Salary and wages expenses as well as the guarantee fee increased |
Administration expenses | 585,005,385.75 | 539,493,552.86 | 8.44% | |
Financial expenses | -17,393,580.55 | 7,316,996.79 | -337.71% | Interest income of deposit increased |
R&D expenses | 403,263,972.20 | 391,315,234.75 | 3.05% |
4. R&D investment
√Applicable □ Not applicable
During the reporting period, the Company focused on the enterprise technology innovation strategy and planning,adhered to the technological innovation, accelerated the research and development of key projects and products,
put forth effort to improve the industrialization of new products, and enhanced new power for the enterprisesdevelopment. The traditional energy products are mainly power engineering which meet the requirements ofenergy saving and emission reduction, and continue to maintain the leading position in the industry. At the sametime, the company actively deploys new energy driving technologies and promotes the research and developmentand capacity building in new fields such as hydrogen fuel cell technology and intelligent network. The smoothimplementation of these projects guarantees the company’s leading position in the auto parts industry in thefuture.
R&D investment of the Company
2018 | 2017 | Change ratio | |
Number of R&D (people) | 1,109 | 1,132 | -2.03% |
Ratio of number of R&D | 20.08% | 20.92% | -0.84% |
R&D investment (Yuan) | 403,263,972.20 | 391,315,234.75 | 3.05% |
R&D investment accounted for R&D income | 4.62% | 4.34% | 0.28% |
R&D investment capitalization (Yuan) | 0.00 | 0.00 | 0.00% |
Capitalization R&D investment accounted for R&D investment | 0.00% | 0.00% | 0.00% |
The reason of great changes in the proportion of total R&D investment accounted for operation income than last year□ Applicable √ Not applicableReason for the great change in R&D investment capitalization rate and rational description□ Applicable √ Not applicable
5. Cash flow
In RMB
Item | 2018 | 2017 | Increase/decrease y-o-y |
Subtotal of cash inflow arising from operating activities | 8,192,375,196.74 | 7,864,444,717.03 | 4.17% |
Subtotal of cash outflow arising from operating activities | 7,317,993,670.11 | 6,906,746,815.96 | 5.95% |
Net cash flows arising from operating activities | 874,381,526.63 | 957,697,901.07 | -8.70% |
Subtotal of cash inflow from investing activities | 12,682,037,088.99 | 10,609,070,063.25 | 19.54% |
Subtotal of cash outflow from investing activities | 12,888,463,580.85 | 11,859,361,718.71 | 8.68% |
Net cash flows arising from investing activities | -206,426,491.86 | -1,250,291,655.46 | |
Subtotal of cash inflow from financing activities | 471,198,213.94 | 254,520,000.00 | 85.13% |
Subtotal of cash outflow from financing activities | 1,686,046,969.98 | 799,122,114.37 | 110.99% |
Net cash flows arising from financing activities | -1,214,848,756.04 | -544,602,114.37 | |
Net increase of cash and cash equivalents | -543,765,214.73 | -846,784,323.89 |
Main reasons for y-o-y major changes in aspect of relevant data√Applicable □ Not applicableCash outflow from financing activities has major growth mainly due to the greatly increase of profit distribution in the year
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company√Applicable □Not applicable
Mainly due to the investment, and specific influencing factors found more in supplementary information of cashflow statement carried in Annotation of the Report.
III. Analysis of the non-main business
√Applicable □Not applicable
In RMB
Amount | Ratio in total profit | Note | Whether be sustainable | |
Investment income | 1,955,668,055.33 | 75.15% | Income mainly form the two joint ventures (Bosch Automobile Diesel and Zhonglian Electronic) with stock participated by the Company | The joint ventures Bosch Automobile Diesel and Zhonglian Electronic have stable production and operation , so the investment returns can be sustained and stable |
Gain/loss of fair value changes | -490,329.13 | -0.02% | ||
Asset impairment | 250,873,745.84 | 9.64% | ||
Non-operating income | 1,264,830.90 | 0.05% | ||
Non-operating expense | 9,977,159.55 | 0.38% |
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of 2018 | End of 2017 | Ratio changes | Note of major changes | |||
Amount | Ratio in total assets | Amount | Ratio in total assets | |||
Monetary funds | 2,616,321,740.73 | 12.52% | 3,118,709,412.83 | 15.42% | -2.90% | |
Account receivable | 1,919,793,266.91 | 9.19% | 1,995,577,830.90 | 9.86% | -0.67% |
Inventory | 1,438,528,714.59 | 6.89% | 1,478,939,040.70 | 7.31% | -0.42% | |
Investment real estate | 21,906,134.52 | 0.10% | 23,544,830.78 | 0.12% | -0.02% | |
Long-term equity investments | 4,976,773,946.74 | 23.82% | 4,140,064,825.58 | 20.46% | 3.36% | |
Fixed assets | 2,707,374,678.61 | 12.96% | 2,584,872,628.54 | 12.78% | 0.18% | |
Construction in progress | 166,414,542.18 | 0.80% | 100,345,461.28 | 0.50% | 0.30% | Construction in progress at period-end has major growth over that of year-begin, mainly because the equipment for technical innovation and expansion increased |
Short-term borrowings | 298,928,213.94 | 1.43% | 243,000,000.00 | 1.20% | 0.23% | |
Long-term loans | 30,000,000.00 | 0.14% | 45,000,000.00 | 0.22% | -0.08% |
2. Assets and liability measured by fair value
√Applicable □Not applicable
In RMB
Items | Amount at the beginning period | Changes of fair value gains/losses in this period | Accumulative changes of fair value reckoned into equity | Devaluation of withdrawing in the period | Amount of purchase in the period | Amount of sale in the period | Amount at period-end |
Financial assets | |||||||
3.Available-for-sale financial assets | 266,376,600.00 | -117,053,064.00 | -19,809,442.95 | 37,869,361.83 | 121,066,008.00 | ||
Subtotal of financial assets | 266,376,600.00 | -117,053,064.00 | -19,809,442.95 | 37,869,361.83 | 121,066,008.00 | ||
Above total | 266,376,600.00 | -117,053,064.00 | -19,809,442.95 | 37,869,361.83 | 121,066,008.00 | ||
Financial liabilities | 0.00 | -490,329.13 | 0.00 | 0.00 | 490,329.13 |
Whether there have major changes on measurement attributes for main assets of the Company in report period or not□ Yes √No
3. The assets rights restricted till end of the period
Item | Book value at period-end | Restriction reason |
Monetary funds | 1,450,000.00 | Cash deposit paid for LC |
Monetary funds | 79,315,732.67 | Cash deposit paid for bank acceptance |
Monetary funds | 881,868.57 | Court freeze |
Notes receivable | 423,527,758.19 | Notes pledge for bank acceptance |
Available-for-sale financial assets | 112,850,891.16 | In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of Guangdong Shenzhen Intermediate People's Court (Hereinafter referred to as Shenzhen Intermediate People's Court), the property with the value of 217 million Yuan under the name of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye Holdings Co., Ltd. (Hereinafter referred to as Hejun Company) was frozen. As of the end of the reporting period, 4.71 million shares of Miracle Logistics and 11,739,102 shares of SDEC held by the Company were frozen. |
Total | 618,026,250.59 |
V. Investment
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
√Applicable □Not applicable
In RMB
Variety of securities | Code of securities | Short form of securities | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Current gain/loss of fair value changes | Cumulative fair value changes in equity | Current purchase amount | Current sales amount | Profit and loss in the Reporting Period | Book value at the end of the period | Accounting subject | Capital Source |
Domestic and foreign stocks | 600841 | SDEC | 199,208,000.00 | Measured by fair value | 186,966,000.00 | -73,250,064.00 | -20,229,810.45 | 37,869,361.83 | -73,196,378.59 | 85,458,408.00 | Available-for-sale financial assets | Own funds | |
Domestic and foreign stocks | 002009 | Miracle Logistics | 69,331,500.00 | Measured by fair value | 79,410,600.00 | -43,803,000.00 | 420,367.50 | -43,567,500.00 | 35,607,600.00 | Available-for-sale financial assets | Own funds |
Total | 268,539,500.00 | -- | 266,376,600.00 | -117,053,064.00 | -19,809,442.94 | 0.00 | 37,869,361.83 | -116,763,878.59 | 121,066,008.00 | -- | -- |
Disclosure date of securities investment approval of the Board | 24 March 2012 | ||||||||||
4 June 2013 | |||||||||||
Disclosure date of securities investment approval of the Shareholder Meeting (if applicable) |
(2) Derivative investment
□ Applicable √ Not applicableThe Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable √ Not applicableNo application of raised proceeds in the period
VI. Significant asset and equity sales
1. Significant asset sales
□ Applicable √ Not applicableNo significant assets being sold in the Period
2. Significant equity sales
□ Applicable √ Not applicable
VII. Analysis of the main equity participation and controlling subsidiary
√ Applicable □ Not applicableMain subsidiary and stock-jointly enterprise with over 10% influence on net profit of the Company
In RMB
Company name | Type | Main business | Register capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
Weifu Leader | Subsidiary | Exhaust after-treatment system products | 502,596,300.00 | 2,996,351,016.44 | 1,629,384,624.82 | 2,800,874,733.81 | 74,092,173.78 | 74,556,894.40 |
Weifu Jinning | Subsidiary | Fuel injection system products | 346,286,825.80 | 1,337,513,352.71 | 973,609,125.61 | 613,545,903.22 | 233,693,081.69 | 208,505,596.11 |
Bosch Automobile Diesel | Equity participation enterprise | Fuel injection system products | US$ 241,000,000.00 | 12,798,513,740.22 | 8,698,465,606.92 | 15,539,892,004.67 | 4,003,245,866.33 | 3,545,497,532.33 |
Zhonglian Electronic | Equity participation enterprise | Gasoline system products | 600,620,000.00 | 5,431,102,281.22 | 5,425,343,448.82 | 23,186,214.38 | 1,834,686,458.07 | 1,834,198,811.78 |
Subsidiary obtained and disposed in the Period□Applicable √Not applicableExplanation on holding equity participation enterprise
In the reporting period, Weifu Jinning’s land, housing and housing attachments located at No. 69, Taiping Village,Yanziji Town, Qixia District were levied by the government, accordingly gains of disposal of assets increased by100,824,053.07 yuan.
VIII. The structured subject controlled by the Company
□ Applicable √ Not applicable
IX. Prospects for future development
(I) Industry competition pattern and development trendIn the past 40 years of reform and opening up, China’s economy has shifted from a high-speed growth stage to ahigh-quality development stage. Although the market may continue to show unexpected changes in the future, webelieve that the fundamentals of China’s healthy and stable economic development will not change, and the Chineseeconomy is fully capable of maintaining a reasonable growth range. At the same time, the Chinese auto market hasentered a period of steady growth since 2010, in order to solve the increasingly severe traffic jams, environmentalpollution, energy conservation and consumption reduction, the automobile industry has accelerated the technologyupgrades, and the automobile new energy applications are rapidly advancing, nowadays the artificial intelligence,internet of things and other technologies develop rapidly and accelerate the penetration into various fields, it hasreached a consensus on the development of intelligent networked automobiles which promotes the developmentenvironment of intelligent networked automobiles to become increasingly perfect.(ii)Development strategy of the CompanyThe Company has became the backbone enterprise of the core parts of domestic automobile (power engineering)after 60 years of cultivation. 80% of the current core business of auto parts are matching with electronic controlsystem and with electronic control realized, which owes a leading position in self-owned brand. The Companygive a positive response to national new energy and intelligent networking strategy, core with the auto partsindustry chain and supplemented by other relevant fields, make a layout for new energy automobile drivetechnology, improve hydrogen fuel battery technology as well as the research and development capability ofintelligent networking technology. Market target: consolidating the current business market position and
positioning new business for the potential market; technical target: strengthen the technical strength of pillarbusiness, lay out the frontier technology for new business, actively exploit new fields based on the currentbusiness. And making efforts to achieved the enterprise goals of leaders of automotive core parts.(iii) Operation plan for year of 2019In 2019, the market environment is still complicated and severe, many factors such as macro economy, automobileindustry cycle, automobile consumption policy and implementation of the Guo VI Standard are still uncertain,opportunities and challenges coexist, the opportunities are inspiring, and challenges are alarming. In the new year,the company will revolve around the development goals of “high quality, stable volume, and fine management” andcomplete the following key tasks:
1. Figure out the situation, grasp the general trend, conform to the trend, conform to the mainstream, change withthe situation, face the difficulties, seek opportunities, and open up projects. The rapid improvement can meet theGuo VI Standard and the technical quality level of T4 products, enhance the project acquisition ability of productson the client side, locate at key customers, leading products and key projects, and strive to increase the market shareof key products. Promote the collaborative marketing of traditional product systems to further expand theaftermarket and overseas markets.2. Focus on management quality, optimize product structure, optimize input-output structure, carefully analyze coststructure, find out the focus of cost reduction and the factors affecting cost increase and profit reduction,continuously control and gradually reduce manufacturing costs; optimize manufacturing process control, make fulluse of interconnection technology, strengthen data interconnection and interoperability, and further enhance theability of data collection, analysis and prediction. Continuously improve the manufacturing process management,strengthen flexible and agile production, realize the intelligent deployment capability of manufacturing process,further improve the lean manufacturing production level; optimize operational support management, smooth theprocesses, build business project information management platform, unblock business system barriers, andefficiently adjust and control, improve quality and efficiency, improve operational efficiency; promote theconstruction of human resources platform, further improve the talent selection, training and managementmechanism, and comprehensively optimize and improve the human resource management. Constantly strengthenthe foundation of development.3. Struggle to act by innovation driven, actively create new situations, and form a dual-engine drive model.Consolidate the existing business market position, accelerate the development of traditional business products, takea position in the potential market for innovative business, actively promote the investment in emerging businesses,accelerate the layout of forward-looking project products of innovative business, promote the construction ofplatform projects, and promote the R&D capability of new business products, and improve the research anddevelopment system so as to lay a foundation for the company’s sustainable development.IV Risks and response measures(1) Macroeconomic and market risksChina’s economy has shifted from a high-speed growth stage to a high-quality development stage, the market maycontinue to show unexpected changes, but we believe that the Chinese economy is fully capable of maintaining areasonable growth range. At the same time, the Chinese auto market has entered a period of steady growth, and it
will also pay more attention to high-quality development in the future.Response measures: We must change the habitual and deterministic thinking model to cope with futureuncertainties, rely on the existing business, actively expand new areas, consolidate the existing business marketposition, and take a position in the new business potential market, and strive to improve the company’s corecompetitiveness and overall ability to resist risks.(2) Operating management and control risksWith the continuous expansion of the company’s asset scale and business scope, the company has a largemanagement span and many links in terms of personnel, business, finance and capital, and there are potential risksof operating management and control.Response measures:
The company will continue to promote the optimization and improvement of internal management, focus onstrengthening compliance management, further improve the system and processes, promote the institutionalizationand standardization of company management, and control operational risks.(3) Risk of fluctuations in raw material pricesThe company’s main raw materials include various grades of steel, aluminum, precious metals, etc., and thecontinued rise in prices will bring the company the risk of rising costs.Response measures: Pay close attention to the price trend of the company’s main raw materials, choose the righttiming for procurement, and make reasonable strategic reserves to resolve the risk of fluctuations in raw materialprices.
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√ Applicable □ Not applicable
Time | Way | Type | Basic situation index of investigation |
2018-06-27 | Spot research | Institution | The scene of the shareholders’ general meeting |
2018-01-01- 2018-12-31 | Written inquiry | Individual | The Company answered 151 questions for investors online through the investor relations interactive platform(http://irm.p5w.net/dqhd/sichuan/) |
2018-01-01- 2018-12-31 | Telephone communication | Individual | Basic condition of the Company, and views on market, communication with investors by telephone more than 300 |
Reception (times) | 460 | ||
Number of hospitality | 50 | ||
Number of individual reception | 260 | ||
Number of other reception | 151 | ||
Disclosed, released or let out major undisclosed information (Y/N) | N |
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe Reporting Period√ Applicable □ Not applicable
1. Cash dividend policy: carry out bonus distribution according to the regulations in Article of Association2. In reporting period, the Company implemented the profit distribution for year of 2017, based on the total sharecapital 1,008,950,570 shares, distributed 12.00 Yuan (tax included) bonus in cash for every 10 shares held, nocapitalization from public reserves. The plan was completed in July 2018. The implementation of the Company'scash dividend policy is in compliance with the provisions of Articles of Association, relevant decision-makingprocedures are complete and fully listen to the views of independent directors and minority shareholders andmaintain the legitimate rights and interests of minority shareholders.
Special explanation on cash dividend policy | |
Satisfy regulations of General Meeting or requirement of Article of Association (Y/N): | Yes |
Well-defined and clearly dividend standards and proportion (Y/N): | Yes |
Completed relevant decision-making process and mechanism (Y/N): | Yes |
Independent directors perform duties completely and play a proper role (Y/N): | Yes |
Minority shareholders have opportunity to express opinions and demands totally and their legal rights are fully protected (Y/N): | Yes |
Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed (Y/N): | Not applicable |
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years(including the reporting period)
The profit distribution plan for 2018: based on total share capital of 1,008,950,570 shares at end of 2018,distribute cash dividend of RMB 12.00 (tax included) for every 10 shares, and no capitalization of capital reserve.The profit distribution plan for 2017: based on total share capital of 1,008,950,570 shares at end of 2017,distribute cash dividend of RMB 12.00 (tax included) for every 10 shares, and no capitalization of capital reserve.The plan was completed in July 2018.The profit distribution plan for 2016: based on total share capital of 1,008,950,570 shares at end of 2016,distribute cash dividend of RMB 6.00 (tax included) for every 10 shares, and no capitalization of capital reserve.The plan was completed in July 2017.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Year for bonus shares | Amount for cash bonus (tax included) | Net profit attributable to common stock shareholders of listed company in consolidation statement for | Ratio of the cash bonus in net profit attributable to common stock shareholders of listed company | Proportion for cash bonus by other ways(i.e. share buy-backs) | Ratio of the cash bonus by other ways in net profit attributable to common stock shareholders of | Total cash bonus (including other ways) | Ratio of the total cash bonus (other ways included) in net profit attributable to common stock |
bonus year | contained in consolidation statement | listed company contained in consolidation statement | shareholders of listed company contained in consolidation statement | ||||
2018 | 1,210,740,684.00 | 2,396,077,415.21 | 50.53% | 0.00 | 0.00% | 1,210,740,684.00 | 50.53% |
2017 | 1,210,740,684.00 | 2,571,339,490.04 | 47.09% | 0.00 | 0.00% | 1,210,740,684.00 | 47.09% |
2016 | 605,370,342.00 | 1,672,224,317.05 | 36.20% | 0.00 | 0.00% | 605,370,342.00 | 36.20% |
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company ispositive but no plan of cash dividend proposed of common stock□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√ Applicable □ Not applicable
Bonus shares for every 10-share (Share) | 0 |
Dividends for every 10-share (RMB) (Tax included) | 12.00 |
Shares added for every 10-share base (Share) | 0 |
Equity base of distribution plan (Share) | 1,008,950,570 |
Total cash dividend(RMB) (Tax included) | 1,210,740,684.00 |
Cash dividend by other ways (share buy-back included) (RMB) | 0.00 |
Total cash dividend (other ways included) (RMB) | 1,210,740,684.00 |
Distributable profits (RMB) | 9,340,610,451.36 |
Ratio of the total cash dividend (other ways included) in total profit distribution | 100% |
Cash dividend policy: | |
Other | |
Detail explanation on profit distribution or capitalization from capital public reserve | |
Pursuit to the Standard Unqualified Auditor’s Report for year of 2018 issued by Jiangsu Gongzheng, the profit available for distribution of the parent company for year of 2018 are as: net profit of the parent company for year of 2018 amount as 2,190,550,000 Yuan, plus retained profit at beginning of the year 8,360,801,100 Yuan and deducted the divided 1,210,740,700 Yuan for year of 2017, the distributable profit at end of the period amounted as 9,340,610,400Yuan. Profit distribution plan for year of 2018: on base of the total 1,008,950,570 shares at end of 2018, distributed 12.00 Yuan (tax included) in cash for each 10 shares, no bonus, and no transfer of reserve to common shares. The remaining retained profit carried forward to next year. Profits allocate for year of 2018 amounting to 1,210,740,700 Yuan. |
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, buyers and the Company havefulfilled during the reporting period and have not yet fulfilled by the end of reporting period
□ Applicable √ Not applicable
No commitments that the actual controller, shareholders, related party, buyers and the Company have fulfilled during the reportingperiod and have not yet fulfilled by the end of the period
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicableNo non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculationmethod compared with the financial report of last year
√Applicable □ Not applicable
(1) Change of major accounting policyOn June 15, 2018, the Ministry of Finance issued the Notice on Amending the Format of Financial Statements ofGeneral Enterprises in 2018 (CK No. [2018] 15), revised the financial statements format of general enterprises.According to the requirement, relevant content of the accounting policy needs to be adjusted, and the financialstatement should be prepared in line with the format of financial statement for general enterprise(applicable toenterprise that have not yet implemented new financial and revenue standards).The impacts on the items and amounts related to consolidated financial statements and the parent company’sfinancial statements during the comparable period are as:
Changes of accounting policy | Impact on the amount in relevant financial statement of 2017/on 31 December 2017 | ||
Item | Amount affected (+,-) | ||
Consolidate financial statement | Financial statement of parent company | ||
The Company prepared the financial statement of 2018 in line with the format regulated in CK No. [2018] 15, and changed the presentation of relevant financial statements by retrospective method | Notes receivable | -1,464,256,934.83 | -449,209,323.02 |
Account receivable | -1,995,577,830.90 | -1,047,012,889.92 | |
Note receivable and account receivable | 3,459,834,765.73 | 1,496,222,212.94 | |
Interest receivable | -2,281,979.17 | -97,627.77 | |
Other receivables | 2,281,979.17 | 97,627.77 | |
Note payable | -947,976,759.10 | -459,762,950.78 | |
Account payable | -2,570,956,205.83 | -1,082,206,882.07 | |
Note payable and account payable | 3,518,932,964.93 | 1,541,969,832.85 | |
Interest payable | -401,928.43 | -93,777.78 |
Other accounts payable | 401,928.43 | 93,777.78 |
Long-term account payable | 18,265,082.11 | -- |
Special account payable | -18,265,082.11 | -- |
Administration expenses | -391,315,234.75 | -119,083,205.53 |
R&D expenses | 391,315,234.75 | 119,083,205.53 |
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicableNo major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’sscope
√Applicable □Not applicable
Content changed | Company | Way of obtained the equity | Time when equity obtained | Ratio of fund contribution |
Consolidate scope increased | Nanchang Weifu Leader Auto Parts & Components Co., Ltd. | Newly established | 2018-3-8 | 100.00% |
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm | Jiangsu Gongzheng Tianye Certified Public Accountants (Special General Partnership) |
Remuneration for domestic accounting firm (in 10 thousand Yuan) | 158 |
Continuous life of auditing service for domestic accounting firm | 27 |
Name of domestic CPA | Bo Lingjing, Meng Yin |
Continuous life of auditing service for domestic accounting firm | 4 |
Re-appointed accounting firms in this period□Yes √NoAppointment of internal control auditing accounting firm, financial consultant or sponsor√ Applicable □ Not applicable
Being deliberated in Annual Shareholders General Meeting of 2017, Jiangsu Gongzheng was appointed as auditaccounting firm for internal control of the Company for year of 2018. In the Period, auditing charge for internalcontrol amounting to 0.22 million Yuan
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicableNo bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitration of the Company
√Applicable □Not applicable
Basic Situation of Litigation (Arbitration) | Amount Related to the Case (Yuan) | Whether Formed Accrued Liabilities | Progress of Litigation (Arbitration) | Trial Results and Effects of Litigation (Arbitration) | Judgment Implementation of Litigation (Arbitration) | Disclosure Date | Disclosure Index |
On March 6, 2017, the company received the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 from Shenzhen Intermediate People's Court about the dispute case that the plaintiff applicant China Cinda Asset Management Co., Ltd. Shenzhen Branch (hereinafter referred to as “Cinda Company”) appealed the respondent Weifu High Technology and other seven respondents and the shareholders of the third party Hejun Company damaged the interests of corporate creditors, which adopted the mandatory measures to freeze the assets with value of RMB 217 million under the name of the Company and other seven respondents and Hejun Company. Freeze 4.71 million shares of Miracle Logistics and 15.3 million shares of SDEC Stock held by the company. | 21,703 | N | By the company’s application for reconsideration, Shenzhen Intermediate People's Court deemed the total assets that Cinda Company applied for preservation to be RMB 217,027,697.23. The total value of 15.3 million shares of SDEC Stock and 4.71 million shares of Miracle Logistics held by the company has exceeded the total assets that Cinda Company applied for preservation, therefore, 3,560,898 shares of SDEC Stock held by the company was unfrozen. Up to the end of the reporting period, the company’s frozen assets were as follows: 4.71 million shares of Miracles Logistics held by the company and its fruits, and 11,739,102 shares of SDEC Stock held by the company and its | This litigation will not affect the company’s daily operating activities for the time being | Not yet implemented | 8 March 2017 | (Announcement No.: 2017-002) published on Juchao Website (www.cninfo.com.cn) |
fruits. At present, this litigation is in the first instance (the first trial held on 24 Sept. 2017, and follow trial will wait for notice by the court). | |||||||
The Company has applied to Futian People's Court of Shenzhen for compulsory liquidation with Hejun Company | 3,300 | N | The Company has applied to Futian People's Court of Shenzhen for compulsory liquidation with Hejun Company. The civil ruling paper (Yue (0304) QS[2017] No. 5)made by Shenzhen Futian District People’s Court ruled that Hejun Company should be made compulsory liquidation. The Company will actively cooperate with the court to work on the liquidation to protect its legitimate rights and interests. | There are no impact on daily operation activities of the Company | Relevant works are in process | 6 Dec. 2017 | (Announcement No.: 2017-023) published on Juchao Website (www.cninfo.com.cn) |
XIII. Penalty and rectification
□ Applicable √ Not applicableNo penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan orother employee incentives
√ Applicable □ Not applicable
On 20 June 2014, the Company held the 2013 AGM which deliberated "the Company’s incentive fundimplementation methods", the Company has fully implemented it during the reporting period, completed themedium and long term special incentive allocation for core talents, farthest mobilized the enthusiasm andcreativity of employees, stabilized the employees, attracted the high-quality talents, and enhance the cohesiveforce in enterprise.
XVI. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principle | Related transaction price | Related transaction amount (in 10 thousand Yuan) | Proportion in similar transactions | Trading limit approved (in 10 thousand Yuan) | Whether over the approved limited or not (Y/N) | Clearing form for related transaction | Available similar market price | Date of disclosure | Index of disclosure |
Weifu Precision Machinery | Associated enterprise | Procurement of goods | Procurement of goods | Fair market pricing | Market price | 4,465.72 | 0.71% | 5,000 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Bosch Automobile Diesel | Associated enterprise, controlling subsidiary of Robert Bosch | Procurement of goods | Procurement of goods | Fair market pricing | Market price | 6,848.56 | 1.09% | 7,000 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Weifu Environment | Joint venture of Weifu Leader | Procurement of goods | Procurement of goods | Fair market pricing | Market price | 151,526.62 | 24.01% | 192,500 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Robert Bosch | Second largest shareholder of the Company | Procurement of goods | Procurement of goods | Fair market pricing | Market price | 17,984.12 | 2.85% | 14,300 | Y | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Weifu Precision Machinery | Associated enterprise | Sales of goods | Sales of goods | Fair market pricing | Market price | 378.52 | 0.04% | 300 | Y | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Bosch Automobile Diesel | Associated enterprise、controlling subsidiary of Robert Bosch | Sales of goods | Sales of goods | Fair market pricing | Market price | 272,291.93 | 31.22% | 300,000 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Weifu Environment | Joint venture of Weifu Leader | Sales of goods | Sales of goods | Fair market pricing | Market price | 5,018.19 | 0.58% | 5,300 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Robert Bosch | Second largest shareholder of the | Sales of goods | Sales of goods | Fair market pricing | Market price | 72,070.94 | 8.26% | 77,220 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 |
Company | |||||||||||||
Bosch Automobile Diesel | Associated enterprise, controlling subsidiary of Robert Bosch | Other | Payable for labour and technical services | Fair market pricing | Market price | 135.55 | 100 | Y | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 | |
Robert Bosch | Second largest shareholder of the Company | Other | Payable for technical services | Fair market pricing | Market price | 348.48 | 550 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 | |
Weifu Environment | Joint venture of Weifu Leader | Other | Lease fees receivable | Fair market pricing | Market price | 250.81 | 255 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 | |
Bosch Automobile Diesel | Associated enterprise、controlling subsidiary of Robert Bosch | Other | Purchase of fixed assets | Fair market pricing | Market price | 1,962.99 | 5,000 | N | According to the contract | Market price | 17 April 2018 | Notice No: 2018-009 | |
Robert Bosch | Second largest shareholder of the Company | Other | Purchase of fixed assets | Fair market pricing | Market price | 357.6 | Y | According to the contract | Market price | ||||
Weifu Environment | Joint venture of Weifu Leader | Other | Purchase of fixed assets | Fair market pricing | Market price | 0.99 | Y | According to the contract | Market price | ||||
Weifu Environment | Joint venture of Weifu Leader | Other | Sales of fixed assets | Fair market pricing | Market price | 18.78 | Y | According to the contract | Market price | ||||
Industry Group | First majority shareholder of the Company | Other | Interest paying | Fair market pricing | Market price | 21.44 | Y | According to the contract | Market price | ||||
Total | -- | -- | 533,681.24 | -- | 607,525 | -- | -- | -- | -- | -- | |||
Detail of sales return with major amount involved | Not applicable |
Report the actual implementation of the daily related transactions which were projected about their total amount by types during the reporting period(if applicable) | Being deliberated and approved by AGM of 2017, total related transaction for year of 2018 predicted as 6075.25 million Yuan, actually 5336.8124 million Yuan occurred in the Period, the related transaction classified according to types are as: 1. it estimated that purchasing goods and labor service from related party in 2018 will up to 2188 million Yuan, while 1808.2502 million Yuan occurred actually in the Period; 2. it estimated that sales of goods and labor service to related party in 2018 will up to 3828.2 million Yuan, while 3497.5958 million Yuan actually occurred in the period; 3. it estimated that other related transactions with related party for year of 2018 will up to 59.05 million Yuan while 30.9664 million Yuan actually occurred. |
Reasons for major differences between trading price and market reference price | Not applicable |
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicableNo related transactions by assets acquisition and sold for the Company in reporting period
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicableNo main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
□ Applicable √ Not applicableThe Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
□ Applicable √ Not applicableThe company had no other significant related transactions in reporting period.
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicableNo trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicableNo contract for the Company in reporting period
(3) Leasing
□ Applicable √ Not applicableNo leasing for the Company in reporting period
2. Major guarantees
√ Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company and subsidiary (Barring the guarantee for subsidiaries) | ||||||||
Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
Guarantee of the Company for subsidiaries | ||||||||
Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
Ningbo Tianli Turbocharging Technology Co., Ltd. | 27 Oct. 2016 | 6,000 | 4,500 | Joint liability guaranty | 5 | N | N | |
Total amount of approving guarantee for subsidiaries in report period (B1) | 0 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 4,500 | |||||
Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 6,000 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 4,500 | |||||
Guarantee of the subsidiaries for the subsidiaries | ||||||||
Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
Total amount of guarantee of the Company( total of three above mentioned guarantee) | ||||||||
Total amount of approving guarantee in report period (A1+B1+C1) | Total amount of actual occurred guarantee in report period (A2+B2+C2) | 4,500 | ||||||
Total amount of approved guarantee at the end of report period (A3+B3+C3) | 6,000 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 4,500 | |||||
The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4) | 0.28% | |||||||
Including: | ||||||||
Amount of guarantee for shareholders, actual controller and its related parties(D) | 0 | |||||||
The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly(E) | 0 | |||||||
Proportion of total amount of guarantee in net assets of the Company exceed 50%(F) | 0 | |||||||
Total amount of the aforesaid three guarantees(D+E+F) | 0 | |||||||
Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) | Not applicable | |||||||
Explanations on external guarantee against regulated procedures (if applicable) | Not applicable |
Explanation on guarantee with composite way
(2)Guarantee outside against the regulation
□ Applicable √ Not applicableNo guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
√ Applicable □ Not applicableTrust financing during the period
In 10 thousand Yuan
Specific type | Sources of funds | Amount occurred | Undue balance | Overdue amount |
Financing products | Free funds | 334,000 | 238,150 | 0 |
Financial products of securities firms | Free funds | 13,000 | 10,000 | 0 |
Trust financial products | Free funds | 112,790 | 97,144.81 | 0 |
Other type | Free funds | 166,150 | 106,000 | 0 |
Total | 625,940 | 451,294.81 | 0 |
Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed√ Applicable □ Not applicable
In 10 thousand Yuan
Trustee institution r name | Trustee type | Type | Amount | Source of funds | Start date | End date | Capital investment purpose | Criteria for fixing reward | Reference annual rate of return | Anticipated income (if applicable) | Actual gains/losses in period | Actual collected gains/losses in period | Amount of reserve for devaluation of withdrawing (if applicable) | Whether approved by legal procedure (Y/N) | Whether has entrust finance plan in the future | Summary of the items and related query index (if applicable) |
Bank | Bank | Non-guaranteed floating income | 791,000 | Owned fund | 3 Jan. 2018 | 8 Apr. 2019 | Financial products | Reference annual rate of return by the contract | 4.05%-5.7% | 15,684.5 | 14,162.93 | Collected according to the contract | Y | Y | Notice No.: 2018-010 on 17 April 2018 | |
Securities trader | Securities trader | Non-guaranteed floating income | 43,000 | Owned fund | 31 Jan. 2018 | 16 Jan. 2019 | Collective assets management plan | 4.6% -5.5% | 730.11 | 306.15 | Y | Y | ||||
Trust | Trust | Non-guarantee | 233,894 | Owned fund | 4 Jan. 2018 | 28 Jan. | Collection | 5.1% | 7,738.81 | 7,066.41 | Y | Y |
d floating income | 2019 | trust plan | -9.5% | |||||||||||||
Other (Fund etc.) | Other (Fund etc.) | Non-guaranteed floating income | 122,000 | Owned fund | 4 Jan. 2018 | 9 Sept. 2019 | Fixed income fund products | 5% -9% | 5,521.57 | 9,590.71 | Y | Y | ||||
Total | 1,189,894 | -- | -- | -- | -- | -- | -- | 29,674.99 | 31,126.2 | -- | -- | -- | -- |
Entrust financial expected to be unable to recover the principal or impairment might be occurred□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicableThe company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicableNo other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Performance of social responsibility
As for the Social Responsibility Report 2018 of the Company, found more in the Juchao Website (www.cninfo.com.cn), theinformation disclosure website appointed by Shenzhen Stock Exchange
2. Precise poverty alleviation social responsibility
There are no precise poverty alleviation carried out in the period and no follow plan either
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection departmentNoThe company and its subsidiaries are not the key pollutant discharge units announced by the State Environmental ProtectionDepartment. The company attaches great importance to environmental protection management. During the production and operationprocess, the company strictly abides by relevant national and local environmental protection laws, regulations and rules, and timelyacquires, updates and conveys relevant environmental laws, regulations and standards, and conducts the company’s internal dailyenvironmental management based on new regulations and standards., actively fulfills corporate environmental protection obligations,and implements national energy conservation and emission reduction guidelines and policies.
XIX. Explanation on other significant events
□Applicable √ Not applicableThere are no explanation on other significant events in the period
XX. Significant event of subsidiary of the Company
√ Applicable □ Not applicable1. Proposed application for listing in the national middle and small enterprises stock transfer system by the controlling subsidiaryWeifu TianliOn 25 October 2016, the 9
th
session of the 8
th
BOD consider and approve the proposal relating to proposed application for listing inthe national middle and small enterprises stock transfer system by the controlling subsidiary Weifu Tianli Pressure Technology Co.,Ltd; on 30 December 2016, Weifu Tianli was served with the notice of acceptance from the National Equities Exchange andQuotations Company Limited (GP2016120120). The relevant announcements (No.: 2016-020, 2016-023 and 2017-001) werepublished on China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao Information Website(http://www.cninfo.com.cn).Other state-owned shareholders of Weifu Tianli are unable to obtain the approval of state-owned assets,so the matter is stagnant at present. Shareholders meeting of the Weifu Tianli decided to cancel the listing application of the NationalEquities Exchange and Quotations
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
Amount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | Amount | Proportion | |
I. Restricted shares | 78,577 | 0.01% | 1,502 | 1,502 | 80,079 | 0.01% | |||
3. Other domestic shares | 78,577 | 0.01% | 1,502 | 1,502 | 80,079 | 0.01% | |||
Domestic natural person’s shares | 78,577 | 0.01% | 1,502 | 1,502 | 80,079 | 0.01% | |||
II. Unrestricted shares | 1,008,871,993 | 99.99% | -1,502 | -1,502 | 1,008,870,491 | 99.99% | |||
1. RMB Ordinary shares | 836,491,993 | 82.90% | -1,502 | -1,502 | 836,490,491 | 82.90% | |||
2. Domestically listed foreign shares | 172,380,000 | 17.09% | 172,380,000 | 17.09% | |||||
III. Total shares | 1,008,950,570 | 100.00% | 1,008,950,570 | 100.00% |
Reasons for share changed□ Applicable √ Not applicableApproval of share changed□ Applicable √ Not applicableOwnership transfer of share changed□ Applicable √ Not applicableProgress of shares buy-back□ Applicable √ Not applicableImplementation progress of reducing holdings of shares buy-back by centralized bidding□ Applicable √ Not applicableInfluence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period□ Applicable √ Not applicableOther information necessary to disclose or need to disclosed under requirement from security regulators□ Applicable √ Not applicable
2. Changes of restricted shares
√ Applicable □Not applicable
In Share
Shareholder | Shares restricted at period-begin | Shares released in the period | Shares with restriction increased in the period | Shares restricted at period-end | Restriction cause | Date release for trading |
Dai Lizhong | 1,500 | 1,500 | Lock-up shares for senior executive (elected as supervisor in general election of supervisory committee) | Not applicable | ||
Total | 0 | 0 | 1,500 | 1,500 | -- | -- |
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets andliability structure
□ Applicable √ Not applicable
3. Current internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total common stock shareholders in reporting period-end | 60,946 | Total common stock shareholders at end of last month before annual report disclosed | 54,791 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (see note 8) | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) (see note 8) | 0 | ||||||
Particulars about shares held above 5% by shareholders or top ten shareholders | |||||||||||||
Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total shareholders at the end of report period | Changes in report period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | ||||||
State of share | Amount | ||||||||||||
Wuxi Industry Development Group Co., Ltd. | State-owned corporate | 20.22% | 204,059,398 | 0 | |||||||||
ROBERT BOSCH | Foreign | 14.16% | 142,841,400 | 0 |
GMBH | corporate | ||||||||||
Hong Kong Securities Clearing Company | Foreign corporate | 4.01% | 40,482,044 | 20,983,702 | |||||||
Bank of Communication – HSBC Jixin Double Core Strategy Mixed Securities Investment Fund | Other | 2.64% | 26,612,573 | 26,612,573 | |||||||
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | Foreign corporate | 1.78% | 18,002,797 | 3,243,303 | |||||||
Central Huijin Assets Management Co., Ltd. | State-owned corporate | 1.27% | 12,811,200 | 0 | |||||||
Zhonghai Trust Co., Ltd. - Jinhai No.9 Securities Investment Collective Fund Trust | Other | 0.79% | 7,931,752 | 7,931,752 | |||||||
Agricultural Bank of China - CS 500 ETF | Other | 0.62% | 6,211,068 | 4,090,419 | |||||||
FIDELITY INVMT TRT FIDELITY INTL SMALL CAP FUND | Foreign corporate | 0.57% | 5,791,618 | 1,378,786 | |||||||
Basic pension fund-- 1207 portfolio | Other | 0.50% | 5,028,007 | 5,028,007 | |||||||
Strategy investor or general legal person becoming the top 10 shareholders by placing new shares (if applicable) (see note 3) | Not applicable | ||||||||||
Explanation on associated relationship among the aforesaid shareholders | Among the top ten shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not belong to the persons acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. | ||||||||||
Particular about top ten shareholders with un-restrict shares held | |||||||||||
Shareholders’ name | Amount of un-restrict shares held at Period-end | Type of shares | |||||||||
Type | Amount | ||||||||||
Wuxi Industry Development Group Co., Ltd. | 204,059,398 | RMB common shares | 204,059,398 | ||||||||
ROBERT BOSCH GMBH | 142,841,400 | RMB common shares | 115,260,600 |
Domestically listed foreign shares | 27,580,800 | ||
Hong Kong Securities Clearing Company | 40,482,044 | RMB common shares | 40,482,044 |
Bank of Communication – HSBC Jixin Double Core Strategy Mixed Securities Investment Fund | 26,612,573 | RMB common shares | 26,612,573 |
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | 18,002,797 | Domestically listed foreign shares | 18,002,797 |
Central Huijin Assets Management Co., Ltd. | 12,811,200 | RMB common shares | 12,811,200 |
Zhonghai Trust Co., Ltd. - Jinhai No.9 Securities Investment Collective Fund Trust | 7,931,752 | RMB common shares | 7,931,752 |
Agricultural Bank of China - CS 500 ETF | 6,211,068 | RMB common shares | 6,211,068 |
FIDELITY INVMT TRT FIDELITY INTL SMALL CAP FUND | 5,791,618 | Domestically listed foreign shares | 5,791,618 |
Basic pension fund-- 1207 portfolio | 5,028,007 | RMB common shares | 5,028,007 |
Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders | Among the top ten shareholders, there has no associated relationship between Wuxi Industry Development Croup Co., Ltd. and other shareholders, the first largest shareholder of the Company; and they do not belong to the persons acting in concert regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. | ||
Explanation on top 10 shareholders involving margin business (if applicable) (see note 4) | Not applicable |
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-backagreement dealing in reporting period□ Yes √ NoThe top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: legal person
Controlling shareholders | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
Wuxi Industry Development Group Co., Ltd. | Jiang Guoxiong | 5 October 1995 | 913202001360026543 | Authorizing the state-owned assets operation within a certain areas, investment management of significant project, investment and development of manufacturing and services and venture capital in high-tech achievement, entrust enterprise and management etc. |
Equity of other domestic/oversea listed company control by controlling | First majority shareholder of the Company—Industry Group is the controlling shareholder of Wuxi Taiji Industry Corporation Limited (stock code: 600667) |
Changes of controlling shareholders in reporting period□ Applicable √ Not applicableThe Company had no changes of controlling shareholders in reporting period
3. Actual controller and person acting in concert of the Company
Nature of actual controller: local state-owned assets managementType of actual controller: legal person
shareholder as well asstock-joint in reportperiod
Actual controlling shareholders
Actual controlling shareholders | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
State-owned Assets Supervision & Administration Commission of Wuxi Municipality of Jiangsu Province | ~ | ~ | State-owned Assets Administration | |
Equity of domestic/oversea listed company control by actual controller in report period | Not applicable |
Changes of actual controller in reporting period□ Applicable √ Not applicableNo changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow:
Property right and controlling relationship between the actual controller and the Company is as follow:
100%
20.22%
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
State-owned Assets Supervision & AdministrationCommission of Wuxi Municipality of Jiangsu ProvinceWuxi Industry Development Croup Co., Ltd.
