无锡威孚高科技集团股份有限公司Weifu High-Technology Group Co., Ltd.
Semi-Annual Financial Report 2020
August 2020
无锡威孚高科技集团股份有限公司2020年半年度财务报告
I. Audit reportWhether the semi annual report is audited
□ Yes √ No
The company's semi annual financial report has not been auditedII. Financial statement
Unit in note of financial statement refers to CNY: RMB (Yuan)
1. Consolidated balance sheet
Prepared by Weifu High-Technology Group Co., Ltd
2020-06-30
In RMB
Item | 2020-6-30 | 2019-12-31 |
Current assets: | ||
Monetary funds | 2,564,147,609.58 | 1,596,893,711.87 |
Settlement provisions | ||
Capital lent | ||
Transaction financial assets | 3,186,262,183.13 | 3,940,885,674.32 |
Derivative financial assets | ||
Note receivable | 985,930,905.61 | 1,812,141,371.94 |
Account receivable | 3,674,151,635.33 | 2,310,666,475.89 |
Receivable financing | 756,743,779.54 | 23,873,317.86 |
Accounts paid in advance | 224,243,911.70 | 139,241,917.78 |
Insurance receivable | ||
Reinsurance receivables | ||
Contract reserve of reinsurance receivable | ||
Other account receivable | 1,129,113,083.12 | 43,730,023.31 |
Including: Interest receivable | 2,091,107.78 | 655,052.98 |
Dividend receivable | 1,092,040,579.49 | 1,070,000.00 |
Buying back the sale of financial assets | ||
Inventories | 1,670,738,746.77 | 2,418,744,835.82 |
Contractual assets | ||
Assets held for sale |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Non-current asset due within one year | ||
Other current assets | 547,477,135.79 | 1,012,055,605.74 |
Total current assets | 14,738,808,990.57 | 13,298,232,934.53 |
Non-current assets: | ||
Loans and payments on behalf | ||
Debt investment | ||
Other debt investment | ||
Long-term account receivable | ||
Long-term equity investment | 3,977,690,136.49 | 5,322,405,953.35 |
Investment in other equity instrument | 285,048,000.00 | 285,048,000.00 |
Other non-current financial assets | 1,723,343,284.00 | 1,043,589,987.43 |
Investment real estate | 21,648,596.74 | 22,410,511.87 |
Fixed assets | 2,875,000,573.89 | 2,845,176,078.20 |
Construction in progress | 253,735,407.77 | 247,857,777.25 |
Productive biological asset | ||
Oil and gas asset | ||
Right-of-use assets | ||
Intangible assets | 416,926,802.38 | 430,594,372.12 |
Expense on Research and Development | ||
Goodwill | 1,784,086.79 | 1,784,086.79 |
Long-term expenses to be apportioned | 22,170,795.30 | 18,536,000.25 |
Deferred income tax asset | 229,081,360.18 | 212,476,501.54 |
Other non-current asset | 210,102,212.32 | 230,235,982.45 |
Total non-current asset | 10,016,531,255.86 | 10,660,115,251.25 |
Total assets | 24,755,340,246.43 | 23,958,348,185.78 |
Current liabilities: | ||
Short-term loans | 328,308,738.00 | 312,153,969.81 |
Loan from central bank | ||
Capital borrowed | ||
Trading financial liability | ||
Derivative financial liability | ||
Note payable | 1,339,329,488.99 | 1,745,218,439.52 |
Account payable | 4,190,201,244.86 | 3,312,254,229.84 |
Accounts received in advance | 1,873,510.34 | 113,737,432.61 |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Contractual liability | 58,136,812.04 | |
Selling financial asset of repurchase | ||
Absorbing deposit and interbank deposit | ||
Security trading of agency | ||
Security sales of agency | ||
Wage payable | 243,039,308.55 | 314,343,737.66 |
Taxes payable | 99,211,334.02 | 129,538,411.86 |
Other account payable | 433,417,811.60 | 65,266,262.39 |
Including: Interest payable | 5,348.44 | |
Dividend payable | 367,000,766.60 | |
Commission charge and commission payable | ||
Reinsurance payable | ||
Liability held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | 147,739,169.58 | |
Total current liabilities | 6,841,257,417.98 | 5,992,512,483.69 |
Non-current liabilities: | ||
Insurance contract reserve | ||
Long-term loans | 20,000,000.00 | |
Bonds payable | ||
Including: Preferred stock | ||
Perpetual capital securities | ||
Lease liability | ||
Long-term account payable | 35,108,263.11 | 35,108,263.11 |
Long-term wages payable | 58,392,053.61 | 58,392,053.61 |
Accrual liability | ||
Deferred income | 342,551,476.28 | 365,116,022.98 |
Deferred income tax liabilities | 21,045,135.05 | 22,566,051.72 |
Other non-current liabilities | ||
Total non-current liabilities | 477,096,928.05 | 481,182,391.42 |
Total liabilities | 7,318,354,346.03 | 6,473,694,875.11 |
Owner’s equity: | ||
Share capital | 1,008,950,570.00 | 1,008,950,570.00 |
Other equity instrument |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Including: Preferred stock | ||
Perpetual capital securities | ||
Capital public reserve | 3,391,527,806.33 | 3,391,527,806.33 |
Less: Inventory shares | 300,007,852.84 | |
Other comprehensive income | 137,919.77 | 134,871.67 |
Reasonable reserve | 2,636,485.98 | 3,247,757.06 |
Surplus public reserve | 510,100,496.00 | 510,100,496.00 |
Provision of general risk | ||
Retained profit | 12,309,546,790.54 | 12,076,443,635.56 |
Total owner’ s equity attributable to parent company | 16,922,892,215.78 | 16,990,405,136.62 |
Minority interests | 514,093,684.62 | 494,248,174.05 |
Total owner’ s equity | 17,436,985,900.40 | 17,484,653,310.67 |
Total liabilities and owner’ s equity | 24,755,340,246.43 | 23,958,348,185.78 |
Legal Representative: Wang XiaodongPerson in charge of accounting works: OuJianbinPerson in charge of accounting institute: OuJianbin
2. Balance Sheet of Parent Company
In RMB
Item | 2020-6-30 | 2019-12-31 |
Current assets: | ||
Monetary funds | 1,814,721,636.94 | 965,770,877.82 |
Trading financial assets | 3,053,235,591.18 | 3,758,789,072.68 |
Derivative financial assets | ||
Note receivable | 301,148,395.76 | 202,403,993.13 |
Account receivable | 1,161,589,142.48 | 768,500,929.93 |
Receivable financing | ||
Accounts paid in advance | 125,616,113.42 | 89,116,730.45 |
Other account receivable | 1,404,402,207.25 | 250,014,956.74 |
Including: Interest receivable | 2,280,037.26 | 804,929.68 |
Dividend receivable | 1,115,292,687.93 | 1,070,000.00 |
Inventories | 460,669,652.62 | 565,144,234.49 |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Contractual assets | ||
Assets held for sale | ||
Non-current assets maturing within one year | ||
Other current assets | 399,924,007.15 | 938,616,881.51 |
Total current assets | 8,721,306,746.80 | 7,538,357,676.75 |
Non-current assets: | ||
Debt investment | ||
Other debt investment | ||
Long-term receivables | ||
Long-term equity investments | 4,849,926,353.51 | 6,331,363,630.04 |
Investment in other equity instrument | 209,108,000.00 | 209,108,000.00 |
Other non-current financial assets | 1,723,343,284.00 | 1,043,589,987.43 |
Investment real estate | ||
Fixed assets | 1,806,345,623.11 | 1,646,333,216.50 |
Construction in progress | 145,355,080.49 | 136,573,912.28 |
Productive biological assets | ||
Oil and natural gas assets | ||
Right-of-use assets | ||
Intangible assets | 211,198,062.84 | 203,663,423.60 |
Research and development costs | ||
Goodwill | ||
Long-term deferred expenses | 260,105.36 | |
Deferred income tax assets | 112,121,048.86 | 105,137,877.84 |
Other non-current assets | 137,027,549.83 | 172,646,721.05 |
Total non-current assets | 9,194,685,108.00 | 9,848,416,768.74 |
Total assets | 17,915,991,854.80 | 17,386,774,445.49 |
Current liabilities | ||
Short-term borrowings | 156,224,237.11 | 116,126,459.33 |
Trading financial liability | ||
Derivative financial liability | ||
Notes payable | 343,305,621.14 | 284,054,137.00 |
Account payable | 1,174,285,272.28 | 930,273,146.35 |
Accounts received in advance | 12,010,730.30 | |
Contractual liability | 9,004,203.84 |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Wage payable | 183,677,527.12 | 213,626,754.45 |
Taxes payable | 56,030,565.60 | 56,540,307.59 |
Other accounts payable | 378,353,017.16 | 11,976,576.21 |
Including: Interest payable | ||
Dividend payable | 351,251,997.80 | |
Liability held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | 105,837,709.56 | |
Total current liabilities | 2,406,718,153.81 | 1,624,608,111.23 |
Non-current liabilities: | ||
Long-term loans | ||
Bonds payable | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Lease liability | ||
Long-term account payable | ||
Long term employee compensation payable | 50,058,386.76 | 50,058,386.76 |
Accrued liabilities | ||
Deferred income | 301,626,400.33 | 322,971,778.82 |
Deferred income tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 351,684,787.09 | 373,030,165.58 |
Total liabilities | 2,758,402,940.90 | 1,997,638,276.81 |
Owners’ equity: | ||
Share capital | 1,008,950,570.00 | 1,008,950,570.00 |
Other equity instrument | ||
Including: preferred stock | ||
Perpetual capital securities | ||
Capital public reserve | 3,481,221,286.39 | 3,488,221,286.39 |
Less: Inventory shares | 300,007,852.84 | |
Other comprehensive income | ||
Special reserve | ||
Surplus reserve | 510,100,496.00 | 510,100,496.00 |
Retained profit | 10,457,324,414.35 | 10,381,863,816.29 |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Total owner’s equity | 15,157,588,913.90 | 15,389,136,168.68 |
Total liabilities and owner’s equity | 17,915,991,854.80 | 17,386,774,445.49 |
3. Consolidated Profit Statement
In RMB
Item | 2020 semi-annual | 2019 semi-annual |
I. Total operating income | 6,594,403,624.56 | 4,403,444,346.05 |
Including: Operating income | 6,594,403,624.56 | 4,403,444,346.05 |
Interest income | ||
Insurance gained | ||
Commission charge and commission income | ||
II. Total operating cost | 6,098,234,750.74 | 4,005,776,550.51 |
Including: Operating cost | 5,413,969,374.53 | 3,405,386,504.44 |
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 | ||
Tax and extras | 31,961,549.15 | 34,534,571.66 |
Sales expense | 138,394,171.31 | 104,270,647.40 |
Administrative expense | 336,984,661.28 | 310,909,980.43 |
R&D expense | 211,531,953.72 | 180,167,642.16 |
Financial expense | -34,606,959.25 | -29,492,795.58 |
Including: Interest expenses | 5,800,553.09 | 9,264,648.42 |
Interest income | 43,053,210.79 | 48,416,919.83 |
Add: other income | 43,932,417.68 | 17,632,117.95 |
Investment income (Loss is listed with “-”) | 923,574,526.61 | 888,216,680.48 |
Including: Investment income on affiliated company and joint venture | 785,533,710.72 | 790,465,131.05 |
The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) | -408,092.36 | |
Exchange income (Loss is listed with “-”) |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Net exposure hedging income (Loss is listed with “-”) | ||
Income from change of fair value (Loss is listed with “-”) | 258,157.65 | 30,686,277.13 |
Loss of credit impairment (Loss is listed with “-”) | -3,622,549.31 | -6,237,790.75 |
Losses of devaluation of asset (Loss is listed with “-”) | -52,807,909.47 | -1,500,885.27 |
Income from assets disposal (Loss is listed with “-”) | 232,499.55 | 5,107,848.45 |
III. Operating profit (Loss is listed with “-”) | 1,407,736,016.53 | 1,331,572,043.53 |
Add: Non-operating income | 164,150.94 | 27,544,757.26 |
Less: Non-operating expense | 4,124,451.68 | 2,631,453.02 |
IV. Total profit (Loss is listed with “-”) | 1,403,775,715.79 | 1,356,485,347.77 |
Less: Income tax expense | 57,505,452.12 | 81,382,654.54 |
V. Net profit (Net loss is listed with “-”) | 1,346,270,263.67 | 1,275,102,693.23 |
(i) Classify by business continuity | ||
1.continuous operating net profit (net loss listed with ‘-”) | 1,346,270,263.67 | 1,275,102,693.23 |
2.termination of net profit (net loss listed with ‘-”) | ||
(ii) Classify by ownership | ||
1.Net profit attributable to owner’s of parent company | 1,326,344,424.98 | 1,256,661,577.09 |
2.Minority shareholders’ gains and losses | 19,925,838.69 | 18,441,116.14 |
VI. Net after-tax of other comprehensive income | 4,618.33 | 271,537.20 |
Net after-tax of other comprehensive income attributable to owners of parent company | 3,048.10 | 261,591.54 |
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
1.Changes of the defined benefit plans that re-measured | ||
2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
3.Change of fair value of investment in other equity instrument | ||
4.Fair value change of enterprise's credit risk | ||
5. Other | ||
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | 3,048.10 | 261,591.54 |
1.Other comprehensive income under equity method that can transfer to gain/loss | ||
2.Change of fair value of other debt investment |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
3.Amount of financial assets re-classify to other comprehensive income | ||
4.Credit impairment provision for other debt investment | ||
5.Cash flow hedging reserve | ||
6.Translation differences arising on translation of foreign currency financial statements | 3,048.10 | 261,591.54 |
7.Other | ||
Net after-tax of other comprehensive income attributable to minority shareholders | 1,570.23 | 9,945.66 |
VII. Total comprehensive income | 1,346,274,882.00 | 1,275,374,230.43 |
Total comprehensive income attributable to owners of parent Company | 1,326,347,473.08 | 1,256,923,168.63 |
Total comprehensive income attributable to minority shareholders | 19,927,408.92 | 18,451,061.80 |
VIII. Earnings per share: | ||
(i) Basic earnings per share | 1.32 | 1.25 |
(ii) Diluted earnings per share | 1.32 | 1.25 |
Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, andrealized 0 Yuan at last period for combined partyLegal Representative: Wang XiaodongPerson in charge of accounting works: OuJianbinPerson in charge of accounting institute: OuJianbin
4. Profit Statement of Parent Company
In RMB
Item | 2020 semi-annual | 2019 semi-annual |
I. Operating income | 2,336,262,373.08 | 2,092,474,460.24 |
Less: Operating cost | 1,686,488,679.58 | 1,471,971,514.70 |
Taxes and surcharge | 18,740,531.01 | 17,510,903.97 |
Sales expenses | 13,053,690.12 | 15,320,342.43 |
Administration expenses | 227,324,018.06 | 211,000,027.34 |
R&D expenses | 90,410,044.71 | 75,873,810.90 |
Financial expenses | -40,808,506.49 | -41,092,188.59 |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Including: interest expenses | 2,501,198.55 | 3,597,363.92 |
Interest income | 39,756,148.10 | 44,742,417.24 |
Add: other income | 35,239,425.50 | 11,683,224.30 |
Investment income (Loss is listed with “-”) | 907,907,258.50 | 840,215,361.66 |
Including: Investment income on affiliated Company and joint venture | 708,709,791.17 | 742,463,812.23 |
The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”) | ||
Net exposure hedging income (Loss is listed with “-”) | ||
Changing income of fair value (Loss is listed with “-”) | -403,481.50 | 30,195,948.00 |
Loss of credit impairment (Loss is listed with “-”) | -1,033,980.28 | -1,901,377.70 |
Losses of devaluation of asset (Loss is listed with “-”) | -3,370,784.10 | -24,294.39 |
Income on disposal of assets (Loss is listed with “-”) | -174,293.98 | 1,844,051.48 |
II. Operating profit (Loss is listed with “-”) | 1,279,218,060.23 | 1,223,902,962.84 |
Add: Non-operating income | 22,947.75 | 15,034.36 |
Less: Non-operating expense | 3,443,673.01 | 1,196,252.91 |
III. Total Profit (Loss is listed with “-”) | 1,275,797,334.97 | 1,222,721,744.29 |
Less: Income tax | 57,174,946.95 | 73,937,477.28 |
IV. Net profit (Net loss is listed with “-”) | 1,218,622,388.02 | 1,148,784,267.01 |
(i)continuous operating net profit (net loss listed with ‘-”) | 1,218,622,388.02 | 1,148,784,267.01 |
(ii) termination of net profit (net loss listed with ‘-”) | ||
V. Net after-tax of other comprehensive income | ||
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
1.Changes of the defined benefit plans that re-measured | ||
2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