Wuxi Industry Development Croup Co., Ltd.
Weifu High-Technology Group Co., Ltd.
4. Particulars about other legal person shareholders with over 10% shares held
√Applicable □Not applicable
Corporate shareholders | Legal rep./person in charge of unit | Dated founded | Register capital | Main business or management activity |
ROBERT BOSCH GMBH | Heiko Carrie, Bettina Holzwarth | 15 November 1886 | 1200 million euros | Development, manufacture and sales of automotive equipment and engine equipment; engaged in electro-technical, electronic technology, machinery manufacturing and optical system as well as produce iron, metal and plastic products and similar commodity. The company engaged in varies trading business concerned with its business scope and established relevant company concerned with its business scope. |
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicableThe Company had no preferred stock in the Period.
Section VIII. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Name | Title | Working status | Sex (M/F) | Age | Start dated of office term | End date of office term | Shares held at period-begin (Share) | Amount of shares increased in this period (Share) | Amount of shares decreased in this period (Share) | Other changes (share) | Shares held at period-end (Share) |
Chen Xuejun | Chairman | Currently in office | M | 51 | 7 March 2012 | 26 June 2021 | 34,753 | 34,753 | |||
Rudolf Maier | Vice Chairman | Currently in office | M | 61 | 7 March 2012 | 26 June 2021 | |||||
Wang Xiaodong | Vice Chairman, GM | Currently in office | M | 52 | 7 March 2012 | 26 June 2021 | 20,781 | 20,781 | |||
Ou Jianbin | Director,Deputy General Manager and financing Charger | Currently in office | M | 52 | 7 March 2012 | 26 June 2021 | 10,000 | 10,000 | |||
Zhang Xiaogeng | Director | Currently in office | M | 55 | 28 May 2015 | 26 June 2021 | |||||
Chen Yudong | Director | Currently in office | M | 57 | 7 March 2012 | 26 June 2021 | |||||
Hua Wanrong | Director | Currently in office | F | 54 | 7 March 2012 | 26 June 2021 | |||||
Yu Xiaoli | Independent Director | Currently in office | F | 55 | 27 June 2018 | 26 June 2021 | |||||
Lou Diming | Independent Director | Currently in office | M | 55 | 28 May 2015 | 26 June 2021 | |||||
Jin Zhangluo | Independent Director | Currently in office | M | 68 | 28 May 2015 | 26 June 2021 |
Xu Xiaofang | Independent Director | Currently in office | M | 55 | 28 May 2015 | 26 June 2021 | |||||
Shi Xingyuan | Chairman of the Supervisory Committee | Currently in office | M | 56 | 7 March 2012 | 26 June 2021 | 12,673 | 12,673 | |||
Ma Yuzhou | Supervisor | Currently in office | M | 44 | 27 June 2018 | 26 June 2021 | |||||
Dai Lizhong | Supervisor | Currently in office | M | 43 | 27 June 2018 | 26 June 2021 | 2,000 | 2,000 | |||
Miao Yuming | Deputy GM | Currently in office | M | 55 | 16 April 2003 | 26 June 2021 | 10,000 | 10,000 | |||
Xu Yunfeng | Deputy GM | Currently in office | M | 47 | 7 March 2012 | 26 June 2021 | 13,000 | 13,000 | |||
Zhou Weixing | Secretary of the Board | Currently in office | M | 55 | 9 June 2005 | 26 June 2021 | 3,565 | 3,565 | |||
Xing Min | Independent Director | Office leaving | M | 64 | 7 March 2012 | 26 June 2018 | |||||
Zhang Zhenting | Supervisor | Office leaving | M | 54 | 28 May 2015 | 26 June 2018 | 500 | -500 | |||
Liu Jinjun | Supervisor | Office leaving | M | 43 | 7 March 2012 | 26 June 2018 | |||||
Total | -- | -- | -- | -- | -- | -- | 105,272 | 2,000 | -500 | 106,772 |
II. Changes of directors, supervisors and senior executives
√Applicable □Not applicable
Name | Position | Type | Date | Cause |
Xing Min | Independent Director | Office leaving for office term expires | 26 June 2018 | General election of the BOD |
Zhang Zhenting | Supervisor | Office leaving for office term expires | 26 June 2018 | General election of the Supervisory Committee |
Liu Jinjun | Supervisor | Office leaving for office term expires | 26 June 2018 | General election of the Supervisory Committee |
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors andsenior executive
Mr. Chen Xuejun, was born in May 1967, communist party members, a university background and a senioreconomist. He has served as Director and Party branch secretary of the Company mining and supply department,Director of Party Committee Office. He has served as chairman of supervisory committee of the Company, deputychairman and General Manager of the Company. He currently serves as Chairman of the Company, partysecretary of the Company and director of the majority shareholder of the Company – Industry Group.
Mr. Rudolf Maier, was born in October 1957, a German citizenship with a doctor degree. He previously was GMof Bosch Automobile Diesel System Co., Ltd., executive deputy president of diesel system division and chairmanof commercial vehicle dept. in Robert Bosch Group; now he serves as Vice Chairman of the Company andChairman of Bosch Automobile Diesel System Co., Ltd.
Mr. Wang Xiaodong, was born in November 1966, communist party members, a university graduate, MBA and seniorengineer. He previously served as Division Chief of Products Development Department of the Company, DeputyGM of Bosch Automobile Diesel and supervisor of the Company. Currently serves as vice chairman and GM ofthe Company.
Mr. Ou Jianbin, born in June 1966, communist party members, a senior college graduated and an accountant.Previously served as Assistant Minister and Deputy Minister of Financial Department of Weifu Company,Director and deputy GM of subsidiary Weifu Jinning, Deputy GM and GM of subsidiary Weifu Leader andsupervisor of the Company. Currently he serves as director and standing deputy GM as well as chief of thefinancial of the Company.
Mr. Zhang Xiaogeng, born in March 1963, college degree, senior economist. He previously served as clerk of theproduction system office at commission for restructuring of Wuxi City, deputy director of enterprise reformdepartment of Wuxi City, director of comprehensive institution department of Wuxi City, director of developmentand planning department (policy and regulation division) of SASAC of Wuxi City and deputy GM of WuxiIndustry Asset Management Co., Ltd; now he serves sa the deputy President of Industry Group, the first majorityshareholder of the Company and Director of the Company. currently serves as director of the Company, deputypresident of majority shareholder – Industry Group; and
Mr. Chen Yudong, was born in September 1961, an America citizenship and a Doctor. He previously served assenior vice president of the gasoline system division of Robert Bosch Group, executive vice president of Bosch(China) Investment Ltd. Now he serves as President of Bosch (China) Investment Ltd. and director of theCompany.
Ms. Hua Wanrong, born in September 1964, communist party members, graduated from college, a senioraccountant. She previously she served as deputy director of administrative resources division of State-ownedAssets Supervision and Administration Bureau of Wuxi City, director of tax policy and regulations division anddirector of state-owned assets division of Wuxi Municipal Bureau of Finance, director of property managementdepartment and director of development and planning department of State-owned Assets Supervision andAdministration Commission of Wuxi City, director of investment banking department of major shareholder –Industry Group. Currently she serves as GM of the investment banking dept. in Industry Group, majorityshareholder of the Company and Director of Taiji Industry as well as the Company
Ms. Yu Xiaoli, born in January 1963, a member of the Communist Party of China, Ph.D., a professor of ZhejiangUniversity, served as an independent director of the sixth and seventh board of directors of the Company and thedean of the engineering branch of Zhejiang University City College. She is currently a professor at ZhejiangUniversity, the chairman of the Society of Automotive Engineers of Zhejiang, an executive director of JinhuaBozhong Automobile Technology Co., Ltd., the chairman of Zhejiang Bozhong Automobile Technology Co., Ltd.,a director of Shaoxing Taige Electromechanical Tech. Co., an independent director of Zhejiang Asia-PacificMechanical & Electronic Co., Ltd., an independent director of Hangzhou XZB Tech Co., Ltd., an independentdirector of Zhejiang Fenglong Electric Co., Ltd., an independent director of Hangzhou EVTECH Co., Ltd, and anindependent director of the Company.
Mr. Lou Diming, born in July 1963, a member of the Communist Party of China, has a Ph.D., and is a professor. Heused to be the deputy director and the secretary of the party branch of the Department of Mechanical Engineering ofShanghai Railway Institute, the deputy secretary of the party committee of the School of Mechanical Engineering ofTongji University and the party secretary of the Department of Locomotive and Vehicle Engineering of TongjiUniversity, and the executive vice president of the Institute of Rail Transit, and the secretary of the second jointcommittee of Tongji University, etc. He is currently a professor of Tongji University, a doctoral tutor, director ofthe Automotive Engine Design Institute of the School of Automotive Studies, vice chairman of the ShanghaiInternal Combustion Engines Society, director of the China Society for Internal Combustion Engines, vicechairman of the small and medium power diesel engine branch and the oils and clean fuels branch and thepost-processing technology branch, a member of the Expert Committee of the National Technical Committee 177on Internal Combustion Engine of Standardization Administration of China, a member of the Expert Committee ofthe China Internal Combustion Engine Industry Association, an independent director of Shanghai Diesel EngineCo., Ltd., an independent director of Jiangsu Liance Electromechanical Technology Co., Ltd., a senior consultantof Kunming Yunnei Power Co., Ltd., and an independent director of the Company.
Mr. Jin Zhangluo, born in August 1950, a member of the Communist Party of China, holds a college degree, and isa certified public accountant and senior accountant. He used to be the financial controller of Jintan Diesel EngineFactory in Jiangsu Province, deputy section chief, section chief and chief accountant of finance section of Wuxi
Power Machine Factory, and department manager, deputy director and executive deputy director of JiangsuGongzheng Certified Public Accountants. He currently serves as an independent director of Suzhou Taihu ElectricNew Materials Co., Ltd., an independent director of Jiangsu Pengyao Environmental Protection Technology Co.,Ltd., and an independent director of the Company.
Mr. Xu Xiaofang, born in March 1963, communist party members, graduate, a lawyer. He previously he served aspart-time lawyer in Beihai Economic Law Firm, staff in China Chamber of International Commerce BeihaiBranch, part-time lawyer of Guangdong Yuanjian Law Firm, and staff of legal affairs in CEIEC and lawyer ofGuangdong Bohe Law Firm. Now he serves as lawyer in Kunlun (Shenzhen) Law Firm, arbitrator of theShenzhen Arbitration Commission, independent director of Shenzhen Kaizhong Precision Technology Co., Ltdand the Company.
Mr. Shi Xingyuan, was born in May 1962, communist party members, a postgraduate, Master of Commerce andIndustry, senior engineer. He previously he served as GM and Director of the Company; now he serves as Chairman ofthe Supervisory Committee as well as the deputy Party Secretary and Chairman of the Labor Union of the Company
Mr. Ma Yuzhou, was born in September 1974, communist party members, owns Master’s degree and a engineer.He previously served as Deputy GM of Weifu Tianli, Deputy GM and GM of the mechanical system division ofthe Company; now he serves as Supervisor of the Company and director of the Organizational personneldepartment of the Company.
Mr. Dai Lizhong, was born in July 1975, communist party members, owns Master’s degree and a engineer. Hepreviously served as Deputy GM and GM of the Weifu Diesel; now he serves as Supervisor of the Company andstanding deputy GM of the mechanical system division of the Company
Mr. Miao Yuming, born in April 1963, communist party members, a university background, MBA and senior engineer.He previously served as director of sales department and assistant GM in the Company. Currently he serves asdeputy GM of the Company, deputy GM of Bosch Automobile Diesel;
Mr. Xu Yunfeng, born in November 1971, communist party members, graduate from University, a Master andengineer. He previously served as assistant GM and GM Weifu Automobile Diesel. Currently serves as deputyGM of the Company.
Mr. Zhou Weixing, born in January 1963, communist party members, graduate from University, a senior engineer.He previously served as representative of security affairs and director of security office of the Company; now heserves as secretary of the Board of the Company.
Post-holding in shareholder’s unit√ Applicable □ Not applicable
Name | Name of shareholder’s unit | Position in shareholder’s unit n | Start dated of office term | End date of office term | Received remuneration from shareholder’s unit (Y/N) |
Rudolf Maier | Bosch Automobile Diesel System Co., Ltd. | Chairman | Y | ||
Chen Yudong | Bosch (China) Investment Ltd. | President | 1 Jan. 2011 | Y | |
Zhang Xiaogeng | Wuxi Industry Development Group Co., Ltd. | Vice president | 1 Apr. 2008 | Y | |
Hua Wanrong | Wuxi Industry Development Group Co., Ltd. | GM of the investment banking department | 1 Oct. 2018 | Y | |
Miao Yuming | Bosch Automobile Diesel System Co., Ltd. | Deputy GM | 1 Mar. 2012 | Y |
Post-holding in other unit√ Applicable □ Not applicable
Name | Name of other units | Position in other unit n | Start dated of office term | End date of office term | Received remuneration from other unit (Y/N) |
Yu Xiaoli | Zhejiang University | Teacher and professor | 1 August 1985 | ||
Yu Xiaoli | Society of Automotive Engineers of Zhejiang | Director-general | 1 June 2015 | ||
Yu Xiaoli | Zhejiang Bozhong Auto Technology Co., Ltd | Chairman | 1 April 2008 | ||
Yu Xiaoli | Shaoxing Taige Electromechanical Tech. Co., Ltd | Director | 1 April 2004 | ||
Yu Xiaoli | Zhejiang Asia-Pacific Mechanical & Electronic Co., Ltd | Independent Director | 1 April 2013 | ||
Yu Xiaoli | Hangzhou XZB Tech. Co., Ltd | Independent Director | 1 December 2013 | ||
Yu Xiaoli | Zhejiang Fenglong Electric Co., Ltd | Independent Director | 1 April 2016 | ||
Yu Xiaoli | Hangzhou EVTECH Co., Ltd | Independent Director | 1 June 2016 | ||
Lou Diming | Tongji University | Professor, doctoral supervisor | 15 April 2000 | ||
Lou Diming | Shanghai Diesel Engine Co., Ltd | Independent Director | 20 May 2015 | ||
Lou Diming | Jiangsu Liance Electromechanical Technology Co., Ltd | Independent Director | 1 June 2017 | ||
Lou Diming | Kunming Yunnei Power Co., Ltd | Senior consultant | 1 August 2018 | ||
Jin Zhangluo | Suzhou Taihu Electric Advanced Material Co., Ltd | Independent Director | 4 February 2016 | ||
Jin Zhangluo | Jiangsu Pengyao Environmental Protection Tech. Co., Ltd | Independent Director | 1 February 2014 |
Xu Xiaofang | Kunlun (Shenzhen) Law Firm | Lawyer | 1 September 2004 | ||
Xu Xiaofang | Shenzhen Kaizhong Precision Technology Co., Ltd | Independent Director | 1 June 2018 | ||
Explanation on post-holding in other unit | The aforesaid are the independent directors of the Company |
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors andsenior management during the reporting period□ Applicable √ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
1. Decision-making procedure: the remuneration and review committee of the Board shall make proposalsaccording to completion status of the major annual targets, the implementation of which is subject to submissionto and approval by the Board;2. Determination reference: remuneration of directors, supervisors and senior management who receiveremuneration from the Company is determined based on the annual operating results assessment measures ofsenior management and remuneration management rules of senior management as approved at the generalmeetings. Salary for independent directors of the Company is determined by general meeting which is set at RMB25,000 per quarter (after tax), and the traveling expense occurred by them arising from attending the Company’sboard meeting, general meetings and relevant activities will be reimbursed according to the actual conditions.3. Actual payment: remuneration of directors, supervisors and senior management who receive remuneration fromthe Company comprises of basic annual pay and performance related annual salary. The basic annual pay shall bedetermined based on specific positions and paid monthly, while the performance related salary is determined andpaid based on satisfaction of the various performance indicators since it is directly linked with the economicbenefits of the Company. Remuneration of independent directors will be paid on a quarterly basis.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Name | Title | Sex | Age | Post-holding status | Total remuneration obtained from the Company (before taxes) | Whether remuneration obtained from related party of the Company |
Chen Xuejun | Chairman | M | 51 | Currently in office | 95 | N |
Rudolf Maier | Vice Chairman | M | 61 | Currently in office | Y | |
Wang Xiaodong | Vice Chairman、GM | M | 52 | Currently in office | 86 | N |
Ou Jianbin | Director, Deputy General Manager and financing Charger | M | 52 | Currently in office | 72 | N |
Zhang Xiaogeng | Director | M | 55 | Currently in office | Y | |
Chen Yudong | Director | M | 57 | Currently in office | Y | |
Hua Wanrong | Director | F | 54 | Currently in office | Y | |
Yu Xiaoli | Independent Director | F | 55 | Currently in office | 6 | N |
Lou Diming | Independent Director | M | 55 | Currently in office | 12 | N |
Jin Zhangluo | Independent Director | M | 68 | Currently in office | 12 | N |
Xu Xiaofang | Independent Director | M | 55 | Currently in office | 12 | N |
Shi Xingyuan | Chairman of the Supervisory Committee | M | 56 | Currently in office | 72 | N |
Ma Yuzhou | Supervisor | M | 44 | Currently in office | 19 | N |
Dai Lizhong | Supervisor | M | 43 | Currently in office | 19 | N |
Miao Yuming | Deputy GM | M | 55 | Currently in office | Y | |
Xu Yunfeng | Deputy GM | M | 47 | Currently in office | 72 | N |
Zhou Weixing | Secretary of the Board | M | 55 | Currently in office | 41 | N |
Xing Min | Independent Director | M | 64 | Office leaving | 6 | N |
Zhang Zhenting | Supervisor | M | 54 | Office leaving | 23 | N |
Liu Jinjun | Supervisor | M | 43 | Office leaving | 19 | N |
Total | -- | -- | -- | -- | 566 | -- |
Delegated equity incentive for directors, supervisors and senior executives in reporting period□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of Employees, Professional composition, Education background
Employee in-post of the parent Company (people) | 2,509 |
Employee in-post of main Subsidiaries (people) | 3,013 |
The total number of current employees (people) | 5,522 |
The total number of current employees to receive pay (people) | 5,522 |
Retired employee’ s expenses borne by the parent Company and main Subsidiaries (people) | 0 |
Professional composition | |
Category of professional composition | Numbers of professional composition (people) |
Production personnel | 3,386 |
Sales personnel | 230 |
Technical personnel | 1,236 |
Financial personnel | 91 |
Administrative personnel | 579 |
Total | 5,522 |
Education background | |
Category of education background | Numbers (people) |
Master degree and above | 244 |
Undergraduate | 1,317 |
Junior college | 1,202 |
Other | 2,759 |
Total | 5,522 |
2. Remuneration PolicyIn 2018, the company further improved the performance management and compensation management system,differentiated the competency evaluation of “people” and the performance evaluation of “things”, established atwo-dimensional evaluation system of performance and capability, realized the interaction between organizationalperformance and employee performance, and optimize the merit pay proportion by taking “one level isresponsible for one level” as the standard. Based on the principles of “remuneration market orientation andlandscape orientation balance” and combined with external research and internal post analysis, optimized salarystrategy and salary model, formed certain market competitiveness, stabilized the core employees of the company’score positions; gave full play to the role of incentive funds, clarified the objective of struggle, strengthened theincentive effect, and promoted the spirit of “climbing higher than the challenge, challenging the high difficulties”in the employees, which played an incentive role for the realization of the company’s annual goals; explored newwelfare mechanisms and piloted the establishment of flexible welfare platform for company employees. TheCompany arranged social insurance for all of its employees, and continued to make available the complementaryannuity and medical and accident commercial insurances, effectively improve the level of employee motivationand managing to activate employees’ enthusiasm and innovation, retain employees, attract high quality elites andstrengthen corporate cohesiveness.3. Training programsIn 2018, the Company further increased training to improve the professionalism and expertise of employees.Throughout the year, it held in aggregate 118 internal training with 167 in-house trainers. Besides, it conducted anoverall dynamic management against its training courses and trainers in order to achieve constant improvement ofinternal training quality. A total of about 10,300 people have received relevant training from the Company, amongwhich, internal training accounted for 91%. The major training subjects included development plan for potentialelites, establishment and implementation of training plan for core elites. Together with the assessment oneffectiveness of training, the Company managed to strengthen training management on application and sharingplans. In addition, the company also tried to design and implemented the “SPACE” model of talent professionalskill development and training, solidified the talent development training mode, strengthened the landing of
application, and embodied the training concept of “results oriented, training and fighting combined,
interesting and effective” through the course study, rotation practice, application action, selfchallenge, evaluation improvement.
4. Labor outsourcing
□ Applicable √ Not applicable
Section IX. Corporate Governance
I. Corporate governance of the Company
During the reporting period, the Company earnestly implemented the Basic Internal Control Standards forEnterprise and its guidance in strict accordance to the requirements of the Company Law, Securities Law, ListingRules of Shenzhen Stock Exchange as well as Guidance on Standard Operation of Listed Company on Main Board,continued to improve and enhance legal person governance structure and internal control system, thus tostandardize its operation. The actual status of corporate governance in accordance with the requirements of ChinaSecurities Regulatory Commission regulatory documents related to listing Corporation.The company has established a series of document systems for standardized management including the Rules ofProcedure of three committees, Working Rules, internal control system, Evaluation Management System ofInternal Control, Information Disclosure Management Approach, Financial Decision-making System ofSignificant Investment, Related Party Transaction System and Inside Information and Insider ManagementSystem.
According to the Company Law, Articles of Association and relevant laws and regulations, the companyestablished a relatively complete organizational control architecture system. The company’s board of directorsexecutes the resolution of general meeting of stockholders, takes charge of the company’s great decisions, andtake responsible for the general meeting of stockholders; the company sets up the general manager according tolaw to preside over the company’s daily production and operation and management, organize and implement theresolutions of the board of directors, and take responsible for the board of directors; the company’s board ofsupervisors is the company’s supervisory body, takes responsible for behaviors of the directors and seniormanagement and the supervise the company’s financial affairs. The board of directors has four special committeesincluding the strategy committee, remuneration and appraisal committee, audit committee, and nominationscommittee. The company’s general meeting of stockholders, board of directors, board of supervisors, andmanagement layer have clear rights and obligations, perform their own duties, effectively check and balance,scientifically make decisions, coordinate operations, and lay a solid foundation for the company’s sustainable,stable and healthy development.
The company’s independent directors perform their duties and faithfully and conscientiously fulfill theirobligations in strict accordance with relevant regulations of Articles of Association and the Independent DirectorSystem, and actively attend the board meetings and shareholders' meetings, understand and obtain relevantinformation before meetings; carefully consider each motion, and actively participate in the discussions and makerecommendations. Seriously make independent opinions, and effectively protect the interests of the company andshareholders, especially the minority shareholders. Independent directors have no objections on relevant mattersof the company.
The company further implements the Basic Norms of Enterprise Internal Control and its guidelines, constructs theinternal control system in the company headquarters and major subsidiaries, enhance the company's managementand control level, optimize the work flow, improve the internal control system, identify and control theoperational risks. Please see the detailed contents of 2018 Annual Internal Control Evaluation Report onwww.cninfo.com.cn which is the information disclosure website designated by Shenzhen Stock Exchange.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance forlisted company from CSRC?□ Yes √ NoThere are no differences between the actual condition of corporate governance and relevant regulations about corporate governancefor listed company from CSRC.
II. Independence of the Company relative to controlling shareholders’ in aspect of businesses,personnel, assets, organization and finance
1. Business: the company has a complete independent research and development, procurement, production andsales systems, the main business does not have horizontal competition with the controlling shareholders. Thebusiness is absolutely separated.2. Personnel: the company has mutual independence with its controlling shareholders in labor, personnel andsalary management; there is no mixed operation and management with the controlling shareholders. Thecompany’s general manager, vice general manager, financial administrator, secretary of the board, and seniorexecutives don’t hold any position in the shareholders’ units.3. Assets: the company's assets are independent and complete, the property relations with the controllingshareholders are clear.4. Organization: the company has established organization completely independent from its controllingshareholders, the duty and authority of the company’s stockholders' meeting, board of directors, board ofsupervisors and management level are clearly defined, the internal management system can operateindependently.5. Finance: the company has set up an independent financial department, established the independent financialaccounting system and financial management system, opened the independent bank account, and paid taxesseparately according to law.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting andextraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Session of meeting | Type | Ratio of investor participation | Date | Date of disclosure | Index of disclosure |
Annual General Meeting of 2017 | AGM | 42.04% | 27 June 2018 | 28 June 2018 | (Notice No.: 2018-021) published on Juchao Website(www.cninfo.com.cn) |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting and general meeting | |||||||
Independent Director | Times of Board meeting supposed to attend in the report period | Times of Board meeting Presence | Times of attending Board meeting by communication | Times of Board meeting entrusted presence | Times of Board meeting Absence | Absent the Board Meeting for the second time in a row (Y/N) | Times of attending shareholding meeting |
Yu Xiaoli | 3 | 1 | 2 | 0 | 0 | N | 1 |
Lou Diming | 7 | 2 | 4 | 1 | 0 | N | 1 |
Jin Zhangluo | 7 | 3 | 4 | 0 | 0 | N | 1 |
Xu Xiaofang | 7 | 3 | 4 | 0 | 0 | N | 1 |
Explanation of absent the Board Meeting for the second time in a rowNot applicable
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters□ Yes √ NoIndependent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
During the reporting period, the company’s independent directors have paid close attention to the company’soperations, independently performed their duties, made special opinions on the company’s system improvementand daily operating decisions in strict accordance with relevant laws and regulations and the provisions of Articlesof Association, made independent and just opinions on the matters that need the independent directors’ opinionsduring the reporting period, and played the due role in improving the corporate governance mechanism,maintaining the legitimate rights and interests of the company and all shareholders.
VI. Duty performance of the special committees under the board during the reporting period
1. Two meetings of Audit committee of the Board, deliberated and approved followed: Financial Result Report of2017, Annual Report of 2017 and its Summary, Conclusion Report of auditing for year of 2017, Engagement ofaudit institute for financial report of 2018, Engagement of audit institute for internal control of the Company of2018 and Semi-Annual Report of 2018 and its Summary etc.;2. One meeting of remuneration and appraisal committee of the Board, deliberate and approved the Remunerationevaluation and payment for senior executive of 2017;3. One meeting of strategy committee of the Board, deliberate and approved the Operation target for year of2018.4. Two meetings of nomination committee of the Company, deliberate the director nominee of 9
th
BOD withoutobjection; and examined the qualification of senior managers and the related situation without objection.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee□ Yes √ NoSupervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
Assessment and incentive of senior management of the Company is conducted pursuant to the Company Law,Articles of Association, and the Annual Operating Results Assessment Measures of Senior Management andRemuneration Management Rules of Senior Management as approved at the general meetings. Assessment ofoperating results of senior management comprises of annual operating results assessment and term-of-serviceoperating results assessment. Assessment on results and procedure was combined, and assessment results werelinked to incentives and punishment. With respect to annual operating results review, the remuneration and reviewcommittee of the Board made comprehensive assessment on satisfaction of the annual operating targets anddetermined the annual remuneration, incentives or punishment for senior management based on their reviewresults (which was implemented according to remuneration management rules of senior management), based onthe major annual operating targets set by the Board under required procedures and methods through establishmentof scientific performance indicators and assessment system and combination of scoring in terms of quantity and
review comments. During the reporting period, the Company made appropriate assessment on its seniormanagement under the performance indicator and assessment system, the results of which had been reflected inthe annual performance related remuneration.Currently, the Company has not exercised any share option scheme.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control evaluation report | 23 April 2019 | |
Disclosure index of full internal control evaluation report | Self-evaluation report of internal control for 2018, more details found in Juchao website (www.cninfo.com.cn) appointed by Shenzhen Stock Exchange | |
The ratio of the total assets of units included in the scope of evaluation accounting for the total assets on the company's consolidated financial statements | 100.00% | |
The ratio of the operating income of units included in the scope of evaluation accounting for the operating income on the company's consolidated financial statements | 100.00% | |
Defects Evaluation Standards | ||
Category | Financial Reports | Non-financial Reports |
Qualitative criteria | See details in (II) Basis for evaluation of internal controls and defect identification standards of internal controls of III Evaluation of Internal Controls in 2018 Annual Internal Control Self-Evaluation Report disclosed on www.cninfo.com.cn on April 23, 2019. | See details in (II) Basis for evaluation of internal controls and defect identification standards of internal controls of III Evaluation of Internal Controls in 2018 Annual Internal Control Self-Evaluation Report disclosed on www.cninfo.com.cn on April 23, 2019 |
Quantitative standard | See details in (II) Basis for evaluation of internal controls and defect identification standards of internal controls of III Evaluation of Internal Controls in 2018Annual Internal Control Self-Evaluation Report disclosed on www.cninfo.com.cn on April 23, 2019. | See details in (II) Basis for evaluation of internal controls and defect identification standards of internal controls of III Evaluation of Internal Controls in 2018 Annual Internal Control Self-Evaluation Report disclosed on www.cninfo.com.cn on April 23, 2019 |
Amount of significant defects in financial reports | 0 |
Amount of significant defects in non-financial reports | 0 |
Amount of important defects in financial reports | 0 |
Amount of important defects in non-financial reports | 0 |
X. Auditing report of internal control
√Applicable □ Not applicable
Deliberations in Internal Control Audit Report | |
Audit institute considers that: according to relevant regulations and Basic Rules of Internal Control for Enterprises, Weifu High-Technology Co., Ltd. in all major aspects, keeps an efficiency of internal control of financial report dated 31 December 2018 | |
Disclosure details of audit report of internal control | Disclosed |
Disclosure date of audit report of internal control (full-text) | 23 April 2019 |
Index of audit report of internal control (full-text) | Audit report of internal control for year of 2018, more details found in Juchao website (www.cninfo.com.cn) appointed by Shenzhen Stock Exchange |
Opinion type of auditing report of IC | Standard unqualified |
Whether the non-financial report had major defects | No |
Carried out modified opinion for internal control audit report from CPA□Yes √ NoThe internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board√ Yes □ No
Section X. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whenannual report approved for released or fail to cash in full on dueNo
Section XI. Financial Report
I. Audit report
Type of audit opinion | Standard unqualified opinion |
Signing date of audit report | 19 April 2019 |
Name of audit institute | Jiangsu Gongzheng Tianye Certified Public Accountants (Special General Partnership) |
Document number of audit report | SGW[2019]No.:A525 |
Name of CPA | Bo Lingjing, Meng Yin |
Auditor’s Report
SGW[2019]No.:A525
To the Shareholders of Weifu High-Technology Group Co., Ltd.:
I. Auditing opinionsWe have audited the financial statement under the name of Weifu High-Technology Group Co., Ltd. (hereinafter referred to asWFHT), including the consolidated and parent Company’s balance sheet of 31 December 2018 and profit statement, and cash flowstatement, and statement on changes of shareholders’ equity for the year ended, and notes to the financial statements for the yearended.In our opinion, the Company’s financial statements have been prepared in accordance with the Enterprises Accounting Standards andEnterprises Accounting System, and they fairly present the financial status of the Company and of its parent company as of 31December 2018 and its operation results and cash flows for the year ended.
II. Basis of opinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilitiesunder those standards are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” section of theauditor’s report. We are independent of the Company in accordance with the Certified Public Accountants of China’s Code of Ethicsfor Professional Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financialstatements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, andin forming our opinion thereon, and we do not provide a separate opinion on these matters.The key audit matter we identified is as follows:
(i) Revenue Recognition1.Matter description
As carried in the 24. Revenue in Note V and 35. Operation revenue and cost in Note VII, WFHT achieved an operation revenue of8721.6747 million Yuan for the year of 2018.As one of the biggest source of profits for WFHT, operation revenue has a significant effect on the general financial statement, inwhich there are certain of inherent risks existed for the reason that the management manipulate the timing of recognition so as toachieve specific objectives or anticipations. Therefore, we will take the Revenue Recognition Principle as the key auditing matter.2.The solution to the matter in auditing(1)The Company has tested the design and execution of key internal control related to revenue recycling so as to confirm the validityof internal control; (2) The Company should make sure whether the recognition condition and method of major operating revenue arecompliance with the enterprise accounting principle and whether the front phase consistent with the rear phase; it also should pay anattention to that whether the cyclical and occasional revenue is compliance with the decided revenue recognition principle andmethods; (3) Combining with status and policies of the industry where WFHT is located, and make a judgment on the rationality offluctuation; (4) The Company should carry out the procedure of account receivable and income letter of confirmation, and make ajudgment on the rationality of the timing of revenue recognition; (5) Combining with the procedure of letter of confirmation, theCompany should make a random inspection on sales contracts or orders, delivery lists, logistics bills, customs declaration, salesinvoices and other documents related to revenue to verify the authenticity of revenue; and (6) Referring to the recorded revenuebefore and after the Balance Sheet Date, the Company should select some samples and check out the supportive documents such asdelivery lists, customs declaration and receipt forms to make a judgment on whether the income has been recorded at the appropriateaccounting period.(ii) Impairment of available-for-sale financial assets1. Description of the matterAs stated in Note V, 10 “Financial Instruments” and Note VII, 7 “Available for Sale Financial Assets” of the financial statements, asof December 31, 2018, the book balance of available-for-sale financial assets in the consolidated statements of WFHT was460,603,200 Yuan, the balance of impairment provision was204,628,034.04Yuan, of which the impairment provision calculated inthe current period was145,994,927.09 Yuan. For available-for-sale financial assets, the management of WFHT (hereinafter referredto as the management) considered whether these financial assets had objective evidence showing signs of impairment, the objectiveevidence of the existence of signs of impairment included the fair value of available-for-sale equity instruments having a serious ornon-temporary decline. As the amount of available-for-sale financial assets was significant, the impairment assessment requiredsignificant judgment from the management, and the impairment assessment of such assets was recognized as a key audit matter.2. Response to the matter in the audit(1) Assess and test the validity of the design and operation of the internal control of the process related to the impairment ofavailable-for-sale financial assets; (2) Assess the management’s judgment on whether there is any indication of impairment, theassessment is based on the fair value of the financial instrument and the financial condition of the invested enterprise; (3) Assess therationality of the management’s judgment that the financial instrument is serious or non-temporary less than its cost standard; (4) Forimpairment of available-for-sale financial assets, test the amount of impairment provision accrued by the management. We assessedthe basis and parameters (such as market value, financial information of the invested enterprise, etc.) used to calculate the impairmentprovision during the test.IV. Other informationThe management of WFHT is responsible for other information which includes the information covered in the Company’s 2018annual report excluding the financial statement and our audit report.The audit opinion issued by us for the financial statement has not covered other information, for which we do not issue any form ofassurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shall consider whether otherinformation differs materially from the financial statements or that we understand during our audit, or whether there is any materialmisstatement.
Based on the work we have carried out, if we determine that there is a material misstatement of other information, we should reportthat fact and in this regard we have nothing to report.
V. Responsibilities of management and those charged with governance for the financial statementsThe management is responsible for the preparation of the financial statements in accordance with the Accounting Standards forEnterprise to secure a fair presentation, and for the design, establishment and maintenance of the internal control necessary to enablethe preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to continue as a goingconcern, disclosing matters related to going concern (if applicable) and using the going concern assumption unless the managementeither intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Responsibilities of the auditor for the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordance with the CAS will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financialstatements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional skepticism throughoutthe audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design andperform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis foraudit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, asfraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on the audit evidenceobtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’sability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by the CAS to draw users’
attention in audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify auditopinion. Our conclusions are based on the information obtained up to the date of audit report. However, future events or conditionsmay cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether thefinancial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within theCompany to express audit opinion on the financial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regardingindependence, and communicate with them all relationships and other matters that may reasonably be considered to affect ourindependence, as well as the relevant precautions (if applicable)
From the matters communicated with those charged with governance, we determine those matters that were of most significance inthe audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in theauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in the auditor’s report because of the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Jiangsu Gongzheng Tianye CPA Chinese CPA: Bo Lingjing(Special Ordinary Partnership) (engagement partner)
Wuxi, China Chinese CPA: Meng Yin
19 April 2019
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
Prepared by Weifu High-Technology Group Co., Ltd.