3.Change of fair value of investment in other equity instrument | ||
4.Fair value change of enterprise's credit risk | ||
5. Other | ||
(II) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
1.Other comprehensive income under equity method |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
that can transfer to gain/loss | ||
2.Change of fair value of other debt investment | ||
3.Amount of financial assets re-classify to other comprehensive income | ||
4.Credit impairment provision for other debt investment | ||
5.Cash flow hedging reserve | ||
6.Translation differences arising on translation of foreign currency financial statements | ||
7.Other | ||
VI. Total comprehensive income | 1,218,622,388.02 | 1,148,784,267.01 |
VII. Earnings per share: | ||
(i) Basic earnings per share | ||
(ii) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
Item | 2020 semi-annual | 2019 semi-annual |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 5,676,491,804.78 | 4,275,001,010.93 |
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 | ||
Cash received from interest, commission charge and commission | ||
Net increase of capital borrowed | ||
Net increase of returned business capital | ||
Net cash received by agents in sale and purchase of securities | ||
Write-back of tax received | 15,404,444.43 | 25,327,532.10 |
Other cash received concerning operating activities | 70,801,912.94 | 85,775,494.76 |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Subtotal of cash inflow arising from operating activities | 5,762,698,162.15 | 4,386,104,037.79 |
Cash paid for purchasing commodities and receiving labor service | 4,122,764,678.30 | 2,534,137,461.67 |
Net increase of customer loans and advances | ||
Net increase of deposits in central bank and interbank | ||
Cash paid for original insurance contract compensation | ||
Net increase of capital lent | ||
Cash paid for interest, commission charge and commission | ||
Cash paid for bonus of guarantee slip | ||
Cash paid to/for staff and workers | 630,754,424.71 | 681,756,769.56 |
Taxes paid | 314,691,082.22 | 310,797,279.61 |
Other cash paid concerning operating activities | 256,830,904.51 | 169,088,618.70 |
Subtotal of cash outflow arising from operating activities | 5,325,041,089.74 | 3,695,780,129.54 |
Net cash flows arising from operating activities | 437,657,072.41 | 690,323,908.25 |
II. Cash flows arising from investing activities: | ||
Cash received from recovering investment | 4,008,128,352.27 | 3,686,500,000.00 |
Cash received from investment income | 1,183,089,487.76 | 525,843,992.65 |
Net cash received from disposal of fixed, intangible and other long-term assets | 25,781,114.63 | 72,457,256.41 |
Net cash received from disposal of subsidiaries and other units | ||
Other cash received concerning investing activities | ||
Subtotal of cash inflow from investing activities | 5,216,998,954.66 | 4,284,801,249.06 |
Cash paid for purchasing fixed, intangible and other long-term assets | 218,473,940.03 | 237,326,162.98 |
Cash paid for investment | 3,553,000,000.00 | 3,658,800,000.00 |
Net increase of mortgaged loans | ||
Net cash received from subsidiaries and other units obtained | 49,930,736.62 | |
Other cash paid concerning investing activities | 24,000,000.00 | |
Subtotal of cash outflow from investing activities | 3,771,473,940.03 | 3,970,056,899.60 |
Net cash flows arising from investing activities | 1,445,525,014.63 | 314,744,349.46 |
III. Cash flows arising from financing activities | ||
Cash received from absorbing investment | 13,880,037.60 | |
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | 13,880,037.60 |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Cash received from loans | 245,289,418.04 | 393,249,222.11 |
Other cash received concerning financing activities | 5,470,000.00 | |
Subtotal of cash inflow from financing activities | 250,759,418.04 | 407,129,259.71 |
Cash paid for settling debts | 203,192,671.61 | 378,622,036.77 |
Cash paid for dividend and profit distributing or interest paying | 747,748,424.37 | 836,528,586.57 |
Including: Dividend and profit of minority shareholder paid by subsidiaries | ||
Other cash paid concerning financing activities | 300,007,852.84 | 5,809,091.00 |
Subtotal of cash outflow from financing activities | 1,250,948,948.82 | 1,220,959,714.34 |
Net cash flows arising from financing activities | -1,000,189,530.78 | -813,830,454.63 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 4,663,278.76 | 415,189.69 |
V. Net increase of cash and cash equivalents | 887,655,835.02 | 191,652,992.77 |
Add: Balance of cash and cash equivalents at the period -begin | 820,498,653.85 | 2,404,674,139.49 |
VI. Balance of cash and cash equivalents at the period -end | 1,708,154,488.87 | 2,596,327,132.26 |
6. Cash Flow Statement of Parent Company
In RMB
Item | 2020 semi-annual | 2019 semi-annual |
I. Cash flows arising from operating activities: | ||
Cash received from selling commodities and providing labor services | 2,137,522,482.58 | 2,342,213,493.89 |
Write-back of tax received | ||
Other cash received concerning operating activities | 53,647,269.21 | 48,525,763.15 |
Subtotal of cash inflow arising from operating activities | 2,191,169,751.79 | 2,390,739,257.04 |
Cash paid for purchasing commodities and receiving labor service | 1,258,667,867.50 | 1,218,981,667.53 |
Cash paid to/for staff and workers | 356,095,444.60 | 369,225,756.08 |
Taxes paid | 199,611,845.20 | 186,084,989.75 |
Other cash paid concerning operating activities | 107,303,419.41 | 107,664,076.68 |
Subtotal of cash outflow arising from operating activities | 1,921,678,576.71 | 1,881,956,490.04 |
Net cash flows arising from operating activities | 269,491,175.08 | 508,782,767.00 |
II. Cash flows arising from investing activities: |
无锡威孚高科技集团股份有限公司2020年半年度财务报告
Cash received from recovering investment | 3,605,396,703.43 | 3,521,500,000.00 |
Cash received from investment income | 1,141,100,004.91 | 506,897,740.22 |
Net cash received from disposal of fixed, intangible and other long-term assets | 3,870,511.23 | 4,034,532.29 |
Net cash received from disposal of subsidiaries and other units | ||
Other cash received concerning investing activities | 139,134,277.49 | 215,512,158.54 |
Subtotal of cash inflow from investing activities | 4,889,501,497.06 | 4,247,944,431.05 |
Cash paid for purchasing fixed, intangible and other long-term assets | 113,826,331.79 | 158,044,430.36 |
Cash paid for investment | 3,070,448,157.81 | 3,328,800,000.00 |
Net cash received from subsidiaries and other units obtained | 82,156,428.71 | |
Other cash paid concerning investing activities | 150,000,000.00 | 187,880,372.33 |
Subtotal of cash outflow from investing activities | 3,334,274,489.60 | 3,756,881,231.40 |
Net cash flows arising from investing activities | 1,555,227,007.46 | 491,063,199.65 |
III. Cash flows arising from financing activities | ||
Cash received from absorbing investment | ||
Cash received from loans | 100,000,000.00 | 160,000,000.00 |
Other cash received concerning financing activities | 21,620,000.00 | |
Subtotal of cash inflow from financing activities | 121,620,000.00 | 160,000,000.00 |
Cash paid for settling debts | 60,000,000.00 | 180,000,000.00 |
Cash paid for dividend and profit distributing or interest paying | 744,490,470.75 | 831,020,889.20 |
Other cash paid concerning financing activities | 316,627,852.84 | |
Subtotal of cash outflow from financing activities | 1,121,118,323.59 | 1,011,020,889.20 |
Net cash flows arising from financing activities | -999,498,323.59 | -851,020,889.20 |
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 4,152,072.50 | 593,522.94 |
V. Net increase of cash and cash equivalents | 829,371,931.45 | 149,418,600.39 |
Add: Balance of cash and cash equivalents at the period -begin | 532,115,862.26 | 1,920,076,358.43 |
VI. Balance of cash and cash equivalents at the period -end | 1,361,487,793.71 | 2,069,494,958.82 |
7. Statement of Changes in Owners’ Equity (Consolidated)
This Period
In RMB
Item | 2020 semi-annual | ||||||||||||||
Owners’ equity attributable to the 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 | Other | Subtotal | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||||
I. Balance at the end of the last year | 1,008,950,570.00 | 3,391,527,806.33 | 134,871.67 | 3,247,757.06 | 510,100,496.00 | 12,076,443,635.56 | 16,990,405,136.62 | 494,248,174.05 | 17,484,653,310.67 | ||||||
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 | 3,391,527,806.33 | 134,871.67 | 3,247,757.06 | 510,100,496.00 | 12,076,443,635.56 | 16,990,405,136.62 | 494,248,174.05 | 17,484,653,310.67 | ||||||
III.Increase/ Decrease in this year (Decrease is listed with “-”) | 300,007,852.84 | 3,048.10 | -611,271.08 | 233,103,154.98 | -67,512,920.84 | 19,845,510.57 | -47,667,410.27 |
(i) Total comprehensive income | 3,048.10 | 1,326,344,424.98 | 1,326,347,473.08 | 19,927,408.92 | 1,346,274,882.00 | ||||||||||
(ii) Owners’ devoted and decreased capital | 300,007,852.84 | -300,007,852.84 | 15,598,792.00 | -284,409,060.84 | |||||||||||
1.Common shares invested by shareholders | 15,598,792.00 | 15,598,792.00 | |||||||||||||
2. Capital invested by holders of other equity instruments | |||||||||||||||
3.Amount reckoned into owners equity with share-based payment | |||||||||||||||
4. Other | 300,007,852.84 | -300,007,852.84 | -300,007,852.84 | ||||||||||||
(III)Profit distribution | -1,093,241,270.00 | -1,093,241,270.00 | -15,748,768.80 | -1,108,990,038.80 | |||||||||||
1. Withdrawal of surplus reserves | |||||||||||||||
2. Withdrawal of general risk provisions | |||||||||||||||
3. Distribution for owners (or shareholders) | -1,093,241,270.00 | -1,093,241,270.00 | -15,748,768.80 | -1,108,990,038.80 | |||||||||||
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.Carry-over retained earnings from the defined benefit plans | |||||||||||||||
5.Carry-over retained earnings from other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V)Reasonable reserve | -611,271.08 | -611,271.08 | 68,078.45 | -543,192.63 | |||||||||||
1. Withdrawal in the report period | 11,612,779.18 | 11,612,779.18 | 1,079,264.69 | 12,692,043.87 | |||||||||||
2. Usage in the report period | 12,224,050.26 | 12,224,050.26 | 1,011,186.24 | 13,235,236.50 | |||||||||||
(VI)Others | |||||||||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,391,527,806.33 | 300,007,852.84 | 137,919.77 | 2,636,485.98 | 510,100,496.00 | 12,309,546,790.54 | 16,922,892,215.78 | 514,093,684.62 | 17,436,985,900.40 |
Last Period
In RMB
Item | 2019 semi-annual | ||||||||||||||
Owners’ equity attributable to the 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 | Other | Subtotal | |||||
Preferred stock | Perpetual capital securities | Other | |||||||||||||
I. Balance at the end of the last year | 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 | 15,913,828,778.82 | 538,142,268.53 | 16,451,971,047.35 | ||||||
Add: Changes of accounting policy | 19,809,442.95 | -19,809,442.95 | |||||||||||||
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 | 3,416,022,795.14 | 0.00 | 1,618,490.50 | 510,100,496.00 | 10,977,136,427.18 | 15,913,828,778.82 | 538,142,268.53 | 16,451,971,047.35 | ||||||
III. Increase/ Decrease in this year (Decrease is | 261,591.54 | 917,170.19 | 82,068,587.53 | 83,247,349.26 | 33,215,155.68 | 116,462,504.94 |
listed with “-”) | |||||||||||||||
(i)Total comprehensive income | 1,256,661,577.09 | 1,256,661,577.09 | 18,451,061.80 | 1,275,112,638.89 | |||||||||||
(ii) Owners’ devoted and decreased capital | 14,461,725.98 | 14,461,725.98 | |||||||||||||
1.Common shares invested by shareholders | |||||||||||||||
2.Capital invested by holders of other equity instruments | |||||||||||||||
3.Amount reckoned into owners equity with share-based payment | |||||||||||||||
4. Other | 14,461,725.98 | 14,461,725.98 | |||||||||||||
(III) Profit distribution | -1,174,592,989.56 | -1,174,592,989.56 | -1,174,592,989.56 | ||||||||||||
1. Withdrawal of surplus reserves | |||||||||||||||
2. Withdrawal of general risk provisions | |||||||||||||||
3. Distribution for owners (or shareholders) | -1,210,740,684.00 | -1,210,740,684.00 | -1,210,740,684.00 |
4. Other | 36,147,694.44 | 36,147,694.44 | 36,147,694.44 | ||||||||||||
(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.Carry-over retained earnings from the defined benefit plans | |||||||||||||||
5.Carry-over retained earnings from other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V)Reasonable reserve | 917,170.19 | 917,170.19 | 302,367.90 | 1,219,538.09 | |||||||||||
1. Withdrawal in the report | 10,101,863.74 | 10,101,863.74 | 892,049.10 | 10,993,912.84 |
period | |||||||||||||||
2. Usage in the report period | 9,184,693.55 | 9,184,693.55 | 589,681.20 | 9,774,374.75 | |||||||||||
(VI)Others | 261,591.54 | 261,591.54 | 261,591.54 | ||||||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,416,022,795.14 | 261,591.54 | 2,535,660.69 | 510,100,496.00 | 11,059,205,014.71 | 15,997,076,128.08 | 571,357,424.21 | 16,568,433,552.29 |
8. Statement of Changes in Owners’ Equity (Parent Company)
This Period
In RMB
Item | 2020 semi-annual | |||||||||||
Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | 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 | 0.00 | 510,100,496.00 | 10,381,863,816.29 | 15,389,136,168.68 | ||||||
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 | 0.00 | 510,100,496.00 | 10,381,863,816.29 | 15,389,136,168.68 | ||||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -7,000,000.00 | 300,007,852.84 | 75,460,598.06 | -231,547,254.78 |
(i) Total comprehensive income | 1,218,622,388.02 | 1,218,622,388.02 | ||||||||||
(ii) Owners’ devoted and decreased capital | 300,007,852.84 | -49,920,519.96 | -349,928,372.80 | |||||||||
1.Common shares invested by shareholders | ||||||||||||
2. Capital invested by holders of other equity instruments | ||||||||||||
3. Amount reckoned into owners equity with share-based payment | ||||||||||||
4. Other | 300,007,852.84 | -49,920,519.96 | -349,928,372.80 | |||||||||
(III) Profit distribution | -1,093,241,270.00 | -1,093,241,270.00 | ||||||||||
1. Withdrawal of surplus reserves | ||||||||||||
2. Distribution for owners (or shareholders) | -1,093,241,270.00 | -1,093,241,270.00 | ||||||||||
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.Carry-over retained earnings from the defined benefit plans | ||||||||||||
5.Carry-over retained earnings from other comprehensive income |
6. Other | ||||||||||||
(V) Reasonable reserve | -1,177,442.02 | -1,177,442.02 | ||||||||||
1. Withdrawal in the report period | 2,924,878.27 | 2,924,878.27 | ||||||||||
2. Usage in the report period | 4,102,320.29 | 4,102,320.29 | ||||||||||
(VI)Others | -7,000,000.00 | 1,177,442.02 | -5,822,557.98 | |||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,481,221,286.39 | 300,007,852.84 | 0.00 | 510,100,496.00 | 10,457,324,414.35 | 15,157,588,913.90 |
Last period
In RMB
Item | 2019 semi-annual | |||||||||||
Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | 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 | -19,809,442.95 | 510,100,496.00 | 9,340,610,451.36 | 14,328,073,360.80 | ||||||
Add: Changes of accounting policy | 19,809,442.95 | -19,809,442.95 | ||||||||||
Error correction of the last period | ||||||||||||
Other | ||||||||||||
II. Balance at the beginning of this year | 1,008,950,570 | 3,488,221,286.39 | 0.00 | 510,100,496.00 | 9,320,801,008.41 | 14,328,073,360.80 |
.00 | ||||||||||||
III. Increase/ Decrease in this year (Decrease is listed with “-”) | -25,808,722.55 | -25,808,722.55 | ||||||||||