2018-12-31
In RMB
Item | Ending balance | Opening balance |
Current assets: | ||
Monetary funds | 2,616,321,740.73 | 3,118,709,412.83 |
Settlement provisions | ||
Capital lent | ||
Financial assets measured by fair value and with variation reckoned into current gains/losses | ||
Derivative financial assets | ||
Note receivable and account receivable | 3,067,900,870.59 | 3,459,834,765.73 |
Including: Note receivable | 1,148,107,603.68 | 1,464,256,934.83 |
Account receivable | 1,919,793,266.91 | 1,995,577,830.90 |
Account paid in advance | 94,651,431.31 | 97,576,197.88 |
Insurance receivable | ||
Reinsurance receivables | ||
Contract reserve of reinsurance receivable | ||
Other receivables | 84,582,246.16 | 7,496,602.58 |
Including: Interest receivable | 1,842,437.50 | 2,281,979.17 |
Dividend receivable | ||
Buying back the sale of financial assets | ||
Inventory | 1,438,528,714.59 | 1,478,939,040.70 |
Assets held for sale | ||
Non-current asset due within one year | ||
Other current assets | 4,632,137,600.26 | 3,887,997,290.53 |
Total current assets | 11,934,122,603.64 | 12,050,553,310.25 |
Non-current assets: | ||
Loans and payments on behalf | ||
Available-for-sale financial assets | 255,975,176.91 | 588,142,869.00 |
Held-to-maturity investments | ||
Long-term receivables | ||
Long-term equity investments | 4,976,773,946.74 | 4,140,064,825.58 |
Investment real estate | 21,906,134.52 | 23,544,830.78 |
Fixed assets | 2,707,374,678.61 | 2,584,872,628.54 |
Construction in progress | 166,414,542.18 | 100,345,461.28 |
Productive biological assets | ||
Oil and gas assets | ||
Intangible assets | 324,892,822.75 | 340,632,143.36 |
Research and development costs | ||
Goodwill | 1,784,086.79 | 1,784,086.79 |
Long-term deferred expenses | 16,637,652.31 | 2,969,770.81 |
Deferred income tax assets | 234,697,139.58 | 203,007,622.23 |
Other non-current assets | 251,462,676.27 | 195,088,675.74 |
Total non-current assets | 8,957,918,856.66 | 8,180,452,914.11 |
Total assets | 20,892,041,460.30 | 20,231,006,224.36 |
Current liabilities: | ||
Short-term borrowings | 298,928,213.94 | 243,000,000.00 |
Loan from central bank | ||
Absorbing deposit and interbank deposit | ||
Capital borrowed | ||
Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
Derivative financial liability | 490,329.13 | |
Note payable and account payable | 3,065,704,368.40 | 3,518,932,964.93 |
Accounts received in advance | 41,329,857.80 | 42,820,236.07 |
Selling financial asset of repurchase | ||
Commission charge and commission payable | ||
Wage payable | 312,113,178.24 | 327,778,677.29 |
Taxes payable | 74,271,613.92 | 93,869,690.36 |
Other accounts payable | 64,448,723.52 | 63,339,869.33 |
Including: Interest payable | 517,469.08 | 401,928.43 |
Dividend payable | ||
Reinsurance payable |
Insurance contract reserve | ||
Security trading of agency | ||
Security sales of agency | ||
Liability held for sale | ||
Non-current liabilities due within one year | 15,000,000.00 | 10,000,000.00 |
Other current liabilities | ||
Total current liabilities | 3,872,286,284.95 | 4,299,741,437.98 |
Non-current liabilities: | ||
Long-term loans | 30,000,000.00 | 45,000,000.00 |
Bonds payable | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Long-term account payable | 35,422,354.11 | 35,761,445.11 |
Long-term wages payable | 74,679,175.36 | 30,448,132.88 |
Accrual liabilities | ||
Deferred income | 425,769,854.13 | 451,281,721.77 |
Deferred income tax liabilities | 1,912,744.40 | 17,406,622.39 |
Other non-current liabilities | ||
Total non-current liabilities | 567,784,128.00 | 579,897,922.15 |
Total liabilities | 4,440,070,412.95 | 4,879,639,360.13 |
Owners’ equity: | ||
Share capital | 1,008,950,570.00 | 1,008,950,570.00 |
Other equity instrument | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Capital reserve | 3,416,022,795.14 | 3,417,841,402.89 |
Less: Inventory shares | ||
Other comprehensive income | -19,809,442.95 | 87,169,455.01 |
Reasonable reserve | 1,618,490.50 | 2,606.93 |
Surplus reserve | 510,100,496.00 | 510,100,496.00 |
Provision of general risk | ||
Retained profit | 10,996,945,870.13 | 9,811,609,138.92 |
Total owners’ equity attributable to parent company | 15,913,828,778.82 | 14,835,673,669.75 |
Minority interests | 538,142,268.53 | 515,693,194.48 |
Total owners’ equity | 16,451,971,047.35 | 15,351,366,864.23 |
Total liabilities and owner’s equity | 20,892,041,460.30 | 20,231,006,224.36 |
Legal Representative: Chen XuejunPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
2. Balance Sheet of Parent Company
In RMB
Item | Ending balance | Opening balance |
Current assets: | ||
Monetary funds | 1,922,408,227.00 | 2,460,413,190.84 |
Financial assets measured by fair value and with variation reckoned into current gains/losses | ||
Derivative financial assets | ||
Note receivable and account receivable | 1,006,511,198.29 | 1,496,222,212.94 |
Including: Note receivable | 264,264,207.30 | 449,209,323.02 |
Account receivable | 742,246,990.99 | 1,047,012,889.92 |
Account paid in advance | 59,028,927.25 | 52,269,971.38 |
Other receivables | 196,849,092.13 | 50,272,280.93 |
Including: Interest receivable | 188,682.78 | 97,627.77 |
Dividend receivable | ||
Inventory | 492,054,274.67 | 425,577,163.53 |
Assets held for sale | ||
Non-current asset due within one year | ||
Other current assets | 4,576,688,553.49 | 3,876,370,675.52 |
Total current assets | 8,253,540,272.83 | 8,361,125,495.14 |
Non-current assets: | ||
Available-for-sale financial assets | 180,035,176.91 | 512,202,869.00 |
Held-to-maturity investments | ||
Long-term receivables | ||
Long-term equity investments | 5,739,110,426.55 | 4,962,522,689.49 |
Investment real estate | ||
Fixed assets | 1,534,109,106.80 | 1,567,315,925.73 |
Construction in progress | 78,673,300.59 | 29,152,398.74 |
Productive biological assets |
Oil and gas assets | ||
Intangible assets | 188,101,655.94 | 196,726,670.75 |
Research and development costs | ||
Goodwill | ||
Long-term deferred expenses | ||
Deferred income tax assets | 140,286,756.70 | 114,706,976.54 |
Other non-current assets | 184,208,090.40 | 80,866,308.04 |
Total non-current assets | 8,044,524,513.89 | 7,463,493,838.29 |
Total assets | 16,298,064,786.72 | 15,824,619,333.43 |
Current liabilities: | ||
Short-term borrowings | 112,000,000.00 | 78,000,000.00 |
Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
Derivative financial liability | ||
Note payable and account payable | 1,154,238,521.88 | 1,541,969,832.85 |
Accounts received in advance | 6,639,554.63 | 12,242,442.51 |
Wage payable | 200,205,508.25 | 216,598,203.73 |
Taxes payable | 39,193,425.15 | 71,370,793.35 |
Other accounts payable | 12,142,596.68 | 10,076,446.33 |
Including: Interest payable | 149,966.66 | 93,777.78 |
Dividend payable | ||
Liability held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | ||
Total current liabilities | 1,524,419,606.59 | 1,930,257,718.77 |
Non-current liabilities: | ||
Long-term loans | ||
Bonds payable | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Long-term account payable | ||
Long-term wages payable | 63,962,762.93 | 16,665,236.81 |
Accrual liabilities | ||
Deferred income | 381,609,056.40 | 407,070,636.08 |
Deferred income tax liabilities | 15,382,844.99 | |
Other non-current liabilities | ||
Total non-current liabilities | 445,571,819.33 | 439,118,717.88 |
Total liabilities | 1,969,991,425.92 | 2,369,376,436.65 |
Owners’ equity: | ||
Share capital | 1,008,950,570.00 | 1,008,950,570.00 |
Other equity instrument | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Capital reserve | 3,488,221,286.39 | 3,488,221,286.39 |
Less: Inventory shares | ||
Other comprehensive income | -19,809,442.95 | 87,169,455.01 |
Reasonable reserve | ||
Surplus reserve | 510,100,496.00 | 510,100,496.00 |
Retained profit | 9,340,610,451.36 | 8,360,801,089.38 |
Total owners’ equity | 14,328,073,360.80 | 13,455,242,896.78 |
Total liabilities and owner’s equity | 16,298,064,786.72 | 15,824,619,333.43 |
3. Consolidated Profit Statement
In RMB
Item | Current period | Last Period |
I. Total operating income | 8,721,674,671.18 | 9,017,280,159.80 |
Including: Operating income | 8,721,674,671.18 | 9,017,280,159.80 |
Interest income | ||
Insurance gained | ||
Commission charge and commission income | ||
II. Total operating cost | 8,216,834,165.41 | 8,086,342,833.98 |
Including: Operating cost | 6,691,856,839.97 | 6,761,729,398.36 |
Interest expense | ||
Commission charge and commission expense | ||
Cash surrender value | ||
Net amount of expense of compensation | ||
Net amount of withdrawal of insurance contract reserve | ||
Bonus expense of guarantee slip |
Reinsurance expense | ||
Operating tax and extras | 65,388,329.92 | 72,413,140.48 |
Sales expenses | 237,839,472.28 | 194,854,780.37 |
Administration expenses | 585,005,385.75 | 539,493,552.86 |
R&D expenses | 403,263,972.20 | 391,315,234.75 |
Financial expenses | -17,393,580.55 | 7,316,996.79 |
Including: Interest expenses | 17,562,164.63 | 10,044,328.07 |
Interest income | 34,156,380.22 | 18,726,974.19 |
Losses of devaluation of asset | 250,873,745.84 | 119,219,730.37 |
Add: Other income | 48,404,480.99 | 40,394,724.11 |
Investment income (Loss is listed with “-”) | 1,955,668,055.33 | 1,853,638,285.20 |
Including: Investment income on affiliated company and joint venture | 1,623,761,059.52 | 1,604,027,207.30 |
Income from change of fair value (Loss is listed with “-”) | -490,329.13 | |
Exchange income (Loss is listed with “-”) | ||
Income from assets disposal (Loss is listed with “-”) | 102,472,995.47 | -748,927.63 |
III. Operating profit (Loss is listed with “-”) | 2,610,895,708.43 | 2,824,221,407.50 |
Add: Non-operating revenue | 1,264,830.90 | 11,968,167.87 |
Less: Non-operating expenditure | 9,977,159.55 | 5,773,593.62 |
IV. Total Profit (Loss is listed with “-”) | 2,602,183,379.78 | 2,830,415,981.75 |
Less: Income tax expense | 135,888,676.31 | 183,206,057.17 |
V. Net profit (Net loss is listed with “-”) | 2,466,294,703.47 | 2,647,209,924.58 |
(i) net profit from continuous operation (Net loss is listed with “-”) | 2,466,294,703.47 | 2,647,209,924.58 |
(ii) net profit from discontinued operation (Net loss is listed with “-”) | ||
Net profit attributable to owner’s of parent company | 2,396,077,415.21 | 2,571,339,490.04 |
Minority shareholders’ gains and losses | 70,217,288.26 | 75,870,434.54 |
VI. Net amount of other comprehensive income after-tax | -106,978,897.96 | -57,553,372.50 |
Net after-tax of other comprehensive income attributable to owners of parent company | -106,978,897.96 | -57,553,372.50 |
(i) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
1.Re-measurement of the change of defined benefit plan | ||
2.Other comprehensive income unable transfer to gain/loss |
under equity method | ||
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | -106,978,897.96 | -57,553,372.50 |
1.Other comprehensive income able to transfer to gain/loss under equity method | ||
2.Gains or losses arising from changes in fair value of available-for-sale financial assets | -106,978,897.96 | -57,553,372.50 |
3.Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets | ||
4.The effect hedging portion of gains or losses arising from cash flow hedging instruments | ||
5.Translation differences arising on translation of foreign currency financial statements | ||
6.Other | ||
Net amount of other comprehensive income after-tax attributable to minority shareholders | ||
VII. Total comprehensive income | 2,359,315,805.51 | 2,589,656,552.08 |
Total comprehensive income attributable to owners of parent Company | 2,289,098,517.25 | 2,513,786,117.54 |
Total comprehensive income attributable to minority shareholders | 70,217,288.26 | 75,870,434.54 |
VIII. Earnings per share: | ||
(i) Basic earnings per share | 2.37 | 2.55 |
(ii) Diluted earnings per share | 2.37 | 2.55 |
As for the enterprise combined under the same control, net profit of Yuan achieved by the merged party before combination while Yuan achieved last period
Legal Representative: Chen XuejunPerson in charge of accounting works: Ou JianbinPerson in charge of accounting institute: Ou Jianbin
4. Profit Statement of Parent Company
In RMB
Item | Current period | Last Period |
I. Operating income | 3,998,191,191.20 | 3,646,015,253.48 |
Less: Operating cost | 2,878,837,450.12 | 2,772,717,901.96 |
Operating tax and extras | 35,149,305.22 | 32,231,401.32 |
Sales expenses | 37,478,558.29 | 41,447,839.21 |
Administration expenses | 376,379,869.65 | 264,781,355.23 |
R&D expenses | 177,593,532.59 | 119,083,205.53 |
Financial expenses | -21,456,061.70 | 612,009.78 |
Including: Interest expenses | 7,628,727.78 | 10,044,328.07 |
Interest income | 28,648,955.90 | 18,726,974.19 |
Losses of devaluation of asset | 175,101,684.40 | 32,483,156.75 |
Add: Other income | 29,495,580.27 | 29,394,763.19 |
Investment income (Loss is listed with “-”) | 1,936,311,115.66 | 2,684,760,048.35 |
Including: Investment income on affiliated company and joint venture | 1,529,792,676.71 | 1,470,504,861.61 |
Income from change of fair value (Loss is listed with “-”) | ||
Income from assets disposal (Loss is listed with “-”) | 378,212.58 | -712,637.95 |
II. Operating profit (Loss is listed with “-”) | 2,305,291,761.14 | 3,096,100,557.29 |
Add: Non-operating revenue | 207,671.23 | 3,830,135.74 |
Less: Non-operating expenditure | 7,273,534.03 | 2,394,121.52 |
III. Total Profit (Total loss is listed with “-”) | 2,298,225,898.34 | 3,097,536,571.51 |
Less: Income tax expense | 106,753,611.42 | 96,268,627.83 |
IV. Net profit(Net loss is listed with “-”) | 2,190,550,045.98 | 3,001,267,943.68 |
(i) net profit from continuous operation (Net loss is listed with “-”) | 2,190,550,045.98 | 3,001,267,943.68 |
(ii) net profit from discontinued operation (Net loss is listed with “-”) | ||
V. Net amount of other comprehensive income after-tax | -106,978,897.96 | -57,553,372.50 |
(i) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
1.Re-measurement of the change of defined benefit plan | ||
2.Other comprehensive income unable transfer to gain/loss under equity method | ||
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | -106,978,897.96 | -57,553,372.50 |
1.Other comprehensive income able to transfer to gain/loss under equity method | ||
2.Gains or losses arising from changes in fair value of available-for-sale financial assets | -106,978,897.96 | -57,553,372.50 |
3.Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets |
4.The effect hedging portion of gains or losses arising from cash flow hedging instruments | ||
5.Translation differences arising on translation of foreign currency financial statements | ||
6.Other | ||
VI. Total comprehensive income | 2,083,571,148.02 | 2,943,714,571.18 |
VII. Earnings per share: | ||
(i) Basic earnings per share | ||
(ii) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
Item | Current period | Last Period |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 7,999,323,110.21 | 7,754,845,248.56 |
Net increase of customer deposit and interbank deposit | ||
Net increase of loan from central bank | ||
Net increase of capital borrowed from other financial institution | ||
Cash received from original insurance contract fee | ||
Net cash received from reinsurance business | ||
Net increase of insured savings and investment | ||
Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses | ||
Cash received from interest, commission charge and commission | ||
Net increase of capital borrowed | ||
Net increase of returned business capital | ||
Write-back of tax received | 74,874,331.14 | 43,620,789.57 |
Other cash received concerning operating activities | 118,177,755.39 | 65,978,678.90 |
Subtotal of cash inflow arising from operating activities | 8,192,375,196.74 | 7,864,444,717.03 |
Cash paid for purchasing commodities and receiving labor service | 4,916,153,332.79 | 4,582,582,669.13 |
Net increase of customer loans and advances | ||
Net increase of deposits in central bank and interbank | ||
Cash paid for original insurance contract compensation |
Cash paid for interest, commission charge and commission | ||
Cash paid for bonus of guarantee slip | ||
Cash paid to/for staff and workers | 1,258,270,424.72 | 1,160,114,421.44 |
Taxes paid | 584,432,693.90 | 616,431,389.37 |
Other cash paid concerning operating activities | 559,137,218.70 | 547,618,336.02 |
Subtotal of cash outflow arising from operating activities | 7,317,993,670.11 | 6,906,746,815.96 |
Net cash flows arising from operating activities | 874,381,526.63 | 957,697,901.07 |
II. Cash flows arising from investing activities: | ||
Cash received from recovering investment | 11,441,378,669.57 | 9,448,612,477.03 |
Cash received from investment income | 1,161,469,760.54 | 1,098,610,121.87 |
Net cash received from disposal of fixed, intangible and other long-term assets | 79,188,658.88 | 57,287,480.01 |
Net cash received from disposal of subsidiaries and other units | ||
Other cash received concerning investing activities | 4,559,984.34 | |
Subtotal of cash inflow from investing activities | 12,682,037,088.99 | 10,609,070,063.25 |
Cash paid for purchasing fixed, intangible and other long-term assets | 642,108,805.53 | 469,961,718.71 |
Cash paid for investment | 12,245,264,000.00 | 11,389,400,000.00 |
Net increase of mortgaged loans | ||
Net cash received from subsidiaries and other units obtained | ||
Other cash paid concerning investing activities | 1,090,775.32 | |
Subtotal of cash outflow from investing activities | 12,888,463,580.85 | 11,859,361,718.71 |
Net cash flows arising from investing activities | -206,426,491.86 | -1,250,291,655.46 |
III. Cash flows arising from financing activities: | ||
Cash received from absorbing investment | 800,000.00 | 9,520,000.00 |
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | 800,000.00 | 9,520,000.00 |
Cash received from loans | 464,928,213.94 | 245,000,000.00 |
Cash received from issuing bonds | ||
Other cash received concerning financing activities | 5,470,000.00 | |
Subtotal of cash inflow from financing activities | 471,198,213.94 | 254,520,000.00 |
Cash paid for settling debts | 419,000,000.00 | 157,000,000.00 |
Cash paid for dividend and profit distributing or interest paying | 1,251,137,878.98 | 640,733,312.09 |
Including: Dividend and profit of minority shareholder paid by subsidiaries | 22,543,737.00 | 25,491,872.94 |
Other cash paid concerning financing activities | 15,909,091.00 | 1,388,802.28 |
Subtotal of cash outflow from financing activities | 1,686,046,969.98 | 799,122,114.37 |
Net cash flows arising from financing activities | -1,214,848,756.04 | -544,602,114.37 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 3,128,506.54 | -9,588,455.13 |
V. Net increase of cash and cash equivalents | -543,765,214.73 | -846,784,323.89 |
Add: Balance of cash and cash equivalents at the period-begin | 2,948,439,354.22 | 3,795,223,678.11 |
VI. Balance of cash and cash equivalents at the period-end | 2,404,674,139.49 | 2,948,439,354.22 |
6. Cash Flow Statement of Parent Company
In RMB
Item | Current period | Last Period |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 4,733,753,801.62 | 3,416,825,598.91 |
Write-back of tax received | ||
Other cash received concerning operating activities | 41,027,003.47 | 517,431,460.97 |
Subtotal of cash inflow arising from operating activities | 4,774,780,805.09 | 3,934,257,059.88 |
Cash paid for purchasing commodities and receiving labor service | 2,886,319,248.71 | 2,151,676,404.43 |
Cash paid to/for staff and workers | 680,624,287.14 | 536,335,082.41 |
Taxes paid | 394,154,946.50 | 286,855,287.15 |
Other cash paid concerning operating activities | 190,629,457.19 | 122,961,088.23 |
Subtotal of cash outflow arising from operating activities | 4,151,727,939.54 | 3,097,827,862.22 |
Net cash flows arising from operating activities | 623,052,865.55 | 836,429,197.66 |
II. Cash flows arising from investing activities: | ||
Cash received from recovering investment | 10,801,378,669.57 | 8,859,701,492.00 |
Cash received from investment income | 1,209,267,861.85 | 1,994,517,515.08 |
Net cash received from disposal of fixed, intangible and other long-term assets | 39,600,092.79 | 52,607,353.75 |
Net cash received from disposal of subsidiaries and other units | 2,410,502.57 | |
Other cash received concerning investing activities | 208,164,304.89 | 203,883,811.97 |
Subtotal of cash inflow from investing activities | 12,258,410,929.10 | 11,113,120,675.37 |
Cash paid for purchasing fixed, intangible and other long-term assets | 374,303,391.72 | 171,633,121.17 |
Cash paid for investment | 11,561,834,000.00 | 10,801,729,258.63 |
Net cash received from subsidiaries and other units obtained | ||
Other cash paid concerning investing activities | 298,197,471.87 | 47,000,000.00 |
Subtotal of cash outflow from investing activities | 12,234,334,863.59 | 11,020,362,379.80 |
Net cash flows arising from investing activities | 24,076,065.51 | 92,758,295.57 |
III. Cash flows arising from financing activities: | ||
Cash received from absorbing investment | ||
Cash received from loans | 212,000,000.00 | 80,000,000.00 |
Cash received from issuing bonds | ||
Other cash received concerning financing activities | ||
Subtotal of cash inflow from financing activities | 212,000,000.00 | 80,000,000.00 |
Cash paid for settling debts | 178,000,000.00 | 82,000,000.00 |
Cash paid for dividend and profit distributing or interest paying | 1,218,313,222.90 | 607,280,892.11 |
Other cash paid concerning financing activities | ||
Subtotal of cash outflow from financing activities | 1,396,313,222.90 | 689,280,892.11 |
Net cash flows arising from financing activities | -1,184,313,222.90 | -609,280,892.11 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 2,563,681.07 | -8,586,691.91 |
V. Net increase of cash and cash equivalents | -534,620,610.77 | 311,319,909.21 |
Add: Balance of cash and cash equivalents at the period-begin | 2,454,696,969.20 | 2,143,377,059.99 |
VI. Balance of cash and cash equivalents at the period-end | 1,920,076,358.43 | 2,454,696,969.20 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
Item | Current period | ||||||||||||
Owners’ equity attributable to parent company | Minority interests | Total owners’ equity | |||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||
I. Balance at the end of the last year | 1,008,950,570.00 | 3,417,841,402.89 | 87,169,455.01 | 2,606.93 | 510,100,496.00 | 9,811,609,138.92 | 515,693,194.48 | 15,351,366,864.23 | |||||
Add: Changes of accounting policy | |||||||||||||
Error correction of the last period | |||||||||||||
Enterprise combine under the same control | |||||||||||||
Other | |||||||||||||
II. Balance at the beginning of this year | 1,008,950,570.00 | 3,417,841,402.89 | 87,169,455.01 | 2,606.93 | 510,100,496.00 | 9,811,609,138.92 | 515,693,194.48 | 15,351,366,864.23 | |||||
III. Increase/ Decrease | -1,818,607.75 | -106,978,897. | 1,615,883.5 | 1,185,336,731.21 | 22,449,074.05 | 1,100,604,183.12 |
in this year (Decrease is listed with “-”) | 96 | 7 | |||||||||||
(i) Total comprehensive income | -106,978,897.96 | 2,396,077,415.21 | 70,217,288.26 | 2,359,315,805.51 | |||||||||
(ii) Owners’ devoted and decreased capital | -1,818,607.75 | 7,024.21 | -12,958,416.46 | -14,770,000.00 | |||||||||
1.Common shares invested by owners | 800,000.00 | 800,000.00 | |||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||||
3. Amount reckoned into owners equity with share-based payment | |||||||||||||
4.Other | -1,818,607.75 | 7,024.21 | -13,758,416.46 | -15,570,000.00 | |||||||||
(III) Profit distribution | -1,210,740,684.00 | -35,204,600.00 | -1,245,945,284.00 | ||||||||||
1. Withdrawal of surplus reserves | |||||||||||||
2. Withdrawal of general risk provisions | |||||||||||||
3. Distribution for owners (or shareholders) | -1,210,740,684.00 | -35,204,600.00 | -1,245,945,284.00 | ||||||||||
4.Other | |||||||||||||
(IV) Carrying forward internal owners’ equity |
1. Capital reserves conversed to capital (share capital) | |||||||||||||
2. Surplus reserves conversed to capital (share capital) | |||||||||||||
3. Remedying loss with surplus reserve | |||||||||||||
4. Change amount of defined benefit plans that carry forward retained earnings | |||||||||||||
5.Other | |||||||||||||
(v) Reasonable reserve | 1,608,859.36 | 394,802.25 | 2,003,661.61 | ||||||||||
1. Withdrawal in the report period | 20,133,398.64 | 2,758,918.74 | 22,892,317.38 | ||||||||||
2. Usage in the report period | 18,524,539.28 | 2,364,116.49 | 20,888,655.77 | ||||||||||
(vi)Other | |||||||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,416,022,795.14 | -19,809,442.95 | 1,618,490.50 | 510,100,496.00 | 10,996,945,870.13 | 538,142,268.53 | 16,451,971,047.35 |
Last period
In RMB
Item | Last period | ||||||||||||
Owners’ equity attributable to parent company | Minority interests | Total owners’ equity | |||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||
I. Balance at the end of the last year | 1,008,950,570.00 | 3,417,841,402.89 | 144,722,827.51 | 89,005.19 | 510,100,496.00 | 7,845,639,990.88 | 471,086,098.05 | 13,398,430,390.52 | |||||
Add: Changes of accounting policy | |||||||||||||
Error correction of the last period | |||||||||||||
Enterprise combine under the same control | |||||||||||||
Other | |||||||||||||
II. Balance at the beginning of this year | 1,008,950,570.00 | 3,417,841,402.89 | 144,722,827.51 | 89,005.19 | 510,100,496.00 | 7,845,639,990.88 | 471,086,098.05 | 13,398,430,390.52 | |||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -57,553,372.50 | -86,398.26 | 1,965,969,148.04 | 44,607,096.43 | 1,952,936,473.71 | ||||||||
(i) Total | -57,553,372.5 | 2,571,339,490.04 | 75,870,434.54 | 2,589,656,552.08 |
comprehensive income | 0 | ||||||||||||
(ii) Owners’ devoted and decreased capital | 8,480,761.72 | 8,480,761.72 | |||||||||||
1.Common shares invested by owners | 9,520,000.00 | 9,520,000.00 | |||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||||
3. Amount reckoned into owners equity with share-based payment | |||||||||||||
4.Other | -1,039,238.28 | -1,039,238.28 | |||||||||||
(III) Profit distribution | -605,370,342.00 | -39,650,290.00 | -645,020,632.00 | ||||||||||
1. Withdrawal of surplus reserves | |||||||||||||
2. Withdrawal of general risk provisions | |||||||||||||
3. Distribution for owners (or shareholders) | -605,370,342.00 | -39,650,290.00 | -645,020,632.00 | ||||||||||
4.Other | |||||||||||||
(IV) Carrying forward internal owners’ equity | |||||||||||||
1. Capital reserves conversed to capital (share capital) |
2. Surplus reserves conversed to capital (share capital) | |||||||||||||
3. Remedying loss with surplus reserve | |||||||||||||
4. Change amount of defined benefit plans that carry forward retained earnings | |||||||||||||
5.Other | |||||||||||||
(v)Reasonable reserve | -86,398.26 | -93,809.83 | -180,208.09 | ||||||||||
1. Withdrawal in the report period | 17,947,661.67 | 2,379,810.36 | 20,327,472.03 | ||||||||||
2. Usage in the report period | 18,034,059.93 | 2,473,620.19 | 20,507,680.12 | ||||||||||
(vi)Other | |||||||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,417,841,402.89 | 87,169,455.01 | 2,606.93 | 510,100,496.00 | 9,811,609,138.92 | 515,693,194.48 | 15,351,366,864.23 |
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
Item | Current period | ||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Total owners’ equity | |||
Preferred stock | Perpetual capital securities | Other | |||||||||
I. Balance at the end of the last year | 1,008,950,570.00 | 3,488,221,286.39 | 87,169,455.01 | 510,100,496.00 | 8,360,801,089.38 | 13,455,242,896.78 | |||||
Add: Changes of accounting policy | |||||||||||
Error correction of the last period | |||||||||||
Other | |||||||||||
II. Balance at the beginning of this year | 1,008,950,570.00 | 3,488,221,286.39 | 87,169,455.01 | 510,100,496.00 | 8,360,801,089.38 | 13,455,242,896.78 | |||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -106,978,897.96 | 979,809,361.98 | 872,830,464.02 | ||||||||
(i) Total comprehensive income | -106,978,897.96 | 2,190,550,045.98 | 2,083,571,148.02 | ||||||||
(ii) Owners’ devoted and decreased capital | |||||||||||
1.Common shares |
invested by owners | |||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||
3. Amount reckoned into owners equity with share-based payment | |||||||||||
4.Other | |||||||||||
(III) Profit distribution | -1,210,740,684.00 | -1,210,740,684.00 | |||||||||
1. Withdrawal of surplus reserves | |||||||||||
2. Distribution for owners (or shareholders) | -1,210,740,684.00 | -1,210,740,684.00 | |||||||||
3.Other | |||||||||||
(IV) Carrying forward internal owners’ equity | |||||||||||
1. Capital reserves conversed to capital (share capital) | |||||||||||
2. Surplus reserves conversed to capital (share capital) | |||||||||||
3. Remedying loss with surplus reserve | |||||||||||
4. Change amount of defined benefit plans that |
carry forward retained earnings | |||||||||||
5.Other | |||||||||||
(v)Reasonable reserve | |||||||||||
1. Withdrawal in the report period | 7,503,921.32 | 7,503,921.32 | |||||||||
2. Usage in the report period | 7,503,921.32 | 7,503,921.32 | |||||||||
(vi)Other | |||||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,488,221,286.39 | -19,809,442.95 | 510,100,496.00 | 9,340,610,451.36 | 14,328,073,360.80 |
Last period
In RMB
Item | Last period | ||||||||||
Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Total owners’ equity | |||
Preferred stock | Perpetual capital securities | Other | |||||||||
I. Balance at the end of the last year | 1,008,950,570.00 | 3,448,408,786.39 | 144,722,827.51 | 510,100,496.00 | 5,525,644,079.79 | 10,637,826,759.69 | |||||
Add: Changes of accounting policy | |||||||||||
Error correction of the last period | |||||||||||
Other | |||||||||||
II. Balance at the | 1,008,950,570.00 | 3,448,408,786.39 | 144,722,827.51 | 510,100,496.00 | 5,525,644,079.79 | 10,637,826,759.69 |
beginning of this year | |||||||||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | 39,812,500.00 | -57,553,372.50 | 2,835,157,009.59 | 2,817,416,137.09 | |||||||
(i) Total comprehensive income | -57,553,372.50 | 3,001,267,943.68 | 2,943,714,571.18 | ||||||||
(ii) Owners’ devoted and decreased capital | |||||||||||
1.Common shares invested by owners | |||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||
3. Amount reckoned into owners equity with share-based payment | |||||||||||
4.Other | |||||||||||
(III) Profit distribution | -605,370,342.00 | -605,370,342.00 | |||||||||
1. Withdrawal of surplus reserves | |||||||||||
2. Distribution for owners (or shareholders) | -605,370,342.00 | -605,370,342.00 | |||||||||
3.Other | |||||||||||
(IV) Carrying forward internal owners’ equity | |||||||||||
1. Capital reserves |
conversed to capital (share capital) | |||||||||||
2. Surplus reserves conversed to capital (share capital) | |||||||||||
3. Remedying loss with surplus reserve | |||||||||||
4. Change amount of defined benefit plans that carry forward retained earnings | |||||||||||
5.Other | |||||||||||
(v)Reasonable reserve | |||||||||||
1. Withdrawal in the report period | 4,785,959.00 | 4,785,959.00 | |||||||||
2. Usage in the report period | 4,785,959.00 | 4,785,959.00 | |||||||||
(vi)Other | 39,812,500.00 | 439,259,407.91 | 479,071,907.91 | ||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,488,221,286.39 | 87,169,455.01 | 510,100,496.00 | 8,360,801,089.38 | 13,455,242,896.78 |
III. Basic information of the Company
1. Historical origin of the CompanyBy the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee, WeifuHigh-Technology Group Co., Ltd. (hereinafter referred to “the Company” or “Company”) was established as acompany of limited liability with funds raised from targeted sources, and registered at Wuxi Administration forIndustry & Commerce in October 1992. The original share capital of the Company totaled RMB 115.4355 million,including state-owned share capital amounting to RMB 92.4355 million, public corporate share capital amountingto RMB 8 million and inner employee share capital amounting to RMB 15 million.
Between year of 1994 and 1995, the Company was restructured and became a holding subsidiary of Wuxi WeifuGroup Co., Ltd (hereinafter referred to as “Weifu Group”).
By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995, the Companyissued 68 million special ordinary shares (B-share) with value of RMB 1.00 for each, and the total value of thoseshares amounted to RMB 68 million. After the issuance, the Company’s total share capital increased to RMB183.4355 million.
By the approval of CSRC in June 1998, the Company issued 120 million RMB ordinary shares (A-share) atShenzhen Stock Exchange through on-line pricing and issuing. After the issuance, the total share capital of theCompany amounted to RMB 303.4355 million.
In the middle of 1999, deliberated and approved by the Board and Shareholders’ General Meeting, the Companyimplemented the plan of granting 3 bonus shares for each 10 shares. After that, the total share capital of theCompany amounted to RMB 394.46615 million, of which state-owned shares amounted to RMB 120.16615million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.40 million, RMBordinary shares (A-share) RMB 156 million and inner employee shares RMB 19.5 million.
In the year 2000, by the approval of the CSRC and based upon the total share capital of 303.4355 million sharesafter the issuance of A-share in June 1998, the Company allotted 3 shares for each 10 shares, with a price of RMB10 for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after the allotmentincreased to RMB 436.36615 million, of which state-owned corporate shares amounted to RMB 121.56615million, public corporate shares RMB 10.4 million, foreign-funded shares (B-share) RMB 88.4 million and RMBordinary shares (A-share) RMB 216 million.
In April 2005, Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan,and examined and approved by 2004 Shareholders’ General Meeting , the Company distributed 3 shares for each10 shares to the whole shareholders totaling to 130,909,845 shares in 2005.
According to the Share Merger Reform Scheme of the Company that passed by related shareholders’ meeting ofShare Merger Reform and SGZF [2006] No.61 Reply on Questions about State-owned Equity Management inShare Merger Reform of Weifu High-Technology Co., Ltd. issued by State-owned Assets Supervision &Administration Commission of Jiangsu Province, the Weifu Group etc. 8 non-circulating shareholders arrangedpricing with granting 1.7 shares for each 10 shares to circulating A-share shareholders (totally granted 47,736,000shares), so as to realize the originally non-circulating shares can be traded on market when satisfied certainconditions, the scheme has been implemented on April 5, 2006.
On 27 May 2009, Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares for each 10shares based on the number of circulating A share as prior to Share Merger Reform, according to the aforesaidShare Merger Reform, with an aggregate of 14,039,979 shares dispatched. Subsequent to implementation ofdispatch of consideration shares, Weifu Group then held 100,021,999 shares of the Company, representing17.63% of the total share capital of the Company.
Pursuant to the document (XGZQ(2009)No.46) about Approval for Merger of Wuxi Weifu Group Co., Ltd. byWuxi Industry Development Group Co., Ltd. issued by the State-owned Assets Supervision and AdministrationCommission of Wuxi City Government, Wuxi Industry Development Group Co., Ltd. (hereinafter referred to asWuxi Industry Group) acquired Weifu Group. After the merger, Weifu Group was then revoked, and its assets andcredits & debts were transferred to be under the name of Wuxi Industry Group. Accordingly, Wuxi IndustryGroup became the first largest shareholder of the Company since then.
In accordance with the resolutions of shareholders' meeting and provisions of amended constitution, and approvedby [2012] No. 109 document of China Securities Regulatory Commission, in Feb., the Company issued RMBordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investor, RobertBosch Co., Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company), face value wasONE Yuan per share, added registered capital of RMB 112,858,000, and the registered capital after change wasRMB 680,133,995. Wuxi Industry Group is the first majority shareholder of the Company, and Robert BoschCompany is the second majority shareholder of the Company.In March 2013, the profit distribution pre-plan for year of 2012 was deliberated and approved by the Board, andalso passed in Annual General Meeting 2012 of the Company in May 2013. On basis of total share capital680,133,995 shares, distribute 5-share for every 10 shares held by whole shareholders, 340,066,997 shares in totalare distributed. Total share capital of the Company amounting RMB 1,020,200,992 up to 31 December 2013.
Deliberated and approved by the company’s first extraordinary general meeting in 2015, the company hasrepurchased 11,250,422 shares of A shares from August 26, 2015 to September 8, 2015, and has finished thecancellation procedures for above repurchase shares in China Securities Depository and Clearing CorporationLimited Shenzhen Branch on September 16, 2015; after the cancellation of repurchase shares, the company’spaid-up capital (share capital) becomes 1,008,950,570 Yuan after the change.
2. Registered place, organization structure and head office of the CompanyRegistered place and head office of the Company: No. 5 Huashan Road, New District, WuxiUnified social credit code: 91320200250456967NThe Company sets up Shareholders’ General Meeting, the Board of Directors and the Supervisory Committee.
The Company sets up Administration Department, Technology Centre, organization & personnel department,Office of the Board, compliance department, IT department, Market & Strategy Department, Party-massesDepartment, Finance Department, Purchase Department, Manufacturing Quality Department, MS (MechanicalSystem) division, AC(Automobile Components) division and DS (Diesel System ) division etc. and subsidiariessuch as Wuxi Weifu Leader Catalytic Converter Co., Ltd. and Nanjing Weifu Jinning Co., Ltd.
3. Business nature and major operation activities of the CompanyOperation scope of parent company: Technology development and consulting service in the machinery industry;manufacture of engine fuel oil system products, fuel oil system testers and equipment, manufacturing of autoelectronic parts, automotive electrical components, non-standard equipment, non-standard knife tool and exhaustafter-treatment system; sales of the general machinery, hardware & electrical equipment, chemical products & rawmaterials (excluding hazardous chemicals), automobile components and vehicles (excluding nine-seat passengercar); internal combustion engine maintenance; leasing of the own houses; import and export business in respect ofdiversified commodities and technologies (other than those commodities and technologies limited or forbidden bythe State for import and export) by self-operation and works as agent for such business. (any projects that needs tobe approved by laws can only be carried out after getting approval by relevant authorities)Major subsidiaries respectively activate in production and sales of engine accessories, automobile components,mufflers, and purifiers.