(i)Total comprehensive income | 1,148,784,267.01 | 1,148,784,267.01 | ||||||||||
(ii) Owners’ devoted and decreased capital | ||||||||||||
1.Common shares invested by shareholders | ||||||||||||
2. Capital invested by holders of other equity instruments | ||||||||||||
3. Amount reckoned into owners equity with share-based payment | ||||||||||||
4. Other | ||||||||||||
(III) Profit distribution | -1,174,592,989.56 | -1,174,592,989.56 | ||||||||||
1. Withdrawal of surplus reserves | ||||||||||||
2.Distribution for owners (or shareholders) | -1,210,740,684.00 | -1,210,740,684.00 | ||||||||||
3. Other | 36,147,694.44 | 36,147,694.44 | ||||||||||
(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.Carry-over retained earnings from the defined benefit plans | ||||||||||||
5.Carry-over retained earnings from other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Reasonable reserve | ||||||||||||
1. Withdrawal in the report period | 1,474,547.80 | 1,474,547.80 | ||||||||||
2. Usage in the report period | 1,474,547.80 | 1,474,547.80 | ||||||||||
(VI)Others | ||||||||||||
IV. Balance at the end of the report period | 1,008,950,570.00 | 3,488,221,286.39 | 0.00 | 510,100,496.00 | 9,294,992,285.86 | 14,302,264,638.25 |
III. Basic information of the Company
1. Historical origin of the Company
By 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 115.4355 million Yuan,including state-owned share capital amounting to 92.4355 million Yuan, public corporate share capital amountingto 8 million Yuan and inner employee share capital amounting to 15 million Yuan.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 1.00 Yuan for each, and the total value of thoseshares amounted to 68 million Yuan. After the issuance, the Company’s total share capital increased to 183.4355million Yuan.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 303.4355 million Yuan.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 394.46615 million Yuan, of which state-owned shares amounted to 120.16615 millionYuan, public corporate shares 10.4 million Yuan, foreign-funded shares (B-share) 88.40 million Yuan, RMBordinary shares (A-share) 156 million Yuan and inner employee shares 19.5 million Yuan.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 10Yuan for each allotted share. Actually 41.9 million shares was allotted, and the total share capital after theallotment increased to 436.36615 million Yuan, of which state-owned corporate shares amounted to 121.56615million Yuan, public corporate shares 10.4 million Yuan, foreign-funded shares (B-share) 88.4 million Yuan andRMB ordinary shares (A-share) 216 million Yuan.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 certain
conditions, 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, representing
17.63% 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 February 2012, the Company issuedRMB ordinary shares (A-share) of 112,858,000 shares to Wuxi Industry Groups and overseas strategic investorprivately, Robert Bosch Co., Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company),face value was ONE Yuan per share, added registered capital of 112,858,000Yuan, and the registered capital afterchange was 680,133,995Yuan. Wuxi Industry Group is the first majority shareholder of the Company, and RobertBosch Company 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 1,020,200,992Yuan 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 Company
Registered place and head office of the Company: No.5 Huashan Road, Xinwu District, WuxiUnified social credit code: 91320200250456967NThe Company sets up Shareholders’ General Meeting, the Board of Directors (BOD) and the Board of Supervisors(BOS)The Company sets up Administration Department, Technology Centre, human resources, Office of the BOD,compliance department, IT department, Strategy& Market Department, Party-masses Department, FinanceDepartment, Purchase Department,Manufacturing Quality Department, MS (Mechanical System) division,AC(Automobile Components) division and DS (Diesel System ) division etc. and subsidiaries such as Wuxi WeifuLeader Catalytic Converter Co., Ltd. and Nanjing Weifu Jinning Co., Ltd.
3. Business nature and major operation activities of the Company
Operation 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. Engineering and technicalresearch & experimental development; R&D of energy recovery system; manufacturing of auto parts and fittings;manufacture of general machinery(excluding manufacture of special equipment) .(any projects that needs to beapproved 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 report of the Company were approved by the Board of Directors for reporting dated 21 August 2020.
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 accessories | Y |
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 Schmidt Power System Spare Parts Co., Ltd. | Weifu Schmidt | 66.00 | -- | 66.00 | 7,600 | Internal-combustion engine accessories | Y |
Ningbo Weifu Tianli | Weifu Tianli | 98.83 | 1.17 | 100.00 | 11,136 | Internal-combustion | Y |
Supercharging Technique Co., Ltd. | engine accessories | ||||||
Wuxi Weifu-Autocam Fine Machinery Co. Ltd. | Weifu Autocam | 51.00 | -- | 51.00 | USD2,110 | 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 Automobile components Co., Ltd. | Weifu Leader (Nanchang) | -- | 100.00 | 100.00 | 5,000 | Purifier and muffler | Y |
Wuxi Weifu Electric Drive Technology Co., Ltd. | Weifu Electric Drive | 80.00 | -- | 80.00 | USD2,000 | Hub motor | Y |
Weifu Holding ApS | SPV | 100.00 | -- | 100.00 | DKK 37 | Investment | Y |
IRD Fuel Cells A/S | IRD | -- | 66.00 | 66.00 | DKK8,560 | Fuel cell components | Y |
IRD FUEL CELLS LLC | IRD America | -- | 66.00 | 66.00 | USD300 | Fuel cell components | Y |
Wuxi Weifu ITM Supercharging Technique Co., Ltd was absorbed and merged by the Company on January 1, 202
0. So, compared with the end of last year, it was not listed separately in Scope of consolidate financial statement.
IV. Basis of preparation of financial statements
1. Preparation base
The 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 andproceedings, 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 concern
The 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 EstimationSpecific 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-32- Other important 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 during thereporting period such as financial position, operation achievements and cash flow.
2. Accounting period
Accounting 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 form each1 January to 31 December.
3. Business cycles
Normal 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 currency
The 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 control
Enterprise 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 control
A 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 thecombination.As a purchaser, fair value of the assets (equity of purchaser held before the date of purchasingincluded) for purchasing controlling right from the purchaser, the liability occurred or undertake on purchasingdate less the fair value of identifiable net assets of the purchaser obtained in combination, recognized as goodwillif the results is positive; if the number is negative, the acquirer shall firstly review the measurement of the fairvalue of the identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as thecombination costs.After that, if the combination costs are still lower than the fair value of the identifiable netassets obtained, the acquirer shall recognize the difference as the profit or loss in the current period.Other directlyexpenses cost for combination shall be reckoned into current gains/losses. Difference of the fair value of assetspaid and its book values, reckoned into current gains/losses. On purchasing date, the identifiable assets, liability orcontingency of the purchaser obtained by the Company recognized by fair value, that required identificationconditions; 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 scope
On 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 invested
party’s relevant activities and the ability to affect such return by use of the aforesaid right over the investedparty.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 beingdisposed, 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 or
loss 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 schemeby 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. Recognition standards for cash and cash equivalent
Cash 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 conversion
The 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 areconverted in accordance 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. There into, 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 areconverted in accordance with the middle rate of the market exchange rate published by the People's Bank of Chinaon the transaction date without changing its original recording currency amount; the foreign currency non-monetaryitems measured 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 are
included 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 instrument
Financial 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) Recognition and termination of financial instrument
A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.The recognition of a financial assets shall be terminated if it meets one of the following conditions:
① the contractual right to receive the cash flow of the financial assets terminates;
②The financial asset has been transferred, and the Company has transferred almost all risks and rewards of theownership of the financial asset to the transferee;
③The financial asset has been transferred. Although the Company has neither transferred nor retained almost allthe risks and rewards of the ownership of the financial asset, it has given up the control of the financial asset.
If all or part of the current obligations of a financial liability has been discharged, the financial liability or part of itis terminated for recognition. When the Company (debtor) and the creditor sign an agreement to replace the existingfinancial liabilities with new financial liabilities, and the new financial liabilities and the existing financial liabilitiesare substantially different from the contract terms, terminated the recognition of the existing financial liabilities andrecognize the new financial liabilities at the same time.
Financial assets are traded in the normal way and their accounting recognition and terminated the recognition ofproceed on a trade date basis.
(2) Classification and measurement of financial assets
At the initial recognition, according to the business model of managing financial assets and the contractual cashflow characteristics of financial assets, the Company classifies the financial assets into the financial assetsmeasured at amortized cost, the financial assets measured at fair value and whose changes are included in othercomprehensive income, and the financial assets measured at fair value and whose changes are included in currentprofit or loss. Financial assets are measured at fair value at initial recognition, but if the receivables or receivablesfinancing arising from the sale of goods or the provision of services do not include a significant financingcomponent or do not consider a financing component that does not exceed one year, it shall be initially measuredin accordance with the transaction value. For financial assets measured at fair value and whose changes areincluded in the current profit or loss, related transaction costs are directly included in the current profit and loss;for other types of financial assets, related transaction costs are included in the initially recognized amount.
The business model for managing financial assets refers to how the Company manages financial assets to generatecash flows. The business model determines whether the cash flow of financial assets managed by the Company isbased on contract cash flow, selling financial assets or both. The Company determines the business model formanaging financial assets based on objective facts and based on the specific business objectives of financial assetsmanagement determined by key management personnel.
The Company evaluates the contractual cash flow characteristics of financial assets to determine whether thecontractual cash flows generated by the relevant financial assets on a specific date are only payments for theprincipal and the interest based on the outstanding principal amount. The principal is the fair value of the financialassets at initial recognition; the interest includes the time value of money, the credit risk associated with theoutstanding principal amount for a specific period, and other basic borrowing risks, costs and consideration of profit.In addition, the Company evaluates the contractual terms that may result in changes in the time distribution or theamount of contractual cash flows of the financial assets to determine whether they meet the requirements of theabove contractual cash flow characteristics.
Only when the Company changes its business model of managing financial assets, all affected financial assets arereclassified on the first day of the first reporting period after the business model changes, otherwise the financialassets are not allowed to be reclassified after initial recognition.
① Financial assets measured at amortized cost
The Company classifies the financial assets that meet the following conditions and haven’t been designated asfinancial assets measured at fair value and whose changes are included in current profit or loss as financial assetsmeasured at amortized cost:
A. the group's business model for managing the financial assets is to collect contractual cash flows; and
B. the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only paid forthe principal and interest based on the outstanding principal amount.After initial recognition, such financial assets are measured at amortized cost by using the effective interest method.Gains or losses arising from financial assets which are measured at amortized cost and are not a component of anyhedging relationship are included in current profit or loss when being derecognized, amortized by effective interestmethod, or impaired.
② Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Company classifies the financial assets that meet the following conditions and haven’t been designated asfinancial assets measured at fair value and whose changes are included in current profit or loss as financial assetsmeasured at fair value and whose changes are included in other comprehensive income:
A. the Group's business model for managing the financial assets is targeted at both the collection of contractualcash flows and the sale of financial assets; andB. the contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only thepayment of the principal and the interest based on the outstanding principal amount.After initial recognition, such financial assets are subsequently measured at fair value. Interests, impairment lossesor gains and exchange gains and losses calculated by using the effective interest method are included in profit or lossfor the period, and other gains or losses are included in other comprehensive income. When being terminate forrecognition, the accumulated gains or losses previously included in other comprehensive income are transferredfrom other comprehensive income and included in current profit or loss.