4. Relevant party offering approval reporting of financial statements and date thereofFinancial statements of the Company were approved by the Board of Directors for reporting dated 19 April 2019.
5. Scope of consolidate financial statement
Name of subsidiary | Short name of subsidiary | Shareholding ratio (%) | Proportion of votes (%) | Registered capital (in 10 thousand Yuan) | Business scope | Statement consolidate (Y/N) | |
Directly | Indirectly | ||||||
Nanjing Weifu Jinning Co., Ltd. | Weifu Jinning | 80.00 | -- | 80.00 | 34,628.70 | Internal-combustion engine accessories | Y |
Wuxi Weifu Leader Catalytic Converter Co., Ltd. | Weifu Leader | 94.81 | -- | 94.81 | 50,259.63 | Purifier and muffler | Y |
Weifu Mashan Pump Glib Co., Ltd. | Weifu Mashan | 100.00 | -- | 100.00 | 16,500 | Internal-combustion engine | Y |
accessoriesWuxi Weifu Chang’an Co., Ltd.
Wuxi Weifu Chang’an Co., Ltd. | Weifu Chang’an | 100.00 | -- | 100.00 | 21,000 | Internal-combustion engine accessories | Y |
Wuxi Weifu International Trade Co. Ltd. | Weifu International Trade | 100.00 | -- | 100.00 | 3,000 | Trade | Y |
Wuxi Weifu ITM Supercharging Technique Co., Ltd. | Weifu ITM | 100.00 | -- | 100.00 | 16,000 | Internal-combustion engine accessories | Y |
Wuxi Weifu Schmidt Power System Spare Parts Co., Ltd. | Weifu Schmidt | 66.00 | -- | 66.00 | 7,600 | Internal-combustion engine accessories | Y |
Ningbo Weifu Tianli Supercharging Technique Co., Ltd. | Weifu Tianli | 54.2295 | -- | 54.2295 | 11,136 | Internal-combustion engine accessories | Y |
Wuxi Weifu-Autocam Fine Machinery Co. Ltd. | Weifu Autocam | 51.00 | -- | 51.00 | US$ 2,110 | Automobile components | Y |
Wuxi Weifu Leader Catalytic Converter (Wuhan) Co., Ltd. | Weifu Leader (Wuhan) | -- | 60.00 | 60.00 | 1,000 | Purifier and muffler | Y |
Weifu Leader(Chongqing)Automobile components Co., Ltd. | Weifu Leader (Chongqing) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
Nanchang Weifu Leader Auto Parts & Components Co., Ltd. | Weifu Leader (Nanchang) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
The entity included in consolidate scope has Weifu Leader (Nanchang) newly added by compare with last period. Found more indescription carried in 5- Other change of consolidate scope in Note VIII.
IV. Basis of preparation of financial statements
1. Preparation baseThe financial statement were stated in compliance with Accounting Standard for Business Enterprises –BasicNorms issued by Ministry of Finance, the specific 42 accounting rules revised and issued dated 15 February 2006and later, the Application Instruments of Accounting Standards and interpretation on Accounting standards andother relevant regulations (together as “Accounting Standards for Business Enterprise”), as well as theCompilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 – GeneralProvision of Financial Report (Amended in 2014) issued by CSRC in respect of the actual transactions and
proceedings, on a basis of ongoing operation.
In line with relevant regulations of Accounting Standards of Business Enterprise, accounting of the Company ison accrual basis. Except for certain financial instruments, the financial statement measured on historical cost.Assets have impairment been found, corresponding depreciation reserves shall accrual according to relevant rules.2. Going concernThe Company comprehensively assessed the available information, and there are no obvious factors that impactsustainable operation ability of the Company within 12 months since end of the reporting period.
V. Major Accounting Policies and Estimation
Whether the Company needs to comply with the disclosure requirement of special industryNoSpecific accounting policies and estimation attention:
The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil systemproducts, automobile components, mufflers and purifiers etc., in line with the real operational characteristics andrelevant accounting standards, many specific accounting policies and estimation have been formulated for thetransactions and events with revenue recognized concerned. As for the explanation on major accounting judgmentand estimation, found more in Note V-28- Other major accounting policy and accounting estimation.1. Statement on observation of Accounting Standard for Business EnterprisesFinancial statements prepared by the Company were in accordance with requirements of Accounting Standard forBusiness Enterprises, which truly and completely reflected the financial information of the Company dated 31December 2018, such as financial position, operation achievements and cash flow for the year of 2018.2. Accounting periodAccounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period shorterthan one annual accounting year. The company adopts Gregorian calendar as accounting period, namely formeach 1 January to 31 December.3. Business cyclesNormal business cycle is the period from purchasing assets used for process by the Company to the cash and cashequivalent achieved. The Company’s normal business cycle was one-year (12 months).4. Recording currencyThe Company’s reporting currency is the RMB Yuan.
5. Accounting Treatment Method for Business Combinations under the same/different controlBusiness combination is the transaction or events that two or two above independent enterprises combined as areporting entity. Business combination including enterprise combined under the same control and businesscombined under different control.(1) The business combination under the same controlEnterprise combination under the same control is the enterprise who take part in the combination are have thesame ultimate controller or under the same controller, the control is not temporary. The assets and liabilityacquired by combining party are measured by book value of the combined party on combination date. Balance ofnet asset’s book value acquired by combining party and combine consideration paid (or total book value of theshares issued), shall adjusted capital reserve (share premium); if the capital reserves (share premium) is notenough for deducted, adjusted for retained earnings. Vary directly expenses occurred for enterprise combination,the combining party shall reckoned into current gains/losses while occurring. Combination day is the date whencombining party obtained controlling rights from the combined party.(2) Combine not under the same controlA business combination not involving entities under common control is a business combination in which all of thecombining entities are not ultimately controlled by the same party or parties both before and after the combination.As a purchaser, fair value of the assets (equity of purchaser held before the date of purchasing included) forpurchasing controlling right from the purchaser, the liability occurred or undertake on purchasing date less the fairvalue of identifiable net assets of the purchaser obtained in combination, recognized as goodwill if the results ispositive; if the number is negative, the acquirer shall firstly review the measurement of the fair value of theidentifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as the combination costs.After that, if the combination costs are still lower than the fair value of the identifiable net assets obtained, theacquirer shall recognize the difference as the profit or loss in the current period. Other directly expenses cost forcombination shall be reckoned into current gains/losses. Difference of the fair value of assets paid and its bookvalues, reckoned into current gains/losses. On purchasing date, the identifiable assets, liability or contingency ofthe purchaser obtained by the Company recognized by fair value, that required identification conditions;Acquisition date refers to the date on which the acquirer effectively obtains control of the purchaser.6. Preparation method for consolidated financial statement(1) Recognition principle of consolidated scopeOn basis of the financial statement of the parent company and owned subsidiaries, prepared consolidatedstatement in line with relevant information. The scope of consolidation of consolidated financial statements isascertained on the basis of effective control. Once certain elements involved in the above definition of controlchange due to changes of relevant facts or circumstances, the Company will make separate assessment.
(2) Basis of control
Control is the right to govern an invested party so as to obtain variable return through participating in the investedparty’s relevant activities and the ability to affect such return by use of the aforesaid right over the invested party.Relevant activates refers to activates have major influence on return of the invested party’s.
(3) Consolidation process
Subsidiaries are consolidated from the date on which the company obtains their actual control, and arede-consolidated from the date that such control ceases. All significant inter-group balances, investment,transactions and unrealized profits are eliminated in the consolidated financial statements. For subsidiaries being
disposed, the operating results and cash flows prior to the date of disposal are included in the consolidated incomestatement and consolidated cash flow statement; for subsidiaries disposed during the period, the opening balancesof the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combinationnot under common control, their operating results and cash flows subsequent to the acquisition date are includedin the consolidated income statement and consolidated cash flow statement, and the opening balances andcomparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from abusiness combination under common control, their operating results and cash flows from the date ofcommencement of the accounting period in which the combination occurred to the date of combination areincluded in the consolidated income statement and consolidated cash flow statement, and the comparative figuresof the consolidated balance sheet would be restated.In preparing the consolidated financial statements, where the accounting policies or the accounting periods areinconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted inaccordance with the accounting policies and accounting period of the company.Concerning the subsidiary obtained under combination with different control, adjusted several financial statementof the subsidiary based on the fair value of recognizable net assets on purchased day while financial statementconsolidation; concerning the subsidiary obtained under combination with same control, considered current statusof being control by ultimate controller for consolidation while financial statement consolidation.The unrealized gains and losses from the internal transactions occurred in the assets the Company sold to thesubsidiaries fully offset "the net profit attributable to the owners of the parent company". The unrealized gains andlosses from the internal transactions occurred in the assets the subsidiaries sold to the Company are distributed andoffset between "the net profit attributable to the owners of the parent company" and "minority interest" accordingto the distribution ratio of the Company to the subsidiary. The unrealized gains and losses from the internaltransactions occurred in the assets sold among the subsidiaries are distributed and offset between "the net profitattributable to the owners of the parent company" and "minority interest" according to the distribution ratio of theCompany to the subsidiary of the seller.The share of the subsidiary’s ownership interest not attributable to the Company is listed as “minority interest”item under the ownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit orloss attributable to the minority interests is listed as "minority interest" item under the net profit item in theconsolidated income statement. The share of the subsidiary’s current consolidated income attributable to theminority interests is listed as the “total consolidated income attributable to the minority shareholders” item underthe total consolidated income item in the consolidated income statement. If there are minority shareholders, addthe "minority interests" item in the consolidated statement of change in equity to reflect the changes of theminority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed theshare that the minority shareholders hold in the subsidiary ownership interest in the beginning of the period, thebalance still charges against the minority interests.When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary, the fairvalue of the remaining equity interest is re-measured on the date when the control ceased. The difference betweenthe sum of the consideration received from disposal of equity interest and the fair value of the remaining equityinterest, less the net assets attributable to the company since the acquisition date, is recognized as the investmentincome from the loss of control. Other comprehensive income relating to original equity investment insubsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by thepurchaser directly when the control is lost, namely be transferred to current investment income other than therelevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit scheme
by the original subsidiary. Subsequent measurement of the remaining equity interests shall be in accordance withrelevant accounting standards such as Accounting Standards for business Enterprises 2 – Long-term EquityInvestments or Accounting Standards for business Enterprises 22 – Financial Instruments Recognition andMeasurement.The company shall determine whether loss of control arising from disposal in a series of transactions should beregarded as a bundle of transactions. When the economic effects and terms and conditions of the disposaltransactions met one or more of the following situations, the transactions shall normally be accounted for as abundle of transactions: ①The transactions are entered into after considering the mutual consequences of eachindividual transaction; ② The transactions need to be considered as a whole in order to achieve a deal incommercial sense; ③The occurrence of an individual transaction depends on the occurrence of one or moreindividual transactions in the series; ④ The result of an individual transaction is not economical, but it would beeconomical after taking into account of other transactions in the series. When the transactions are not regarded asa bundle of transactions, the individual transactions shall be accounted as “disposal of a portion of an interest in asubsidiary which does not lead to loss of control” and “disposal of a portion of an interest in a subsidiary whichlead to loss of control”. When the transactions are regarded as a bundle of transactions, the transactions shall beaccounted as a single disposal transaction; however, the difference between the consideration received fromdisposal and the share of net assets disposed in each individual transactions before loss of control shall berecognized as other comprehensive income, and reclassified as profit or loss arising from the loss of control whencontrol is lost.7. Joint arrangement classification and accounting treatment for joint operationsIn accordance with the Company’s rights and obligation under a joint arrangement, the Company classifies jointarrangements into: joint ventures and joint operations.The company confirms the following items related to the share of interests in its joint operations, and inaccordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company inappropriation to the share of the Company;(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by theCompany in appropriation to the share of the Company;(3) Recognize revenue from disposal of the share of joint operations of the Company;(4) Recognize fees solely occurred by Company;(5) Recognize fees from joint operations in appropriation to the share of the Company.8. Determining standards for cash and cash equivalentCash refers to stock cash, savings available for paid at any time; cash and cash equivalent refers to the cash heldby the Company with short terms(expired within 3 months since purchased), and liquid and easy to transfer asknown amount and investment with minor variation in risks.9. Foreign currency business and conversionThe occurred foreign currency transactions are converted into the recording currency in accordance with themiddle rate of the market exchange rate published by the People's Bank of China on the transaction date. Thereinto,
the occurred foreign currency exchange or transactions involved in the foreign currency exchange are converted inaccordance with the actual exchange rate in the transactions.
At the balance sheet date, the account balance of the foreign currency monetary assets and liabilities is convertedinto the recording currency amount in accordance with the middle rate of the market exchange rate published bythe People's Bank of China on the transaction date. The balance between the recording currency amount convertedaccording to exchange rate at the balance sheet date and the original recording currency amount is disposed as theexchange gains or losses. Thereinto, the exchange gains or losses occurred in the foreign currency loans related tothe purchase and construction of fixed assets are disposed according to the principle of capitalization of borrowingcosts; the exchange gains and losses occurred during the start-up are included in the start-up costs; the rest isincluded in the current financial expenses.
At the balance sheet date, the foreign currency non-monetary items measured with the historical costs are convertedin accordance with the middle rate of the market exchange rate published by the People's Bank of China on thetransaction date without changing its original recording currency amount; the foreign currency non-monetary itemsmeasured with the fair value are converted in accordance with the middle rate of the market exchange ratepublished by the People's Bank of China on the fair value date, and the generated exchange gains and losses areincluded in the current profits and losses as the gains and losses from changes in fair value.
The following displays the methods for translating financial statements involving foreign operations into thestatements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at thespot exchange rates on the balance sheet date. Among the owners’ equity items, the items other than“undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and expenseitems in the income statements of overseas operations are translated at the average exchange rates of thetransaction dates. The exchange difference arising from the above mentioned translation are recognized in othercomprehensive income and is shown separately under owner’ equity in the balance sheet; such exchangedifference will be reclassified to profit or loss in current year when the foreign operation is disposed according tothe proportion of disposal.
The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash flows.The effect of exchange rate changes on cash is presented separately in the cash flow statement.10. Financial instrumentFinancial instrument is the contract that taken shape of the financial asses for an enterprise and of the financialliability or equity instrument for other units.(1) Classification and measurement on financial assets and financial liabilityIn terms of investment purposes and economic natures, the Company divides its financial assets into financialassets( with its variation of fair value reckoned into current gains/losses), financial assets available for sale,account receivables and held-to-maturity investments, among which, transactional financial asset is measured atfair value and movement of its fair value is recorded in current gains and losses; financial asset available for saleis measured at fair value and movement of its fair value is recorded in owners’ equity; account receivables andheld-to-maturity investments are measured at amortized cost.In terms of economic nature, the Company divides its financial liabilities into two groups, namely financial
liabilities at fair value through gains and losses and other financial liabilities at amortized cost.
(2) Determination of fair values for financial assets and financial liabilitiesThe fair value refers to the price that will be received when selling an asset or the price to be paid to transfer aliability in an orderly transaction between market participants on the date of measurement. Financial instrumentsexist in an active market. Fair value is determined based on the quoted price in such market. An active marketrefers to where pricing is easily and regularly obtained from exchanges, brokers, industrial organizations and pricefixing service organizations, representing the actual price of a market transaction that takes place in a fair deal.While financial instruments do not exist in an active market, the fair value is determined using valuationtechniques. Valuation technologies include reference to be familiar with situation and prices reached in recentmarket transactions entered into by both willing parties, reference to present fair values of similar other financialinstruments, cash flow discounting method and option pricing models.As for the equity investment of the invested party held by the Company, which has no controlling rights, commoncontrol or significant influence (that is under the major influence), has no quota in an active market and the fairvalue cannot be measure reasonably, than divided into financial assets available for sale and measured by cost.
(3) Recognition basis and measurement for transfer of financial assetsThat the Company grants or delivers financial assets to party other than the issuer of such financial assets equalstransfer of financial assets. Financial assets transferred could be the entire or part of such financial assets. Twoforms are listed as follows:
① Transfer of right for collecting cash flow of financial assets to another party;② Transfer financial assets to another party, while the aforementioned right is retained, with obligation of payingsuch cash flow to final collectorWhen that the Company has transferred almost all risks and remunerations arising from ownership of all or partfinancial assets to another party, accordingly, recognition for such entire or part financial assets shall be ceased.Gains and losses are determined by the received consideration less the carrying value of the transferred financialassets. Meanwhile, the original accumulated gains or losses of financial assets recognized in the owners’ equityshall transferred to gains and losses; when all risks and remunerations attached to ownership are retained,recognition for such entire or part financial assets shall continue, and the consideration received shall be viewed asfinancial liabilities.
As for the financial assets which the Company has neither transferred nor retained all risks and remunerationsattached to ownership of such financial assets, while control upon such financial assets still exists, recognitionshall be conducted in light of the degree of its continuous involvement in the transferred financial assets.Accordingly, relevant liabilities shall be recognized.
(4) Recognition for termination of financial assets and liabilityUpon satisfaction of one of the following condition, financial assets will immediately experience discontinuedrecognition:
① Right entitled by contract in respect of collection of cash flow from such financial asset terminates.② Such financial assets have been transferred and meet discontinued recognition condition for financial assets as
regulated by Accounting Standard for Enterprise No.23-Transfer of Financial Assets.Only when present obligations under financial liability have been released entirely or partly, could ceaserecognition of such financial liability or part thereof.
(5) Impairment of financial assetsThe Company conducts inspection on carrying values of financial assets, except for transactional financial assets,as at balance sheet date. If there is objective evidence indicating that impairment has happened to financial assets,impairment reserve then shall be provided. Financial asset with great amount in single item is subject to separateimpairment test. In case of any objective evidence indicating that impairment has happened to such financial asset,impairment loss shall be recognized and recorded in current gains and losses. As for the financial assets with nogreat amount in single item and those which prove to be not impaired after separate test, the Company willconduct impairment test on basis of credit portfolio which is determined in light of customers’ credit records andhistorical bad debts, so as to recognize impairment loss.Objective evidence indicating impairment happens to financial assets means the proceedings meeting the threecharacteristics: actually occurred subsequent to initial recognition of such financial assets, bring influence over theestimated future cash flow of such financial assets, and such influence could be reliably measured by theCompany.The followings are included in objective evidences indicating impairment happens to financial assets:
① Serious financial difficulty happens to issuer or debtor;② Breach of terms of contract by debtor, such as breach or overdue in repaying interest or principal;③ Creditor makes concession for debtors who experience financial trouble in light of consideration for economyor laws;④ Debtor is very likely to experience bankrupt or financial reorganization;⑤ Financial assets are not able to be traded in active market since material financial difficulty happens to issuer;⑥ It is unable to judge whether cash flow from certain asset in a group of financial assets has decreased, while itis finally found that the estimated future cash flow of such financial asset has actually decreased since its initialrecognition and the decrease can be reliably measured by reference to the general valuation based on open data.For example, payment capacity of debtor of such financial assets portfolio gradually worsens, or unemployment incountry or region where the debtor locates risen, price of guaranty falls greatly in the place where it locate, and theindustry in which it belongs to is unpromising;⑦ Material negative changes happen to technologies, markets, economy or law environment in which debtoroperates, which leads to that equity instrument investor is not likely to be able to recover investment cost;⑧ Fair value of equity instrument investment experiences severe or non-temporary falling;⑨ Other objective evidence indicating impairment happens to financial assets.In the event of impairment in financial asset at amortized cost, impairment loss is calculated based on thedifference between carrying value and present value of estimated future cash flow discounted at effective interestrate.After impairment loss is recognized for financial asset at amortized cost, if there is objective evidence indicatingvalue of such financial asset has recovered, which is objectively related to proceedings occurred after recognitionof such loss, the original impairment loss shall be reversed and recorded in current gains and losses. However, the
carrying value subsequent to such reversal shall not exceed the amortized cost of such financial asset as at thereversal date on assumption that such impairment loss had not been provided.Impairment of available-for-sale financial assets: in the event that decline in fair value of the available-for-saleequity instrument is regarded as “severe decline” or “non-temporary decline” on the basis of comprehensiverelated factors, it indicates that there is impairment loss of the available-for-sale equity instrument. In particular,“severe decline” refers to fair value is lower than 50% of the cost price and last for over one year.“Non-temporary decline” refers to fair value fell for over 6-month sessions.When the available-for-sale financial assets impair, the accumulated loss originally included in the othercomprehensive income arising from the decrease in fair value was transferred out from the capital reserve andincluded in the profit or loss for the period. The accumulated loss that transferred out from the capital reserve isthe balance of the acquired initial cost of asset, after deduction of the principal recovered, amortized amounts,current fair value and the impairment loss originally included in the profit or loss.After recognition of the impairment loss, if there is objective evidence showing recovery in value of such financialassets impaired and which is related to any event occurring after such recognition in subsequent periods, theimpairment loss originally recognized shall be reversed. The impairment loss reversal of the available-for-saleequity instrument will be recognized as other comprehensive income, and the impairment loss reversal of theavailable-for-sale debt instrument will be included in the profit or loss for the period.When an equity investment that is not quoted in an active market and the fair value of which cannot be measuredreliably, or the impairment loss of a derivative financial asset linked to the equity instrument that shall be settledby delivery of that equity instrument, then it will not be reversed.11. Note receivable and account receivable(1) Account Receivable withdrawal on single significant amount and with bad debt provision accrued forsingle item
Determine basis or amount standards for single significant amount | The Company’s account receivables with above RMB 1 million in single item is defined as account receivables with significant amount in single item. |
Withdrawal method for account with single significant amount and withdrawal single item bad debt provision | In line with the difference of present value of future cash flow lower its book value, carried out impairment test independently and withdrawal the bad debt reserves |
(2) Receivables with bad debt provision accrual by credit portfolio
Combination | Bad debt provision accrual |
Classify to many combination based on credit portfolio for those receivables with minor account singly and those with major amount but has no impairment been found after testing independently; base on the actual loss ratio of the receivables of previous years, with same or similar credit portfolio, and combining actual condition accrual bad debt reserves. | Age analysis method |
In combination, accounts whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable
Account age | Accrual ratio for account receivable | Accrual ratio for other receivables |
Within 6 months |
6 months to one year | 10.00% | 10.00% |
1-2 years | 20.00% | 20.00% |
2-3 years | 40.00% | 40.00% |
Over 3 years | 100.00% | 100.00% |
3-4 years | 100.00% | 100.00% |
4-5 years | 100.00% | 100.00% |
Over 5 years | 100.00% | 100.00% |
In combination, withdrawal proportion of bad debt provision based on balance proportion□ Applicable √ Not applicableIn combination, withdrawal proportion of bad debt provision based on other methods:
□ Applicable √ Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item
Reasons for withdrawal single item bad debt provision | The present value of future cash flow has major difference with the receivable group’s present value of future cash flow |
Withdrawal method for bad debt provision | Carried out impairment test independently, accrual bad debt reserves according to the difference of present value of future cash flow lower its book value |
12. Inventory
Whether the Company needs to comply with the disclosure requirement of special industryN
(1) Classification of inventoriesThe Company’s inventories are categorized into stock materials, product in process and stock goods etc.(2) Pricing for delivered inventoriesA. Generally, stock materials are calculated at planned cost. Material cost difference is individually set accordingto classification of grant types. Pursuant to the difference between the planned cost of the received or deliveredraw materials and the material cost the aforesaid cost should share after carrying forward at period-end, theCompany adjusts the planned cost to effective cost; finished products are priced at effective costs, and carriedforward to operating cost by weighted average method when being delivered;B. Products in process are priced at effective costs, and carried forward to finished products at actually occurredcost;C. Finished self-produced products are priced at effective costs, and carried forward to operating cost by weightedaverage method; external purchase goods (from import and export trades) are carried forward to sales cost byindividual pricing method.(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairmentprovision
Inventories as at period-end are priced at the lower of costs and net realizable values; at period end, on the basis ofoverall clearance about inventories, inventory impairment provision is withdrew for uncollectible part of costs ofinventories which result from destroy of inventories, out-of-time of all and part inventories, or sales pricelowering than cost. Inventory impairment provision for stock goods and quantity of raw materials is subject to thedifference between costs of single inventory item over its net realizable value. As for other raw materials withlarge quantity and comparatively low unit prices, inventory impairment provision is withdrawn pursuant tocategories.As for finished goods, commodities and materials available for direct sales, their net realizable values aredetermined by their estimated selling prices less estimated sales expenses and relevant taxes. For materialinventories held for purpose of production, their net realizable values are determined by the estimated sellingprices of finished products less estimated costs, estimated sales expenses and relevant taxes accumulated tillcompletion of production. As for inventories held for implementation of sales contracts or service contracts, theirnet realizable values are calculated on the basis of contract prices. In the event that inventories held by a companyexceed order amount as agreed in sales contracts, net realizable values of the surplus part are calculated on thebasis of normal sale price.
(4) Inventory system
Perpetual Inventory System is adopted by the Company and takes a physical inventory.(5) Amortization of low-value consumables and wrappage①Low-value consumablesThe Company adopts one-off amortization method to amortize the low-value consumables.②WrappageThe Company adopts one-off amortization method to amortize the wrappage at the time of receipt.13. Assets held for saleThe Company classifies non-current assets or disposal groups that meet all of the following conditions asheld-for-sale: according to the practice of selling this type of assets or disposal groups in a similar transaction, thenon-current assets or disposal group can be sold immediately at its current condition; The sale is likely to occur,that is, the Company has made resolution on the selling plan and obtained definite purchase commitment, theselling is estimated to be completed within one year. Those assets whose disposal is subject to approval fromrelevant authority or supervisory department under relevant requirements are subject to that approval.Where the Company loses control over its subsidiary due to disposal of investment in the subsidiary, whether ornot the Company retains part equity investment after such disposal, investment in the subsidiary shall be classifiedin its entirety as held for sale in the separate financial statement of the parent company subject to that theinvestment in the subsidiary proposed to be disposed satisfies the conditions for being classified as held for sale,and all the assets and liabilities of the subsidiary shall be classified as held for sale in consolidated financialstatement.The purchase commitment identified refers to the legally binding purchase agreement entered into between theCompany and other parties, which sets out certain major terms relating to transaction price, time and adequately
stringent punishment for default, which render an extremely minor possibility for material adjustment orrevocation of the agreement.Assets held for sale are measured at the lower of heir carrying value and fair value less selling expense. If thecarrying value is higher than fair value less selling expense, the excess shall be recognized as impairment loss andrecorded in profit or loss for the period, and allowance for impairment shall be provided for in respect of theassets. In respect of impairment loss recognized for disposal group held for sale, carrying value of the goodwill inthe disposal group shall be deducted first, and then deduct the carrying value of the non-current assets within thedisposal group applicable to this measurement standard on a pro rata basis according to the proportion taken bytheir carrying value.If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance sheetdate increases, the amount previously reduced for accounting shall be recovered and reverted from the impairmentloss recognized after the asset is classified under the category of held for sale, with the amount reverted recordedin profit or loss for the period. Impairment loss recognized before the asset is classified under the category of heldfor sale shall not be reverted. If the net amount of fair value of the disposal group held for sale on the subsequentbalance sheet date less sales expenses increases, the amount reduced for accounting in previous periods shall berestored, and shall be reverted in the impairment loss recognized in respect of the non-current assets which areapplicable to relevant measurement provisions after classification into the category of held for sale, with thereverted amount charged in profit or loss for the current period. The written-off carrying value of goodwill shallnot be reverted.The non-current assets in the non-current assets or disposal group held for sale is not depreciated or amortized,and the debt interests and other fees in the disposal group held for sale continue to be recognized.If the non-current assets or disposal group are no longer classified as held for sale since they no longer meet thecondition of being classified as held for sale or the non-current assets are removed from the disposal group heldfor sale, they will be measured at the lower of the following:
(i) The amount after their book value before they are classified as held for sale is adjusted based on thedepreciation, amortization or impairment that should have been recognized given they are not classified as heldfor sale;(ii) The recoverable amount.14.Long-term equity investmentsLong-term equity investments refer to long-term equity investments in which the Company has control, jointcontrol or significant influence over the invested party. Long-term equity investment without control or jointcontrol or significant influence of the Group is accounted for as available-for-sale financial assets or financialassets measured at fair value with any change in fair value charged to profit or loss.(1) Determination of initial investment costInvestment costs of the long-term equity investment are recognized by the follow according to different way ofacquirement:
①For a long-term equity investment acquired through a business combination involving enterprises undercommon control, the initial investment cost of the long-term equity investment shall be the absorbing party’sshare of the carrying amount of the owner’s equity under the consolidated financial statements of the ultimate
controlling party on the date of combination. The difference between the initial cost of the long-term equityinvestment and the cash paid, non-cash assets transferred as well as the book value of the debts borne by theabsorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retainedearnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initialinvestment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount ofthe owner’s equity under the consolidated financial statements of the ultimate controlling party on the date ofcombination. With the total face value of the shares issued as share capital, the difference between the initial costof the long-term equity investment and total face value of the shares issued shall be used to offset against thecapital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. (For businesscombination resulted in an enterprise under common control by acquiring equity of the absorbing party undercommon control through a stage-up approach with several transactions, these transactions will be judged whetherthey shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these transactions willbe accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket”, the initialinvestment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount ofthe owner’s equity under the consolidated financial statements of the ultimate controlling party on the date ofcombination. The difference between the initial cost of the long-term equity investment and the aggregate of thecarrying amount of the long-term equity investment before merging and the carrying amount the additionalconsideration paid for further share acquisition on the date of combination shall offset against the capital reserve.If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Other comprehensive incomerecognized as a result of the previously held equity investment accounted for using equity method on the date ofcombination or recognized for available-for-sale financial assets will not be accounted for.)②For a long-term equity investment acquired through a business combination involving enterprises not undercommon control, the initial investment cost of the long-term equity investment shall be the cost of combination onthe date of acquisition. Cost of combination includes the aggregate fair value of assets paid by the acquirer,liabilities incurred or borne and equity securities issued. (For business combination resulted in an enterprise notunder common control by acquiring equity of the acquire under common control through a stage-up approach withseveral transactions, these transactions will be judged whether they shall be treat as “transactions in a basket”. Ifthey belong to “transactions in a basket”, these transactions will be accounted for a transaction in obtainingcontrol. If they are not belong to “transactions in a basket”, the initial investment cost of the long-term equityinvestment accounted for using cost method shall be the aggregate of the carrying amount of equity investmentpreviously held by the acquire and the additional investment cost. For previously held equity accounted for usingequity method, relevant other comprehensive income will not be accounted for. For previously held equityinvestment classified as available-for-sale financial asset, the difference between its fair value and carryingamount, as well as the accumulated movement in fair value previously included in the other comprehensiveincome shall be transferred to profit or loss for the current period.) plus the combination cost measured by costswhich have directly connection with acquisition are considered as initial investment cost of such long-term equityinvestment. Realizable assets and liabilities undertaken by such assets (including contingent liabilities) of theparty being combined as at the combination date are all measured at fair values, without consideration to amountof minority interests. The surplus of combination cost less fair value net realizable assets of the party beingcombined is recorded as goodwill, and the deficit is directly recognized in the consolidated statement of gains andlosses.③Long-term investments obtained through other ways:
A. Initial investment cost of long-term equity investment obtained through cash payment is determined accordingto actual payment for purchase;
B. Initial investment cost of long-term equity investment obtained through issuance of equity securities isdetermined at fair value of such securities;C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange withnon-monetary assets, which is of commercial nature, is determined at fair value of the assets exchanged-out;otherwise determined at carrying value of the assets exchanged-out if it is not of commercial nature;D. Initial investment cost of long-term equity investment obtained through debt reorganization is determined atfair value of such investment.
(2) Subsequent measurement on long-term equity investment①Presented controlling ability on invested party, the investment shall use cost method for measurement.②Long-term equity investments with joint control (excluding those constitute joint ventures) or significantinfluence on the invested party are accounted for using equity method.Under the equity method, where the initial investment cost of a long-term equity investment exceeds theinvestor’s interest in the fair value of the invested party’s identifiable net assets at the acquisition date, noadjustment shall be made to the initial investment cost. Where the initial investment cost is less than the investor’sinterest in the fair value of the invested party’s identifiable net assets at the acquisition date, the difference shall becharged to profit or loss for the current period, and the cost of the long term equity investment shall be adjustedaccordingly.Under the equity method, investment gain and other comprehensive income shall be recognized based on theGroup’s share of the net profits or losses and other comprehensive income made by the invested party,respectively. Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carryingamount of long-term equity investment shall be reduced based on the Group’s share of profit or cash dividenddistributed by the invested party. In respect of the other movement of net profit or loss, other comprehensiveincome and profit distribution of invested party, the carrying value of long-term equity investment shall beadjusted and included in the capital reserves. The Group shall recognize its share of the invested party’s net profitsor losses based on the fair values of the invested party’s individual separately identifiable assets at the time ofacquisition, after making appropriate adjustments thereto. In the event of inconformity between the accountingpolicies and accounting periods of the invested party and the Company, the financial statements of the investedparty shall be adjusted in conformity with the accounting policies and accounting periods of the Company.Investment gain and other comprehensive income shall be recognized accordingly. In respect of the transactionsbetween the Group and its associates and joint ventures in which the assets disposed of or sold are not classified asoperation, the share of unrealized gain or loss arising from inter-group transactions shall be eliminated by theportion attributable to the Company. Investment gain shall be recognized accordingly. However, any unrealizedloss arising from inter-group transactions between the Group and an invested party is not eliminated to the extentthat the loss is impairment loss of the transferred assets. In the event that the Group disposed of an asset classifiedas operation to its joint ventures or associates, which resulted in acquisition of long-term equity investment by theinvestor without obtaining control, the initial investment cost of additional long-term equity investment shall bethe fair value of disposed operation. The difference between initial investment cost and the carrying value ofdisposed operation will be fully included in profit or loss for the current period. In the event that the Group sold anasset classified as operation to its associates or joint ventures, the difference between the carrying value of
consideration received and operation shall be fully included in profit or loss for the current period. In the eventthat the Company acquired an asset which formed an operation from its associates or joint ventures, relevanttransaction shall be accounted for in accordance with “Accounting Standards for Business Enterprises No. 20“Business combination”. All profit or loss related to the transaction shall be accounted for.The Group’s share of net losses of the invested party shall be recognized to the extent that the carrying amount ofthe long-term equity investment together with any long-term interests that in substance form part of the investor’snet investment in the invested party are reduced to zero. If the Group has to assume additional obligations, theestimated obligation assumed shall be provided for and charged to the profit or loss as investment loss for theperiod. Where the invested party is making profits in subsequent periods, the Group shall resume recognizing itsshare of profits after setting off against the share of unrecognized losses.③Acquisition of minority interestUpon the preparation of the consolidated financial statements, since acquisition of minority interest increased oflong-term equity investment which was compared to fair value of identifiable net assets recognized which aremeasured based on the continuous measurement since the acquisition date (or combination date) of subsidiariesattributable to the Group calculated according to the proportion of newly acquired shares, the difference of whichrecognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retainedearnings.④Disposal of long-term equity investmentsIn these consolidated financial statements, for disposal of a portion of the long-term equity investments in asubsidiary without loss of control, the difference between disposal cost and disposal of long-term equityinvestments relative to the net assets of the subsidiary is charged to the owners’ equity. If disposal of a portion ofthe long-term equity investments in a subsidiary by the parent company results in a change in control, it shall beaccounted for in accordance with the relevant accounting policies as described in Note V.- 6 “Preparation Methodof the Consolidated Financial Statements”.On disposal of a long-term equity investment otherwise, the difference between the carrying amount of theinvestment and the actual consideration paid is recognized through profit or loss in the current period.In respect of long-term equity investment accounted for using equity method with the remaining equity interestafter disposal also accounted for using equity method, other comprehensive income previously under owners’equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by invested party on pro rata basis at the time of disposal. The owners’ equity recognized for themovement of other owners’ equity (excluding net profit or loss, other comprehensive income and profitdistribution of invested party) shall be transferred to profit or loss for the current period on pro rata basis.In respect of long-term equity investment accounted for using cost method with the remaining equity interest afterdisposal also accounted for cost equity method, other comprehensive income measured and reckoned under equitymethod or financial instrument before control of the invested party unit acquired shall be accounted for inaccordance with the same accounting treatment for direct disposal of relevant asset or liability by invested partyon pro rata basis at the time of disposal and shall be transferred to profit or loss for the current period on pro ratabasis; among the net assets of invested party unit recognized by equity method (excluding net profit or loss, other
comprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the currentperiod on pro rata basis.In the event of loss of control over invested party due to partial disposal of equity investment by the Group, inpreparing separate financial statements, the remaining equity interest which can apply common control or imposesignificant influence over the invested party after disposal shall be accounted for using equity method. Suchremaining equity interest shall be treated as accounting for using equity method since it is obtained andadjustment was made accordingly. For remaining equity interest which cannot apply common control or imposesignificant influence over the invested party after disposal, it shall be accounted for using the recognition andmeasurement standard of financial instruments. The difference between its fair value and carrying amount as atthe date of losing control shall be included in profit or loss for the current period. In respect of othercomprehensive income recognized using equity method or the recognition and measurement standard of financialinstruments before the Group obtained control over the invested party, it shall be accounted for in accordance withthe same accounting treatment for direct disposal of relevant asset or liability by invested party at the time whenthe control over invested party is lost. Movement of other owners’ equity (excluding net profit or loss, othercomprehensive income and profit distribution under net asset of invested party accounted for and recognizedusing equity method) shall be transferred to profit or loss for the current period at the time when the control overinvested party is lost. Of which, for the remaining equity interest after disposal accounted for using equity method,other comprehensive income and other owners’ equity shall be transferred on pro rata basis. For the remainingequity interest after disposal accounted for using the recognition and measurement standard of financialinstruments, other comprehensive income and other owners’ equity shall be fully transferred.In the event of loss of common control or significant influence over invested party due to partial disposal of equityinvestment by the Group, the remaining equity interest after disposal shall be accounted for using the recognitionand measurement standard of financial instruments. The difference between its fair value and carrying amount asat the date of losing common control or significant influence shall be included in profit or loss for the currentperiod. In respect of other comprehensive income recognized under previous equity investment using equitymethod, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by invested party at the time when equity method was ceased to be used. Movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset ofinvested party accounted for and recognized using equity method) shall be transferred to profit or loss for thecurrent period at the time when equity method was ceased to be used.The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until thecontrol over the subsidiary is lost. If the said transactions belong to “transactions in a basket”, each transactionshall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. Thedifference between the disposal consideration for each transaction and the carrying amount of the correspondinglong-term equity investment of disposed equity interest before loss of control shall initially recognized as othercomprehensive income, and subsequently transferred to profit or loss arising from loss of control for the currentperiod upon loss of control.
(3) Impairment test method and withdrawal method for impairment provisionFound more in Note V-20-”impairment of long-term investment”(4) Criteria of Joint control and significant influenceJoint control is the Company’s contractually agreed sharing of control over an arrangement, which relevantactivities of such arrangement must be decided by unanimously agreement from parties who share control. All theparticipants or participant group whether have controlling over such arrangement as a group or not shall be judgefirstly, than judge that whether the decision-making for such arrangement are agreed unanimity by the participantsor not.Significant influence is the power of the Company to participate in the financial and operating policy decisions ofan invested party, but to fail to control or joint control the formulation of such policies together with other parties.While recognizing whether have significant influence by invested party, the potential factors of voting power ascurrent convertible bonds and current executable warrant of the invested party held by investors and other partiesshall be thank over.15. Investment real estate
Measurement modeMeasured by cost methodDepreciation or amortization method
Investment real estate is stated at cost. During which, the cost of externally purchased propertiesheld-for-investment includes purchasing price, relevant taxes and surcharges and other expenses which aredirectly attributable to the asset. Cost of self construction of properties held for investment is composed ofnecessary expenses occurred for constructing those assets to a state expected to be available for use. Propertiesheld for investment by investors are stated at the value agreed in an investment contract or agreement, but thoseunder contract or agreement without fair value are stated at fair value.The Company adopts cost methodology amid subsequent measurement of properties held for investment, whiledepreciation and amortization is calculated using the straight-line method according to their estimated useful lives.The basis of provision for impairment of properties held for investment is referred to Note V-20-“Impairment oflong-term assets”16. Fixed assets
(1) Confirmation conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, with aservice life excess one year and has more unit value.
(2) Depreciation methods
Categories | Method | Years of depreciation | Scrap value rate | Yearly depreciation rate |
House and Building | Straight-line depreciation | 20~35 | 5 | 2.71~4.75 |
Machinery equipment | Straight-line depreciation | 10 | 5 | 9.50 |
Transportation equipment | Straight-line depreciation | 4~5 | 5 | 19.00~23.75 |
Electronic and other equipment | Straight-line depreciation | 3~10 | 5 | 9.50~31.67 |
As for the fixed assets with impairment accrual, calculated depreciation amount based on the accumulativenumber of impairment of fixed assets accrual.(3) Recognition basis, valuation and depreciation method for financial lease assetsThe Company affirms those that conform to below one or several criteria as the finance lease fixed assets:
① Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on thelease commencement date), the ownership of lease fixed assets can be transferred to the Company after the expiryof the lease period;② The Company has the option to purchase or lease the fixed assets, and the purchase price is estimated to bemuch less than the fair value of the lease of fixed assets when exercises the options, so whether the Company willexercise the option can be reasonably determined on the lease commencement date;③ Even though the fixed asset ownership is not transferred, the lease term accounts for 75% of the service life ofthe lease fixed assets;④ The present value of the Company’s of minimum lease payment on the lease commencement date isequivalent to 90% or more of the fair value of the lease fixed assets on the lease commencement date; the presentvalue of the leaser’s of minimum lease payment on the lease commencement date is equivalent to 90% or more ofthe fair value of the lease fixed assets on the lease commencement date;⑤ The leased assets with special properties can only be used by the Company without major modifications. Thefixed assets rented by finance leases is calculated as the book value according to the lower one between the fairvalue of leased assets on the lease commencement date and the present value of the minimum lease payments.(4) The impairment test method of fixed assets and the method of provision for impairment see Note V-20-“Longterm asset impairment”.17. Construction in progress
Whether the Company needs to comply with the disclosure requirement of special industryNo
From the date on which the fixed assets built by the Company come into an expected usable state, the projectsunder construction are converted into fixed assets on the basis of the estimated value of project estimates orpricing or project actual costs, etc. Depreciation is calculated from the next month. Further adjustments are madeto the difference of the original value of fixed assets after final accounting is completed upon completion ofprojects.The basis of provision for impairment of properties held for construction in process is referred to NoteV-20-“Impairment of long-term assets”
18. Borrowing costs(1) Recognition of capitalization of borrowing costsBorrowing costs comprise interest occurred, amortization of discounts or premiums, ancillary costs and exchangedifferences in connection with foreign currency borrowings. The borrowing costs of the Company, which incurfrom the special borrowings occupied by the fixed assets that need more than one year (including one year) forconstruction, development of investment properties or inventories or from general borrowings, are capitalized andrecorded in relevant assets costs; other borrowing costs are recognized as expenses and recorded in the profit orloss in the period when they are occurred. Relevant borrowing costs start to be capitalized when all of thefollowing three conditions are met:
① Capital expenditure has been occurred;② Borrowing costs have been occurred;③ Acquisition or construction necessary for the assets to come into an expected usable state has been carried out.(2) Period of capitalization of borrowing costsBorrowing costs arising from purchasing fixed asset, investment real estate and inventory, and occurred after suchassets reached to its intended use of status or sales, than reckoned into assets costs while satisfy the abovementioned capitalization condition; capitalization of borrowing costs shall be suspended and recognized as currentexpenditure during periods in which construction of fixed assets, investment real estate and inventory areinterrupted abnormally, when the interruption is for a continuous period of more than 3 months, until theacquisition, construction or production of the qualifying asset is resumed; capitalization shall discontinue whenthe qualifying asset is ready for its intended use or sale, the borrowing costs occurred subsequently shall reckonedinto financial expenses while occurring for the current period.(3) Measure of capitalization for borrowing costIn respect of the special borrowings borrowed for acquisition, construction or production and development of theassets qualified for capitalization, the amount of interests expenses of the special borrowings actually occurred inthe period less interest income derived from unused borrowings deposited in banks or less investment incomederived from provisional investment, are recognized.With respect to the general borrowings occupied for acquisition, construction or production and development ofthe assets qualified for capitalization, the capitalized interest amount for general borrowings is calculated andrecognized by multiplying a weighted average of the accumulated expenditure on the assets in excess of theexpenditure on the some assets of the special borrowings, by a capitalization rate for general borrowings. Thecapitalization rate is determined by calculation of the weighted average interest rate of the general borrowings.19. Intangible assets(1) Measurement, use of life and impairment testing① Measurement of intangible assetsThe intangible assets of the Company including land use rights, patented technology and non-patents technologyetc.The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other relatedcosts.
The cost of an intangible asset contributed by an investor shall be determined in accordance with the valuestipulated in the investment contract or agreement, except where the value stipulated in the contract or agreementis not fair.The intangible assets acquired through exchange of non-monetary assets, which is commercial in substance, iscarried at the fair value of the assets exchanged out; for those not commercial in substance, they are carried at thecarrying amount of the assets exchanged out.The intangible assets acquired through debt reorganization, are recognized at the fair value.② Amortization methods and time limit for intangible assets:
Land use right of the company had average amortization by the transfer years from the beginning date of transfer(date of getting land use light); Patented technology, non-patented technology and other intangible assets of theCompany are amortized evenly with the shortest terms among expected useful life, benefit years regulated in thecontract and effective age regulated by the laws. The amortization amount shall count in relevant assets costs andcurrent gains/losses according to the benefit object.As for the intangible assets as trademark, with uncertain benefit terms, amortization shall not be carried.Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in NoteV-20-“Long-term assets impairment”.(2) Internal accounting policies relating to research and development expendituresExpenses incurred during the research phase are recognized as profit or loss in the current period; expensesincurred during the development phase that satisfy the following conditions are recognized as intangible assets(patented technology and non-patents technology):
① It is technically feasible that the intangible asset can be used or sold upon completion;② there is intention to complete the intangible asset for use or sale;③ The products produced using the intangible asset has a market or the intangible asset itself has a market;④ there is sufficient support in terms of technology, financial resources and other resources in order to completethe development of the intangible asset, and there is capability to use or sell the intangible asset;⑤ the expenses attributable to the development phase of the intangible asset can be measured reliably.If the expenses incurred during the development phase did not qualify the above mentioned conditions, suchexpenses incurred are accounted for in the profit or loss for the current period. The development expenditurereckoned in gains/losses previously shall not be recognized as assets in later period. The capitalized expenses indevelopment stage listed as development expenditure in balance sheet, and shall be transfer as intangible assetssince such item reached its expected conditions for service.20. Impairment of long-term assetThe Company will judge if there is any indication of impairment as at the balance sheet date in respect ofnon-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite usefullife, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlledentities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shallbe estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assets
beyond working conditions will be tested for impairment annually, regardless of whether there is any indication ofimpairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, theimpairment provision will be made according to the difference and recognized as an impairment loss. Therecoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of thefuture cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in anarm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall bedetermined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shallbe based on the best available information. Costs of disposal are expenses attributable to disposal of the asset,including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare theasset for its intended sale. The present value of the future cash flows expected to be derived from the asset overthe course of continued use and final disposal is determined as the amount discounted using an appropriatelyselected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If itis not possible to estimate the recoverable amount of the individual asset, the Group shall determine therecoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assetscapable of generating cash flows independently.For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financialstatements shall be allocated to the asset groups or group of assets benefiting from synergy of businesscombination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairmentloss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the assetgroup or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within theasset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect ofthe part whose value can be recovered.21. Long-term deferred expensesLong-term expenses to be amortized of the Company the expenses that are already charged and with the beneficialterm of more than one year are evenly amortized over the beneficial term. For the long-term deferred expenseitems cannot benefit the subsequent accounting periods, the amortized value of such items is all recorded in theprofit or loss during recognition.22. Employee compensation(1) Accounting treatment for short-term compensationDuring the accounting period when the staff providing service to the Company, the short-term remuneration actualoccurred shall recognized as liability and reckoned into current gains/losses. During the accounting period whenstaff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilitiesand reckoned into current gains/losses, except for those in line with accounting standards or allow to reckonedinto capital costs; the welfare occurred shall reckoned into current gains/losses or relevant asses costs whileactually occurred. The employee compensation shall recognize as liabilities and reckoned into current gains/lossesor relevant assets costs while actually occurred. The employee benefits that belong to non-monetary benefits are
measured in accordance with the fair value; the social insurances including the medical insurance, work-injuryinsurance and maternity insurance and the housing fund that the enterprise pays for the employees as well as thelabor union expenditure and employee education funds withdrawn by rule should be calculated and determined asthe corresponding compensation amount and determined the corresponding liabilities in accordance with thespecified withdrawing basis and proportion, and reckoned in the current profits and losses or relevant asset costsin the accounting period that the employees provide services.(2) Accounting treatment for post-employment benefitThe post-employment benefit included the defined contribution plans and defined benefit plans. Post-employmentbenefits plan refers to the agreement about the post-employment benefits between the enterprise and employees,or the regulations or measures the enterprise established for providing post-employment benefits to employees.Thereinto, the defined contribution plan refers to the post-employment benefits plan that the enterprise doesn’tundertake the obligation of payment after depositing the fixed charges to the independent fund; the defined benefitplans refers to post-employment benefits plans except the defined contribution plan.(3) Accounting for retirement benefitsWhen the Company terminates the employment relationship with employees before the end of the employmentcontracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, theCompany shall recognize employee compensation liabilities arising from compensation for staff dismissal andincluded in profit or loss for the current period, when the Company cannot revoke unilaterally compensation fordismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Companyrecognize cost and expenses related to payment of compensation for dismissal and restructuring, whichever isearlier. The early retirement plan shall be accounted for in accordance with the accounting principles forcompensation for termination of employment. The salaries or wages and the social contributions to be paid for theemployees who retire before schedule from the date on which the employees stop rendering services to thescheduled retirement date, shall be recognized (as compensation for termination of employment) in the currentprofit or loss by the Group if the recognition principles for provisions are satisfied.(4)Accounting for other long-term employee benefitsExcept for the compulsory insurance, the Company provides the supplementary retirement benefits to theemployees satisfying some conditions, the supplementary retirement benefits belong to the defined benefit plans,and the defined benefit liability confirmed on the balance sheet is the value by subtracting the fair value of planassets from the present value of defined benefit obligation. The defined benefit obligation is annually calculated inaccordance with the expected accumulated welfare unit method by the independent actuary by adopting thetreasury bond rate with similar obligation term and currency. The service charges related to the supplementaryretirement benefits (including the service costs of the current period, the previous service costs, and the settlementgains or losses) and the net interest are reckoned in the current profits and losses or other asset costs, the changesgenerated by recalculating the net liabilities of defined benefit plans or net assets should be reckoned in otherconsolidated income.
23. Accrual liabilities
(1) Recognition principle
An obligation related to a contingency, such as guarantees provided to outsiders, pending litigation or arbitration,product warranties, redundancy plans, onerous contracts, reconstructing, expected disposal of fixed assets, etc.shall be recognized as an estimated liability when all of the following conditions are satisfied:
① the obligation is a present obligation of the Company;② it is Contingent that an outflow of economic benefits will be required to settle the obligation;③ the amount of the obligation can be measured reliably.(2) Measurement method: Measure on the basis of the best estimates of the expenses necessary for paying off thecontingencies24. Revenue
Whether the Company needs to comply with the disclosure requirement of special industryNo
(1) Concrete judging criteria for time of recognizedThe major risks and remuneration entitled to the ownership of goods are transferred to buyer; neither retain thecontinued management right generally related to ownership, nor exercise effective control over the sold products;the relevant economic benefits are probable to flow into the Company; the relevant income and costs can bemeasured reliably.Concrete judging criteria for time of recognized the income from goods sales:
The Company's domestic sales revenue recognition time: The company delivers goods as agreed, checks thegoods that the buyers have received and inspected during the period of the last reconciliation date and thisreconciliation date with the buyers on the reconciliation date as agreed, and transfers the risks and remunerationsto the buyers after checking, the Company issues the invoices to the buyers in accordance with the recognizedvarieties, quantities and amounts and affirms the sales revenue realization on the reconciliation date.The Company's overseas sales revenue recognition time: After checking by the customs, the Company affirms thesales revenue realization according to the date of departure on the customs declaration.(2) Recognition of revenue of assets using right alienationRevenue from use by others of enterprise assets shall be recognized only when the associated economic benefitcan flow into the Company, and the amount of revenue can be measured reliably, revenue measured by the follow:
① Interest income amount: calculated and determined in accordance with the time that others use the enterprisescash and the actual interest rate.② Royalty revenue amount: calculated and determined in accordance with the charging time and method of therelevant contract or agreement as agreed.The basis that the Company confirms the revenue from transferring the right to use assets.Rental income: the revenue realization is confirmed after collecting the rent on the date as agreed in the rentalcontract (or agreement). For the rent not received on the date as agreed in the contract or agreement but can bereceived, and of which the amount of revenue can be measured reliably can also be recognized as revenue.(3) When confirming the incomes of labor services and construction contracts according to the percentage ofcompletion method, determine the basis and method of the contract completion plan.For the service transaction results can be estimated reliably on the balance sheet date, the service revenue isdetermined and recognized by adopting the percentage of completion method. The completion progress of service
transaction is determined by the proportion of incurred costs in the estimated total cost.The total service revenue is determined by the received or receivable contract or agreement costs, except that thereceived or receivable contract or agreement costs are not fair. On the balance sheet date, the service revenue of thecurrent period is determined by multiplying the total service revenue by the completion progress and deductingthe amount accumulated in the previous accounting period and confirmed to render the service revenue.Meanwhile, the labor costs of the current period are carried forward by multiplying the total estimated costs oflabor services by the completion progress and deducting the amount accumulated in the previous accountingperiod with confirmed service costs.For the service transaction results cannot be estimated reliably on the balance sheet date, respectively dispose asfollowing circumstances:
①The incurred labor costs estimated to be compensated are confirmed to render the service revenue according tothe incurred labor costs, and are carried forward by the equivalent amount.②The incurred labor costs estimated not to be compensated are reckoned in the current profits or losses, and arenot confirmed to render the service revenue.25. Government Grants
(1) Types
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group atno consideration. Government grants are classified into government grants related to assets and government grantsrelated to income.As for the assistance object not well-defined in government’s documents, the classification criteria forassets-related or income-related grants are as: whether the grants turn to long-term assets due to purchasing forconstruction or other means.
(2) Recognition and measure
The government grants shall be recognized while meet the additional conditions of the grants and amount isactually can be obtained.If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amountreceived or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall bemeasured at fair value. If the fair value can not be reliably acquired, than measured by nominal amount.
(3) Accounting treatment
A government grant related to an asset shall be recognized as deferred income, and reckoned into currentgains/losses according to the depreciation process in use life of such assets.A government grant related to income, if they making up relevant expenses and losses for later period, thanrecognized deferred income, and should reckoned into current gain/loss during the period while relevant expensesare recognized; if they making up relevant expenses and losses that occurred, than reckoned into currentgains/losses.A government grant related to daily operation activity of the Company should reckoned into other income; thosewithout related to daily operation activity should reckoned into non-operation income and expenses.The financial discount funds received by the Company shall write down relevant borrowing costs.26. Deferred income tax assets/Deferred income tax liabilities(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between the
carrying values of assets and liabilities and their taxation bases (as for the ones did not recognized as assets andliability and with taxation basis recognized in line with tax regulations, different between tax base and its bookvalue) at the tax rates applicable in the periods when the Company recovers such assets or settles such liabilities.(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxable income which isused to set off the deductible temporary difference. As at the balance sheet date, if there is obvious evidenceshowing that it is probable to obtain sufficient taxable income to set off the deductible temporary difference infuture periods, deferred income tax assets not realized in previous accounting periods shall be realized.(3) On balance sheet date, re-review shall be made in respect of the carrying value of deferred income tax assets.If it is impossible to obtain sufficient taxable income to set off the benefits of deferred income tax assets in futureperiods, then the carrying value of deferred income tax assets shall be reduced accordingly. If it is probable toobtain sufficient taxable income, then the amount reduced shall be switched back.(4) Current income tax and deferred income tax considered as income tax expenses or incomes reckoned intocurrent gains/losses, excluding the follow income tax:
①Enterprise combination;②Transactions or events recognized in owner’s equity directly27. Lease(1) Accounting for operating leaseThe rental fee paid for renting the properties by the company are amortized by the straight-line method andreckoned in the current expenses throughout the lease term without deducting rent-free period. The initial directcosts related to the lease transactions paid by the company are reckoned in the current expenses.
When the lessor undertakes the expenses related to the lease that should be undertaken by the company, thecompany shall deduct the expenses from the total rental costs, share by the deducted rental costs during the leaseterm, and reckon in the current expenses.
Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shall beamortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasingtransaction concerned are reckoned into current expenditure; the amount is larger is capitalized when incurred,and accounted for as profit or loss for the current period on the same basis as recognition of rental income over theentire lease period.
When the company undertakes the expenses related to the lease that should be undertaken by the lessor, thecompany shall deduct the expenses from the total rental income, and distribute by the deducted rental costs duringthe lease term.(2) Accounting for financing leaseAssets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at thelower of the fair value of the leased asset and the present value of minimum lease payment at the beginning dateof the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with differencerecognized as unrecognized financing expenses. Unrecognized financing expenses shall be reckoned in financial
expenses and amortized and using effective interest method during the leasing period. The initial direct costsincurred by the Company shall be reckoned into value of assets lease-in.Finance leased assets: on the lease commencement date, the company affirms the balance among the finance leasereceivables, the sum of unguaranteed residual value and its present value as the unrealized financing income, andrecognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to therental transaction, the company reckons in the initial measurement of the finance lease receivables, and reducesthe amount of income confirmed in the lease term.28. Other important accounting policy and accounting estimationIn the process of applying the Company's accounting policies, due to the inherent uncertainty of business activities,the Company needs to judge, estimate and assume the book value of the report items cannot be accuratelymeasured. These judgments, estimates and assumptions are made on the basis of the historical experience of theCompany’s management and by considering other relevant factors, which shall impact the reported amounts ofincome, expenses, assets and liabilities and the disclosure of contingent liabilities on the balance sheet date.However, the actual results caused by the estimated uncertainties may differ from the management's currentestimates of the Company so as to carry out the significant adjustments to the book value of the assets or liabilitiesto be affected.
The Company regularly reviews the aforementioned judgments, estimates and assumptions on the basis ofcontinuing operations, the changes in accounting estimates only affect the current period, of which the impacts arerecognized in the current period; the changes in accounting estimates not only affect the current period but also thefuture periods, of which the impacts are recognized in the current and future periods.
On the balance sheet date, the important areas of the financial statements that the Company needs to judge, estimateand assume are as follows:
(1) Provision for bad debts
According to the accounting policies of the accounts receivable, the Company adopts the allowance method tocalculate the bad debt losses. The impairment of receivables is based on the assessment to the collectability of theaccounts receivable. The impairment of accounts receivable requires the management’s judgments and estimates.The actual results and the differences between the previously estimated results shall affect the book value ofaccounts receivable and the provision or return of the receivables’ bad debt reserves during the period estimated tobe changed.
(2) Inventory impairment
According to the inventory accounting policies, the Company measures by the comparison between the cost andthe net realizable value, if the cost is higher than the net realizable value and the old and unsalable inventories, theCompany calculates and withdraws the inventory impairment. The inventory devalues to the net realizable valueby evaluating the inventory’s vendibility and net realizable value. To identify the inventory impairment, themanagement needs to obtain the unambiguous evidences, and consider the purpose to hold the inventory, andjudge and estimate the impacts of events after the balance sheet date. The actual results and the differencesbetween the previously estimated results shall affect the book value of inventory and the provision or return of theinventory impairment during the period estimated to be changed.
(3) Held-to-maturity investmentsThe Company classifies the non-derivative financial assets that meet the requirements, have the fixed orascertainable repayment amount and fixed due date, and that the Company has the positive intention and ability tohold to maturity as the held-to-maturity investment. This classification involves a lot of judgments. In the processof making the judgments, the Company will evaluate its willingness and ability to this held-to-maturity investment.Except in certain cases (such as the investments with insignificant sales amount when the maturity date comes), ifthe Company fails to hold these investments till the maturity date, then all the investments shall be reclassified tothe available-for-sale financial assets which cannot be classified as the held-to-maturity investments in this fiscalyear and the next two fiscal years. This kind of case may have a significant impact on the relevant financial assetsvalue listed on the financial statements, and may affect the Company's financial instruments risk managementstrategy.
(4) Impairment of held-to-maturity investmentsThe Company determines that the impairment of held-to-maturity investments largely relies on management'sjudgments. The objective evidences of impairment include that the issuer has serious financial difficulties so thatthe financial assets cannot continue to be traded in an active market, or cannot be able to fulfill the contract terms(for example, breach the contract of paying the interests or principal), etc. In the process of making the judgments,the Company needs to evaluate the impact of the objective evidence of impairment to the expected future cashflows of the investment.
(5) Impairment of financial assets available for saleThe Company determines that the impairment of held-to-maturity investments largely relies on management'sjudgments and assumptions so as to determine whether it is needed to affirm its impairment loss in the profitstatement. In the process of making the judgments and assumptions, the Company needs to evaluate the extent andduration when the fair value of the investment is less than the cost, as well as the financial situation and short-termbusiness prospects of the invested party, including the industry conditions, technological change, credit rating,default rates, and risks of the counter party.
(6) Preparation for the impairment of non-financial & non-current assetsThe Company checks whether the non-current assets except for the financial assets may decrease in value at thebalance sheet date. For the intangible assets with indefinite service life, in addition to the annual impairment test,the impairment test is also needed when there is a sign of impairment. For the other non-current assets except forthe financial assets, the impairment test is needed when it indicates that the book amounts may not be recoverable.
When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher between the netamount by subtracting the disposal costs from th e fair value and the present value of expected future cash flows, itindicates the impairment.
As for the net amount by subtracting the disposal costs from the fair value, refer to the sales agreement price similarto the assets in the fair trade or the observable market price, and subtract the incremental costs determinationdirectly attributable to the disposal of the asset.
When estimating the present value of the future cash flow, the Company needs to make significant judgments to theoutput, price, and related operating expenses of the asset (or asset group) and the discount rate used for calculating
the present value. When estimating the recoverable amount, the Company shall adopt all the relevant informationcan be obtained, including the prediction related to the output, price, and related operating expenses based on thereasonable and supportable assumptions.
The Company tests whether its business reputation decreases in value every year, which requires to estimating thepresent value of the asset group allocated with goodwill or the future cash flow combined by the asset group. Whenestimating the present value of the future cash flow, the Company needs to estimate the future cash flows generatedby the asset group or the combination of asset group, and select the proper discount rate to determine the presentvalue of the future cash flows.
(7) Depreciation and amortizationThe Company depreciates and amortizes the investment property, fixed assets and intangible assets according to thestraight-line method in the service life after considering the residual value. The Company regularly reviews theservice life to determine the depreciation and amortization expense amount to be reckoned in each reporting period.The service life is determined by the Company based on the past experience of similar assets and the expectedtechnological updating. If the previous estimates have significant changes, the depreciation and amortizationexpense shall be adjusted in future periods.
(8) Income tax
In the Company’s normal business activities, the final tax treatment and calculation of some transactions have someuncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requires needs toget approval from the tax authorities. If the final affirmation of these tax matters differs from the initially estimatedamount, the difference shall have an impact on its current and deferred income taxes during the final identificationperiod.
(9) Early retirement benefits and supplementary retirement benefitsThe expenses of the Company's early retirement benefits and supplementary retirement benefits and the amount ofliabilities are determined in accordance with various assumptions. These assumptions include the discount rate,the average growth rate of health care costs, the subsidy growth rate of the early retired personnel and retirees andthe other factors. The differences between the actual results and assumptions will be immediately identified andincluded in the costs of the current year. Although the management thought the reasonable assumptions have beenadopted, the changes in the actual experience and assumed conditions will impact the costs and liability balancesof the Company's internal early retirement benefits and supplementary retirement benefits.29. Changes of important accounting policy and estimation(1) Changes of major accounting policies
√ Applicable □Not applicable
Content and causes for changes of accounting policy | Approval procedures |
On June 15, 2018, the Ministry of Finance issued the Notice on Amending the Format of Financial Statements of General Enterprises in 2018 (CK No. [2018] 15), revised the financial statements format of general enterprises. According to the requirement, relevant content of the accounting policy needs to be adjusted, and the financial statement should be prepared in line with the format of financial statement for | Deliberated and approved by 5th session of the 9th BOD |
The impacts on the items and amounts related to consolidated financial statements and the parent company’sfinancial statements during the comparable period are as:
general enterprise(applicable to enterprise that have not yet implemented new financial and revenuestandards).
Changes ofaccounting policy
Changes of accounting policy | Impact on the amount in relevant financial statement of 2017/on 31 December 2017 | ||
Item | Amount affected (+,-) | ||
Consolidate financial statement | Financial statement of parent company | ||
The Company prepared the financial statement of 2018 in line with the format regulated in CK No. [2018] 15, and changed the presentation of relevant financial statements by retrospective method | Notes receivable | -1,464,256,934.83 | -449,209,323.02 |
Account receivable | -1,995,577,830.90 | -1,047,012,889.92 | |
Note receivable and account receivable | 3,459,834,765.73 | 1,496,222,212.94 | |
Interest receivable | -2,281,979.17 | -97,627.77 | |
Other receivables | 2,281,979.17 | 97,627.77 | |
Note payable | -947,976,759.10 | -459,762,950.78 | |
Account payable | -2,570,956,205.83 | -1,082,206,882.07 | |
Note payable and account payable | 3,518,932,964.93 | 1,541,969,832.85 | |
Interest payable | -401,928.43 | -93,777.78 | |
Other accounts payable | 401,928.43 | 93,777.78 | |
Long-term account payable | 18,265,082.11 | -- | |
Special account payable | -18,265,082.11 | -- | |
Administration expenses | -391,315,234.75 | -119,083,205.53 | |
R&D expenses | 391,315,234.75 | 119,083,205.53 |
(2) Changes of important accounting estimate
□ Applicable √ Not applicable
VI. Taxation
1. Major taxes and tax rates
Tax | Basis | Tax rate |
VAT | Taxable income | Tax rate of 17%, 16%, 11%, 10%, 6% and 5%,rate for exported commodities is stipulated by the state with declaration of export tax rebate, rate of tax may be “exempted, credited and refunded” |
City maintaining & construction tax | Turnover tax payable | 7% |
Corporation income tax | Taxable income | 25%、15% |
Educational surtax | Turnover tax payable | 5%、4.5% |
Disclose reasons for different taxpaying body
Taxpaying body | Income tax rate |
Weifu Mashan, Weifu Chang’an, Weifu International Trade, Weifu ITM, Weifu Schmidt, Weifu Leader (Wuhan), Weifu Leader(Nanchang) | 25% |
The Company, Weifu Jinning, Weifu Leader, Weifu Tianli, Weifu Autocam , Weifu Leader(Chongqing) | 15% |
2. Tax preferenceOn 17 November 2017, the Company got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732000007. Corporate income tax of theCompany shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 27 December 2017, Weifu Jinning got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732004010. Corporate income tax of theWeifu Jinning shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 17 November 2017, Weifu Leader got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732001828. Corporate income tax of theWeifu Leader shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 29 November 2017, Weifu Tianli got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Bureau of Ningbo, Department of Finance of Ningbo, Ningbo Office, SAT and Ningbo, ZhejiangProvincial Local Taxation Bureau, certificate No.: GR201733100363. Corporate income tax of the Weifu Tianlishall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
On 17 November 2017, Weifu Autocam got a “High-Tech Enterprise Certificate” issued jointly by Science &Technology Department of Jiangsu Province, Department of Finance of Jiangsu Province, Jiangsu ProvincialOffice, SAT and Jiangsu Local Taxation Bureau, certificate No.: GR201732001043. Corporate income tax of theWeifu Autocam shall be taxed by 15% in three years since 1 January 2017 in accordance with State regulations.
The State Administration of Taxation announced the first item of Announcement of the State Administration ofTaxation on the Enterprise Income Tax Issues Concerning the Implementation of the Western DevelopmentStrategy No. 12 of 2012 that from January 1, 2011 to December 31, 2020, the enterprises located in the westregion and mainly engaged in the industrial projects stipulated in the Catalogue of Encouragement Industries inthe Western Region, and whose main business income accounting for more than 70% of the total income of theenterprise in the current year can pay the corporate income tax at the tax rate of 15%. In 2018, Weifu Leader(Chongqing) paid its corporate income tax at the tax rate of 15%.
VII. Notes to major items in consolidated financial statements
1. Monetary funds
In RMB/CNY
Item | Ending balance | Opening balance |
Cash on hand | 194,161.03 | 736,773.22 |
Cash in bank | 2,534,479,978.46 | 3,027,702,581.00 |
Other Monetary funds | 81,647,601.24 | 90,270,058.61 |
Total | 2,616,321,740.73 | 3,118,709,412.83 |
Other explanation
Item | 2018-12-31 | 2017-12-31 |
Bank acceptance bill, L/C and other collateral | 80,765,732.67 | 89,623,690.04 |
Frozen dividend | 881,868.57 | 646,368.57 |
Total | 81,647,601.24 | 90,270,058.61 |
Other explanation:
The frozen dividend of 881,868.57 Yuan represents the part of dividends distributed by SDEC (stock code:600841)and Miracle Logistics (stock code:002009) for 2017 and 2018 held by the Company as financial assets availablefor sale. According to the notices numbered Yue 03MC[2016]2490 and Yue 03MC[2016]2492 served byGuangdong Shenzhen Intermediate People’s Court, these dividends were frozen.2. Note receivable and account receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Notes receivable | 1,148,107,603.68 | 1,464,256,934.83 |
Account receivable | 1,919,793,266.91 | 1,995,577,830.90 |
Total | 3,067,900,870.59 | 3,459,834,765.73 |
(1)Notes receivable
1)Classification of notes receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Bank acceptance bill | 1,082,574,482.88 | 1,399,006,661.54 |
Commercial acceptance bill | 65,533,120.80 | 65,250,273.29 |
Total | 1,148,107,603.68 | 1,464,256,934.83 |
2) Notes receivable already pledged by the Company at the end of the period
In RMB/CNY
Item | Amount pledge at period-end |
Bank acceptance bill | 423,527,758.19 |
Total | 423,527,758.19 |
3) Notes endorsement or discount and undue on balance sheet date
In RMB/CNY
Item | Amount derecognition at period-end | Amount not derecognition at period-end |
Bank acceptance bill | 776,847,577.64 | |
Commercial acceptance bill | 9,230,507.00 | |
Total | 786,078,084.64 |
4) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB/CNY
Item | Amount transfer to account receivable at period-end |
Commercial acceptance bill | 7,000,000.00 |
Total | 7,000,000.00 |
Other explanation
The commercial acceptance bills that the company transferred to the accounts receivable due to the failure of thedrawer to perform the agreement at the end of the period were the bills of the subsidiaries controlled by BaotaPetrochemical Group Co., Ltd. and the bills accepted by Baota Petrochemical Group Finance Co., Ltd. (hereinafterreferred to as “BD bills”); as of December 31, 2018, these bills had expired.
(2)Account receivable
1) Classification of account receivable
In RMB/CNY
Category | Ending balance | Opening balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
Account receivable with single significant amount and withdrawal bad debt provision separately | 7,000,000.00 | 0.36% | 7,000,000.00 | 100.00% | ||||||
Account receivables with bad debt provision accrual by | 1,951,016,221.14 | 99.56% | 31,222,954.23 | 1.60% | 1,919,793,266.91 | 2,006,937,035. | 99.90% | 11,359,204.21 | 0.57% | 1,995,577,830.90 |
credit portfolio | 11 | |||||||||
Account receivable with single significant amount and bad debts provision accrued individually | 1,685,110.25 | 0.08% | 1,685,110.25 | 100.00% | 1,935,107.25 | 0.10% | 1,935,107.25 | 100.00% | ||
Total | 1,959,701,331.39 | 100.00% | 39,908,064.48 | 2.04% | 1,919,793,266.91 | 2,008,872,142.36 | 100.00% | 13,294,311.46 | 0.66% | 1,995,577,830.90 |
Account receivable with single significant amount and withdrawal bad debt provision separately at period end√ Applicable □ Not applicable
In RMB/CNY
Account receivable(by enterprise) | Ending balance | |||
Account receivable | Bad debt reserve | Accrual ratio | Accrual causes | |
BD bills | 7,000,000.00 | 7,000,000.00 | 100.00% | Have difficulty in collection |
Total | 7,000,000.00 | 7,000,000.00 | -- | -- |
Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Not applicable
In RMB/CNY
Account age | Ending balance | ||
Account receivable | Bad debt reserve | Accrual ratio | |
Subitem of within one year | |||
Within 6 months | 1,728,298,586.40 | ||
6 months to one year | 179,611,775.01 | 17,961,177.51 | 10.00% |
Subtotal of within one year | 1,907,910,361.41 | 17,961,177.51 | |
1-2 years | 36,164,276.98 | 7,232,855.40 | 20.00% |
2-3 years | 1,521,102.38 | 608,440.95 | 40.00% |
Over 3 years | 5,420,480.37 | 5,420,480.37 | 100.00% |
Total | 1,951,016,221.14 | 31,222,954.23 | 1.60% |
Explanation on combination determines:
Excluding the account receivable accrual impairment provision separately; based on actual loss ratio of thereceivable groups that owes same or similar risk features, which has classify by age in previous years, determineaccrual ratio for bad debt provision combine with real condition
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable□ Applicable √ Not applicableIn combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
Nil2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 27,321,822.63 Yuan; the amount collected or switches back amounting to 353,111.39 Yuan.3) Account receivable actual charge off in the Period
In RMB/CNY
Item | Amount charge off |
Jiangyin KPT Power Machinery Manufacturing Co., Ltd. | 450,000.00 |
Chengdu Chengfa Automobile Engine Co., Ltd. | 142,862.60 |
Hangzhou Yaman Engine Co., Ltd | 92,921.30 |
Rugao Diesel Engine Factory | 76,090.00 |
Retail enterprise | 299,307.10 |
Total | 1,061,181.00 |
Charge-off for account receivable:
The amount are arising from non-related transactions
4) Top 5 receivables at ending balance by arrears partyTotal year-end balance of top five receivables by arrears party amounting to 932,473,509.48 Yuan, takes 47.58percent of the total account receivable at year-end, bad debt provision accrual correspondingly at year-endamounting as 4,753,294.41 Yuan.5) Account receivable derecognition due to financial assets transfer Nil6) Assets and liabilities resulted by account receivable transfer and continues involvement Nil3. Account paid in advance(1)Account age of account paid in advance
In RMB/CNY
Account age | Ending balance | Opening balance | ||
Amount | Ratio | Amount | Ratio | |
Within one year | 89,076,980.53 | 94.11% | 94,641,350.21 | 96.99% |
1-2 years | 4,536,408.47 | 4.79% | 2,550,321.91 | 2.61% |
2-3 years | 980,958.32 | 1.04% | 319,185.79 | 0.33% |
Over 3 years | 57,083.99 | 0.06% | 65,339.97 | 0.07% |
Total | 94,651,431.31 | -- | 97,576,197.88 | -- |
Explanation on reasons of failure to settle on important advance payment with age over one year: Nil
(2) Top 5 advance payment at ending balance by prepayment objectTotal year-end balance of top five advance payment by prepayment object amounted to 30,798,878.95 Yuan,takes 32.54 percent of the total advance payment at year-end.
4. Other receivables
In RMB/CNY
Item | Ending balance | Opening balance |
Interest receivable | 1,842,437.50 | 2,281,979.17 |
Other receivables | 82,739,808.66 | 5,214,623.41 |
Total | 84,582,246.16 | 7,496,602.58 |
(1)Interest receivable
1) Category of interest receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Fixed deposits | 1,842,437.50 | 2,281,979.17 |
Total | 1,842,437.50 | 2,281,979.17 |
2) Significant overdue interest
Nil
(2)Dividend receivable
Nil
(3)Other receivables
1) Category of other receivables
In RMB/CNY
Category | Ending balance | Opening balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
Other account receivable with single significant amount and withdrawal bad debt provision separately | 2,775,552.63 | 3.15% | 2,775,552.63 | 100.00% | 2,775,552.63 | 25.60% | 2,775,552.63 | 100.00% | ||
Other receivables with bad debt provision accrual by credit portfolio | 85,423,012.66 | 96.85% | 2,683,204.00 | 3.14% | 82,739,808.66 | 8,067,466.20 | 74.40% | 2,852,842.79 | 35.36% | 5,214,623.41 |
Total | 88,198,565.29 | 100.00% | 5,458,756.63 | 6.19% | 82,739,808.66 | 10,843,018.83 | 100.00% | 5,628,395.42 | 51.91% | 5,214,623.41 |
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√ Applicable □ Not applicable
In RMB/CNY
Other receivables(by enterprise) | Ending balance | |||
Other receivables | Bad debt reserve | Accrual ratio | Accrual causes | |
American HESS | 1,514,671.20 | 1,514,671.20 | 100.00% | The counter party has bankruptcy |
Nanjing Jinning Machinery Factory | 1,260,881.43 | 1,260,881.43 | 100.00% | Have difficulty in collection |
Total | 2,775,552.63 | 2,775,552.63 | -- | -- |
In combination, other accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable
In RMB/CNY
Account age | Ending balance | ||
Other receivables | Bad debt reserve | Accrual ratio | |
Subitem of within one year | |||
Within 6 months | 82,715,687.17 | ||
6 months to one year | 19,454.00 | 1,945.40 | 10.00% |
Subtotal of within one year | 82,735,141.17 | 1,945.40 | |
1-2 years | 5,400.00 | 1,080.00 | 20.00% |
2-3 years | 3,821.49 | 1,528.60 | 40.00% |
Over 3 years | 2,678,650.00 | 2,678,650.00 | 100.00% |
Total | 85,423,012.66 | 2,683,204.00 | 3.14% |
Explanations on combination determine:
Excluding the other account receivable accrual impairment provision separately; based on actual loss ratio of thereceivable groups that owes same or similar risk features, which has classify by age in previous years, determineaccrual ratio for bad debt provision combine with real condition.