③Financial assets measured at fair value and whose changes are included in current profit or lossExcept for the above financial assets measured at amortized cost and measured at fair value and whose changes areincluded in other comprehensive income, the Company classifies all other financial assets as financial assetsmeasured at fair value and whose changes are included in current profit or loss. In the initial recognition, in order toeliminate or significantly reduce accounting mismatch, the Company irreversibly designates part of the financialassets that should be measured at amortized cost or measured at fair value and whose changes are included in theother comprehensive income as the financial assets measured at fair value and whose changes are included incurrent profit or loss.
After the initial recognition, such financial assets are subsequently measured at fair value, and the gains or losses(including interests and dividend income) are included in the current profit and loss, unless the financial assets arepart of the hedging relationship.
However, for non-trading equity instrument investments, the Company irreversibly designates them as the financialassets that are measured at fair value and whose changes are included in other comprehensive income in the initialrecognition. The designation is made based on a single investment and the relevant investment is in line with the
definition of equity instruments from the issuer's perspective. After initial recognition, such financial assets aresubsequently measured at fair value. Dividend income that meets the conditions is included in profit or loss, andother gains or losses and changes in fair value are included in other comprehensive income. When it is derecognized,the accumulated gains or losses previously included in other comprehensive income are transferred from othercomprehensive income and included in retained earnings.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified as financial liabilities measured at fair value and whosechanges are included in current profit or loss and financial liabilities measured at amortized cost at the initialrecognition. For financial liabilities that are not classified as financial liabilities measured at fair value and whosechanges are included in current profit or loss, the related transaction expenses are included in the initial recognitionamount.
①Financial liability measured by fair value and with variation reckoned into current gains/lossesFinancial liability measured by fair value and with variation reckoned into current gains/losses includingTransaction financial liability and the financial liabilities that are designated as fair value in the initial recognitionand whose changes are included in current profit or loss. For such financial liabilities, the subsequent measurementis based on fair value, and the gains or losses arising from changes in fair value and the dividends and interestexpenses related to these financial liabilities are included in current profit or loss.
②Financial liability measured by amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective interest method. Thegain or loss arising from recognition termination or amortization is included in current profit or loss.
③Distinctions between financial liabilities and equity instruments
Financial liabilities are liabilities that meet one of the following conditions:
A. Contractual obligations to deliver cash or other financial assets to other parties.B. Contractual obligations to exchange financial assets or financial liabilities with other parties under potentiallyadverse conditions.C. Non-derivative contracts that must be settled or that can be settled by the company's own equity instruments inthe future, and the enterprise will deliver a variable amount of its own equity instruments according to the contract.D. Derivative contracts that must be settled or that can be settled by the company's own equity instruments in thefuture, except for derivatives contracts that exchange a fixed amount of cash or other financial assets with a fixedamount of their own equity instruments.An equity instrument is a contract that proves it has a residual equity in the assets of an enterprise after deducting allliabilities.
If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash or otherfinancial assets, the contractual obligation is consistent with the definition of financial liability.If a financial instrument is required to be settled or can be settled by the Company's own equity instruments, it isnecessary to consider whether the Company's own equity instruments used to settle the instrument are a substitutefor cash or other financial assets, or to make the instrument holder enjoy the residual equity in the assets of the issuerafter deducting all liabilities. In the former case, the instrument is the Company's financial liability; if it is the latter,the instrument is the Company's equity instrument.
(4) Fair value of financial instruments
The company uses valuation techniques that are applicable under current circumstances and that have sufficientavailable data and other information support to determine the fair value of related financial assets and financialliabilities. The company divides the input values used by valuation techniques into the following levels and usesthem in sequence:
① The first-level input value is the unadjusted quotation of the same assets or liabilities that can be obtained on themeasurement date in the active market;
② The second-level input value is the direct or indirect observable input value of the relevant assets or liabilitiesother than the first-level input value, including quotations of similar assets or liabilities in an active market;quotations of same or similar assets or liabilities in an active market; other observable input value other thanquotations, such as interest rate and yield curves that are observable during the normal quote interval;market-validated input value, etc.;
③ The third-level input value is the unobservable input value of the relevant assets or liabilities, including theinterest rate that cannot be directly observed or cannot be verified by observable market data, stock volatility, futurecash flow of the retirement obligation assumed in the business combination, and financial forecasting made by itsown data, etc.
(5) Impairment of financial assets
On the basis of expected credit losses, the Company performs impairment treatment on financial assets measuredat amortized cost and creditors’ investment measured at fair value and whose changes are included in othercomprehensive income and recognize the provisions for loss. For the account receivable or receivable financingresulting by selling goods or providing services, if they contains no significant financing components or withoutconsider the financing components no more than one year, the company always measures its loss provisionsaccording to the amount of expected credit losses during the entire renewal period.
①Measurement of expected credit losses
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by the risk ofdefault. Credit loss refers to the difference between all contractual cash flows that the Company discounts at the
original actual interest rate and are receivable in accordance with contract and all cash flows expected to bereceived, that is, the present value of all cash shortages. Among them, for the purchase or source of financialassets that have suffered credit impairment, the Company discounts the financial assets at the actual interest rateadjusted by credit.When measuring expected credit losses, the Company individually evaluates credit risk for financial assets withsignificantly different credit risks, such as receivables involving litigation and arbitration with the other party, orreceivables having obvious indications that the debtor is likely to be unable to fulfill its repayment obligations,and so on.
Except for the financial assets that separately assess the credit risks, the Company classified the accountreceivable according to their characteristic of risks, calculated the expected credit losses on basis of portfolio.Basis for determining the portfolio as follow:
A - Note receivableNote receivable 1: bank acceptanceNote receivable 2: trade acceptanceB - Account receivableAccount receivable 1: receivable from clientsAccount receivable 2: receivable from internal related partyC-Other account receivablesOther account receivables 1: receivable from internal related partyOther account receivables 2: receivable from othersAs for the note receivable, account receivable and other account receivable classified in portfolio, by referring tothe experience of historical credit loss, the expected credit loss is calculated by combining the current situationand the forecast of future economic conditions.
On December 31, 2019, the company reviewed the appropriateness of the provision for bad debts of receivables ofprevious years.Based on the credit risk characteristics of bills receivable, comprehensively evaluated the creditrisk of bills receivable, the Company did not accrue credit impairment losses for bills receivable.There was acorrelation between the default probability of accounts receivable portfolio and other accounts receivable portfolioand the aging, the aging was still a sign of whether the credit risk of the Company’s receivables had increasedsignificantly.Therefore, the Company’s credit loss risk from June 30, 2020 was estimated on the basis of the agingand based on the original loss ratio.
Except for the above-mentioned financial assets adopting simplified metering method, the Company assesses ateach balance sheet date whether its credit risk has increased significantly since initial recognition. If credit risk hasnot increased significantly since initial recognition, it is in the first stage, the Company measures the lossprovisions based on the amount equivalent to the expected credit loss in the next 12 months; if the credit risk has
increased significantly since initial recognition but no credit impairment has occurred, it is in the second stage, theCompany measures the loss provisions based on the amount equivalent to the expected credit loss for the entireduration; if credit impairment occurs after initial recognition, it is in the third stage, the Company measures theloss provisions based on the amount equivalent to the expected credit loss for the entire duration.For financialinstruments with low credit risks at the balance sheet date, the Company assumes that their credit risks have notincreased significantly since initial recognition.The Company evaluates the expected credit losses of financial instruments based on individual items andportfolios. The Company considers the credit risk characteristics of different customers and evaluates the expectedcredit losses of receivables based on the aging portfolios.When assessing expected credit losses, the Company considers reasonable and evidence-based information aboutpast events, current conditions, and forecasts of future economic conditions.When the Company no longer reasonably expects to be able to fully or partially recover the contractual cash flowof a financial asset, the Company directly writes down the book balance of the financial asset.
②Assessment of a significant increase in credit risk:
The Company determines the relative changes in default risk of the financial instrument occurred in the expectedduration and assess whether the credit risks of financial instrument has increased significantly since the initialrecognition by comparing the risk of default of the financial instrument on the balance sheet date with the risk ofdefault of financial instrument on the initial recognition date. When determining whether the credit risk hasincreased significantly since the initial recognition, the Company considers reasonable and evidence-basedinformation that can be obtained without unnecessary additional costs or effort, including forward-lookinginformation. The information considered by the Company includes:
A. The debtor fails to pay the principal and interest according to the contractual maturity date;B. Serious worsening of external or internal credit rating (if any) of the financial instruments that have occurred orare expected;C. Serious deterioration of the debtor’s operating results that have occurred or are expected;D. Changes in existing or anticipated technical, market, economic or legal circumstances that will have a materialadverse effect on the debtor's ability to repay the company.Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantlyon the basis of a single financial instrument or combination of financial instruments. When conducting anassessment based on a combination of financial instruments, the Company can classify financial instruments basedon common credit risk characteristics, such as overdue information and credit risk ratings.The Company believes that financial assets are subject to default in the following circumstances:
The debtor is unlikely to pay the full amount to the Company, and the assessment does not consider the Company totake recourse actions such as realizing collateral (if held).
③Financial assets with credit impairment
On the balance sheet date, the Company assesses whether the credit of financial assets measured at amortized costand the credit of debt investments measured at fair value and whose changes are included in other comprehensiveincome has been impaired. When one or more events that adversely affect the expected future cash flows of afinancial asset occur, the financial asset becomes a financial asset that has suffered credit impairment. Evidence thatcredit impairment has occurred in financial assets includes the following observable information:
A. The issuer or the debtor has significant financial difficulties;B. The debtor breaches the contract, such as default or overdue repayment of interest or principal;C. The Company gives concessions to the debtor that will not be made in any other circumstances for economic orcontractual considerations relating to the financial difficulties of the debtor;D. The debtor is likely to go bankrupt or carry out other financial restructurings;E. The financial difficulties of the issuer or the debtor have caused the active market of the financial asset todisappear.
④ Presentation of expected credit loss provisions
In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Companyre-measures the expected credit losses on each balance sheet date, and the resulting increase or reversal of the lossprovisions shall be included in current profit and loss as impairment losses or gains. For financial assets measured atamortized cost, the loss provisions are written off against the book value of the financial assets listed in the balancesheet; for debt investments measured at fair value and whose changes are included in other comprehensive income,the Company recognizes the loss provisions in other comprehensive income and does not deduct the book value ofthe financial asset.
⑤Write-off
If the Company no longer reasonably expects that the financial asset contract cash flow can be fully or partiallyrecovered, directly write down the book balance of the financial asset. Such write-downs constitute the terminationof recognition for related financial assets. This usually occurs when the Company determines that the debtor has noassets or sources of income to generate sufficient cash flow to repay the amount that will be written down. However,according to the Company's procedures for recovering the due amount, the financial assets that have been writtendown may still be affected by the execution activities.
If the financial assets that have been written down are recovered afterwards, they shall be included in the profit orloss of the period being recovered as the reversal of the impairment loss
(6) Transfer of financial assets
The transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the transferee)other than the issuer of the financial assets.
For financial assets that the Company has transferred almost all risks and rewards of ownership of financial assets tothe transferee, terminate the recognition of the financial assets; if almost all the risks and rewards of ownership offinancial assets have been retained, do not terminate the recognition of the financial assets.
If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets,dispose as following situations: If the control of the financial assets is abandoned, terminate the recognition of thefinancial assets and determine the resulting assets and liabilities. If the control of the financial assets is notabandoned, determine the relevant financial assets according to the extent to which they continue to be involved inthe transferred financial assets, and determine the related liabilities accordingly.
(7) Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financialassets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet. In addition,the financial assets and liabilities are listed in the balance sheet without being balanced out.
11. Note receivable
The notes receivable settled by the Company are all bank acceptance and letters of credit, based on the credit riskcharacteristics of notes receivable, the credit risk of notes receivable is comprehensively evaluated, the Companydoes not make credit impairment losses for notes receivable.
12. Account receivable
(1) Account Receivable withdrawal on single significant amount and with bad debt provision accrued for singleitem
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
Classify to many combination based on credit portfolio for those receivables with minor account singly and thosewith major amount but has no impairment been found after testing independently; base on the actual loss ratio ofthe receivables of previous years, with same or similar credit portfolio, and combining actual condition accrualbad debt reserves.
①Accrual ratio for bad debt provision of account receivable based on age analysis in account age portfolio:
Account age | Accrual ratio for account receivable | Accrual ratio for other receivables |
Within 6 months | Without accrual | Without accrual |
6 months to one year | 10% | 10% |
1-2 years | 20% | 20% |
2-3 years | 40% | 40% |
Over 3 years | 100% | 100% |
②As for the receivable for parent company or the related party under the control of same parent company, no baddebt provision accrual.
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single itemReasons for accrual: The present value of future cash flow has major difference with the receivable group’spresent value of future cash flow.Accrual method for bad debt provision: Carried out impairment test independently, accrual bad debt reservesaccording to the difference of present value of future cash flow lower its book valueThe recognition standards and accrual method for bad debt provision of account receivable found more in“10.Financial instrument”.
13.Account receivable financing
The Company measures the loss provision for the financing of receivables at the amount equivalent to theexpected credit loss during the entire duration, and the resulting increase or reversal of the loss provision isincluded in the current profit and loss as an impairment loss or profit.
14. Other account receivables
Method for determining expected credit losses of other receivables and accounting treatment methodsFor other receivables, whether or not it contains significant financing components, the company always measures itsloss provisions according to the amount of expected credit losses during the entire renewal period, and the resultingincrease or reversal amount of loss provisions is included in the current profit and loss as an impairment loss.The company classifies other receivables into several combinations based on similar credit risk characteristics, andcalculates the expected credit losses based on all reasonable and evidenced information (including forward-lookinginformation) on the basis of combination, the basis for determining the combination is as follows:
Item | Basis for determining portfolio | Method of measuring expected credit loss |
Other account | Account age | Refer to the historical credit loss experience, combine with the current situation and the forecast |
receivables | of future economic conditions, compile a comparison table of the age of other receivables and the expected credit loss rate of the entire renewal period, and calculate the expected credit losses. |
15. Inventory
(1) Classification of inventories
The Company’s inventories are categorized into stock materials, product in process and stock goods etc.
(2) Pricing for delivered inventories
The cost of inventory at the time of acquisition and delivery is calculated according to the standard cost method,and the difference in cost that it should bear is carried forward at the end of the period, and the standard cost isadjusted to the actual cost.
(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairmentprovisionInventories 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 wrappage
①Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables.
②Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
16. Assets held for sale
The 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 adequatelystringent 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 shall
not 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.
17. Long-term equity investment
Long-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 by fair value and with variation reckoned into current gains/losses. As for other accountingpolicies found more in “10. Financial instrument” in Note V.
(1) Determination of initial investment cost
Investment 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 ultimatecontrolling 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 business combination resulted in an enterprise under common control by acquiring equity of the absorbingparty under common control through a stage-up approach with several transactions, these transactions will bejudged whether they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these
transactions will be accounted for a transaction in obtaining control. If they are not belong to “transactions in abasket”, the initial investment cost of the long-term equity investment shall be the absorbing party’s share of thecarrying amount of the owner’s equity under the consolidated financial statements of the ultimate controllingparty on the date of combination. The difference between the initial cost of the long-term equity investment andthe aggregate of the carrying amount of the long-term equity investment before merging and the carrying amountthe additional consideration paid for further share acquisition on the date of combination shall offset against thecapital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Othercomprehensive income recognized as a result of the previously held equity investment accounted for using equitymethod on the date of combination 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, plus the combination cost measured by costs which havedirectly 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 the partybeing combined as at the combination date are all measured at fair values, without consideration to amount ofminority 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.
For business combination resulted in an enterprise not under common control by acquiring equity of the acquireunder common control through a stage-up approach with several transactions, these transactions will be judgedwhether they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, thesetransactions will be accounted for a transaction in obtaining control. If they are not belong to “transactions in abasket”, the initial investment cost of the long-term equity investment accounted for using cost method shall bethe aggregate of the carrying amount of equity investment previously held by the acquire and the additionalinvestment cost. For previously held equity accounted for using equity method, relevant other comprehensiveincome will not be accounted for. For previously held equity investment classified as available-for-sale financialasset, the difference between its fair value and carrying amount, as well as the accumulated movement in fairvalue previously included in the other comprehensive income shall be transferred to profit or loss for the currentperiod.
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 is
determined 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 investment
①Presented 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 in-conformity 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 the
investor 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 ofconsideration 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 interest
Upon 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 investments
In 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 relevant
asset 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, othercomprehensive 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 other
owners’ 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 provision
Found more in Note V-23.”impairment of long-term assets”
(4) Criteria of Joint control and significant influence
Joint 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 otherparties.While recognizing whether have significant influence by invested party, the potential factors of votingpower as current convertible bonds and current executable warrant of the invested party held by investors andother parties shall be thank over.
18. 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 those
under 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-“23.Impairment oflong-term assets”
19. Fixed assets
(1) Recognition 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
Category | Depreciation 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 |
For the fixed assets with impairment provision, the depreciation amount shall be calculated after deducting theaccumulated amount of impairment provision for fixed assets
(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 the leasecommencement date), the ownership of lease fixed assets can be transferred to the Company after the expiry ofthe 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 is equivalentto 90% or more of the fair value of the lease fixed assets on the lease commencement date; the present value of the
leaser’s of minimum lease payment on the lease commencement date is equivalent to 90% or more of the fairvalue 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 NoteV-“23.Impairment of long-term assets”.
20. Construction in progress
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-“23.Impairment of long-term assets”
21. Borrowing costs
(1) Recognition of capitalization of borrowing costs
Borrowing 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:
①Capital expenditure has been occurred;
②Borrowing 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 costs
Borrowing 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 current
expenditure 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 cost
In 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.
22. Intangible assets
(1) Measurement, use of life and impairment testing
① Measurement of intangible assets
The 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 the
contract 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-“23. Impairment of long-term assets”.
(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):
①It is technically feasible that the intangible asset can be used or sold upon completion;
②there 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;
④there 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.
23. Impairment of long-term assets
The 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 assetsbeyond 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 be
determined 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.
24. Long-term deferred expenses
Long-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.
25. Contract liability
The Company lists contract assets or contract liabilities in the balance sheet based on the relationship betweenperformance obligations and customer payments. The Company offsets the contract assets and contract liabilitiesunder the same contract and lists as a net amount.Contract liabilities refer to the obligations to transfer goods or services to customers for the consideration receivedor receivable from customers, such as the payment received by an enterprise before the transfer of promised goodsor services.
26. Employee compensation
(1) Accounting treatment for short-term compensation
During 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 aremeasured 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 benefit
The 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 benefits
When 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 current
profit or loss by the Group if the recognition principles for provisions are satisfied.
(4)Accounting for other long-term employee benefits
Except 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.
27. 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 thecontingencies
28. Revenue
Accounting policies for recognition and measurement of revenue
(applicable since 1 Jan. 2020)
1. Revenue recognition principle
On the starting date of the contract, the company evaluates the contract, identifies each individual performanceobligation contained in the contract, and determines whether each individual performance obligation is performedwithin a certain period of time or at a certain point in time.When one of the following conditions is met, it belongs to the performance obligation within a certain period oftime, otherwise, it belongs to the performance obligation at a certain point in time: (1) The customer obtains andconsumes the economic benefits brought by the company's performance while the company performs the contract;
( 2) The customer can control the goods or services under construction during the company’s performance; (3)The goods or services produced during the company’s performance have irreplaceable uses, and the company hasthe right to collect payment for the performance part that has been completed so far during the entire contractperiod.For performance obligations performed within a certain period of time, the company recognizes revenue inaccordance with the performance progress during that period. When the performance progress cannot bereasonably determined, if the cost incurred is expected to be compensated, the revenue shall be recognizedaccording to the amount of the cost incurred until the performance progress can be reasonably determined.For performance obligations performed at a certain point in time, revenue is recognized at the point when thecustomer obtains control of the relevant goods or services. When judging whether the customer has obtainedcontrol of the goods, the company considers the following signs: (1) The company has the current right to receivepayment for the goods, that is, the customer has the current payment obligation for the goods; (2) The companyhas transferred the legal ownership of the goods to the customer, that is, the customer has the legal ownership ofthe goods; (3) The company has transferred the goods to the customer in kind, that is, the customer has physicallytaken possession of the goods; (4) The company has transferred the main risks and rewards of the ownership ofthe goods to the customer, that is, the customer has obtained the main risks and rewards of the ownership of thegoods; (5) The customer has accepted the goods; (6) Other signs that the customer has obtained control of thegoods.
2. Revenue measurement principle
(1) The company measures revenue based on the transaction price allocated to each individual performanceobligation. The transaction price is the amount of consideration that the company expects to be entitled to receivedue to the transfer of goods or services to customers, and does not include payments collected on behalf of thirdparties and payments expected to be returned to customers.
(2) If there is variable consideration in the contract, the company shall determine the best estimate of the variableconsideration according to the expected value or the most likely amount, but the transaction price including thevariable consideration shall not exceed the amount of cumulatively recognized revenue that is unlikely to besignificantly turned back when the relevant uncertainty is eliminated.
(3) If there is a significant financing component in the contract, the company shall determine the transaction pricebased on the amount payable that the customer is assumed to pay in cash when obtaining the control of the goodsor services. The difference between the transaction price and the contract consideration shall be amortized by theeffective interest method during the contract period. On the starting date of the contract, if the company expectsthat the customer pays the price within one year after obtaining control of the goods or services, the significantfinancing components in the contract shall not be considered.
(4) If the contract contains two or more performance obligations, the company will allocate the transaction priceto each individual performance obligation based on the relative proportion of the stand-alone selling price of thegoods promised by each individual performance obligation on the starting date of the contract.
3. The specific method of revenue recognition
(1) Goods sales
The company's sales of internal combustion engine accessories, purifiers, mufflers and other products belong tothe performance obligations at a certain point in time. The following conditions must be met for the revenuerecognition of domestic products: the company has delivered the product to the customer in accordance with thecontract and the customer has accepted the product, the payment has been collected or the receipt of payment hasbeen obtained, and the relevant economic benefits are likely to flow in, the main risks and rewards of theownership of the goods have been transferred, the legal ownership of the goods has been transferred. Thefollowing conditions must be met to confirm the revenue of export products: the company has declared theproduct in accordance with the contract, obtained the bill of lading, collected the payment or obtained the receiptof payment, and related economic benefits are likely to flow in, and the main risks and rewards of the ownershipof the goods have been transferred, and the legal ownership of the goods has been transferred.
(2) Service delivery
Revenue from the delivery of service contracts between the company and its customers, because the customerobtains and consumes the economic benefits brought about by the company’s performance at the same time whenthe company performs the contract, and the company has the right to collect the revenue payment from thecompleted performance during the entire contract period, the company regards it as a performance obligationperformed within a certain period of time, and recognizes revenue according to the performance progress, unlessthe performance progress cannot be reasonably determined. The company determines theperformance progress ofthe service delivery according to the input method or output method. When the performance progress cannot bereasonably determined, if the company's incurred costs are expected to be compensated, the revenue shall berecognized according to the amount of the incurred costs until the performance progress can be reasonablydetermined.
(3) Rental income
Rental income of operating lease is recognized in accordance with the straight-line method during each period ofthe lease term, and contingent rentals are included in the current profit and loss when they actually occur.
29. 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.
30. 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 thecarrying 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 directly
31. Lease
(1)Accounting for operating lease
The 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 lease
Assets 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 financialexpenses 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 un-guaranteed 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.
32. Other important accounting policy and accounting estimation
In 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 impactsarerecognized 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
The Company has used the expected credit loss model to assess the impairment of financial instruments since2019. The application of the expected credit loss model requires significant judgement and estimates, and mustconsider all reasonable and evidence-based information, including forward-looking information.In making suchjudgments and estimates, the Company infers the expected changes in debtors’ credit risks based on historicalrepayment data combined with economic policies, macroeconomic indicators, industry risks and other factors.
(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) Preparation for the impairment of non-financial & non-current assets
The Company checks whether the non-current assets except for the financial assets may decrease in value at the
balance 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 the 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 pricesimilar to the assets in the fair trade or the observable market price, and subtract the incremental costsdetermination directly attributable to the disposal of the asset.
When estimating the present value of the future cash flow, the Company needs to make significant judgments tothe output, price, and related operating expenses of the asset (or asset group) and the discount rate used forcalculating the present value. When estimating the recoverable amount, the Company shall adopt all the relevantinformation can be obtained, including the prediction related to the output, price, and related operating expensesbased on the reasonable 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.When estimating the present value of the future cash flow, the Company needs to estimate the future cash flowsgenerated by the asset group or the combination of asset group, and select the proper discount rate to determine thepresent value of the future cash flows.
(4) Depreciation and amortization
The Company depreciates and amortizes the investment property, fixed assets and intangible assets according tothe straight-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.
(5) Fair value of financial instrument
Financial instruments that do not have active markets to provide quotes need to use valuation techniques todetermine fair value.Valuation techniques include the latest transaction information, discounted cash flow methods,and option pricing models.The Company has established a set of work processes to ensure that qualified personnelare responsible for the calculation, verification and review of fair value.The valuation model used by the
Company uses the market information as much as possible and uses the Company-specific information as little aspossible.It should be noted that part of the information used in the valuation model requires management’sestimation (such as discount rate, target exchange rate volatility, etc.).The Company regularly reviews the aboveestimates and assumptions and makes adjustments if necessary.
(6) Income tax
In the Company’s normal business activities, the final tax treatment and calculation of some transactions havesome uncertainties. Whether some projects can be disbursed from the cost and expenses before taxes requiresneeds to get approval from the tax authorities. If the final affirmation of these tax matters differs from the initiallyestimated amount, the difference shall have an impact on its current and deferred income taxes during the finalidentification period.
33. Changes of important accounting policy and estimation
(1) Changes of major accounting policies
√ Applicable □ Not applicable
In accordance with the relevant requirements of the Accounting Standards for Business Enterprises No.14-Revenue (CK [2017] No. 22) issued by the Ministry of Finance on July 5, 2017, the company madecorresponding changes and adjustments to the new revenue standards. The details are as follows:
1. Incorporate the current revenue and construction contract standards into a unified revenue recognition model;
2. Use the transfer of control rights instead of the transfer of risk rewards as the criterion for determining the pointin time of revenue recognition;
3. Identify each individual performance obligation contained in the contract and recognize revenue separatelywhen performing it;
4. Provide clearer guidance for the accounting treatment of contracts that include multiple transactionarrangements;
5. Regulations are explicitly stipulated for the revenue recognition and measurement of certain specifictransactions (or events).