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□ Applicable √ Not applicableIn combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:
□ Applicable √ Not applicable
2) Bad debt provision accrual, collected or switch backBad debt provision accrual was 120,915.80 Yuan; the amount collected or switches back amounting to 262,165.59 Yuan.Including the important bad debt provision switch back or collected in the period: Nil3) Other receivables actually written-off during the reporting period
In RMB/CNY
Item | Amount charge off |
Retail enterprise (Details of each amount is small and is not generated by related transactions) | 28,389.00 |
Note of important other receivables of written-off: NilNote of other receivables of written-off: Nil4)Nature of other receivables
In RMB/CNY
Nature | Ending book balance | Opening book balance |
Intercourse funds receivable from units | 15,328,121.55 | 4,883,788.59 |
Receivable of Compensation(note) | 67,981,726.00 | |
Cash deposit | 3,206,825.88 | 3,457,080.65 |
Staff loans and petty cash | 1,172,017.93 | 2,099,504.91 |
Other | 509,873.93 | 402,644.68 |
Total | 88,198,565.29 | 10,843,018.83 |
In 2018, the Qixia District Housing Collection Management Office of Nanjing signed the Agreement on theCollection and Compensation of Housing on State-owned Land in Nanjing with Weifu Jinning. According to theagreement, Weifu Jinning’s land, housing and housing attachments located at No. 69, Taiping Village, YanzijiTown, Qixia District were levied by the government; the compensation method was monetary compensation, thecompensation amount was 104,205,929.00 yuan, which was in accordance with the evaluation result of thehousing expropriation issued by the assessment company. As of December 31, 2018, the company has deliveredthe expropriated houses and land in accordance with the agreement, and delivered the relevant original houseownership certificates and state-owned land use certificates to the Qixia District Housing Collection ManagementOffice of Nanjing. In 2018, the company has collected compensation of 36,224,203.00 yuan, and received theremaining compensation of 67,981,726.00 yuan on January 30, 2019.
5) Top 5 other receivables at ending balance by arrears party
In RMB/CNY
Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other receivables | Ending balance of bad debt reserve |
Qixia District Housing Collection Management Office of Nanjing | Compensation for disposal of assets | 67,981,726.00 | Within 6 months | 77.08% | |
Robert Bosch Company | Intercourse funds of unit | 12,285,081.81 | Within 6 months | 13.93% | |
Ningbo Jiangbei High-Tech Industry Park Development Construction Co., Ltd. | Performance bond | 1,767,000.00 | Over three years | 2.00% | 1,767,000.00 |
American HESS Company | Intercourse funds of unit | 1,514,671.20 | Specific | 1.72% | 1,514,671.20 |
identification | |||||
Nanjing Jinning Machinery Factory | Intercourse funds of unit | 1,260,881.43 | Specific identification | 1.43% | 1,260,881.43 |
Total | -- | 84,809,360.44 | -- | 96.16% | 4,542,552.63 |
6) Other account receivables related to government grants Nil7) Other receivable for termination of confirmation due to the transfer of financial assets Nil8)The amount of assets and liabilities that are transferred other receivable and continued to be involvedNil
5. Inventory
(1)Category of inventory
In RMB/CNY
Item | Ending balance | Opening balance | ||||
Book balance | Depreciation reserve | Book value | Book balance | Depreciation reserve | Book value | |
Raw materials | 405,113,183.37 | 71,085,820.65 | 334,027,362.72 | 444,304,506.71 | 83,879,268.03 | 360,425,238.68 |
Goods in process | 182,564,277.52 | 13,682,081.67 | 168,882,195.85 | 198,648,407.88 | 15,483,517.38 | 183,164,890.50 |
Finished goods | 1,080,800,727.38 | 145,181,571.36 | 935,619,156.02 | 1,098,294,008.21 | 162,945,096.69 | 935,348,911.52 |
Total | 1,668,478,188.27 | 229,949,473.68 | 1,438,528,714.59 | 1,741,246,922.80 | 262,307,882.10 | 1,478,939,040.70 |
(2) Inventory depreciation reserve
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance | ||
Accrual | Other | Switch back or write-off | Other | |||
Raw materials | 83,879,268.03 | 29,627,483.24 | 42,420,930.62 | 71,085,820.65 | ||
Goods in process | 15,483,517.38 | 6,039,633.18 | 7,841,068.89 | 13,682,081.67 | ||
Finished goods | 162,945,096.69 | 41,526,222.10 | 59,289,747.43 | 145,181,571.36 | ||
Total | 262,307,882.10 | 77,193,338.52 | 109,551,746.94 | 229,949,473.68 |
① Net realizable value of the inventory refers to: during the day-to-day activities, results of the estimated sale
price less costs which are going to happen by estimation till works completed, sales price estimated andrelevant taxes.② Accrual basis for inventory depreciation reserve:
Cash on hand | Accrual basis for inventory impairment provision | Specific basis for recognition |
Materials in stock | The materials sold due to finished goods manufactured, its net realizable value is lower than the book value | Results from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed |
Goods in process | The goods in process sold due to finished goods manufactured, its net realizable value is lower than the book value | Results from the estimated sale price of such inventory less the cost what will happen, estimated sales expenses and relevant taxes till the goods completed |
Finished goods | its net realizable value is lower than the book value | Results from the estimated sale price less the vary taxes which shall be taken in process of sales |
③Reasons of write-off for inventory falling price reserves:
Cash on hand | Reasons of write-off |
Materials in stock | Used for production and the finished goods are realized sales |
Goods in process | Goods in process completed in the Period and corresponding finished goods are realized sales in the Period |
Finished goods | Sales in the Period |
(3) Explanation on capitalization of borrowing costs at ending balance of inventoryNil(4) Assets completed without settlement from construction contract at period-endNil6. Other current assets
In RMB/CNY
Item | Ending balance | Opening balance |
Entrust financing products | 4,571,886,703.43 | 3,841,320,000.00 |
Receivable export tax rebates | 7,848,937.72 | 14,289,026.22 |
Prepaid taxes and VAT retained | 47,808,273.37 | 25,338,518.05 |
Input tax to be deducted and certification | 3,420,317.46 | 2,568,145.27 |
Other | 1,173,368.28 | 4,481,600.99 |
Total | 4,632,137,600.26 | 3,887,997,290.53 |
7. Available-for-sale financial assets(1)Available-for-sale financial assets
In RMB/CNY
Item | Ending balance | Opening balance | ||||
Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
Equity instrument available for sale: | 460,603,210.95 | 204,628,034.04 | 255,975,176.91 | 469,495,975.95 | 59,433,106.95 | 410,062,869.00 |
Measured by fair value | 121,066,008.00 | 121,066,008.00 | 266,376,600.00 | 266,376,600.00 | ||
Measured by cost | 339,537,202.95 | 204,628,034.04 | 134,909,168.91 | 203,119,375.95 | 59,433,106.95 | 143,686,269.00 |
Other - financial products | 178,080,000.00 | 178,080,000.00 | ||||
Total | 460,603,210.95 | 204,628,034.04 | 255,975,176.91 | 647,575,975.95 | 59,433,106.95 | 588,142,869.00 |
(2) Financial assets available for sale measured by fair value at period-end
In RMB/CNY
Category of available-for-sale financial assets | Equity instrument available for sale | Debt instrument available for sale | Total |
Cost /liability of equity instrument/ amortization cost of debt instrument | 144,371,235.00 | 144,371,235.00 | |
Fair value | 121,066,008.00 | 121,066,008.00 | |
Amount of fair value changes that cumulatively reckoned in other comprehensive gains | -23,305,227.00 | -23,305,227.00 |
(3) Financial assets available for sale measured by cost at period-end
In RMB/CNY
The invested entity | Book balance | Depreciation reserves | Ratio of share-holding in invested entity | Current cash dividend | ||||||
Period-beginning | Current increased | Current decreased | Period-end | Period-beginning | Current increased | Current decreased | Period-end | |||
Guolian Securities | 12,000,000.00 | 12,000,000.00 | 0.95% | |||||||
Guangxi Liufa Co., Ltd. | 1,600,000.00 | 1,600,000.00 | 1,600,000.00 | 1,600,000.00 | 1.22% | |||||
Financial Company of Changchai Group Co., Ltd. | 800,000.00 | 800,000.00 | 800,000.00 | 800,000.00 | ||||||
H&J Vanguard Investment Co., Ltd. | 33,000,000.00 | 33,000,000.00 | 33,000,000.00 | 33,000,000.00 | ||||||
Nanjing Hengtai Insurance and Broker Co., Ltd. | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | 1.85% |
Henan Gushi Weining Oil Pump & Nozzle Co., Ltd. | 2,033,106.95 | 2,033,106.95 | 2,033,106.95 | 2,033,106.95 | ||||||
Beijing Zhike Industrial Investment Holding Group Co., Ltd | 86,940,000.00 | 86,940,000.00 | 11,000,000.00 | 11,000,000.00 | 12.66% | |||||
Wuxi Xidong Technological Industry Park Co., Ltd. | 5,000,000.00 | 5,000,000.00 | 1.43% | |||||||
Shanghai IMS Automotive Electronic System Co., Ltd. | 10,000,000.00 | 10,000,000.00 | 10,000,000.00 | 10,000,000.00 | 12.27% | |||||
Shanghai CD Dengtong Equity Investment Fund | 50,746,269.00 | 14,925,373.00 | 35,820,896.00 | 14.93% | 2,985,075.00 | |||||
Protean Holdings Corp. | 152,143,200.00 | 152,143,200.00 | 145,994,927.09 | 145,994,927.09 | ||||||
Total | 203,119,375.95 | 152,143,200.00 | 15,725,373.00 | 339,537,202.95 | 59,433,106.95 | 145,994,927.09 | 800,000.00 | 204,628,034.04 | -- | 2,985,075.00 |
(4) Changes of impairment of available-for-sale financial assets in Period
In RMB/CNY
Category of available-for-sale financial assets | Equity instrument available for sale | Debt instrument available for sale | Total |
Balance of impairment accrual at period-begin | 59,433,106.95 | 59,433,106.95 | |
Current accrual | 145,994,927.09 | 145,994,927.09 | |
Current decreased | 800,000.00 | 800,000.00 | |
Balance of impairment accrual at period-end | 204,628,034.04 | 204,628,034.04 |
(5) Where the fair value of equity instruments available for sale drops significantly or not contemporarilyat period-end, without impairment provision is madeNil
8. Long-term equity investments
In RMB/CNY
The invested entity | Opening balance | Current changes (+,-) | Ending balance | Ending balance of depreciation reserves | |||||||
Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrual | Other | ||||
I. Joint venture | |||||||||||
Wuxi Weifu Environment Catalyst Co., Ltd. | 522,882,789.26 | 42,763,297.67 | 565,646,086.93 | ||||||||
Wuxi Weifu Electric Drive Tech. Co., Ltd. | 55,180,800.00 | -438,424.98 | 54,742,375.02 | ||||||||
Subtotal | 522,882,789.26 | 55,180,800.00 | 42,324,872.69 | 620,388,461.95 | |||||||
II. Associated enterprise | |||||||||||
Bosch Automobile Diesel System Co., Ltd. | 2,608,796,934.00 | 1,206,095,040.88 | 607,769,081.48 | 3,207,122,893.40 | |||||||
Zhonglian Automobile Electronic Co., Ltd. | 959,036,193.36 | 366,839,762.36 | 239,400,000.00 | 1,086,475,955.72 | |||||||
Weifu Precision Machinery Manufact | 49,348,908.96 | 9,561,248.94 | 3,600,000.00 | 55,310,157.90 |
uring Co., Ltd. | |||||||||||
Shinwell Automobile Tech. (Wuxi) Co., Ltd. | 9,000,000.00 | -1,523,522.23 | 7,476,477.77 | ||||||||
Subtotal | 3,617,182,036.32 | 9,000,000.00 | 1,580,972,529.95 | 850,769,081.48 | 4,356,385,484.79 | ||||||
Total | 4,140,064,825.58 | 64,180,800.00 | 1,623,297,402.64 | 850,769,081.48 | 4,976,773,946.74 |
Other explanationExplanation on investment for Wuxi Weifu Electric Drive Tech. Co., Ltd. and Shinwell Automobile Tech. (Wuxi) Co., Ltd measuredby equity found more in 3-(1) Joint venture or associated enterprise in Note VII
9. Investment real estate(1) Investment real estate measured by cost
√ Applicable □ Not applicable
In RMB/CNY
Item | House and Building | Land use right | Construction in progress | Total |
I. original book value | ||||
1.Opening balance | 63,545,325.48 | 63,545,325.48 | ||
2.Current increased | ||||
(1) outsourcing | ||||
(2) Inventory\fixed assets\construction in process transfer-in | ||||
(3) increased by combination | ||||
3.Current decreased | 1,867,989.65 | 1,867,989.65 | ||
(1) disposal | 1,867,989.65 | 1,867,989.65 | ||
(2) other transfer-out | ||||
4.Ending balance | 61,677,335.83 | 61,677,335.83 | ||
II. Accumulated depreciation and accumulated amortization | ||||
1.Opening balance | 40,000,494.70 | 40,000,494.70 | ||
2.Current increased | 1,566,198.87 | 1,566,198.87 |
(1) accrual or amortization | 1,566,198.87 | 1,566,198.87 | ||
3.Current decreased | 1,795,492.26 | 1,795,492.26 | ||
(1) disposal | 1,795,492.26 | 1,795,492.26 | ||
(2) other transfer-out | ||||
4.Ending balance | 39,771,201.31 | 39,771,201.31 | ||
III. Depreciation reserves | ||||
1.Opening balance | ||||
2.Current increased | ||||
(1) accrual | ||||
3. Current decreased | ||||
(1) disposal | ||||
(2) other transfer-out | ||||
4.Ending balance | ||||
IV. Book value | ||||
1.Ending Book value | 21,906,134.52 | 21,906,134.52 | ||
2.Opening Book value | 23,544,830.78 | 23,544,830.78 |
(2) Investment real estate measured at fair value
□ Applicable √ Not applicable
(3) Investment real estate without property certification held
Nil
10. Fixed assets
In RMB/CNY
Item | Ending balance | Opening balance |
Fixed assets | 2,707,374,678.61 | 2,584,872,628.54 |
Total | 2,707,374,678.61 | 2,584,872,628.54 |
(1)Fixed assets
In RMB/CNY
Item | House and Building | Machinery equipment | Transportation equipment | Electronic and other equipment | Total |
I. original book value: |
1.Opening balance | 1,537,881,197.20 | 2,214,135,391.61 | 40,678,767.59 | 423,482,779.18 | 4,216,178,135.58 |
2.Current increased | 14,839,633.48 | 305,476,750.70 | 4,026,263.61 | 93,377,537.08 | 417,720,184.87 |
(1) Purchase | 18,965,806.44 | 330,775.86 | 17,351,255.06 | 36,647,837.36 | |
(2) Construction in progress transfer-in | 14,839,633.48 | 286,510,944.26 | 3,695,487.75 | 76,026,282.02 | 381,072,347.51 |
(3) increased by combination | |||||
3.Current decreased | 28,603,301.23 | 8,944,035.83 | 9,927,902.72 | 47,475,239.78 | |
(1) disposal or scrapping | 28,603,301.23 | 8,944,035.83 | 9,927,902.72 | 47,475,239.78 | |
4.Ending balance | 1,552,720,830.68 | 2,491,008,841.08 | 35,760,995.37 | 506,932,413.54 | 4,586,423,080.67 |
II. Accumulated depreciation | |||||
1.Opening balance | 283,668,171.81 | 1,077,183,649.52 | 29,697,332.26 | 185,833,218.62 | 1,576,382,372.21 |
2.Current increased | 46,296,560.27 | 176,973,334.14 | 3,301,058.79 | 57,333,902.25 | 283,904,855.45 |
(1) accrual | 46,296,560.27 | 176,973,334.14 | 3,301,058.79 | 57,333,902.25 | 283,904,855.45 |
3.Current decreased | 24,603,993.39 | 8,252,738.72 | 2,604,749.60 | 35,461,481.71 | |
(1) disposal or scrapping | 24,603,993.39 | 8,252,738.72 | 2,604,749.60 | 35,461,481.71 | |
4.Ending balance | 329,964,732.08 | 1,229,552,990.27 | 24,745,652.33 | 240,562,371.27 | 1,824,825,745.95 |
III. Depreciation reserves | |||||
1.Opening balance | 48,038,049.98 | 73,320.38 | 6,811,764.47 | 54,923,134.83 | |
2.Current increased | 504,907.39 | 504,907.39 | |||
(1) accrual | 504,907.39 | 504,907.39 | |||
3.Current decreased | 1,168,957.36 | 0.48 | 36,428.27 | 1,205,386.11 | |
(1) disposal or scrapping | 1,168,957.36 | 0.48 | 36,428.27 | 1,205,386.11 | |
4.Ending balance | 46,869,092.62 | 73,319.90 | 7,280,243.59 | 54,222,656.11 | |
IV. Book value | |||||
1.Ending Book value | 1,222,756,098.60 | 1,214,586,758.19 | 10,942,023.14 | 259,089,798.68 | 2,707,374,678.61 |
2.Opening Book value | 1,254,213,025.39 | 1,088,913,692.11 | 10,908,114.95 | 230,837,796.09 | 2,584,872,628.54 |
(2) Temporarily idle fixed assets Nil(3) Fixed assets acquired by financing lease Nil(4) Fixed assets acquired by operating lease Nil(5)Fixed assets without property certification held
In RMB/CNY
Item | Book value | Reasons for without the property certification |
Boiler room and guard house of Weifu Jinning | 2,743,741.50 | Still in process of relevant property procedures |
Plant and office building of Weifu Chang’an | 43,746,598.64 | Still in process of relevant property procedures |
(6)Disposal of fixed assets Nil11. Construction in progress
In RMB/CNY
Item | Ending balance | Opening balance |
Construction in progress | 166,414,542.18 | 100,345,461.28 |
Total | 166,414,542.18 | 100,345,461.28 |
(1)Construction in progress
In RMB/CNY
Item | Ending balance | Opening balance | ||||
Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
2nd Phase construction project in industrial park | 3,364,768.05 | 3,364,768.05 | ||||
Weifu Tianli Technical Transformation Project | 3,214,458.65 | 3,214,458.65 | 16,518,417.24 | 16,518,417.24 | ||
Technical | 62,131,476.77 | 1,470,033.00 | 60,661,443.77 | 23,611,775.63 | 1,470,033.00 | 22,141,742.63 |
Technical transformation of Weifu Autocam | 64,861,621.60 | 64,861,621.60 | 32,705,249.53 | 32,705,249.53 | ||
Other Item | 39,773,360.78 | 2,096,342.62 | 37,677,018.16 | 27,711,626.45 | 2,096,342.62 | 25,615,283.83 |
Total | 169,980,917.80 | 3,566,375.62 | 166,414,542.18 | 103,911,836.90 | 3,566,375.62 | 100,345,461.28 |
(2) Changes of major projects under construction
In RMB/CNY
Item | Budget | Opening balance | Current increased | Fixed assets transfer-in in the Period | Other decreased in the Period | Ending balance | Proportion of project investment in budget | Progress | Accumulated amount of interest capitalization | including: interest capitalized amount of the year | Interest capitalization rate of the year | Source of funds |
2nd Phase construction project in industrial | 3,364,768.05 | 4,078,102.04 | 7,442,870.09 | Other |
park | ||||||||||||
Weifu Tianli Technical Transformation Project | 16,518,417.24 | 12,166,203.74 | 25,470,162.33 | 3,214,458.65 | Other | |||||||
Technical | 23,611,775.63 | 156,912,888.51 | 118,393,187.37 | 62,131,476.77 | Other | |||||||
Technical transformation of Weifu Autocam | 32,705,249.53 | 118,272,226.62 | 86,115,854.55 | 64,861,621.60 | Other | |||||||
Total | 76,200,210.45 | 291,429,420.91 | 237,422,074.34 | 130,207,557.02 | -- | -- | -- |
(3) The provision for impairment of construction projectsNil
(4)Engineering material
Nil12. Intangible assets
(1)Intangible assets
In RMB/CNY
Item | Land use right | Patent | Non-patent technology | Trademark and trademark license | Computer software | Total |
I. original book value | ||||||
1.Opening balance | 382,073,520.00 | 3,539,793.05 | 41,597,126.47 | 51,218,449.46 | 478,428,888.98 | |
2.Current increased | 1,778,429.82 | 1,778,429.82 | ||||
(1) Purchase | 1,778,429.82 | 1,778,429.82 | ||||
(2) internal R&D | ||||||
(3) increased by combination | ||||||
3.Current decreased | 870,000.00 | 870,000.00 | ||||
(1) disposal | 870,000.00 | 870,000.00 | ||||
4.Ending balance | 381,203,520.00 | 3,539,793.05 | 41,597,126.47 | 52,996,879.28 | 479,337,318.80 | |
II. accumulated amortization | ||||||
1.Opening balance | 70,825,229.06 | 2,271,368.77 | 9,709,000.00 | 38,344,247.79 | 121,149,845.62 | |
2.Current increased | 8,399,994.44 | 353,977.93 | 8,495,491.00 | 17,249,463.37 |
(1) accrual | 8,399,994.44 | 353,977.93 | 8,495,491.00 | 17,249,463.37 | ||
3.Current decreased | 601,712.94 | 601,712.94 | ||||
(1) disposal | 601,712.94 | 601,712.94 | ||||
4.Ending balance | 78,623,510.56 | 2,625,346.70 | 9,709,000.00 | 46,839,738.79 | 137,797,596.05 | |
III. Depreciation reserves | ||||||
1.Opening balance | 16,646,900.00 | 16,646,900.00 | ||||
2.Current increased | ||||||
(1) accrual | ||||||
3.Current decreased | ||||||
(1) disposal | ||||||
4.Ending balance | 16,646,900.00 | 16,646,900.00 | ||||
IV. Book value | ||||||
1.Ending Book value | 302,580,009.44 | 914,446.35 | 15,241,226.47 | 6,157,140.49 | 324,892,822.75 | |
2.Opening Book value | 311,248,290.94 | 1,268,424.28 | 15,241,226.47 | 12,874,201.67 | 340,632,143.36 |
Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was 0%.
(2)Land use right without property certification heldNil13. Goodwill(1) Original book value of goodwill
In RMB/CNY
The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance |
Weifu Tianli | 1,784,086.79 | 1,784,086.79 | ||
Total | 1,784,086.79 | 1,784,086.79 |
(2) Goodwill depreciation reserves
NilRelevant information about the assets group or portfolio goodwill included
Goodwill of the Weifu Tianli: the Company controlling and combine Weifu Tianli by increasing the capital, thegoodwill is the number that combination cost greater than the fair value of identical net assets of Weifu TianliAt the end of the period, the company forecasted an impairment test on goodwill to estimate the present value offuture cash flows and the recoverable amount of the goodwill-related asset group, which is based on themanagement's financial budget for the next five years and a discount rate of 12.21%, on the assumption that thecash flow of the year after the financial budget for more than 5 years will remain stable. The asset group identified
during the goodwill impairment test is unchanged.20%~23% gross profit margin and 9%~15% of the forecast period operating income growth rate are keyparameters during the measurement of current value of the expected future cash flow of the goodwill related assetgroup. These parameters are determined by management based on historical conditions prior to the forecast periodand forecasts of market development. Through the above tests, it comes a conclusion that the company's goodwilldoes not need to make provision for impairment.14. Long-term deferred expenses
In RMB/CNY
Item | Opening balance | Current increased | Amortized in the Period | Other decrease | Ending balance |
Remodeling costs etc. | 2,969,770.81 | 15,235,143.93 | 1,567,262.43 | 16,637,652.31 | |
Total | 2,969,770.81 | 15,235,143.93 | 1,567,262.43 | 16,637,652.31 |
15. Deferred income tax assets/Deferred income tax liabilities(1) Deferred income tax assets that are not offset
In RMB/CNY
Item | Ending balance | Opening balance | ||
Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
Bad debt reserve | 44,576,998.51 | 6,770,470.23 | 18,591,825.81 | 2,834,842.52 |
Inventory depreciation reserve | 210,088,809.57 | 32,942,217.43 | 240,520,904.57 | 37,599,678.75 |
Depreciation reserves of fixed assets | 20,661,129.43 | 3,315,363.51 | 20,459,349.51 | 3,285,096.52 |
Depreciation reserves of construction in progress | 3,566,375.62 | 534,956.34 | 3,566,375.62 | 534,956.34 |
Depreciation reserves of intangible assets | 16,646,900.00 | 2,497,035.00 | 16,646,900.00 | 2,497,035.00 |
Depreciation reserves of available-for-sale financial asset | 155,994,927.09 | 23,399,239.06 | 10,000,000.00 | 1,500,000.00 |
Change of fair value of available-for-sale financial asset | 23,305,227.00 | 3,495,784.05 | ||
Deferred income | 422,215,782.35 | 63,332,367.36 | 447,676,720.31 | 67,151,508.04 |
Internal un-realized profit | 33,204,053.14 | 6,439,903.29 | 28,149,575.30 | 4,972,350.93 |
Payable salary, accrued expenses etc. | 539,804,494.87 | 85,801,436.71 | 526,642,684.53 | 81,166,909.39 |
Depreciation assets, amortization difference | 53,624,344.54 | 8,439,877.52 | 9,768,298.31 | 1,465,244.74 |
Deductible loss of subsidiary | 9,677,975.44 | 2,419,493.86 | ||
Change of fair value of derivative financial liability | 490,329.13 | 73,549.37 | ||
Total | 1,533,857,346.69 | 239,461,693.73 | 1,322,022,633.96 | 203,007,622.23 |
(2) Deferred income tax liabilities that are not offset
In RMB/CNY
Item | Ending balance | Opening balance | ||
Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
Asset evaluation increment for combination not under the same control | 12,751,629.44 | 1,912,744.40 | 13,491,849.42 | 2,023,777.40 |
Change of fair value of available-for-sale financial asset | 102,552,300.00 | 15,382,844.99 | ||
Accelerated depreciation of fixed assets | 31,763,694.33 | 4,764,554.15 | ||
Total | 44,515,323.77 | 6,677,298.55 | 116,044,149.42 | 17,406,622.39 |
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB/CNY
Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
Deferred income tax assets | -4,764,554.15 | 234,697,139.58 | 203,007,622.23 | |
Deferred income tax liabilities | -4,764,554.15 | 1,912,744.40 | 17,406,622.39 |
(4) Details of unrecognized deferred income tax assets
In RMB/CNY
Item | Ending balance | Opening balance |
Bad debt reserve | 789,822.60 | 330,881.07 |
Inventory depreciation reserve | 19,860,664.11 | 21,786,977.53 |
Loss from subsidiary | 139,281,223.32 | 160,376,822.42 |
Depreciation reserves of fixed assets | 33,561,526.68 | 34,463,785.32 |
Depreciation reserves of available-for-sale financial asset | 48,633,106.95 | 49,433,106.95 |
Total | 242,126,343.66 | 266,391,573.29 |
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB/CNY
Maturity year | Ending amount | Opening amount | Note |
2018 | 23,365,456.08 | Subsidiaries have operating losses | |
2019 | 25,671,694.55 | 35,159,237.40 | Subsidiaries have operating losses |
2020 | 44,795,747.87 | 44,811,748.35 | Subsidiaries have operating losses |
2021 | 46,080,956.48 | 46,080,956.48 | Subsidiaries have operating losses |
2022 | 10,503,882.86 | 10,959,424.11 | Subsidiaries have operating losses |
2023 | 12,228,941.56 | Subsidiaries have operating losses | |
Total | 139,281,223.32 | 160,376,822.42 | -- |
16. Other non-current assets
In RMB/CNY
Item | Ending balance | Opening balance |
Engineering equipment paid in advance | 251,462,676.27 | 195,088,675.74 |
Total | 251,462,676.27 | 195,088,675.74 |
17. Short-term borrowings(1)Category of short-term borrowings
In RMB/CNY
Item | Ending balance | Opening balance |
Debt of honor | 298,928,213.94 | 243,000,000.00 |
Total | 298,928,213.94 | 243,000,000.00 |
(2) Overdue short-term loans without payment
Nil
18. Derivative financial liability
√Applicable □Not applicable
In RMB/CNY
Item | Ending balance | Opening balance |
Derivative financial liability | 490,329.13 | |
Total | 490,329.13 |
19. Note payable and account payable
In RMB/CNY
Item | Ending balance | Opening balance |
Note payable | 1,018,367,533.74 | 947,976,759.10 |
Account payable | 2,047,336,834.66 | 2,570,956,205.83 |
Total | 3,065,704,368.40 | 3,518,932,964.93 |
(1)Category of note payable
In RMB/CNY
Category | Ending balance | Opening balance |
Bank acceptance bill | 1,018,367,533.74 | 947,976,759.10 |
Total | 1,018,367,533.74 | 947,976,759.10 |
Notes expired at year-end without paid was 0.00 Yuan.
(2)Account payable
In RMB/CNY
Item | Ending balance | Opening balance |
Within 1 year | 1,957,672,043.76 | 2,452,140,381.86 |
1-2 years | 10,208,129.49 | 43,524,905.85 |
2-3 years | 7,830,950.08 | 2,318,008.01 |
Over three years | 71,625,711.33 | 72,972,910.11 |
Total | 2,047,336,834.66 | 2,570,956,205.83 |
(3) Important account payable with account age over one year NilOther explanation:
Margin saving 79,315,732.67 Yuan was provided for the bank acceptance bill, 423,527,758.19 Yuan was pledgefor not receivable.Notes expired at year-end without paid was 0.00 Yuan.20.Accounts received in advance(1)Accounts received in advance
In RMB/CNY
Item | Ending balance | Opening balance |
Within 1 year | 33,337,169.03 | 34,272,416.20 |
1-2 years | 6,544,805.44 | 7,271,092.26 |
2-3 years | 425,759.63 | 346,383.11 |
Over three years | 1,022,123.70 | 930,344.50 |
Total | 41,329,857.80 | 42,820,236.07 |
(2) Important account received in advance with account age over one year :Nil(3) Projects that settle without completed from construction contract at period-end:Nil21. Wage payable
(1)Wage payable
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
I. Short-term compensation | 147,444,265.93 | 1,013,770,970.76 | 993,801,185.87 | 167,414,050.82 |
II. Post-employment welfare- defined contribution plans | 34,299,401.90 | 156,460,615.16 | 158,254,339.58 | 32,505,677.48 |
III. Dismissed welfare | 3,397,642.16 | 3,204,395.56 | 4,000,475.97 | 2,601,561.75 |
IV. Other welfare due within one year | 121,670,000.00 | 69,168,944.19 | 100,788,944.19 | 90,050,000.00 |
V. Other short-term welfare-Housing subsidies, employee benefits and welfare funds | 20,967,367.30 | 1,425,479.11 | 19,541,888.19 | |
Total | 327,778,677.29 | 1,242,604,925.67 | 1,258,270,424.72 | 312,113,178.24 |
(2) Short-term compensation
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Wages , bonuses, allowances and subsidies | 128,145,458.85 | 796,197,236.14 | 775,906,715.58 | 148,435,979.41 |
2. Welfare for workers and staff | 77,548,989.55 | 77,548,989.55 | ||
3. Social insurance | 8,642,880.67 | 63,595,212.12 | 62,786,465.21 | 9,451,627.58 |
Including: Medical insurance | 6,749,035.02 | 52,393,141.35 | 51,461,012.64 | 7,681,163.73 |
Work injury insurance | 1,221,106.56 | 6,031,122.87 | 6,254,332.88 | 997,896.55 |
Maternity insurance | 672,739.09 | 5,170,947.90 | 5,071,119.69 | 772,567.30 |
4. Housing accumulation fund | 1,062,011.00 | 63,903,092.60 | 64,306,305.60 | 658,798.00 |
5. Labor union expenditure and personnel education expense | 9,593,915.41 | 12,526,440.35 | 13,252,709.93 | 8,867,645.83 |
Total | 147,444,265.93 | 1,013,770,970.76 | 993,801,185.87 | 167,414,050.82 |
(3) Defined contribution plans
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Basic endowment insurance | 17,818,243.64 | 120,730,720.57 | 120,603,297.89 | 17,945,666.32 |
2. Unemployment insurance | 1,664,483.26 | 1,970,982.42 | 3,053,950.52 | 581,515.16 |
3. Enterprise annuity | 14,816,675.00 | 33,758,912.17 | 34,597,091.17 | 13,978,496.00 |
Total | 34,299,401.90 | 156,460,615.16 | 158,254,339.58 | 32,505,677.48 |
Other explanation:
1 Reclassification of long-term staff remuneration payable:
①An amount of RMB 128,559,600.00 in short-term remuneration is reclassified into long-term staff remunerationpayable, which represents the incentive fund of RMB 128,559,600.00 provided for in this period.② An amount of RMB 81,262,073.88 is recorded in post office benefits - defined benefit plan and incentive fundpayable within one year, which represents the difference between the incentive fund of RMB 103,820,000.00expected to be paid in 2019 and the beginning balance of incentive fund payable within one year, post officebenefits-defined benefit plan and the actual amount paid in this period.2. Post-employment welfare- defined contribution plans:
The Company participates in the pension insurance and unemployment insurance plans established by governmentauthorities by laws. Under these plans, the Company makes monthly contribution to these plans based on 19% and0.5% of the social insurance contribution base for 2018 respectively. Other than the aforesaid monthlycontribution, the Company takes no further payment obligation. The relevant expenditure is included in currentprofit or loss or cost of relevant assets when occurs. Found more of enterprise annuity in Note XVI-4.” Annuityplan”3. Dismiss welfareThe wages payable resulted from the implementation of inner retirement plan, the amount paid in the year RMB3,066,483.64 re-classified into the wage payable from long-term wages payable.22. Taxes payable
In RMB/CNY
Item | Ending balance | Opening balance |
Value-added tax | 15,332,751.18 | 26,675,795.24 |
Corporation income tax | 48,855,330.99 | 53,333,508.69 |
Individual income tax | 1,861,196.92 | 3,102,645.73 |
City maintaining & construction tax | 884,819.63 | 1,873,973.56 |
Educational surtax | 543,438.10 | 1,338,552.54 |
Other (including stamp tax and local funds) | 6,794,077.10 | 7,545,214.60 |
Total | 74,271,613.92 | 93,869,690.36 |
23. Other accounts payable
In RMB/CNY
Item | Ending balance | Opening balance |
Interest payable | 517,469.08 | 401,928.43 |
Other accounts payable | 63,931,254.44 | 62,937,940.90 |
Total | 64,448,723.52 | 63,339,869.33 |
(1)Dividend payable
In RMB/CNY
Item | Ending balance | Opening balance |
Long-term borrowing interest for installment | 90,312.50 | 79,826.39 |
Interest payable for short-term loans | 420,478.58 | 322,102.04 |
Other | 6,678.00 | |
Total | 517,469.08 | 401,928.43 |
Major overdue interest: Nil
(2)Dividend payable
Nil
(3)Other accounts payable
1) Classification of other accounts payable according to nature of account
In RMB/CNY
Item | Ending balance | Opening balance |
Deposit and margin | 18,680,843.00 | 20,977,476.26 |
Social insurance and reserves funds that withholding | 7,682,496.48 | 7,689,385.68 |
Intercourse funds of unit | 30,982,145.98 | 25,754,545.98 |
Other | 6,585,768.98 | 8,516,532.98 |
Total | 63,931,254.44 | 62,937,940.90 |
2) Significant other payable with over one year age
In RMB/CNY
Item | Ending balance | Reasons for non-repayment or carry-over |
Nanjing Jidian Industrial Group Co., Ltd. | 4,500,000.00 | Intercourse funds |
Total | 4,500,000.00 | -- |
24. Non-current liabilities due within one year
In RMB/CNY
Item | Ending balance | Opening balance |
Long-term loans due within one year | 15,000,000.00 | 10,000,000.00 |
Total | 15,000,000.00 | 10,000,000.00 |
25. Other current liabilities
Nil
26. Long-term loans(1)Category of long-term loans
In RMB/CNY
Item | Ending balance | Opening balance |
Guaranteed loan | 30,000,000.00 | 45,000,000.00 |
Total | 30,000,000.00 | 45,000,000.00 |
27. Long-term account payable
In RMB/CNY
Item | Ending balance | Opening balance |
Long-term account payable | 17,157,272.00 | 17,496,363.00 |
Special accounts payable | 18,265,082.11 | 18,265,082.11 |
Total | 35,422,354.11 | 35,761,445.11 |
(1)Long-term account payable listed by nature
In RMB/CNY
Item | Ending balance | Opening balance |
Hi-tech Branch of Nanjing Finance Bureau(note①) | 1,140,000.00 | 1,140,000.00 |
Hi-tech Branch of Nanjing Finance Bureau(note②) | 1,250,000.00 | 1,250,000.00 |
Hi-tech Branch of Nanjing Finance Bureau(note③) | 1,230,000.00 | 1,230,000.00 |
Loan transferred from treasury bond (note④) | 1,017,272.00 | 1,356,363.00 |
Hi-tech Branch of Nanjing Finance Bureau(note⑤) | 2,750,000.00 | 2,750,000.00 |
Hi-tech Branch of Nanjing Finance Bureau(note⑥) | 1,030,000.00 | 1,030,000.00 |
Hi-tech Branch of Nanjing Finance Bureau(note⑦) | 960,000.00 | 960,000.00 |
Hi-tech Branch of Nanjing Finance Bureau(note⑧) | 5,040,000.00 | 5,040,000.00 |
Hi-tech Branch of Nanjing Finance Bureau(note⑨) | 2,740,000.00 | 2,740,000.00 |
Total | 17,157,272.00 | 17,496,363.00 |
Other explanation:
note①:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term isfrom 20 October 2005 to 20 October 2020. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.note②:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term isfrom 20 July 2006 to 20 July 2021. Provided that the operation period in the zone is less than 15 years, financialsupporting capital will be reimbursed.note③:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,the term is from 17 September 2007 to 17 September 2022. Provided that the operation period in the zone isless than 15 years, financial supporting capital will be reimbursed.note④:Loan transferred from treasury bond: Weifu Jinning received RMB1.87 million Yuan of special funds frombudget of the central government, and RMB1.73 million Yuan of special funds from budget of the localgovernment. The non-operating income transferred in was 1.87 million Yuan in 2011 which was confirmed not toreturn, if the Company pays back special funds of 3.73 million Yuan to the local government in 11 years since2012, then the Company needs to repay the principal of 339,091.00 Yuan each year.note⑤:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,the term is from 10 November 2008 to 10 November 2023. Provided that the operation period in the zone isless than 15 years, financial supporting capital will be reimbursed.note⑥:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term isfrom 27 October 2009 to 27 October 2024. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.note⑦:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone,financial supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use,the term is from 27 December 2010 to 27 December 2025. Provided that the operation period in the zone is lessthan 15 years, financial supporting capital will be reimbursed.note⑧:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone, financialsupporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term isfrom 28 December 2011 to 28 December 2026. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.note⑨:To encourage Weifu Jinning to enter Nanjing High-tech Technology Industry Development Zone, financial
supporting capital is allotted by High-tech branch of Finance Bureau of Nanjing for supporting use, the term isfrom 18 December 2013 to 18 December 2028. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.
(2)Special accounts payable
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance | Cause of formation |
Removal compensation of subsidiary Weifu Jinning | 18,265,082.11 | 18,265,082.11 | |||
Total | 18,265,082.11 | 18,265,082.11 | -- |
Other explanation:
In line with regulation of the house acquisition decision of People’s government of Xuanwu District, Nanjing City,Ning Xuan Fu Zheng Zi (2012) No.001, part of the lands and property of Weifu Jingning needs expropriation inorder to carry out the comprehensively improvement of Ming Great Wall. According to the house expropriationand compensation agreement in state-owned lands signed between Weifu Jinning and House ExpropriationManagement Office of Xuanwu District, Nanjing City, RMB 19.7067 million in total are compensate, includingoperation losses from lessee RMB 1.4416 million in total. The above compensation was received in last periodand is making up for the losses from lessee, and the above lands and property have not been collected up to 31December 2018.28. Long-term wages payable
(1)Long-term wages payable
In RMB/CNY
Item | Ending balance | Opening balance |
II. Dismiss welfare | 10,716,412.43 | 13,782,896.07 |
III. Other long-term welfare | 63,962,762.93 | 16,665,236.81 |
Total | 74,679,175.36 | 30,448,132.88 |
(2) Change of defined benefit plans
Nil
29. Deferred income
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance | Cause of formation |
Government grand | 451,281,721.77 | 8,558,700.00 | 34,070,567.64 | 425,769,854.13 | Financial allocation received |
Total | 451,281,721.77 | 8,558,700.00 | 34,070,567.64 | 425,769,854.13 | -- |
Item with government grants involved:
In RMB/CNY
Item | Opening balance | New grants in the Period | Amount reckoned in non-operation revenue | Amount reckoned into other income in the period | Cost reduction in the period | Other changes | Ending balance | Assets related/Income related |
Industrialization project for injection VE pump system with electronically controlled high pressure for less-emission diesel used | 3,605,001.46 | 721,000.30 | 2,884,001.16 | Assets related | ||||
Appropriation on reforming of production line technology and R&D ability of common rail system for diesel by distributive high-voltage | 7,100,000.00 | 7,100,000.00 | Assets related | |||||
Fund of industry upgrade(2012) | 60,400,000.00 | 60,400,000.00 | Income related | |||||
Fund of industry upgrade(2013) | 60,520,000.00 | 60,520,000.00 | Income related | |||||
Appropriation on central basic construction investment | 2,857,142.87 | 714,285.71 | 2,142,857.16 | Assets related | ||||
R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for automobile | 9,956,904.72 | 1,543,095.28 | 8,413,809.44 | Assets related | ||||
Research institute of motor vehicle exhaust aftertreatment technology | 3,116,125.34 | 643,654.13 | 2,472,471.21 | Assets related | ||||
Fund of industry upgrade (2014) | 36,831,000.00 | 36,831,000.00 | Income related | |||||
New-built assets compensation after the removal of parent company | 170,951,302.78 | 23,375,627.26 | 147,575,675.52 | Assets related | ||||
Fund of industry upgrade (2016) | 40,000,000.00 | 40,000,000.00 | Income related | |||||
Guiding capital for the technical reform from State Hi-Tech Technical | 9,740,000.00 | 9,740,000.00 | Assets related |
Commission | ||||||||
Implementation of the variable cross-section turbocharger for diesel engine | 12,438,231.54 | 760,000.00 | 2,289,510.51 | 10,908,721.03 | Assets related | |||
Demonstration project for intelligent manufacturing | 1,808,806.64 | 358,776.54 | 1,450,030.10 | Assets related | ||||
Other | 31,957,206.42 | 7,798,700.00 | 4,424,617.91 | 35,331,288.51 | Assets related | |||
Total | 451,281,721.77 | 8,558,700.00 | 34,070,567.64 | 425,769,854.13 |
Other explanation:
(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of low emissions diesel: inSeptember 2009, Weifu Jinning signed “Project Contract of Technology Outcome Transferring Special Capital in Jiangsu Province”with Nanjing Technical Bureau, according to which Weifu Jinning received appropriation RMB 6.35 million in 2009, RMB 4.775million received in 2010 and RMB 0.875 million received in 2011. According to the contract, the attendance date of this project was:
from October of 2009 to March of 2012. This contract agreed 62% of newly increased investment in project would be spent in fixedassets investment which are belongs to the government grand with assets/income concerned. In 2013, accepted by the science &technology agency of Jiangsu Province, and RMB 4,789,997.04 with income related was reckoned into current operation revenuedirectly; the RMB 7,210,002.96 with assets related was amortized during the predicted service period of the assets, and RMB721,000.30 amortized in the Period.(2) The appropriation for research and development ability of distributive high-pressure common rail system for diesel engine useand production line technological transformation project: according to XCJ No. [2010] 59, the Company has received special fundsof 7.1 million Yuan appropriated by Finance Bureau of Wuxi New District in 2011 and used for the Company’s research anddevelopment ability of distributive high-pressure common rail system for diesel engine use and production line technologicaltransformation project; this appropriation belongs to government subsidies related to assets, and will be amortized according to thedepreciation process of the underlying assets when the project is completed.(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 and Document Xi XinGuancai Fa [2012] No. 85, the Company received funds of 60.4 million Yuan appropriated for industry upgrading this year.(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379, Xi Xin Guan Jing Fa[2013] No.455, Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153, the Company received funds of 60.52million Yuan appropriated for industry upgrading in 2013.(5) Appropriation for investment of capital construction from the central government: In accordance with the document Xi Caijian[2012] No.43, the Company received appropriation of 5 million Yuan for investment of capital construction from the centralgovernment in 2012. The project has passed the acceptance check in current period, this appropriation should be amortized within thesurplus service life of current assets, and amortization amount of current period is 714,285.71 Yuan.(6) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for automobile: theCompany received appropriated for the project in 2013 with 8.05 million Yuan in line with documents of Xi Ke Ji [2013] No.186, XiKe Ji [2013] No.208, Xi Cai Gong Mao [2013] No.104, Xi Cai Gong Mao [2013] No.138, Xi Ke Ji [2014] No.125, Xi Cai GongMao [2014] No.58, Xi Ke Ji [2014] No. 246 and Xi Cai Gong Mao [2014] No.162. Received RMB 3 million in 2014 and RMB 0.45million in 2015; and belongs to government grant with assets concerned, and shall be amortized according to the depreciation process,amount of 1,543,095.28 Yuan amortize in the year.(7) Vehicle exhaust after-treatment technology research institute project: in 2012, the subsidiary Weifu Leader has applied forequipment purchase assisting funds to Wuxi Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau forthe vehicle exhaust after-treatment technology research institute project. This declaration has been approved by Wuxi Huishan
Science and Technology Bureau and Wuxi Science and Technology Bureau in 2012, and the company has received appropriation of2.4 million Yuan in 2012, and received appropriation of 1.6 million Yuan in 2013. This appropriation belongs to governmentsubsidies related to assets and will be amortized according to the depreciation process, amount of 643,654.13 Yuan amortize in theyear.(8) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014] No.427 and Xi Xin Guan Cai Fa[2014] No.143, the Company received funds of 36.831 million Yuan appropriated for industry upgrading in 2014.(9) New-built assets compensation after the removal of parent company: policy relocation compensation received by the Company,and will be amortized according to the depreciation of new-built assets, amount of 23,375,627.26 Yuan amortize in the year.(10) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585 and Xi Xin Fa [2016]No.70, the Company received funds of 40 million Yuan appropriated for industry upgrading in 2016.(11) Guilding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document Xi JingXin ZH [2016] No.9 and Xi Cai GM [2016] No.56, the Company received a 9.74 million Yuan for the guiding capital of technicalreform (1st batch) from Wuxi for year of 2016, which included in the government subsidy with assets-concerned, and will amortizedaccording to the depreciation process after acceptance(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZ Fa[2016]NO.623 and “Strong Industrial Base Project Contract for year of 2016”, subsidiary Weifu Tianli received a specific subsidy of 16.97million Yuan (760,000 Yuan received in the period), the fund supporting strong industrial base project (made-in-China 2025) ofcentral industrial transformation and upgrading 2016 from Ministry of Industry and Information Technology; and belongs togovernment grant with assets concerned, and shall be amortized according to the depreciation process, amount of 2,289,510.51 Yuanamortize in the year.(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the Intelligent ManufacturingModel Project in Huishan District in 2016 (HJXF[2016]No.36), a fiscal subsidy of 3,000,000 Yuan was granted by relevantgovernment authority in Huishan district to our subsidiary Weifu Leader in 2017 to be utilized for transformation and upgrade ofWeifu Leader’s intelligent manufacturing facilities. This subsidy belongs to government grant related to assets which shall beamortized based on the depreciation progress of the assets. Amortization for the year amounts to 358,776.54 Yuan.
30. Share capital
In RMB
Opening balance | Change during the year(+,-) | Ending balance | |||||
New shares issued | Bonus share | Shares transferred from capital reserve | Other | Subtotal | |||
Total shares | 1,008,950,570.00 | 1,008,950,570.00 |
31. Capital reserve
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
Capital premium (Share capital premium) | 3,372,647,413.97 | 1,818,607.75 | 3,370,828,806.22 | |
Other Capital reserve | 45,193,988.92 | 45,193,988.92 | ||
Total | 3,417,841,402.89 | 1,818,607.75 | 3,416,022,795.14 |
Other explanation, including changes in the period and reasons for changes;The share premium was reduced by 1,818,607.75 in the current period, which was the difference between the long-term equityinvestment newly acquired by the company through the purchase of minority shareholding of Weifu Tianli and the net assets share thatWeifu Tianli continued to calculate from the date of purchase according to the new shareholding ratio.
32. Other comprehensive income
In RMB/CNY
Item | Opening balance | Current period | Ending balance | ||||
Account before income tax in the year | Less: written in other comprehensive income in previous period and carried forward to gains and losses in current period | Less : income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
II. Other comprehensive income items which will be reclassified subsequently to profit or loss | 87,169,455.01 | -117,053,064.00 | 8,804,463.00 | -18,878,629.04 | -106,978,897.96 | -19,809,442.95 | |
Gains or losses arising from changes in fair value of available-for-sale financial assets | 87,169,455.01 | -117,053,064.00 | 8,804,463.00 | -18,878,629.04 | -106,978,897.96 | -19,809,442.95 | |
Total other comprehensive income | 87,169,455.01 | -117,053,064.00 | 8,804,463.00 | -18,878,629.04 | -106,978,897.96 | -19,809,442.95 |
Other explanation, including the adjustment on initial recognition for arbitrage items that transfer from the effective part of cash flowhedge profit/loss Nil
33. Reasonable reserve
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
Safety production costs | 2,606.93 | 20,140,422.85 | 18,524,539.28 | 1,618,490.50 |
Total | 2,606.93 | 20,140,422.85 | 18,524,539.28 | 1,618,490.50 |
Other explanation, including changes and reasons for changes:
(1)Instructions for the withdrawing of special reserves (safe production cost): According to the CQ [2012] No. 16 - AdministrativeMeasures on the Withdrawing and Use of Enterprise Safety Production Expenses jointly issued by the Ministry of Finance and theState Administration of Work Safety, in the current period, the Company adopted excess retreat method for quarterly withdrawal bytaking the actual operating income of the previous period as the withdrawing basis.(2)Among the above safety production costs, including the safety production costs accrual by the Company in line with regulationsand the parts enjoy by shareholders of the Company in safety production costs accrual by subsidiary in line with regulations.(3)Other 7,024.21 Yuan, the difference between the special reserves obtained by the company from the purchase of minorityshareholding of Weifu Tianli and the special reserves to be calculated according to the new shareholding ratio.
34. Surplus reserve
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
Statutory surplus reserves | 510,100,496.00 | 510,100,496.00 | ||
Total | 510,100,496.00 | 510,100,496.00 |
Other explanation, including changes and reasons for changes:
Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article of Association, the Company extractedstatutory surplus reserve on 10 percent of the net profit. No more amounts shall be withdrawal if the accumulated statutory surplusreserve takes over 50 percent of the registered capital.
35. Retained profit
In RMB/CNY
Item | Current period | Last period |
Retained profits at the end of last year before adjustment | 9,811,609,138.92 | 7,845,639,990.88 |
Retained profits at the beginning of the year after adjustment | 9,811,609,138.92 | 7,845,639,990.88 |
Add: The net profits belong to owners of patent company of this period | 2,396,077,415.21 | 2,571,339,490.04 |
Common dividend payable | 1,210,740,684.00 | 605,370,342.00 |
Retained profit at period-end | 10,996,945,870.13 | 9,811,609,138.92 |
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retainedprofits at the beginning of the period amounting to 0 Yuan.2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
36. Operating income and cost
In RMB/CNY
Item | Current period | Last Period | ||
Income | Cost | Income | Cost | |
Main operating | 8,262,954,878.87 | 6,334,140,163.43 | 8,535,599,504.73 | 6,420,982,285.26 |
Other business | 458,719,792.31 | 357,716,676.54 | 481,680,655.07 | 340,747,113.10 |
Total | 8,721,674,671.18 | 6,691,856,839.97 | 9,017,280,159.80 | 6,761,729,398.36 |
37. Operating tax and extras
In RMB/CNY
Item | Current period | Last Period |
City maintaining & construction tax | 23,365,378.57 | 27,342,047.81 |
Educational surtax | 16,600,470.65 | 19,529,544.78 |
Property tax | 15,673,296.50 | 16,168,030.42 |
Land use tax | 6,488,307.08 | 6,297,452.61 |
Vehicle use tax | 37,664.70 | 38,597.80 |
Stamp duty | 3,054,969.25 | 3,033,552.04 |
Other taxes | 168,243.17 | 3,915.02 |
Total | 65,388,329.92 | 72,413,140.48 |
38. Sales expenses
In RMB/CNY
Item | Current period | Last Period |
Salary and fringe benefit | 49,030,453.69 | 34,445,822.91 |
Consumption of office materials and business travel charge | 13,500,456.63 | 11,190,696.17 |
Transportation charge | 36,096,699.36 | 38,950,920.39 |
Warehouse charge | 13,503,116.85 | 12,028,839.44 |
Three-guarantee fee | 93,151,070.22 | 75,299,163.49 |
Business entertainment fee | 18,934,440.36 | 14,336,526.65 |
Other | 13,623,235.17 | 8,602,811.32 |
Total | 237,839,472.28 | 194,854,780.37 |
39. Administration expenses
In RMB/CNY
Item | Current period | Last Period |
Salary and fringe benefit | 242,611,825.10 | 258,766,943.35 |
Depreciation charger and long-term assets amortization | 53,544,172.92 | 45,736,858.43 |
Consumption of office materials and business travel charge | 19,301,684.66 | 21,626,135.74 |
Incentive fund | 128,559,600.00 | 83,610,000.00 |
Other | 140,988,103.07 | 129,753,615.34 |
Total | 585,005,385.75 | 539,493,552.86 |
40. R&D expenses
In RMB/CNY
Item | Current period | Last Period |
Technological development expenses | 403,263,972.20 | 391,315,234.75 |
Total | 403,263,972.20 | 391,315,234.75 |
41. Financial expenses
In RMB/CNY
Item | Current period | Last Period |
Interest expenses | 17,562,164.63 | 10,044,328.07 |
Note discount interest expenses | 413,348.40 | 1,196,392.60 |
Less:Saving interest income | 34,156,380.22 | 18,726,974.19 |
Gains/losses from exchange | -4,437,834.09 | 11,345,354.36 |
Handling charges | 3,225,120.73 | 3,457,895.95 |
Total | -17,393,580.55 | 7,316,996.79 |
Other explanation:
The interest expenses for year of 2018 including the 406,834.00 Yuan received of regards for the provincialengineering center42. Losses of devaluation of asset
In RMB/CNY
Item | Current period | Last Period |
I. Bad debt loss | 27,180,572.84 | 2,009,413.99 |
II. Inventory falling price loss | 77,193,338.52 | 97,326,180.89 |
III. Impairment loss of financial assets available for sale | 145,994,927.09 | |
VII. Impairment loss of fixed assets | 504,907.39 | 19,884,135.49 |
Total | 250,873,745.84 | 119,219,730.37 |
43. Other income
In RMB/CNY
Sources of income generated | Current period | Last Period |
Government grants with routine operation activity concerned | 48,404,480.99 | 40,394,724.11 |
Other | ||
Total | 48,404,480.99 | 40,394,724.11 |
44. Investment income
In RMB/CNY
Item | Current period | Last Period |
Income of long-term equity investment calculated based on equity | 1,623,761,059.52 | 1,604,027,207.30 |
Investment income from holding financial assets available for sales | 3,274,260.41 | 3,291,000.00 |
Investment income obtained from disposal of financial assets available for sales | 17,370,816.75 | 24,625,516.88 |
Entrust financial income | 311,261,918.65 | 221,705,034.02 |
Gains/losses of subsidiary liquidation | -10,473.00 | |
Total | 1,955,668,055.33 | 1,853,638,285.20 |
45. Income from change of fair value
In RMB/CNY
Sources | Current period | Last Period |
Financial assets measured by fair value and with its variation reckoned into current gains/losses | -490,329.13 | |
Including: Income from change of fair value from derivative financial instrument | -490,329.13 | |
Total | -490,329.13 |
46. Income from assets disposal
In RMB/CNY
Sources | Current period | Last Period |
Income from disposal of non-current assets | 103,712,793.61 | 1,156,664.72 |
Losses from disposal of non-current assets | -1,239,798.14 | -1,905,592.35 |
Total | 102,472,995.47 | -748,927.63 |
Gains from non-current assets disposal was mainly the compensation of expropriation of housing and landof Weifu Jinning. The detail see Note of VII. 4.(3).4)"Nature of other receivables"47. Non-operating income
In RMB/CNY
Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
Government grants | 6,631,568.54 | ||
Other | 1,264,830.90 | 5,336,599.33 | 1,264,830.90 |
Total | 1,264,830.90 | 11,968,167.87 | 1,264,830.90 |
Government grants reckoned into current gains/losses:
In RMB/CNY
Item | Granting subject | Cause of distribution | Nature type | Whether the impact of subsidies on the current profit and loss | Whether special subsidies | Current period | Last period | Assets related/Income related |
Stabilization subsidy | 3,202,219.54 | Income related | ||||||
Patent funding | 451,800.00 | Income related | ||||||
Support funds | 1,100,000.00 | Income related | ||||||
Reward for acceptance of new third board | 500,000.00 | Income related | ||||||
Innovation ability reward | 500,000.00 | Income related | ||||||
The reward of top thirty industrial enterprise, Star enterprise in service industry and demonstration award for enterprise innovation and development for the year of 2016 in Jiangbei District from People’s Government of Jiangbei District, Ningbo City | 400,000.00 | Income related | ||||||
Other | 477,549.00 | |||||||
Total | 6,631,568.54 |
48. Non-operating expense
In RMB/CNY
Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
Donations | 1,313,246.00 | 1,313,246.00 | |
Non-current assets disposal losses | 6,310,772.90 | 2,473,919.63 | 6,310,772.90 |
Including: fixed assets disposal losses | 6,310,772.90 | 2,473,919.63 | 6,310,772.90 |
Local fund | 1,804,429.63 | 2,442,882.51 | |
Other | 548,711.02 | 856,791.48 | 548,711.02 |
Total | 9,977,159.55 | 5,773,593.62 | 8,172,729.92 |
49. Income tax expense
(1)Income tax expense
In RMB/CNY
Item | Current period | Last Period |
Payable tax in current period | 165,302,326.13 | 176,981,021.79 |
Adjusted the previous income tax | -1,108,883.52 | -853,023.84 |
Increase/decrease of deferred income tax assets | -32,958,287.45 | 7,189,092.22 |
Increase/decrease of deferred income tax liability | 4,653,521.15 | -111,033.00 |
Total | 135,888,676.31 | 183,206,057.17 |
(2)Adjustment on accounting profit and income tax expenses
In RMB/CNY
Item | Current period |
Total profit | 2,602,183,379.78 |
Income tax measured by statutory/applicable tax rate | 390,327,506.97 |
Impact by different tax rate applied by subsidies | 1,919,809.73 |
Adjusted the previous income tax | -1,108,883.52 |
Impact by non-taxable revenue | -243,985,949.07 |
Impact on cost, expenses and losses that unable to deducted | 3,901,402.22 |
Impact by the deductible losses of the un-recognized previous deferred income tax | -12,744,805.79 |
The deductible temporary differences or deductible losses of the un-recognized deferred income tax assets in the Period | 17,703,986.16 |
Impact on additional deduction | -21,253,446.60 |
Other | 1,129,056.21 |
Income tax expense | 135,888,676.31 |
50. Other comprehensive income
See Note VII. 32 “Other comprehensive income”
51. Items of ash flow statement(1) Other cash received in relation to operation activities
In RMB/CNY
Item | Current period | Last Period |
Cash in bank Interest income | 34,156,380.22 | 18,726,974.19 |
Government grants | 23,299,447.35 | 15,752,016.54 |
Margin on operation bill | 53,427,527.69 | 25,598,576.55 |
Other | 7,294,400.13 | 5,901,111.62 |
Total | 118,177,755.39 | 65,978,678.90 |
(2)Other cash paid in relation to operation activities
In RMB/CNY
Item | Current period | Last Period |
Cash cost | 530,988,250.24 | 505,309,877.27 |
Other | 28,148,968.46 | 42,308,458.75 |
Total | 559,137,218.70 | 547,618,336.02 |
(3)Cash received from other investment activities
In RMB/CNY
Item | Current period | Last Period |
Letter of credit for import equipment margin | 79,984.34 | |
Government grants received relevant to assets | 4,480,000.00 | |
Total | 4,559,984.34 |
(4)Cash paid related with investment activities
In RMB/CNY
Item | Current period | Last Period |
Margin paid by L/C for purchase of equipment | 1,090,775.32 | |
Total | 1,090,775.32 |
(5) Other cash received in relation to financing activities
In RMB/CNY
Item | Current period | Last Period |
The borrowings/loans received by Weifu Leader from Wuxi Industry Group | 5,470,000.00 | |
Total | 5,470,000.00 |
(6)Cash paid related with financing activities
In RMB/CNY
Item | Current period | Last Period |
Liquidation charges | 1,049,711.28 | |
National debt paid transfer to loans | 339,091.00 | 339,091.00 |
Account paid for purchasing minority equity of Weifu Tianli | 15,570,000.00 | |
Total | 15,909,091.00 | 1,388,802.28 |
52. Supplementary information to statement of cash flow(1) Supplementary information to statement of cash flow
In RMB/CNY
Supplementary information | Current period | Last Period |
1. Net profit adjusted to cash flow of operation activities: | -- | -- |
Net profit | 2,466,294,703.47 | 2,647,209,924.58 |
Add: Assets impairment provision | 250,873,745.84 | 119,219,730.37 |
Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 285,471,054.32 | 266,894,355.57 |
Amortization of intangible assets | 17,249,463.37 | 18,616,311.55 |
Amortization of long-term deferred expenses | 1,567,262.43 | 1,049,187.11 |
Loss from disposal of fixed assets, intangible assets and other long-term assets(gain is listed with “-”) | -102,472,995.47 | 748,927.63 |
Losses on scrapping of fixed assets (gain is listed with “-”) | 6,310,772.90 | 2,473,919.63 |
Gain/loss of fair value changes (gain is listed with “-”) | 490,329.13 | |
Financial expenses (gain is listed with “-”) | 14,840,492.09 | 19,423,542.44 |
Investment loss (gain is listed with “-”) | -1,956,287,284.27 | -1,849,764,125.27 |
Decrease of deferred income tax asset( (increase is listed with “-”) | -32,958,287.45 | 7,189,092.22 |
Increase of deferred income tax liability (decrease is listed with “-”) | 4,653,521.15 | -111,033.00 |
Decrease of inventory (increase is listed with “-”) | -35,700,126.59 | -223,562,160.19 |
Decrease of operating receivable accounts (increase is listed with “-”) | 381,642,704.00 | -899,544,673.74 |
Increase of operating payable accounts (decrease is listed with “-”) | -429,597,489.90 | 848,035,110.26 |
Other | 2,003,661.61 | -180,208.09 |
Net cash flows arising from operating activities | 874,381,526.63 | 957,697,901.07 |
2. Material investment and financing not involved in cash flow | -- | -- |
3. Net change of cash and cash equivalents: | -- | -- |
Balance of cash at period end | 2,404,674,139.49 | 2,948,439,354.22 |
Less: Balance of cash equivalent at year-begin | 2,948,439,354.22 | 3,795,223,678.11 |
Net increase of cash and cash equivalents | -543,765,214.73 | -846,784,323.89 |
(2)Net cash payment for the acquisition of a subsidiary in the period
Nil
(3)Net cash received from the disposal of subsidiaries
Nil
(4)Constitution of cash and cash equivalent
In RMB/CNY
Item | Ending balance | Opening balance |
I. Cash | 2,404,674,139.49 | 2,948,439,354.22 |
Including: Cash on hand | 194,161.03 | 736,773.22 |
Bank deposit available for payment at any time | 2,404,479,978.46 | 2,947,702,581.00 |
II. Balance of cash and cash equivalents at the period-end | 2,404,674,139.49 | 2,948,439,354.22 |
53. Note of the changes of owners’ equity
Explain the items and amount at period-end adjusted for “Other” at end of the last year: Nil
54. Assets with ownership or use right restricted
In RMB/CNY
Item | Ending Book value | Restriction reason |
Monetary funds | 1,450,000.00 | Cash deposit paid for LC |
Notes receivable | 423,527,758.19 | Notes pledge for bank acceptance |
Monetary funds | 79,315,732.67 | Cash deposit paid for bank acceptance |
Monetary funds | 881,868.57 | Court freeze |
Available-for-sale financial assets | 112,850,891.16 | In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of Guangdong Shenzhen Intermediate People's Court (Hereinafter referred to as Shenzhen Intermediate People's Court), the property with the value of 217 million Yuan under the name of the Company and other seven respondents and the third party Shenzhen Hejun Chuangye Holdings Co., Ltd. (Hereinafter referred to as Hejun Company) was frozen. As of the end of the reporting period, 4.71 million shares of Miracle Logistics and 11,739,102 shares of SDEC held by the Company were frozen. |
Total | 618,026,250.59 | -- |
55. Item of foreign currency(1) Item of foreign currency
In RMB/CNY
Item | Closing balance of foreign currency | Rate of conversion | Ending RMB balance converted |
Monetary funds | -- | -- | |
Including: USD | 31,373,244.14 | 6.8632 | 215,320,849.17 |
EUR | 2,499,310.16 | 7.8473 | 19,612,836.63 |
HKD | 16,024,984.73 | 0.8762 | 14,041,091.62 |
JPY | 8,364,309.47 | 0.061887 | 517,642.02 |
Account receivable | -- | -- | |
Including: USD | 4,195,415.85 | 6.8632 | 28,793,978.06 |
EUR | 1,040,354.52 | 7.8473 | 8,163,974.02 |
JPY | 3,314,442.00 | 0.061887 | 205,120.87 |
Short-term borrowings | |||
Including: EUR | 3,558,958.36 | 7.8473 | 27,928,213.94 |
Account payable | |||
Including: USD | 411,335.19 | 6.8632 | 2,823,075.67 |
EUR | 1,615,586.95 | 7.8473 | 12,677,995.47 |
CHF | 105,642.70 | 6.9494 | 734,153.38 |
JPY | 31,475,376.00 | 0.061887 | 1,947,916.59 |
(2)Explanation on foreign operational entity, including as for the major foreign operational entity,disclosed main operation place, book-keeping currency and basis for selection; if the book-keepingcurrency changed, explain reasons
□ Applicable√ Not applicable
56. Government grants
(1)Government grants
In RMB/CNY
Category | Amount | Item | Amount reckoned in current gain/loss |
Industrialization project for injection VE pump system with electronically controlled high | 721,000.30 | Industrialization project for injection VE pump system with electronically | 721,000.30 |
pressure for less-emission diesel used | controlled high pressure for less-emission diesel used | ||
Key laboratory (engineering center) of the pollution control from motor vehicle exhausting in Jiangsu province | 170,000.00 | Key laboratory (engineering center) of the pollution control from motor vehicle exhausting in Jiangsu province | 170,000.00 |
Grants for key laboratory in Wuxi City | 70,000.00 | Grants for key laboratory in Wuxi City | 70,000.00 |
Supporting funds for technical improvement for annual output as 140,000 pieces of packaging line of catalytic reduction system for commercial vehicles (2014) | 259,000.00 | Supporting funds for technical improvement for annual output as 140,000 pieces of packaging line of catalytic reduction system for commercial vehicles (2014) | 259,000.00 |
Technical transformation for annual output as 300,000 sets of four-cylinder engine supercharger | 225,749.56 | Technical transformation for annual output as 300,000 sets of four-cylinder engine | 225,749.56 |
Annual output of 150000 gasoline engine superchargers | 100,000.00 | Annual output of 150000 gasoline engine superchargers | 100,000.00 |
Depreciation/amortization compensation for the assets newly established after parent company relocated | 23,375,627.26 | Depreciation/amortization compensation for the assets newly established after parent company relocated | 23,375,627.26 |
Central capital investment allocation from Wuxi Finance Bureau (R&D center) | 714,285.71 | Central capital investment allocation from Wuxi Finance Bureau (R&D center) | 714,285.71 |
Provincial special guiding funds for scientific and technological innovation and achievement conversion | 328,571.43 | Provincial special guiding funds for scientific and technological innovation and achievement conversion | 328,571.43 |
Technical reform of catalytic reduction system for 180,000 commercial vehicles annually | 233,555.56 | Technical reform of catalytic reduction system for 180,000 commercial vehicles annually | 233,555.56 |
Development and industrialization of high pressure variable pump for common rail system of vehicle diesel engine | 1,543,095.28 | Development and industrialization of high pressure variable pump for common rail system of vehicle diesel engine | 1,543,095.28 |
Business development funds support allocation from Finance bureau of the new district | 200,000.00 | Business development funds support allocation from Finance bureau of the new district | 200,000.00 |
Funds for intelligent promotion of intelligent integration of two modernization | Funds for intelligent promotion of intelligent integration of two modernization | ||
Demonstration of intelligent manufacturing | 358,776.54 | Demonstration of intelligent manufacturing | 358,776.54 |
Research institute of motor vehicle exhaust post-treatment | 643,654.13 | Research institute of motor vehicle exhaust post-treatment | 643,654.13 |
Implementation scheme of the variable section | 2,289,510.51 | Implementation scheme of the variable | 2,289,510.51 |
turbocharger for diesel engine | section turbocharger for diesel engine | ||
Special funds for technical transformation | 97,010.66 | Special funds for technical transformation | 97,010.66 |
Generation subsidy for distributed PV projects | 923,100.00 | Generation subsidy for distributed PV projects | 923,100.00 |
Funds allocation for science & technology development plan | 1,302,000.00 | Funds allocation for science & technology development plan | 1,302,000.00 |
Supporting funds for new products and new projects of the intelligent manufacturing industrial park | 2,250,000.00 | Supporting funds for new products and new projects of the intelligent manufacturing industrial park | 2,250,000.00 |
Funds for technical reform of boiler wheel supercharger for annual output of 200,000 gasoline engines | 1,193,286.26 | Funds for technical reform of boiler wheel supercharger for annual output of 200,000 gasoline engines | 1,193,286.26 |
Other | 11,406,257.79 | Other | 11,406,257.79 |
Total | 48,404,480.99 | Total | 48,404,480.99 |
(2)Government grants rebate
Nil
57. Other
Nil
VIII. Changes of consolidation scope
1. Enterprise combine not under the same control
Nil
2. Enterprise combine under the same control
Nil
3. Reverse purchase
Nil
4. Disposal of subsidiaries
Nil
5. Other reasons for consolidation range changed
Explain the reasons on consolidate scope changes (i.e. subsidiary newly established, subsidiary liquidation etc.) and relevantinformation:
Change of consolidation scope | Name | Way for obtained the equity | Time for obtained the equity | Ratio of contribution |
Increase of the consolidation scope | Nanchang Weifu Leader Auto Parts & Components Co., Ltd. | Newly established | 2018-3-8 | 100.00% |
IX. Equity in other entity
1. Equity in subsidiary(1) Constitute of enterprise group
Subsidiary | Main operation place | Registered place | Business nature | Share-holding ratio | Acquired way | |
Directly | Indirectly | |||||
Weifu Jinning | Nanjing | Nanjing | Spare parts of internal-combustion engine | 80.00% | Enterprise combine under the same control | |
Weifu Leader | Wuxi | Wuxi | Automobile exhaust purifier, muffler | 94.81% | Enterprise combine under the same control | |
Weifu Mashan | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment | |
Weifu Chang’an | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Investment | |
Weifu International Trade | Wuxi | Wuxi | Trading | 100.00% | Enterprise combine under the same control | |
Weifu ITM | Wuxi | Wuxi | Spare parts of internal-combustion engine | 100.00% | Enterprise combine not under the same control | |
Weifu Schmidt | Wuxi | Wuxi | Spare parts of internal-combustion engine | 66.00% | Investment | |
Weifu Tianli | Ningbo | Ningbo | Spare parts of internal-combustion engine | 54.23% | Enterprise combine not under the same control | |
Weifu Autocam | Wuxi | Wuxi | Spare parts of internal-combustion engine | 51.00% | Enterprise combine not under the same control | |
Weifu Leader (Wuhan) | Wuhan | Wuhan | Automobile exhaust purifier, muffler | 60.00% | Investment | |
Weifu Leader(Chongqing) | Chongqing | Chongqing | Automobile exhaust purifier, muffler | 100.00% | Investment | |
Weifu Leader(Nanchang) | Nanchang | Nanchang | Automobile exhaust purifier, muffler | 100.00% | Investment |
Explanation on share-holding ratio in subsidiary different from ratio of voting right: NilBasis of the invested unit control by the Company though holds half or below voting rights; and the invested unit without controls bythe Company but with over half voting rights hold:
Explanation on equity method for calculation of the investment for Weifu Electronic DriveThe company holds 80.00% equity of Weifu Electronic Drive; the Board of Directors of Weifu Electronic Drive Board consists of 5directors, 3 of whom are appointed by the company; Weifu Electronic Drive’s important board resolutions can only pass the resolutionwhen being unanimously voted by all the present directors. According to this judgment, the company cannot control Weifu ElectronicDrive, and its investment should be used as an investment in the joint venture, which adopts equity method for business accounting.Major structured entity included in consolidate statement: NilBasis of termination of agent or consignor: Nil
(2)Important non-wholly-owned subsidiary
In RMB/CNY
Subsidiary | Share-holding ratio of minority | Gains/losses attributable to minority in the Period | Dividend announced to distribute for minority in the Period | Ending equity of minority |
Weifu Jinning | 20.00% | 41,594,834.20 | 15,604,600.00 | 194,243,753.02 |
Weifu Schmidt | 34.00% | -114,183.58 | 9,481,779.44 | |
Weifu Leader | 5.19% | 3,443,152.24 | 84,803,572.03 | |
Weifu Tianli | 45.77% | 9,419,706.13 | 105,986,824.42 | |
Weifu Autocam | 49.00% | 15,873,779.27 | 19,600,000.00 | 143,626,339.62 |
Total | 70,217,288.26 | 35,204,600.00 | 538,142,268.53 |
Explanation on holding ratio different from the voting right ratio for minority shareholders: Nil
(3)Main finance of the important non-wholly-owned subsidiary
In RMB/CNY
Subsidiary | Ending balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Weifu Jinning | 994,953,012.95 | 342,560,339.76 | 1,337,513,352.71 | 313,381,459.40 | 50,522,767.70 | 363,904,227.10 |
Weifu Schmidt | 92,342,474.64 | 48,855,179.90 | 141,197,654.54 | 112,913,283.31 | 112,913,283.31 | |
Weifu Leader | 1,958,116,370.10 | 1,038,234,646.34 | 2,996,351,016.44 | 1,343,115,779.10 | 23,850,612.52 | 1,366,966,391.62 |
Weifu Tianli | 357,404,441.32 | 233,476,608.83 | 590,881,050.15 | 310,421,704.26 | 47,838,928.45 | 358,260,632.71 |
Weifu Autocam | 242,022,679.84 | 310,989,080.94 | 553,011,760.78 | 262,647,739.06 | 262,647,739.06 | |
Total | 3,644,838,978.85 | 1,974,115,855.77 | 5,618,954,834.62 | 2,342,479,965.13 | 122,212,308.67 | 2,464,692,273.80 |
Subsidiary | Opening balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Weifu Jinning | 804,641,137.00 | 337,158,270.17 | 1,141,799,407.17 | 245,091,101.59 | 54,199,342.64 | 299,290,444.23 |
Weifu Schmidt | 88,975,034.68 | 33,405,432.30 | 122,380,466.98 | 93,741,159.45 | 93,741,159.45 | |
Weifu Leader | 2,392,378,693.81 | 978,224,529.85 | 3,370,603,223.66 | 1,793,072,212.90 | 23,503,280.34 | 1,816,575,493.24 |
Weifu Tianli | 290,628,819.00 | 243,156,899.42 | 533,785,718.42 | 259,270,617.16 | 63,076,581.29 | 322,347,198.45 |
Weifu Autocam | 250,884,987.49 | 216,134,430.81 | 467,019,418.30 | 169,012,066.26 | 169,012,066.26 | |
Total | 3,827,508,671.98 | 1,808,079,562.55 | 5,635,588,234.53 | 2,560,187,157.36 | 140,779,204.27 | 2,700,966,361.63 |
In RMB/CNY
Subsidiary | Current period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
Weifu Jinning | 613,545,903.22 | 208,505,596.11 | 208,505,596.11 | 39,369,830.31 |
Weifu Schmidt | 178,431,433.45 | -354,936.30 | -354,936.30 | 18,242,932.77 |
Weifu Leader | 2,800,874,733.81 | 74,556,894.40 | 74,556,894.40 | -6,864,502.47 |
Weifu Tianli | 378,601,103.90 | 20,603,781.23 | 20,603,781.23 | 21,145,599.68 |
Weifu Autocam | 466,437,403.21 | 32,356,669.68 | 32,356,669.68 | 57,006,160.96 |
Total | 4,437,890,577.59 | 335,668,005.12 | 335,668,005.12 | 128,900,021.25 |
Subsidiary | Last Period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
Weifu Jinning | 639,266,713.42 | 123,846,080.79 | 123,846,080.79 | -14,327,763.61 |
Weifu Schmidt | 132,237,721.83 | 375,719.98 | 375,719.98 | -1,277,329.17 |
Weifu Leader | 2,545,737,100.66 | 102,430,580.66 | 102,430,580.66 | 138,916,907.91 |
Weifu Tianli | 331,060,782.23 | 8,621,636.11 | 8,621,636.11 | 13,915,991.57 |
Weifu Autocam | 518,304,786.01 | 85,063,618.51 | 85,063,618.51 | 70,463,396.99 |
Total | 4,166,607,104.15 | 320,337,636.05 | 320,337,636.05 | 207,691,203.69 |
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise groupNil
(5)Financial or other supporting offers to the structured entity included in consolidated financial statementrangeNil2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights(1)Owners equity shares changed in subsidiary
In May 2018, part of the equity held by minority of Weifu Tianli are purchased by the Company with 15.57 million Yuan in cash;after that, owners’ equity of the Weifu Tianli held by the Company up to 54.2295% instead of 47.9436%
(2)Impact on minority’s interest and owners’ equity attributable to parent company
In RMB/CNY
Weifu Tianli | |
Cost of acquisition/disposal consideration | 15,570,000.00 |
--Cash | 15,570,000.00 |
Less: Net assets share of the subsidiary calculated according to the equity ratio obtained/disposed | 13,751,392.25 |
Balance | 1,818,607.75 |
Including:Capital reserve adjustment | 1,818,607.75 |
3. Equity in joint venture and associated enterprise(1) Important joint venture and associated enterprise
Joint venture or associated enterprise | Main operation place | Registered place | Business nature | Share-holding ratio | Accounting treatment on investment for joint venture and associated enterprise | |
Directly | Indirectly | |||||
I. Joint venture | ||||||
Wuxi Weifu Environment Catalyst Co., Ltd. | Wuxi | Wuxi | Catalyst | 49.00% | Equity method | |
Wuxi Weifu Electric Drive Tech. Co., Ltd. | Wuxi | Wuxi | Wheel-hub motor | 80.00% | Equity method | |
II. Associated enterprise | ||||||
Bosch Automobile Diesel System Co., Ltd. | Wuxi | Wuxi | Internal-combustion engine accessories | 32.50% | 1.50% | Equity method |
Zhonglian Automobile Electronic Co., Ltd. | Shanghai | Shanghai | Internal-combus | 20.00% | Equity method |
tion engine accessories | ||||||
Weifu Precision Machinery Manufacturing Co., Ltd. | Wuxi | Wuxi | Internal-combustion engine accessories | 20.00% | Equity method | |
Shinwell Automobile Tech. (Wuxi) Co., Ltd. | Wuxi | Wuxi | Automobile components | 45.00% | Equity method |
Holding shares ratio different from the voting right ratio:
①Explanation on equity method for calculation of the investment for Weifu Electronic DriveThe company holds 80.00% equity of Weifu Electronic Drive; the Board of Directors of Weifu Electronic Drive Board consists of 5directors, 3 of whom are appointed by the company; Weifu Electronic Drive’s important board resolutions can only pass the resolutionwhen being unanimously voted by all the present directors. According to this judgment, the company cannot control Weifu ElectronicDrive, and its investment should be used as an investment in the joint venture, which adopts equity method for business accounting.②Explanation on equity method for calculation of the investment for Shinwell Automobile Tech. (Wuxi) Co., Ltd.The subsidiary Weifu International Trade holds a 45.00% stake in Shinwell Automobile Tech. (Wuxi); the Board of Directors ofShinwell Automobile Tech. (Wuxi) consists of 5 directors, 2 of whom are appointed by Weifu International Trade.Has major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold:Nil
(2)Main financial information of the important joint venture
In RMB/CNY
Ending balance/Current period | Opening balance/Last Period | |
Weifu Environment | Weifu Environment | |
Current assets | 2,524,886,121.93 | 3,011,258,785.42 |
Including: cash and cash equivalents | 62,820,292.38 | 120,584,888.35 |
Non -current assets | 312,633,597.82 | 284,089,421.89 |
Total assets | 2,837,519,719.75 | 3,295,348,207.31 |
Current liabilities | 1,658,404,950.50 | 2,211,790,474.13 |
Non-current liabilities | 24,735,000.00 | 16,450,000.00 |
Total liabilities | 1,683,139,950.50 | 2,228,240,474.13 |
Shareholders’ equity attributable to parent company | 1,154,379,769.25 | 1,067,107,733.18 |
Share of net assets calculated by shareholding ratio | 565,646,086.93 | 522,882,789.26 |
Book value of equity investment in joint ventures | 565,646,086.93 | 522,882,789.26 |
Operation income | 3,353,480,152.95 | 2,949,564,841.97 |
Financial expenses | 106,283,984.35 | 77,268,038.98 |
Income tax expense | -9,245,702.92 | 13,745,114.70 |
Net profit | 91,456,868.91 | 162,415,440.00 |
Total comprehensive income | 91,456,868.91 | 162,415,440.00 |
(3)Main financial information of the important associated enterprise
In RMB/CNY
Ending balance/Current period | Opening balance/Last Period | |||||
Bosch Diesel System | Zhonglian Automobile | Weifu Precision Machinery | Bosch Diesel System | Zhonglian Automobile | Weifu Precision Machinery | |
Current assets | 10,042,409,061.04 | 153,125,575.56 | 281,266,308.21 | 8,194,014,833.80 | 688,116,022.56 | 238,511,756.68 |
Non -current assets | 2,756,104,679.18 | 5,277,976,705.66 | 133,470,007.84 | 2,696,164,046.92 | 4,668,848,226.74 | 123,616,959.50 |
Total assets | 12,798,513,740.22 | 5,431,102,281.22 | 414,736,316.05 | 10,890,178,880.72 | 5,356,964,249.30 | 362,128,716.18 |
Current liabilities | 4,100,048,133.30 | 2,999,283.95 | 135,365,421.92 | 3,949,654,684.13 | 566,609,302.26 | 112,597,321.52 |
Non-current liabilities | 2,759,548.45 | 2,210,310.00 | ||||
Total liabilities | 4,100,048,133.30 | 5,758,832.40 | 135,365,421.92 | 3,949,654,684.13 | 568,819,612.26 | 112,597,321.52 |
Attributable to parent company shareholders’ equity | 8,698,465,606.92 | 5,425,343,448.82 | 279,370,894.13 | 6,940,524,196.59 | 4,788,144,637.04 | 249,531,394.66 |
Share of net assets calculated by shareholding ratio | 2,957,478,306.35 | 1,085,068,689.76 | 55,874,178.83 | 2,359,778,226.84 | 957,628,927.40 | 49,906,278.93 |
--Goodwill | 267,788,761.35 | 1,407,265.96 | 267,788,761.35 | 1,407,265.96 | ||
--Unrealized profit of internal trading | -18,144,174.02 | -34,986.88 | -18,770,053.91 | -28,335.94 | ||
--Other | -0.28 | -529,034.05 | -0.28 | -529,034.03 | ||
Book value of equity investment in associated enterprise | 3,207,122,893.40 | 1,086,475,955.72 | 55,310,157.90 | 2,608,796,934.00 | 959,036,193.36 | 49,348,908.96 |
Operation income | 15,539,892,004.67 | 23,186,214.38 | 310,813,025.45 | 15,389,748,441.44 | 21,430,344.10 | 235,059,618.08 |
Net profit | 3,545,497,532.33 | 1,834,198,811.78 | 47,839,499.47 | 3,421,160,042.39 | 1,777,156,110.72 | 32,599,240.87 |
Total comprehensive income | 3,545,497,532.33 | 1,834,198,811.78 | 47,839,499.47 | 3,421,160,042.39 | 1,777,156,110.72 | 32,599,240.87 |
Dividends received from associated enterprise in the year | 607,769,081.48 | 239,400,000.00 | 3,600,000.00 | 666,460,456.42 | 207,800,000.00 | 3,600,000.00 |
Other explanation① adjustment item for other “-0.28”: the differential tail;②The dividend of 3.6 million Yuan distributed from Weifu Precision Machinery are collected by bank acceptance in the year; thenote still in balance of note receivable on 31st December 2018
(4)Financial summary for non-important Joint venture and associated enterprise
In RMB/CNY
Ending balance/Current period | Opening balance/Last Period | |
Joint venture: | -- | -- |
Total book value of investment | 54,742,375.02 | |
Amount based on share-holding ratio | -- | -- |
--Net profit | -438,424.98 | |
--Total comprehensive income | -438,424.98 | |
Associated enterprise: | -- | -- |
Total book value of investment | 7,476,477.77 | |
Amount based on share-holding ratio | -- | -- |
--Net profit | -1,523,522.23 | |
--Total comprehensive income | -1,523,522.23 |
(5)Major limitation on capital transfer ability to the Company from joint venture or associated enterpriseNil(6) Excess loss occurred in joint venture or associated enterpriseNil(7)Unconfirmed commitment with joint venture investment concernedNil(8)Intangible liability with joint venture or associated enterprise investment concernedNil
4. Major conduct joint operationNil5. Structured body excluding in consolidate financial statementNil
X. Risk related with financial instrument
Main financial instrument of the Company including equity investment, loans, account receivable, accountpayable etc., more details of the financial instrument can be found in relevant items of Note V. Risks concernedwith the above mentioned financial instrument, and the risk management policy takes for lower the risks are asfollow:
Aims of engaging in the risk management is to achieve equilibrium between the risk and benefit, lower theadverse impact on performance of the Company to minimum standards, and maximized the benefit forshareholders and other investors. Base on the risk management targets, the basic tactics of the risk management isto recognized and analyzed the vary risks that the Company counted, established an appropriate risk exposurebaseline and caring risk management, supervise the vary risks timely and reliably in order to control the risk in alimited range.In business process, the risks with financial instrument concerned happen in front of the Company mainlyincluding credit exposure, market risk and liquidity risk. BOD of the Company takes full charge of the riskmanagement target and policy-making, and takes ultimate responsibility for the target of risk management andpolicy. Risk management department and financial control department manager and monitor those risk exposureto ensuring the risks are control in a limited range.