(2) Changes of important accounting estimate
□ Applicable √ Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new financialinstrument standards, new revenue standards and new leasing standards since 2020ApplicableWhether need to adjust the items in balance sheet at the beginning of the year
√Yes □No
Consolidate balance sheet
In RMB
Item | 2019-12-31 | 2020-01-01 | Adjustments |
Current assets: | |||
Monetary funds | 1,596,893,711.87 | 1,596,893,711.87 | |
Settlement provisions | |||
Capital lent | |||
Transaction financial asset | 3,940,885,674.32 | 3,940,885,674.32 | |
Derivative financial assets | |||
Note receivable | 1,812,141,371.94 | 1,812,141,371.94 | |
Account receivable | 2,310,666,475.89 | 2,406,712,915.10 | 96,046,439.21 |
Receivables financing | 23,873,317.86 | 23,873,317.86 | |
Account paid in advance | 139,241,917.78 | 139,241,917.78 | |
Insurance receivable | |||
Reinsurance receivables | |||
Contract reserve of reinsurance receivable | |||
Other account receivables | 43,730,023.31 | 43,730,023.31 | |
Including: Interest receivable | 655,052.98 | 655,052.98 | |
Dividend receivable | 1,070,000.00 | 1,070,000.00 | |
Buying back the sale of financial assets | |||
Inventory | 2,418,744,835.82 | 2,418,744,835.82 | |
Contract assets | |||
Assets held for sale | |||
Non-current asset due within one year | |||
Other current assets | 1,012,055,605.74 | 1,012,055,605.74 | |
Total current assets | 13,298,232,934.53 | 13,394,279,373.74 | 96,046,439.21 |
Non-current assets: | |||
Loans and payments on behalf | |||
Creditors’ investment | |||
Other creditors’ investment | |||
Long-term account receivables | |||
Long-term equity investment | 5,322,405,953.35 | 5,322,405,953.35 | |
Other equity instrument investment | 285,048,000.00 | 285,048,000.00 |
Other non-current financial assets | 1,043,589,987.43 | 1,043,589,987.43 | |
Investment real estate | 22,410,511.87 | 22,410,511.87 | |
Fixed assets | 2,845,176,078.20 | 2,845,176,078.20 | |
Construction in progress | 247,857,777.25 | 247,857,777.25 | |
Productive biological assets | |||
Oil and gas assets | |||
Right-of-use asset | |||
Intangible assets | 430,594,372.12 | 430,594,372.12 | |
Research and development costs | |||
Goodwill | 1,784,086.79 | 1,784,086.79 | |
Long-term deferred expenses | 18,536,000.25 | 18,536,000.25 | |
Deferred income tax assets | 212,476,501.54 | 212,476,501.54 | |
Other non-current assets | 230,235,982.45 | 230,235,982.45 | |
Total non-current assets | 10,660,115,251.25 | 10,660,115,251.25 | |
Total assets | 23,958,348,185.78 | 24,054,394,624.99 | 96,046,439.21 |
Current liabilities: | |||
Short-term borrowings | 312,153,969.81 | 312,153,969.81 | |
Loan from central bank | |||
Capital borrowed | |||
Transaction financial liability | |||
Derivative financial liability | |||
Note payable | 1,745,218,439.52 | 1,745,218,439.52 | |
Account payable | 3,312,254,229.84 | 3,312,254,229.84 | |
Accounts received in advance | 113,737,432.61 | 1,493,602.00 | -112,243,830.61 |
Contractual liability | 112,243,830.61 | 112,243,830.61 | |
Selling financial asset of repurchase | |||
Absorbing deposit and interbank deposit | |||
Security trading of agency | |||
Security sales of agency | |||
Employee compensation payable | 314,343,737.66 | 314,343,737.66 | |
Taxes payable | 129,538,411.86 | 129,538,411.86 | |
Other account payable | 65,266,262.39 | 65,266,262.39 | |
Including: Interest payable |
Dividend payable | |||
Commission charge and commission payable | |||
Reinsurance payable | |||
Liability held for sale | |||
Non-current liabilities due within one year | |||
Other current liabilities | 96,046,439.21 | 96,046,439.21 | |
Total current liabilities | 5,992,512,483.69 | 6,088,558,922.90 | 96,046,439.21 |
Non-current liabilities: | |||
Insurance contract reserve | |||
Long-term borrowings | |||
Bonds payable | |||
Including: preferred stock | |||
Perpetual capital securities | |||
Lease liability | |||
Long-term account payable | 35,108,263.11 | 35,108,263.11 | |
Long-term employee compensation payable | 58,392,053.61 | 58,392,053.61 | |
Accrual liabilities | |||
Deferred income | 365,116,022.98 | 365,116,022.98 | |
Deferred income tax liabilities | 22,566,051.72 | 22,566,051.72 | |
Other non-current liabilities | |||
Total non-current liabilities | 481,182,391.42 | 481,182,391.42 | |
Total liabilities | 6,473,694,875.11 | 6,569,741,314.32 | 96,046,439.21 |
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 | 3,391,527,806.33 | 3,391,527,806.33 | |
Less: Inventory shares | |||
Other comprehensive income | 134,871.67 | 134,871.67 | |
Reasonable reserve | 3,247,757.06 | 3,247,757.06 | |
Surplus reserve | 510,100,496.00 | 510,100,496.00 | |
Provision of general risk |
Retained profit | 12,076,443,635.56 | 12,076,443,635.56 | |
Total owners’ equity attributable to parent company | 16,990,405,136.62 | 16,990,405,136.62 | |
Minority interests | 494,248,174.05 | 494,248,174.05 | |
Total owners’ equity | 17,484,653,310.67 | 17,484,653,310.67 | |
Total liabilities and owner’s equity | 23,958,348,185.78 | 24,054,394,624.99 | 96,046,439.21 |
Balance sheet of parent company
In RMB
Item | 2019-12-31 | 2020-01-01 | Adjustments |
Current assets: | |||
Monetary funds | 965,770,877.82 | 965,770,877.82 | |
Transaction financial asset | 3,758,789,072.68 | 3,758,789,072.68 | |
Derivative financial assets | |||
Note receivable | 202,403,993.13 | 202,403,993.13 | |
Account receivable | 768,500,929.93 | 836,014,968.93 | 67,514,039.00 |
Receivables financing | |||
Account paid in advance | 89,116,730.45 | 89,116,730.45 | |
Other account receivables | 250,014,956.74 | 250,014,956.74 | |
Including: Interest receivable | 804,929.68 | 804,929.68 | |
Dividend receivable | 1,070,000.00 | 1,070,000.00 | |
Inventory | 565,144,234.49 | 565,144,234.49 | |
Contract assets | |||
Assets held for sale | |||
Non-current asset due within one year | |||
Other current assets | 938,616,881.51 | 938,616,881.51 | |
Total current assets | 7,538,357,676.75 | 7,605,871,715.75 | 67,514,039.00 |
Non-current assets: | |||
Creditors’ investment | |||
Other creditors’ investment | |||
Long-term account receivables | |||
Long-term equity investment | 6,331,363,630.04 | 6,331,363,630.04 | |
Other equity instrument investment | 209,108,000.00 | 209,108,000.00 | |
Other non-current financial assets | 1,043,589,987.43 | 1,043,589,987.43 |
Investment real estate | |||
Fixed assets | 1,646,333,216.50 | 1,646,333,216.50 | |
Construction in progress | 136,573,912.28 | 136,573,912.28 | |
Productive biological assets | |||
Oil and gas assets | |||
Right-of-use asset | |||
Intangible assets | 203,663,423.60 | 203,663,423.60 | |
Research and development costs | |||
Goodwill | |||
Long-term deferred expenses | |||
Deferred income tax assets | 105,137,877.84 | 105,137,877.84 | |
Other non-current assets | 172,646,721.05 | 172,646,721.05 | |
Total non-current assets | 9,848,416,768.74 | 9,848,416,768.74 | |
Total assets | 17,386,774,445.49 | 17,454,288,484.49 | 67,514,039.00 |
Current liabilities: | |||
Short-term borrowings | 116,126,459.33 | 116,126,459.33 | |
Transaction financial liability | |||
Derivative financial liability | |||
Note payable | 284,054,137.00 | 284,054,137.00 | |
Account payable | 930,273,146.35 | 930,273,146.35 | |
Accounts received in advance | 12,010,730.30 | -12,010,730.30 | |
Contract liability | 12,010,730.30 | 12,010,730.30 | |
Employee compensation payable | 213,626,754.45 | 213,626,754.45 | |
Taxes payable | 56,540,307.59 | 56,540,307.59 | |
Other account payable | 11,976,576.21 | 11,976,576.21 | |
Including: Interest payable | |||
Dividend payable | |||
Liability held for sale | |||
Non-current liabilities due within one year | |||
Other current liabilities | 67,514,039.00 | 67,514,039.00 | |
Total current liabilities | 1,624,608,111.23 | 1,692,122,150.23 | 67,514,039.00 |
Non-current liabilities: | |||
Long-term borrowings |
Bonds payable | |||
Including: preferred stock | |||
Perpetual capital securities | |||
Lease liability | |||
Long-term account payable | |||
Long-term employee compensation payable | 50,058,386.76 | 50,058,386.76 | |
Accrual liabilities | |||
Deferred income | 322,971,778.82 | 322,971,778.82 | |
Deferred income tax liabilities | |||
Other non-current liabilities | |||
Total non-current liabilities | 373,030,165.58 | 373,030,165.58 | |
Total liabilities | 1,997,638,276.81 | 2,065,152,315.81 | 67,514,039.00 |
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 | |||
Reasonable reserve | |||
Surplus reserve | 510,100,496.00 | 510,100,496.00 | |
Retained profit | 10,381,863,816.29 | 10,381,863,816.29 | |
Total owners’ equity | 15,389,136,168.68 | 15,389,136,168.68 | |
Total liabilities and owner’s equity | 17,386,774,445.49 | 17,454,288,484.49 | 67,514,039.00 |
(4) Retrospective adjustment of early comparison data description when initially implemented the newfinancial instrument standards and new leasing standards since 2020
□ Applicable √ Not applicable
34. Other
Nil
VI. Taxation
1. Major taxes and tax rates
Tax | Basis | Tax rate |
VAT | Taxable income | 16%, 13%, 6%, Collection rate 5%, 25%(IRD), 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%, 22%, 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 Schmidt, Weifu Leader (Wuhan), Weifu Leader(Nanchang), Weifu Electronic Drive | 25% |
The Company, Weifu Jinning, Weifu Leader, Weifu Tianli, Weifu Autocam, Weifu Leader(Chongqing) | 15% |
SPV、IRD | 22% |
2. Tax preference
On 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, Zhejiang
Provincial 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 Industriesinthe 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%.
3. Other
Nil
VII. Notes to major items in consolidated financial statements
1. Monetary funds
In RMB/CNY
Item | Ending balance | Opening balance |
Cash on hand | 76,486.27 | 93,165.33 |
Cash in bank | 2,479,078,002.60 | 1,531,405,488.52 |
Other monetary funds | 84,993,120.71 | 65,395,058.02 |
Total | 2,564,147,609.58 | 1,596,893,711.87 |
Including: Total amount saving aboard | 15,183,975.35 | 31,442,836.86 |
Other notesThe ending balance of other monetary funds includes a bank acceptance bill deposit of RMB 32,786,262.96, a stock repurchaseamount of RMB 50,000,000.00, and a frozen dividend of RMB 2,206,857.75.The frozen dividend of 2,206,857.75Yuan representsthe part of dividends distributed by SDEC(stock code:600841) and Miracle Automation (stock code:002009) for 2017to 2019 held bythe Company as Transaction financial assets. According to the notices numbered Yue 03MC[2016]2490 and Yue 03MC[2016]2492served by Guangdong Shenzhen Intermediate People’s Court, these dividends were frozen.
2. Transaction financial assets
In RMB/CNY
Item | Ending balance | Opening balance |
Financial assets measured by fair value and with variation reckoned into current gains/losses | 3,186,262,183.13 | 3,940,885,674.32 |
Including: | ||
Including:SDEC stock | 90,523,572.00 | 91,822,332.00 |
Miracle Automation stock | 36,125,700.00 | 36,031,500.00 |
financial products | 3,059,612,911.13 | 3,813,031,842.32 |
Including: | ||
Total | 3,186,262,183.13 | 3,940,885,674.32 |
3. Note receivable
(1) Classification of notes receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Bank acceptance bill | 832,078,337.35 | 1,755,135,175.42 |
Trade acceptance bill | 153,852,568.26 | 57,006,196.52 |
Total | 985,930,905.61 | 1,812,141,371.94 |
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 | |||
Note receivable with bad debt provision accrual on portfolio | 985,930,905.61 | 100.00% | 985,930,905.61 | 1,812,141,371.94 | 100.00% | 1,812,141,371.94 | ||||
Including: | ||||||||||
Portfolio 1: bank acceptance bill | 832,078,337.35 | 84.40% | 832,078,337.35 | 1,755,135,175.42 | 96.85% | 1,755,135,175.42 | ||||
Portfolio 2: trade acceptance bill | 153,852,568.26 | 15.60% | 153,852,568.26 | 57,006,196.52 | 3.15% | 57,006,196.52 | ||||
Total | 985,930,905.61 | 100.00% | 985,930,905.61 | 1,812,141,371.94 | 100.00% | 1,812,141,371.94 |
Bad debt provision accrual on a single basis: nilBad debt provision accrual on portfolio: nilIf the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √ Not applicable
(2) Bad debt provision accrual collected or switch back
□ Applicable √ Not applicable
(3) 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 | 632,125,894.23 |
Trade acceptance bill | 13,421,185.00 |
Total | 645,547,079.23 |
(4) 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 | 371,597,001.62 | |
Trade acceptance bill | 26,771,185.00 | |
Total | 398,368,186.62 |
(5) 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 |
Trade acceptance bill | 5,300,000.00 |
Total | 5,300,000.00 |
Other explanation
The trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of thedrawer to perform the agreementat 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”); In 2018, the amount transferred to account receivable was 7 million yuan, and 1.7million yuan has been recovered in 2019.
(6) Note receivable actually written-off in the period
Nil
4. 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 bad debt provision accrual on a single basis | 61,818,802.14 | 1.64% | 61,818,802.14 | 100.00% | 64,818,802.14 | 2.60% | 64,818,802.14 | 100.00% | ||
Including: |
Account receivable with bad debt provision accrual on portfolio | 3,703,821,632.46 | 98.36% | 29,669,997.13 | 0.80% | 3,674,151,635.33 | 2,429,517,785.18 | 97.40% | 22,804,870.08 | 0.94% | 2,406,712,915.10 |
Including: | ||||||||||
Total | 3,765,640,434.60 | 100.00% | 91,488,799.27 | 2.43% | 3,674,151,635.33 | 2,494,336,587.32 | 100.00% | 87,623,672.22 | 3.51% | 2,406,712,915.10 |
Bad debt provision accrual on single basis: RMB 61,818,802.14
In RMB/CNY
Name | Ending balance | |||
Book balance | Bad debt reserve | Accrual ratio | Accrual causes | |
Hubei Meiyang Auto Industry Co., Ltd. | 20,139,669.45 | 20,139,669.45 | 100.00% | Have difficulty in collection |
Hunan Leopaard Auto Co., Ltd. | 8,989,202.97 | 8,989,202.97 | 100.00% | Have difficulty in collection |
Linyi Zotye Auto Parts Manufacturing Co., Ltd. | 6,193,466.77 | 6,193,466.77 | 100.00% | Have difficulty in collection |
Changchun FAW Sihuan Engine Manufacturing Co., Ltd. | 5,852,415.65 | 5,852,415.65 | 100.00% | Have difficulty in collection |
BD bills | 5,300,000.00 | 5,300,000.00 | 100.00% | Have difficulty in collection |
Tongling Ruineng Purchasing Co., Ltd. | 4,199,674.50 | 4,199,674.50 | 100.00% | Have difficulty in collection |
Zhejiang Zotye Auto Manufacturing Co., Ltd. | 3,217,763.27 | 3,217,763.27 | 100.00% | Have difficulty in collection |
Jiangsu Kawei Auto Industrial Group Co., Ltd. | 1,932,476.26 | 1,932,476.26 | 100.00% | Have difficulty in collection |
Wuxi Kipor Machinery Co., Ltd | 1,220,384.74 | 1,220,384.74 | 100.00% | Have difficulty in collection |
Fujian Zhao’an Country Minyue Bianjie Agricultural Machinery Auto Parts Co., Ltd. | 1,111,007.12 | 1,111,007.12 | 100.00% | Have difficulty in collection |
Other custom | 3,662,741.41 | 3,662,741.41 | 100.00% | Have difficulty in collection |
Total | 61,818,802.14 | 61,818,802.14 | -- | -- |
Bad debt provision accrual on portfolio: RMB 29,669,997.13
In RMB/CNY
Name | Ending balance | ||
Book balance | Bad debt reserve | Accrual ratio | |
Within 6 months | 3,538,196,231.24 | 0.00 | |
6 months to one year | 116,206,384.18 | 11,620,638.42 | 10.00% |
1-2 years | 33,160,913.66 | 6,632,182.73 | 20.00% |
2-3 years | 8,068,212.31 | 3,227,284.91 | 40.00% |
Over 3 years | 8,189,891.07 | 8,189,891.07 | 100.00% |
Total | 3,703,821,632.46 | 29,669,997.13 | -- |
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √ Not applicable
By account age
In RMB/CNY
Account age | Book balance |
Within one year (One year included) | 3,659,886,447.14 |
Including: within 6 months | 3,542,172,732.40 |
6 months to one year | 117,713,714.74 |
1-2 years | 73,223,880.48 |
2-3 years | 21,499,873.00 |
Over 3 years | 11,030,233.98 |
3-4 years | 11,030,233.98 |
Total | 3,765,640,434.60 |
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual in the period:
In RMB/CNY
Category | Opening balance | Amount changed in the period | Ending balance | |||
Accrual | Collected or reversal | Written-off | Other | |||
Bad debt provision | 87,623,672.22 | 12,538,618.35 | 8,673,491.30 | 91,488,799.27 | ||
Total | 87,623,672.22 | 12,538,618.35 | 8,673,491.30 | 91,488,799.27 |
Important bad debt provision collected or switch back:
In RMB/CNY
Enterprise | Amount collected or switch back | Collection way |
Hunan Leopard Automobile Co., Ltd. | 3,000,000.00 | Cash |
Total | 3,000,000.00 | -- |
(3) Account receivable actual charge off in the Period
Nil
(4) Top 5 receivables at ending balance by arrears party
In RMB/CNY
Name | Ending balance of account receivable | Ratio in total ending balance of account receivables | Ending balance of bad debt reserve |
Bosch Automobile Diesel System Co., Ltd. | 712,061,865.41 | 18.91% | 868.90 |
Custom 1 | 308,560,656.96 | 8.19% | 758,123.22 |
Custom 2 | 214,144,964.18 | 5.69% | 1,097.47 |
Custom 3 | 174,254,129.96 | 4.63% | 5,152,919.37 |
Custom 4 | 166,220,032.40 | 4.41% | 369,367.22 |
Total | 1,575,241,648.91 | 41.83% |
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
5. Receivables financing
In RMB/CNY
Item | Ending balance | Opening balance |
Note receivable | 756,743,779.54 | 23,873,317.86 |
Including: bank acceptance bill | 756,743,779.54 | 23,873,317.86 |
Total | 756,743,779.54 | 23,873,317.86 |
Increase and decrease in current period and changes in fair value of receivables financing
□ Applicable √ Not applicable
If the bad debt provision for account receivable is calculated and withdrawn according to the general model of expected credit loss,please refer to the disclosure method of other account receivables in aspect of impairment provision:
□ Applicable √ Not applicable
6. 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 | 204,078,981.25 | 91.01% | 118,030,952.47 | 84.77% |
1-2 years | 17,421,411.19 | 7.77% | 19,644,713.49 | 14.11% |
2-3 years | 1,847,381.49 | 0.82% | 683,098.16 | 0.49% |
Over 3 years | 896,137.77 | 0.40% | 883,153.66 | 0.63% |
Total | 224,243,911.70 | -- | 139,241,917.78 | -- |
Explanation on reasons of failure to settle on important advance payment with age over one year:
Nil
(2) Top 5 account paid in advance at ending balance by prepayment objectTotal year-end balance of top five account paid in advance by prepayment object amounted to 121,104,997.78 Yuan,takes 54.01 percent of the total advance payment at year-end.
7. Other account receivables
In RMB/CNY
Item | Ending balance | Opening balance |
Interest receivable | 2,091,107.78 | 655,052.98 |
Dividend receivable | 1,092,040,579.49 | 1,070,000.00 |
Other account receivables | 34,981,395.85 | 42,004,970.33 |
Total | 1,129,113,083.12 | 43,730,023.31 |
(1) Interest receivable
1) Category of interest receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Interest of fund occupation | 2,091,107.78 | 655,052.98 |
Total | 2,091,107.78 | 655,052.98 |
2) Significant overdue interest
Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
In RMB/CNY
Item (or invested enterprise) | Ending balance | Opening balance |
Weifu Precision Machinery Manufacturing Co., Ltd. | 1,070,000.00 | |
Bosch Automobile Diesel System Co., Ltd. | 900,840,579.49 | |
Zhonglian Automobile Electronic Co., Ltd. | 191,200,000.00 | |
Total | 1,092,040,579.49 | 1,070,000.00 |
2) Important dividend receivable with account age over one year
Nil
(3) Other account receivables
1) Other account receivables classification by nature
In RMB/CNY
Nature | Ending book balance | Opening book balance |
Intercourse funds from units | 37,906,531.13 | 35,441,483.88 |
Equity disposal fund of Protean Holdings Corp. | 10,654,092.89 | |
Cash deposit | 2,797,435.00 | 3,625,917.96 |
Staff loans and petty cash | 2,947,266.36 | 1,346,241.81 |
Other | 450,558.75 | 300,206.93 |
Total | 44,101,791.24 | 51,367,943.47 |
2) Accrual of bad debt provision
In RMB/CNY
Bad debt reserve | Phase I | Phase II | Phase III | Total |
Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) |
Balance on Jan. 1, 2020 | 7,848,301.94 | 1,514,671.20 | 9,362,973.14 | |
Balance of Jan. 1, 2020 in the period | —— | —— | —— | —— |
Current accrual | 1,352,021.01 | 1,352,021.01 | ||
Current reversal | 1,525,891.90 | 68,706.86 | 1,594,598.76 | |
Balance on Jun. 30, 2020 | 7,674,431.05 | 1,445,964.34 | 9,120,395.39 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √ Not applicable
By account age
In RMB/CNY
Account age | Book balance |
Within one year (One year included) | 15,141,754.76 |
Within 6 months | 15,109,948.53 |
6 months to one year | 31,806.23 |
1-2 years | 24,798,127.14 |
2-3 years | 7,200.00 |
Over 3 years | 4,154,709.34 |
3-4 years | 4,154,709.34 |
Total | 44,101,791.24 |
3) Bad debt provision accrual, collected or switch back
Bad debt provision accrual in the period:
In RMB/CNY
Category | Opening balance | Amount changed in the period | Ending balance | |||
Accrual | Collected or reversal | Written-off | Other | |||
Bad debt provision | 9,362,973.14 | 1,352,021.01 | 1,594,598.76 | 9,120,395.39 | ||
Total | 9,362,973.14 | 1,352,021.01 | 1,594,598.76 | 9,120,395.39 |
Including the important bad debt provision switch back or collected in the period:
In RMB/CNY
Name | Reversal or recovery | Recovery method |
Robert Bosch Company | 1,520,000.00 | Cash |
Total | 1,520,000.00 | -- |
4) Other receivables actually written-off during the reporting period
Nil
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 |
Troowin Power System Technology Co., Ltd. | Intercourse funds of unit | 24,000,000.00 | 1-2 years | 54.42% | 4,800,000.00 |
Ningbo Jiangbei High-Tech Industry Park Development Construction Co., Ltd. | Performance bond | 1,767,000.00 | Over 3 years | 4.01% | 1,767,000.00 |
American HESS Company | Intercourse funds of unit | 1,445,964.34 | Over 3 years | 3.28% | 1,445,964.34 |
Nanjing Property Service Guidance Center | Intercourse funds of unit | 1,301,567.91 | Within 6 months | 2.95% | 0.00 |
China Combustion City Gas Development Co., Ltd. | deposit | 575,640.00 | Over 3 years | 1.31% | 575,640.00 |
Total | -- | 29,090,172.25 | -- | 65.96% | 8,588,604.34 |
6) Other account receivables related to government grants
Nil
7) Other receivable for termination of confirmation due to the transfer of financial assets
Nil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Nil
8. Inventory
(1) Category of inventory
In RMB/CNY
Item | Ending balance | Opening balance | ||||
Book balance | Inventory depreciation reserve or Provision for impairment of contract performance costs | Book value | Book balance | Inventory depreciation reserve or Provision for impairment of contract performance costs | Book value | |
Raw materials | 393,084,028.86 | 76,901,935.24 | 316,182,093.62 | 495,927,678.66 | 81,069,128.03 | 414,858,550.63 |
Goods in process | 314,390,207.52 | 9,632,421.12 | 304,757,786.40 | 243,525,007.82 | 13,963,866.92 | 229,561,140.90 |
Finished goods | 1,220,723,800.47 | 170,924,933.72 | 1,049,798,866.75 | 1,937,368,868.87 | 163,043,724.58 | 1,774,325,144.29 |
Total | 1,928,198,036.85 | 257,459,290.08 | 1,670,738,746.77 | 2,676,821,555.35 | 258,076,719.53 | 2,418,744,835.82 |
(2) Inventory depreciation reserve and provision for impairment of contract performance costs
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance | ||
Accrual | Other | Switch back or write-off | Other | |||
Raw materials | 81,069,128.03 | 4,148,326.81 | 8,315,519.60 | 76,901,935.24 | ||
Goods in process | 13,963,866.92 | 419,958.18 | 4,751,403.98 | 9,632,421.12 | ||
Finished goods | 163,043,724.58 | 48,239,624.48 | 40,358,415.34 | 170,924,933.72 | ||
Total | 258,076,719.53 | 52,807,909.47 | 53,425,338.92 | 257,459,290.08 |
① Net realizable value of the inventory refers to: during the day-to-day activities, results of the estimated saleprice less costs which are going to happen by estimation till works completed, sales price estimated and relevanttaxes.
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 |
Cash on hand | Accrual basis for inventory impairment provision | Specific basis for recognition |
③ Reasons 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-endNil
9. Other current assets
In RMB/CNY
Item | Ending balance | Opening balance |
Structured deposits | 525,000,000.00 | 965,000,000.00 |
Receivable export tax rebates | 3,791,825.38 | 5,383,485.34 |
VAT refund receivable | 1,648,669.86 | |
Prepaid taxes and VAT retained | 18,165,659.42 | 36,067,254.77 |
Input tax to be deducted and certification | 188,191.44 | 764,895.21 |
Other | 331,459.55 | 3,191,300.56 |
Total | 547,477,135.79 | 1,012,055,605.74 |
10. Long-term equity investments
In RMB/CNY
The invested entity | Opening balance (book value) | Current changes (+, -) | Ending balance (book value) | 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. | 578,366,832.27 | 53,821,724.29 | 632,188,556.56 |
Subtotal | 578,366,832.27 | 53,821,724.29 | 632,188,556.56 | ||||||||
II. Associated enterprise | |||||||||||
Bosch Automobile Diesel System Co., Ltd. | 3,417,092,136.65 | 600,783,013.31 | 1,801,681,159.00 | 2,216,193,990.96 | |||||||
Zhonglian Automobile Electronic Co., Ltd. | 1,261,232,635.30 | 126,848,340.16 | 331,400,000.00 | 1,056,680,975.46 | |||||||
Weifu Precision Machinery Manufacturing Co., Ltd. | 61,536,602.82 | 7,644,513.80 | 69,181,116.62 | ||||||||
Shinwell Automobile Tech. (Wuxi) Co., Ltd. | 4,177,746.31 | -732,249.42 | 3,445,496.89 | ||||||||
Subtotal | 4,744,039,121.08 | 734,543,617.85 | 2,133,081,159.00 | 3,345,501,579.93 | |||||||
Total | 5,322,405,953.35 | 788,365,342.14 | 2,133,081,159.00 | 3,977,690,136.49 |
11. Other equity instrument investment
In RMB/CNY
Item | Ending balance | Opening balance |
Wuxi Xidong Science & Technology Industrial Park | 5,000,000.00 | 5,000,000.00 |
Beijing Zhike Industry Investment Holding Group Co., Ltd. | 75,940,000.00 | 75,940,000.00 |
Rare earth Catalysis Innovation Research Institute (Dongying) Co., Ltd. | 4,108,000.00 | 4,108,000.00 |
Wuxi Xichang Microchip Semi-Conductor | 200,000,000.00 | 200,000,000.00 |
Total | 285,048,000.00 | 285,048,000.00 |
12. Other non-current financial assets
In RMB/CNY
Item | Ending balance | Opening balance |
Transaction financial assets holding for over one year | 1,680,000,000.00 | 1,000,246,703.43 |
Equity instrument investment | 43,343,284.00 | 43,343,284.00 |
Total | 1,723,343,284.00 | 1,043,589,987.43 |
13. 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 | 65,524,052.61 | 65,524,052.61 | ||
2.Current increased | ||||
(1) outsourcing | ||||
(2) Inventory\fixed assets\construction in process transfer-in | ||||
(3) increased by combination | ||||