1. Credit RiskCredit risk refers to the one party fails to perform the obligation of the financial instruments, form the other partycompany mainly face credit risk for financial loss caused by the customer credit risks. In order to prevent the risks,the Company formulated an evaluation system for the new client’s credit and system to analyze the book creditfor regular customer. The evaluation system for the new client’s credit aims at the new clients, the Company willconduct an background investigation based on the established process, with purpose of determine whether offercredit limit to the client and the amount of the credit and credit terms or not. Whereby, the Company setting acredit limits and credit period for every new client, and such limit is the maximum amount without additionalapproval. The system to analyze the book credit for regular customer refers to after purchase order received byregular customer, the Company will examine the order amount and outstanding balance, if the total over the creditlimit, on the premise of additional approval, sales on account shall be realized, or prepayments for relevantamount shall be required.
Furthermore, as for the sales on account occurred, the Company will guarantee the total credit risks in acontrolling range by analyzed and review the monthly report of the risk attention for account receivables.
The maximum credit risk exposure of the Company is the book amount of such financial assets, till end of 31stDecember 2018; lists of the maximum credit risk exposure of the Company are as:
Item | Amount of merge | Amount of parent company |
Account receivable | 1,919,793,266.91 | 742,246,990.99 |
Other receivables-Other receivables | 82,739,808.66 | 196,660,409.35 |
2. Market riskMarket risk of the financial instrument refers to the fair value of financial instrument or future cash flow due tofluctuations in the market price changes and produce, mainly includes the IRR, FX risk and other price risk.(1) Interest rate risk (IRR)IRR refers to the fluctuate risks on Company’s financial status and cash flow arising from rates changes in market.IRR of the Company mainly related with the bank loans. In order to lower the fluctuate of IRR, the Company, inline with the anticipative change orientation, choose floating rate or fixed rate, that is the rate in future period willgoes up prospectively, than choose fixed rate; if the rate in future period will decline prospectively, than choosethe floating rate. In order to minor the bad impact from difference between the expectation and real condition,loans for liquid funds of the Company are choose the short-term period, and agreed the terms of prepayment inparticular.(2) Foreign exchange (FX) riskFX risks refer to the losses arising from exchange rate movement. The FX risk sustain by the Company mainlyrelated with the USD, EUR, SF, JPY and HKD, except for the USD, EUR, SF, JPY and HKD carried out for theequipment purchasing of parent company and Autocam, material purchasing from business section of WeifuDiesel System, technical service and trademark usage costs from business section of Weifu Diesel System and theimport and export of Weifu International Trade, other main business of the Company are pricing and settle withRMB (Yuan). In consequence of the foreign financial assets and liabilities takes minor ratio in total assets, theCompany has small FX risk of the financial instrument, considered by management of the Company.
End as 31st December 2018, except for the follow assets or liabilities listed with foreign currency, assets andliabilities of the Company are carried with RMB
①Foreign currency assets of the Company till end of 31st December 2018
Cash on hand | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets(%) |
Monetary funds |
Including: USD | 31,373,244.14 | 6.8632 | 215,320,849.17 | 1.03 |
EUR | 2,499,310.16 | 7.8473 | 19,612,836.63 | 0.09 |
JPY | 8,364,309.47 | 0.061887 | 517,642.02 | 0.00 |
HKD | 16,024,984.73 | 0.8762 | 14,041,091.62 | 0.07 |
Account receivable | ||||
Including: USD | 4,195,415.85 | 6.8632 | 28,793,978.06 | 0.14 |
EUR | 1,040,354.52 | 7.8473 | 8,163,974.02 | 0.04 |
JPY | 3,314,442.00 | 0.061887 | 205,120.87 | 0.00 |
Total ratio in assets | 1.37 |
②Foreign currency liability of the Company till end of 31st December 2018:
Cash on hand | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets(%) |
Short-term borrowings |
Including: EUR | 3,558,958.36 | 7.8473 | 27,928,213.94 | 0.63 |
Account payable | ||||
Including: USD | 411,335.19 | 6.8632 | 2,823,075.67 | 0.06 |
EUR | 1,615,586.95 | 7.8473 | 12,677,995.47 | 0.29 |
CHF | 105,642.70 | 6.9494 | 734,153.38 | 0.02 |
JPY | 31,475,376.00 | 0.061887 | 1,947,916.59 | 0.04 |
Total ratio in liabilities | 1.04 |
③Other pricing riskClassification of the Company held is the equity investments in financial assets available for sale, and suchinvestment can be measured by fair value on balance sheet date, thus, the Company owns a risk of stock marketchanges.Furthermore, on the premise of deliberated and approved in 16
th
session of 8
th
BOD, the Company exercise entrustfinancing with the self-owned idle capital; therefore, the Company has the risks of collecting no principal due toentrust financial products default. Aims at such risk, the Company formulated a “Management Mechanism ofCapital Financing”, and well-defined the authority approval, investment decision-making, calculationmanagement and risk controls for the entrust financing in order to guarantee a security funds and preventinvestment risk efficiently. In order to lower the adverse impact from unpredictable factors, the Company chooseshort-term and medium period for investment and investment product’s term is up to 3 years in principle; invariety of investment, the Company did not invested for the stocks, derivative products, security investment fundand the entrust financial products aims at security investment as well as other investment with securitiesconcerned.
3. Liquidity riskLiquidity risk refers to the capital shortage risk occurred during the clearing obligation implemented by theenterprise in way of cash paid or other financial assets. The Company aims at guarantee the Company has richcapital to pay the due debts, therefore, a financial control department is established for collectively controllingsuch risks. On the one hand, the financial control department monitoring the cash balance, the marketablesecurities which can be converted into cash at any time and the rolling forecast on cash flow in future 12 months,ensuring the Company, on condition of reasonable prediction, owes rich capital to paid the debts; on the otherhand, building a favorable relationship with the banks, rationally design the line of credit, credit products andcredit terms, guarantee a sufficient limit for bank credits in order to satisfy vary short-term financingrequirements.
XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB/CNY
Item | Ending fair value | |||
First-order | Second-order | Third-order | Total | |
I. Sustaining measured by fair value | -- | -- | -- | -- |
(2) Equity instrument investment | 121,066,008.00 | -- | -- | 121,066,008.00 |
Total assets sustaining measured by fair value | 121,066,008.00 | 121,066,008.00 | ||
Derivative financial liability | 490,329.13 | 490,329.13 | ||
Total liability sustaining measured by fair value | 490,329.13 | 490,329.13 | ||
II. Non-persistent measure | -- | -- | -- | -- |
2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-orderAccording to relevant requirement of accounting standards, the Company continues to measure the financialassets available for sale-equity instrument investment by fair value on balance sheet date. On 31 December 2018,the financial assets available for sale-equity instrument investment held by the Company refers to the SDEC(stock code: 600841) and Miracle Logistics (Stock code: 002009), determining basis of the market price atperiod-end refers to the closing price of 28 December 2018, the 29 December 2018, 30 December 2018 and 31December 2018 are nonworking days.3. The qualitative and quantitative information for the valuation technique and critical parameter thatsustaining and non-persistent measured by fair value on second-orderThe derivative financial liabilities that continued to be measured at the second level of fair value were the forwardexchange settlement contracts and RMB option contracts held by the subsidiary Weifu Autocam, the fair valuemeasurement of the derivative financial liabilities was measured by the fair value of the forward exchangesettlement contracts and RMB option contracts offered by the bank that signed the contracts.
XII. Related party and related transactions
1. Parent company of the enterprise
Parent company | Registration place | Business nature | Registered capital | Share-holding ratio on the enterprise for parent company | Voting right ratio on the enterprise |
Wuxi Industry Group | Wuxi | Operation of state-owned assets | 4720.6710 million Yuan | 20.22% | 20.22% |
Explanation on parent company of the enterpriseWuxi Industry Development Group Co., Ltd was solely state-owned enterprise funded and established by Wuxi Municipal People’sGovernment which mainly took responsibility of authorizing the state-owned assets operation within a certain areas, investmentmanagement of significant project, investment and development of manufacturing and services and venture capital in high-techachievementUltimate controller of the Company is State-owned Assets Supervision & Administration Commission of Wuxi Municipality of
Jiangsu Province.
2. Subsidiary of the Enterprise
Found more in Note IX. 1.” Equity in subsidiary”
3. Joint venture and associated enterprise
Found more in Note IX.3. “Equity in joint venture and associated enterprise”Other associated enterprise or joint ventures which has related transaction with the Company in the period or occurred previous:
Nil4. Other Related party
Other Related party | Relationship with the Enterprise |
Robert Bosch Company | Second largest shareholder of the Company |
Key executive | Director, supervisor and senior executive of the Company |
5. Related transaction(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB/CNY
Related party | Content of related transaction | Current period | Approved transaction limit | Whether more than the transaction limit (Y/N) | Last Period |
Weifu Precision Machinery | Goods and labor | 44,657,225.89 | 50,000,000.00 | N | 43,069,065.48 |
Bosch Diesel System | Goods and labor | 68,485,584.07 | 70,000,000.00 | N | 200,508,313.30 |
Weifu Environment | Goods | 1,515,266,186.15 | 1,925,000,000.00 | N | 1,131,818,717.21 |
Robert Bosch Company | Goods | 179,841,237.03 | 143,000,000.00 | Y | 158,733,424.37 |
Goods sold/labor service providing
In RMB/CNY
Related party | Content of related transaction | Current period | Last Period |
Weifu Precision Machinery | Goods and labor | 3,785,205.72 | 3,377,877.84 |
Bosch Diesel System | Goods and labor | 2,722,919,316.33 | 3,266,539,117.64 |
Weifu Environment | Goods and labor | 50,181,907.20 | 46,216,269.37 |
Robert Bosch Company | Goods and labor | 720,709,408.92 | 2,528,608.05 |
Explanation on goods sales/sold and labor service providing/receiving
(2)Related trusteeship management/contract & entrust management/ outsourcingNil
(3) Related lease
As a lessor for the Company:
In RMB/CNY
Lessee | Assets type | Lease income recognized in the Period | Lease income recognized at last Period |
Weifu Environment | Workshop | 2,508,057.00 | 2,388,626.00 |
Explanation on related lease
Weifu Leader entered into the house leasing contract with Weifu Environment, as for the plant locates at No.9Linjiang Road, Wuxi new district, owed by Weifu Leader, rent-out to Weifu Environment, agreements are madeas: Rental from 1 January 2018 to 31 December 2018 was 2,508,057.00 Yuan
(4) Related guarantee
Nil(5)Related party’s borrowed/lending funds
In RMB/CNY
Related party | Loan amount | Start date | Maturity | Note |
Wuxi Industry Group | 5,470,000.00 | 2018-02-13- | 2019-02-12 | Weifu Leader borrowed 5.47 million Yuan from Wuxi Industry Group, which will expired on 12 February 2019. |
(6)Related party’s assets transfer and debt reorganizationNil(7) Remuneration of key manager
In RMB/CNY
Item | Current period | Last Period |
Remuneration of key manager | 5,180,000.00 | 5,070,000.00 |
(8)Other related transactions
Item | Related party | 2018 | 2017 |
Payable for technical services | Bosch Diesel System | 1,355,480.71 | 1,294,739.84 |
Purchase of fixed assets | Bosch Diesel System | 19,629,922.97 | 2,607,798.18 |
Technology royalties paid etc. | Robert Bosch Company | 3,484,849.96 | 7,945,222.80 |
Purchase of fixed assets | Robert Bosch Company | 3,576,000.00 | -- |
Purchase of fixed assets | Weifu Environment | 9,858.69 | -- |
Sales of fixed assets | Weifu Environment | 187,779.24 | -- |
Interest paying | Wuxi Industry Group | 214,362.52 | -- |
6. Receivable/payable items of related parties
(1)Receivable item
In RMB/CNY
Item | Related party | Ending balance | Opening balance | ||
Book balance | Bad debt reserve | Book balance | Bad debt reserve | ||
Account receivable | Weifu Precision Machinery | 77,477.41 | 425,363.64 | ||
Account receivable | Bosch Diesel System | 420,746,170.76 | 615,770,490.57 | 72,188.07 | |
Account receivable | Robert Bosch Company | 132,830,976.56 | |||
Other receivables | Robert Bosch Company | 12,285,081.81 | |||
Account receivable | Weifu Environment | 1,233,580.22 | 710,200.00 | ||
Other non-current assets | Bosch Diesel System | 877,500.00 | |||
Account paid in advance | Bosch Diesel System | 1,057,272.58 |
(2)Payable item
In RMB/CNY
Item | Related party | Ending book balance | Opening book balance |
Account payable | Weifu Precision Machinery | 7,941,418.36 | 9,737,530.74 |
Account payable | Weifu Environment | 337,307,634.70 | 379,374,827.01 |
Account payable | Bosch Diesel System | 24,743,403.24 | 44,262,749.15 |
Account payable | Robert Bosch Company | 5,170,470.70 | 38,202,192.76 |
Other accounts payable | Wuxi Industry Group | 5,476,678.00 | |
Accounts received in advance | Robert Bosch Company | 754,552.15 | 579,650.36 |
Accounts received in advance | Weifu Environment | 6,514,951.87 |
7. Commitments of related partyNil
XIII. Share-based payment
Nil
XIV. Commitment or contingency
1. Important commitmentsImportant commitments in balance sheet date Nil2. Contingency(1) Contingency on balance sheet dateGuarantees to subsidiary
Guarantee provided | Guarantee received | Debit bank | Guarantee amount (in 10 thousand Yuan) | Starting from | Terminated dated | Whether guarantee implemented or not |
Weifu High-Technology Group Co., Ltd. | Weifu Tianli | Jiangbei branch of Bank of China in Ningbo | 4,500.00 | 2016-11-15 | 2021-11-10 | N |
(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
XV. Events after balance sheet date
1. Important non adjustment matters Nil2. Profit distribution
In RMB/CNY
Profit or dividend plans to distributed | 1,210,740,684.00 |
Profit or dividend declare to distributed which have been approved | 1,210,740,684.00 |
3. Sales returnNo significant sales return has occurred after the balance sheet date4. Other events after balance sheet date(1) In accordance with the resolution of 4
th
session of 9
th
BOD held on 26 March 2019, the Company plans toestablish a wholly-owned subsidiary SPV Company in Denmark. Acquired the 66.00% equity ofIRDFuelCellsA/S in Denmark held by FCCTApS. Company with EUR 7.26 million by conversion (value of
assessment for IRD as EUR 11 million)(2)According to the resolution passed at the 5
th
session of the 9
th
BOD of the Company held on 19 April 2019, theCompany plans to make entrusted finance management with its own unused funds up to 5 billion Yuan in 2019.The aforesaid limit can be rolling for use to invest in finance management products with low risks.
XVI. Other important events
1. Previous accounting errors collection Nil2. Debt restructuring Nil3. Assets replacement Nil4. Pension planThe Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8
th
session of 7
th
BOD: inorder to mobilize the initiative and creativity of the employees, established a talent long-term incentivemechanism, enhance the cohesive force and competitiveness in enterprise, the Company carried out the abovementioned annuity plan since the date of reply of plans reporting received from labor security administrationdepartment. Annuity plans are: the annuity fund are paid by the enterprise and employees together; the amountpaid by enterprise shall not over the 1/12 of the total salary of last years, amount paid by individual and enterpriseshall not over the 1/6 of the total salary of last year, in accordance with the State’s annuity policy, the Companywill adjusted the economic benefits in due time, in principle of responding to the economic strength of theenterprise, the amount paid by the enterprise at current period control in the 8.33 percent of the total salary of lastyear, specific paying ratio later shall be adjust correspondingly in line with the operation condition of theCompany.In December 2012, the Company received the Reply on annuity plans reporting under the name of WFHT fromlabor security administration department, later, the Company entered into the Entrusted Management Contract ofthe Annuity Plan of WFHT with PICC.5. Discontinued operations Nil6. Segment(1) Recognition basis and accounting policy for reportable segmentDetermine the operating segments in line with the internal organization structure, management requirement andinternal reporting system. Operating segment of the Company refers to the followed components that have beensatisfied at the same time:
①the component is able to generate revenues and expenses in routine activities;②management of the Company is able to assess the operation results regularly, and determine resourcesallocation and performance evaluation for the component;③being analyzed, financial status, operation results and cash flow of the components are able to required by theCompanyThe Company mainly engaged in the manufacture of fuel system of internal combustion engine products, autocomponents, muffler and purifier etc., based on the product segment, the Company determine three reporting
segment as auto fuel injection system, air management system and automotive post processing system.Accounting policy for the three reporting segments are shares the same policy state in Note IIISegment assets exclude financial assets measured by fair value and with variation reckoned into currentgains/losses, derivative instruments, dividends receivables, financial products due within one year, financial assetsavailable for sale, long term equity investment and other undistributed assets, since these assets are not related toproducts operation.(2) Financial information for reportable segment
In RMB/CNY
Item | Product segment of automobile fuel injection system | Product segment of automotive post processing system | Product segment of air management system | Add: investment/income measured by equity, income of financial products or possession and disposal income, the retained assets or gains/losses as the financial assets available for sale or possession and disposal income | Offset of segment | Total |
Operating revenue | 5,633,846,119.26 | 2,800,874,733.81 | 495,075,874.87 | 208,122,056.76 | 8,721,674,671.18 | |
Operating cost | 4,122,647,409.01 | 2,423,800,297.06 | 359,434,846.25 | 214,025,712.35 | 6,691,856,839.97 | |
Total Profit | 727,880,690.18 | 30,653,969.82 | 34,686,895.01 | 1,810,292,357.18 | 1,330,532.41 | 2,602,183,379.78 |
Net profit | 615,703,275.72 | 31,529,412.98 | 37,157,142.45 | 1,782,896,685.93 | 991,813.61 | 2,466,294,703.47 |
Total assets | 8,815,931,131.73 | 2,301,906,124.76 | 814,320,686.35 | 9,882,216,532.95 | 922,333,015.49 | 20,892,041,460.30 |
Total liabilities | 2,780,313,471.43 | 1,366,966,391.62 | 482,134,437.91 | 189,343,888.01 | 4,440,070,412.95 |
7. Major transaction and events makes influence on investor’s decision
Nil
XVII. Principle notes of financial statements of parent company
1.Note receivable and account receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Notes receivable | 264,264,207.30 | 449,209,323.02 |
Account receivable | 742,246,990.99 | 1,047,012,889.92 |
Total | 1,006,511,198.29 | 1,496,222,212.94 |
(1)Notes receivable
1))Category of note receivable:
In RMB/CNY
Item | Ending balance | Opening balance |
Bank acceptance bill | 248,904,207.30 | 449,209,323.02 |
Commercial acceptance bill | 15,360,000.00 | |
Total | 264,264,207.30 | 449,209,323.02 |
2)Notes receivable pledge at end of the period
In RMB/CNY
Item | Amount pledge at period-end |
Bank acceptance bill | 106,328,022.46 |
Total | 106,328,022.46 |
3)Notes receivable that has endorsed or discounted at end of the period and is not yet due on balance sheet date
In RMB/CNY
Item | Amount cease for recognized at period-end | Amount not cease for recognized at period-end |
Bank acceptance bill | 142,341,780.45 | |
Commercial acceptance bill | 190,000.00 | |
Total | 142,531,780.45 |
4)The bills transferred to account receivable for the drawer failed to perform the contract
In RMB/CNY
Item | Amount transfer to account receivable at period-end |
Commercial acceptance bill | 7,000,000.00 |
Total | 7,000,000.00 |
Other explanation
Found more in 2-(1)-4) under the Note VII.
(2)Account receivable
1)Category of account receivable
In RMB/CNY
Category | Ending balance | Opening balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio |
Account receivable with single significant amount and withdrawal bad debt provision separately | 7,000,000.00 | 0.93% | 7,000,000.00 | 100.00% | ||||||
Account receivables with bad debt provision accrual by credit portfolio | 745,766,010.32 | 99.07% | 3,519,019.33 | 0.47% | 742,246,990.99 | 1,049,489,925.33 | 100.00% | 2,477,035.41 | 0.24% | 1,047,012,889.92 |
Total | 752,766,010.32 | 100.00% | 10,519,019.33 | 1.40% | 742,246,990.99 | 1,049,489,925.33 | 100.00% | 2,477,035.41 | 0.24% | 1,047,012,889.92 |
Account receivable with single significant amount and withdrawal bad debt provision separately at period end :
√Applicable □ Not applicable
In RMB/CNY
Account receivable(by enterprise) | Ending balance | |||
Account receivable | Bad debt reserve | Accrual ratio | Accrual causes | |
BD bills | 7,000,000.00 | 7,000,000.00 | 100.00% | Have difficulty in collection |
Total | 7,000,000.00 | 7,000,000.00 | -- | -- |
Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Not applicable
In RMB/CNY
Account age | Ending balance | ||
Account receivable | Bad debt reserve | Accrual ratio | |
Subitem of within one year | |||
Within 6 months | 559,297,293.94 | ||
6 months to one year | 12,039,849.09 | 1,203,984.91 | 10.00% |
Subtotal of within one year | 571,337,143.03 | 1,203,984.91 | |
1-2 years | 1,971,945.25 | 394,389.05 | 20.00% |
2-3 years | 1,101,729.57 | 440,691.83 | 40.00% |
Over 3 years | 1,479,953.54 | 1,479,953.54 | 100.00% |
Total | 575,890,771.39 | 3,519,019.33 | 0.61% |
Explanations on combination determine:
Except for the receivables with impairment reserves accrual singly; base on the actual loss ratio of the receivablesof previous years, with same or similar credit portfolio, and combining actual condition accrual bad debt reservesto determined the accrual ratio for bad debt reserves
In combination, withdrawal bad debt provision based on balance proportion for account receivable:
□ Applicable √ Not applicableIn combination, withdrawal bad debt provision based on other methods for account receivable:
2)Bad debt provision accrual, collected or reversedAccrual bad debt provision 8,049,045.12 Yuan; collected or reversed Yuan.Including major amount collected or reversed in the period: Nil3)Account receivable actually charge off in the period:
The amount charge off in the period refers to the amount from retail enterprise, an the details of each amount issmall and is not generated by related transactions.
4)Top 5 receivables at ending balance by arrears party
Total receivables collected by arrears party for the Period amounting to 622,252,082.05 Yuan, takes 82.66percent in closing balance of the account receivables; 0 Yuan are accrual correspondingly for bad debt reserves.
5)Account receivable derecognition due to financial assets transfer Nil6)Assets and liabilities resulted by account receivable transfer and continues involvement
2. Other receivables
In RMB/CNY
Item | Ending balance | Opening balance |
Interest receivable | 188,682.78 | 97,627.77 |
Other receivables | 196,660,409.35 | 50,174,653.16 |
Total | 196,849,092.13 | 50,272,280.93 |
(1)Interest receivable
1)category of interest receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Entrust loans | 97,627.77 | |
Interest receivable from unified loan and return | 188,682.78 | |
Total | 188,682.78 | 97,627.77 |
Significant overdue interest Nil
(2)Dividend receivable
Nil
(3)Other receivables
1)Category of other receivables
In RMB/CNY
Category | Ending balance | Opening balance | ||||||||
Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
Other receivables with bad debt provision accrual by credit portfolio | 196,660,409.35 | 100.00% | 196,660,409.35 | 50,395,333.34 | 100.00% | 220,680.18 | 0.44% | 50,174,653.16 | ||
Total | 196,660,409.35 | 100.00% | 196,660,409.35 | 50,395,333.34 | 100.00% | 220,680.18 | 0.44% | 50,174,653.16 |
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
□ Applicable √ Not applicableIn combination, other accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable □ Not applicable
In RMB/CNY
Account age | Ending balance | ||
Other receivables | Bad debt reserve | Accrual ratio | |
Subitem of within one year | |||
Within 6 months | 612,673.63 | ||
6 months to one year | |||
Subtotal of within one year | 612,673.63 | ||
Total | 612,673.63 |
Explanations on combination determine:
Except for the other receivables with impairment reserves accrual singly; base on the actual loss ratio of thereceivables of previous years, with same or similar credit portfolio, and combining actual condition accrual baddebt reserves to determined the accrual ratio for bad debt reserves
In combination, withdrawal bad debt provision based on balance proportion for other account receivable□ Applicable √ Not applicableIn combination, withdrawal bad debt provision based on other methods for other account receivable? Applicable √ Not applicable2)Bad debt provision accrual, collected or reversedAccrual bad debt provision Yuan; collected or reversed 220,680.18 Yuan.Including the important bad debt provision switch back or collected in the period:
3)Other receivable actually charge-off in the period:
4)Nature of other receivables
In RMB/CNY
Nature | Ending book balance | Opening book balance |
Staff loans and petty cash | 605,473.63 | 1,438,626.00 |
Balance of related party in the consolidate scope | 196,047,735.72 | 47,000,000.00 |
Intercourse funds of unit | 1,949,507.34 | |
Other | 7,200.00 | 7,200.00 |
Total | 196,660,409.35 | 50,395,333.34 |
5) Top 5 other receivables at ending balance by arrears party
In RMB/CNY
Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other receivables | Ending balance of bad debt reserve |
Weifu Leader | Balance of related party in the consolidate scope | 100,000,000.00 | Within one year | 50.85% | |
Weifu Mashan | Balance of related party in the consolidate scope | 52,047,735.72 | Within 6 months | 26.47% | |
Weifu Schmidt | Balance of related party in the consolidate scope | 24,000,000.00 | Within one year | 12.20% | |
Weifu Chang’an | Balance of related party in the consolidate scope | 20,000,000.00 | Within 6 months | 10.17% | |
Staff | Staff loans and petty cash | 120,000.00 | Within 6 months | 0.06% | |
Total | -- | 196,167,735.72 | -- | 99.75% |
6) Account receivable with government grand involved Nil(7) Other account receivable derecognition due to financial assets transfer Nil(8) Assets and liabilities resulted by other account receivable transfer and continues involvement Nil
3. Long-term equity investments
In RMB/CNY
Item | Ending balance | Opening balance | ||||
Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
Investment for subsidiary | 1,466,611,689.17 | 1,466,611,689.17 | 1,451,041,689.17 | 1,451,041,689.17 | ||
Investment for associates and | 4,272,498,737.38 | 4,272,498,737.38 | 3,511,481,000.32 | 3,511,481,000.32 |
joint venture | ||||||
Total | 5,739,110,426.55 | 5,739,110,426.55 | 4,962,522,689.49 | 4,962,522,689.49 |
(1)Investment for subsidiary
In RMB/CNY
The invested entity | Opening balance | Current increased | Current decreased | Ending balance | Impairment accrual in the period | Ending balance of depreciation reserves |
Weifu Jinning | 178,639,593.52 | 178,639,593.52 | ||||
Weifu Leader | 460,113,855.00 | 460,113,855.00 | ||||
Weifu Mashan | 168,693,380.51 | 168,693,380.51 | ||||
Weifu Chang’an | 220,902,037.30 | 220,902,037.30 | ||||
Weifu International Trade | 32,849,254.85 | 32,849,254.85 | ||||
Weifu ITM | 167,000,000.00 | 167,000,000.00 | ||||
Weifu Schmidt | 50,160,000.00 | 50,160,000.00 | ||||
Weifu Tianli | 90,229,100.00 | 15,570,000.00 | 105,799,100.00 | |||
Weifu Autocam | 82,454,467.99 | 82,454,467.99 | ||||
Total | 1,451,041,689.17 | 15,570,000.00 | 1,466,611,689.17 |
(2)Investment for associates and joint venture
In RMB/CNY
Enterprise | Opening balance | Current changes (+,-) | Ending balance | Ending balance of depreciation reserves | ||||||||
Additional investment | Capital reduction | Investment gain/loss recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Impairment accrual | Other | |||||
I. Joint venture | ||||||||||||
Weifu Electronic Drive | 55,180,800.00 | -438,424.98 | 54,742,375.02 | |||||||||
Subtotal | 55,180,800.00 | -438,424.98 | 54,742,375.02 | |||||||||
II. Associated enterprise |
Bosch Diesel System | 2,503,154,814.59 | 1,153,838,335.18 | 580,955,739.65 | 3,076,037,410.12 | |||||||
Zhonglian Automobile Electronic Co., Ltd. | 959,036,193.36 | 366,839,762.36 | 239,400,000.00 | 1,086,475,955.72 | |||||||
Weifu Precision Machinery | 49,289,992.37 | 9,553,004.15 | 3,600,000.00 | 55,242,996.52 | |||||||
Subtotal | 3,511,481,000.32 | 0.00 | 1,530,231,101.69 | 823,955,739.65 | 4,217,756,362.36 | ||||||
Total | 3,511,481,000.32 | 55,180,800.00 | 1,529,792,676.71 | 823,955,739.65 | 4,272,498,737.38 |
(3)Other explanation
Nil
4. Operating income and cost
In RMB/CNY
Item | Current period | Last Period | ||
Income | Cost | Income | Cost | |
Main business | 3,638,414,291.52 | 2,552,209,818.43 | 3,258,274,223.36 | 2,457,655,148.49 |
Other business | 359,776,899.68 | 326,627,631.69 | 387,741,030.12 | 315,062,753.47 |
Total | 3,998,191,191.20 | 2,878,837,450.12 | 3,646,015,253.48 | 2,772,717,901.96 |
Other explanation:
5. Investment income
In RMB/CNY
Item | Current period | Last Period |
Income of long-term equity investment calculated based on cost | 82,818,400.00 | 978,657,310.00 |
Income of long-term equity investment calculated based on equity | 1,529,792,676.71 | 1,470,504,861.61 |
Investment income from period of holding the financial assets available for sale | 3,274,260.41 | 3,291,000.00 |
Investment income obtained from disposal of financial assets available for | 17,370,816.75 | 24,625,516.88 |
sale | ||
Entrust financial income | 303,054,961.79 | 215,942,650.46 |
Gains/losses of equity liquidation | -8,261,290.60 | |
Total | 1,936,311,115.66 | 2,684,760,048.35 |
6. Other
Nil
XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
In RMB/CNY
Item | Amount | Note |
Gains/losses from the disposal of non-current asset | 96,162,222.57 | 含威孚金宁房屋土地征收处置损益 |
Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 48,811,314.99 | |
Profit and loss of assets delegation on others’ investment or management | 311,261,918.65 | |
Held transaction financial asset, gains/losses of changes of fair values from transaction financial liabilities, and investment gains from disposal of transaction financial asset, transaction financial liabilities and financial asset available for sales, exclude the effective hedging business relevant with normal operations of the Company | 16,880,487.62 | Including the gains/losses of fair value changes from the derivative financial liability |
Switch back of provision for depreciation of account receivable which was singly taken depreciation test | 466,200.00 | |
Other non-operating income and expenditure except for the aforementioned items | -597,126.12 | |
Other gain/loss qualify the definition of non-recurring gains/losses | 353,111.39 | The amount collected in the period while has been charged-off previous |
Relocation expenses | ||
Less: Impact on income tax | 70,234,077.14 | |
Impact on minority shareholders’ equity | 21,827,350.95 | |
Total | 381,276,701.01 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
2. REO and earnings per share
Profits during report period | Weighted average ROE | Earnings per share | |
Basic earnings per share (RMB/Share) | Diluted earnings per share (RMB/Share) | ||
Net profits belong to common stock stockholders of the Company | 15.48 | 2.37 | 2.37 |
Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 13.02 | 2.00 | 2.00 |
3. Difference of the accounting data under accounting rules in and out of China(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable(3) Explanation on data differences under the accounting standards in and out of China; as for the differences adjustmentaudited by foreign auditing institute, listed name of the instituteNot applicable
4. Other
Section XII. Documents available for reference
I. Financial statement carrying the signatures and seals of person in charge of the company, principal of theaccounting works and person in charge of accounting organ (accounting Supervisor);II. Original audit report seal with accounting firms and signature and seal with CPA;III. Original documents of the Company and manuscripts of public notices that disclosed in the website Juchao(http://www.cninfo.com.cn) designated by CSRC in the report period;IV. Annual report published on China Securities Journal, Securities Times and Hong Kong Commercial Dailyduring the Period.
Board of Directors ofWeifu High-Technology Group Co., Ltd.
Chairman:
Chen Xuejun
23 April 2019