3.Current decreased | ||||
(1) disposal | ||||
(2) other transfer-out | ||||
4.Ending balance | 65,524,052.61 | 65,524,052.61 | ||
II. Accumulated depreciation and accumulated amortization | ||||
1.Opening balance | 43,113,540.74 | 43,113,540.74 | ||
2.Current increased | 761,915.13 | 761,915.13 | ||
(1) accrual or amortization | 761,915.13 | 761,915.13 | ||
3.Current decreased | ||||
(1) disposal | ||||
(2) other transfer-out | ||||
4.Ending balance | 43,875,455.87 | 43,875,455.87 | ||
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 | 21,648,596.74 | 21,648,596.74 | ||
2.Opening Book value | 22,410,511.87 | 22,410,511.87 |
(2) Investment real estate measured at fair value
□ Applicable √ Not applicable
(3) Investment real estate without property certification held
Nil
14. Fixed assets
In RMB/CNY
Item | Ending balance | Opening balance |
Fixed assets | 2,875,000,573.89 | 2,845,176,078.20 |
Total | 2,875,000,573.89 | 2,845,176,078.20 |
(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 | 1,577,727,234.03 | 2,892,177,324.22 | 33,031,605.81 | 518,844,612.28 | 5,021,780,776.34 |
2.Current increased | 16,580,464.39 | 156,035,593.57 | 54,194.02 | 59,652,213.15 | 232,322,465.13 |
(1) Purchase | 1,019,898.68 | 1,019,898.68 | |||
(2) Construction in progress transfer-in | 16,580,464.39 | 156,035,593.57 | 54,194.02 | 58,632,314.47 | 231,302,566.45 |
(3) increased by combination | |||||
3.Current decreased | 4,451,607.84 | 33,908,468.53 | 531,811.45 | 9,601,849.61 | 48,493,737.43 |
(1) disposal or scrapping | 4,451,607.84 | 33,908,468.53 | 531,811.45 | 9,601,849.61 | 48,493,737.43 |
4.Ending balance | 1,589,856,090.58 | 3,014,304,449.26 | 32,553,988.38 | 568,894,975.82 | 5,205,609,504.04 |
II. Accumulated depreciation | |||||
1.Opening balance | 373,468,771.98 | 1,466,289,636.27 | 24,572,383.79 | 259,549,999.99 | 2,123,880,792.03 |
2.Current increased | 22,964,995.05 | 96,438,233.50 | 741,420.15 | 49,391,915.07 | 169,536,563.77 |
(1) accrual | 22,964,995.05 | 96,438,233.50 | 741,420.15 | 49,391,915.07 | 169,536,563.77 |
3.Current decreased | 10,373,103.90 | 483,657.79 | 4,595,144.28 | 15,451,905.97 | |
(1) disposal or scrapping | 10,373,103.90 | 483,657.79 | 4,595,144.28 | 15,451,905.97 | |
4.Ending balance | 396,433,767.03 | 1,552,354,765.87 | 24,830,146.15 | 304,346,770.78 | 2,277,965,449.83 |
III. Depreciation reserves | |||||
1.Opening balance | 45,370,341.62 | 73,319.90 | 7,280,244.59 | 52,723,906.11 | |
2.Current increased | |||||
(1) accrual | |||||
3.Current decreased | 80,425.79 | 80,425.79 | |||
(1) disposal or scrapping | 80,425.79 | 80,425.79 | |||
4.Ending balance | 45,289,915.83 | 73,319.90 | 7,280,244.59 | 52,643,480.32 | |
IV. Book value | |||||
1.Ending Book value | 1,193,422,323.55 | 1,416,659,767.56 | 7,650,522.33 | 257,267,960.45 | 2,875,000,573.89 |
2.Opening Book value | 1,204,258,462.05 | 1,380,517,346.33 | 8,385,902.12 | 252,014,367.70 | 2,845,176,078.20 |
(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 |
Plant and office building of Weifu Chang’an | 34,963,912.96 | Still in process of relevant property procedures |
(6) Disposal of fixed assets
Nil
15. Construction in progress
In RMB/CNY
Item | Ending balance | Opening balance |
Construction in progress | 253,735,407.77 | 247,857,777.25 |
Total | 253,735,407.77 | 247,857,777.25 |
(1) Construction in progress
In RMB/CNY
Item | Ending balance | Opening balance | ||||
Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
Technical transformation of parent company | 85,075,711.80 | 85,075,711.80 | 98,032,515.22 | 98,032,515.22 | ||
Technical transformation of Weifu Autocam | 47,416,945.57 | 47,416,945.57 | 44,412,832.62 | 44,412,832.62 | ||
Technical transformation of Weifu Leader | 26,198,395.28 | 26,198,395.28 | 25,051,156.03 | 25,051,156.03 | ||
Other item | 95,044,355.12 | 95,044,355.12 | 80,361,273.38 | 80,361,273.38 | ||
Total | 253,735,407.77 | 253,735,407.77 | 247,857,777.25 | 247,857,777.25 |
(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 |
Technical transformation of parent company | 98,032,515.22 | 160,045,127.43 | 173,001,930.85 | 85,075,711.80 | Other | |||||||
Technical transformation of Weifu Autocam | 44,412,832.62 | 25,534,724.10 | 22,530,611.15 | 47,416,945.57 | Other | |||||||
Technical transformation of Weifu Leader | 25,051,156.03 | 17,978,696.63 | 16,831,457.38 | 26,198,395.28 | Other | |||||||
Total | 167,496,503.87 | 203,558,548.16 | 212,363,999.38 | 158,691,052.65 | -- | -- | -- |
(3) The provision for impairment of construction projects
Nil
(4) Engineer material
Nil
16. Intangible assets
(1) Intangible assets
In RMB/CNY
Item | Land use right | Patent | Non-patent technology | Computer software | Trademark and trademark license | Total |
I. original book value | ||||||
1.Opening balance | 380,986,757.11 | 105,086,673.46 | 81,823,603.48 | 41,597,126.47 | 609,494,160.52 | |
2.Current increased | 30,091.08 | 0.00 | 0.00 | 5,763,026.69 | 0.00 | 5,793,117.77 |
(1) Purchase | 30,091.08 | 5,763,026.69 | 5,793,117.77 | |||
(2) internal R&D | ||||||
(3) increased by combination | ||||||
3.Current decreased | ||||||
(1) disposal | ||||||
4.Ending balance | 381,016,848.19 | 0.00 | 105,086,673.46 | 87,586,630.17 | 41,597,126.47 | 615,287,278.29 |
II. accumulated amortization | ||||||
1.Opening balance | 88,200,675.16 | 9,823,965.21 | 54,519,248.03 | 9,709,000.00 | 162,252,888.40 | |
2.Current increased | 4,173,215.03 | 0.00 | 5,235,571.44 | 8,447,242.60 | 0.00 | 17,856,029.07 |
(1) accrual | 4,173,215.03 | 5,235,571.44 | 8,447,242.60 | 17,856,029.07 | ||
3.Current decreased | ||||||
(1) disposal | ||||||
4.Conversion of foreign currency financial statement | 1,604,658.44 | 1,604,658.44 | ||||
5.Ending balance | 92,373,890.19 | 0.00 | 16,664,195.09 | 62,966,490.63 | 9,709,000.00 | 181,713,575.91 |
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 | 288,642,958.00 | 0.00 | 88,422,478.37 | 24,620,139.54 | 15,241,226.47 | 416,926,802.38 |
2.Opening Book value | 292,786,081.95 | 0.00 | 95,262,708.25 | 27,304,355.45 | 15,241,226.47 | 430,594,372.12 |
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 held
Nil
17. 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 |
Formed by business combination | Disposal | |||
Weifu Tianli | 1,784,086.79 | 1,784,086.79 | ||
Total | 1,784,086.79 | 1,784,086.79 |
(2) Goodwill depreciation reserves
NilInformation about the asset group or combination of asset groups where the goodwill is locatedIn 2010, the company controlled and merged Weifu Tianli by means of cash capital increase, and the goodwill was the part of themerger cost greater than the fair value of Weifu Tianli's identifiable net assets.
18. Long-term deferred expenses
In RMB/CNY
Item | Opening balance | Current increased | Amortized in the Period | Other decrease | Ending balance |
Remodeling costs etc. | 18,536,000.25 | 5,851,016.31 | 2,216,221.26 | 22,170,795.30 | |
Total | 18,536,000.25 | 5,851,016.31 | 2,216,221.26 | 22,170,795.30 |
19. 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 | 98,150,512.49 | 14,890,245.91 | 94,527,571.76 | 14,302,572.39 |
Inventory depreciation reserve | 244,900,480.12 | 39,024,354.66 | 237,900,564.04 | 38,773,864.59 |
Depreciation reserves of fixed assets | 19,117,108.21 | 3,083,687.26 | 19,197,534.00 | 3,095,824.19 |
Depreciation reserves of intangible assets | 16,646,900.00 | 2,497,035.00 | 16,646,900.00 | 2,497,035.00 |
Other equity instrument investment | 10,000,000.00 | 1,500,000.00 | 10,000,000.00 | 1,500,000.00 |
Change of fair value of transaction financial asset | 17,721,963.00 | 2,658,294.45 | 16,517,403.00 | 2,477,610.45 |
Deferred income | 341,129,475.72 | 51,573,421.36 | 362,993,022.12 | 54,664,953.32 |
Internal un-realized profit | 41,257,493.69 | 6,365,502.03 | 22,481,656.04 | 4,568,190.39 |
Payable salary, accrued expenses etc. | 752,208,481.53 | 115,559,690.71 | 622,348,855.94 | 96,720,511.00 |
Depreciation assets, amortization difference | 39,437,881.45 | 6,311,625.21 | 49,220,776.87 | 7,779,059.56 |
Deductible loss of subsidiary | 21,714,524.19 | 4,101,171.83 | 21,714,524.19 | 4,101,171.83 |
Total | 1,602,284,820.40 | 247,565,028.42 | 1,473,548,807.96 | 230,480,792.72 |
(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 | 11,641,299.47 | 1,746,194.96 | 12,011,409.46 | 1,801,711.40 |
The difference between the fair value and taxation basis of IRD assets in a merger not under the same control | 87,722,454.97 | 19,298,940.09 | 94,383,365.10 | 20,764,340.32 |
Change of fair value of transaction financial asset | 21,427,689.29 | 3,214,153.41 | 18,231,842.32 | 2,734,776.35 |
Accelerated depreciation of fixed assets | 98,019,924.32 | 15,269,514.83 | 98,019,924.32 | 15,269,514.83 |
Total | 218,811,368.05 | 39,528,803.29 | 222,646,541.20 | 40,570,342.90 |
(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 | -18,483,668.24 | 229,081,360.18 | -18,004,291.18 | 212,476,501.54 |
Deferred income tax liabilities | -18,483,668.24 | 21,045,135.05 | -18,004,291.18 | 22,566,051.72 |
(4) Details of unrecognized deferred income tax assets
In RMB/CNY
Item | Ending balance | Opening balance |
Bad debt reserve | 2,458,682.17 | 2,459,073.60 |
Inventory depreciation reserve | 12,558,809.96 | 20,176,155.49 |
Loss from subsidiary | 90,708,868.39 | 103,734,801.82 |
Depreciation reserves of fixed assets | 33,526,372.11 | 33,526,372.11 |
Other equity instrument investment | 46,600,000.00 | 48,633,106.95 |
Total | 185,852,732.63 | 208,529,509.97 |
(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 |
2020 | 18,809,345.29 | 23,567,088.89 | Subsidiaries have operating losses |
2021 | 32,724,018.08 | 43,218,245.04 | Subsidiaries have operating losses |
2022 | 9,891,309.24 | 9,901,777.74 | Subsidiaries have operating losses |
2023 | 7,882,026.39 | 7,882,026.39 | Subsidiaries have operating losses |
2024 | 19,165,663.76 | 19,165,663.76 | Subsidiaries have operating losses |
2025 | 2,236,505.63 | Subsidiaries have operating losses | |
Total | 90,708,868.39 | 103,734,801.82 | -- |
20. Other non-current assets
In RMB/CNY
Item | Ending balance | Opening balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Engineering equipment paid in advance | 210,102,212.32 | 210,102,212.32 | 230,235,982.45 | 230,235,982.45 | ||
Total | 210,102,212.32 | 210,102,212.32 | 230,235,982.45 | 230,235,982.45 |
21. Short-term borrowings
(1) Category of short-term borrowings
In RMB/CNY
Item | Ending balance | Opening balance |
Credit loan | 327,932,554.71 | 305,835,808.28 |
Bill financing | 5,976,347.95 | |
Accrued interest | 376,183.29 | 341,813.58 |
Total | 328,308,738.00 | 312,153,969.81 |
(2) Overdue short-term loans without payment
Nil
22. Note payable
In RMB/CNY
Category | Ending balance | Opening balance |
Bank acceptance bill | 1,339,329,488.99 | 1,745,218,439.52 |
Total | 1,339,329,488.99 | 1,745,218,439.52 |
Notes expired at year-end without paid was 0.00 Yuan.
23. Account payable
(1) Account payable
In RMB/CNY
Item | Ending balance | Opening balance |
Within 1 year | 4,083,158,782.01 | 3,214,392,402.81 |
1-2 years | 84,295,174.53 | 74,021,217.00 |
2-3 years | 10,362,261.24 | 5,854,811.50 |
Over three years | 12,385,027.08 | 17,985,798.53 |
Total | 4,190,201,244.86 | 3,312,254,229.84 |
(2) Important account payable with account age over one year
Nil
24. Accounts received in advance
(1) Accounts received in advance
In RMB/CNY
Item | Ending balance | Opening balance |
Within 1 year | 1,873,510.34 | 1,493,602.00 |
1-2 years | ||
2-3 years | ||
Over three years | ||
Total | 1,873,510.34 | 1,493,602.00 |
(2) Important accounts received in advance with account age over one year
Nil
25. Contract liabilities
In RMB/CNY
Item | Ending balance | Opening balance |
Within 1 year | 55,285,401.22 | 110,256,431.74 |
1-2 years | 1,289,811.86 | 698,914.28 |
2-3 years | 697,976.58 | 260,387.26 |
Over three years | 863,622.38 | 1,028,097.33 |
Total | 58,136,812.04 | 112,243,830.61 |
26. Wage payable
(1) Wage payable
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
I. Short-term compensation | 161,202,257.62 | 513,510,301.70 | 547,181,210.50 | 127,531,348.82 |
II. Post-employment welfare- defined contribution plans | 27,587,740.03 | 45,843,040.90 | 50,962,710.85 | 22,468,070.08 |
III. Dismissed welfare | 2,249,529.82 | 96,653.00 | 96,653.00 | 2,249,529.82 |
IV. Other welfare due within one year | 106,180,000.00 | 31,541,027.96 | 74,638,972.04 | |
V. Other short-term welfare-Housing subsidies, employee benefits and welfare funds | 17,124,210.19 | 972,822.40 | 16,151,387.79 | |
Total | 314,343,737.66 | 559,449,995.60 | 630,754,424.71 | 243,039,308.55 |
(2) Short-term compensation
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Wages, bonuses, allowances and subsidies | 141,247,196.85 | 424,901,003.55 | 454,531,155.68 | 111,617,044.72 |
2. Welfare for workers and staff | 28,353,036.34 | 28,353,036.34 | 0.00 | |
3. Social insurance | 8,701,447.13 | 19,046,975.56 | 23,041,946.62 | 4,706,476.07 |
Including: Medical insurance | 7,575,173.65 | 15,378,319.54 | 18,984,989.97 | 3,968,503.22 |
Work injury insurance | 541,230.02 | 1,130,519.15 | 1,283,219.25 | 388,529.92 |
Maternity insurance | 585,043.46 | 2,538,136.87 | 2,773,737.40 | 349,442.93 |
4. Housing accumulation fund | 679,677.00 | 33,920,015.00 | 33,868,163.00 | 731,529.00 |
5. Labor union expenditure and personnel education expense | 10,573,936.64 | 7,289,271.25 | 7,386,908.86 | 10,476,299.03 |
Total | 161,202,257.62 | 513,510,301.70 | 547,181,210.50 | 127,531,348.82 |
(3) Defined contribution plans
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
1. Basic endowment insurance | 9,782,749.83 | 31,942,527.72 | 30,034,012.54 | 11,691,265.01 |
2. Unemployment insurance | 412,974.22 | 807,532.44 | 942,478.37 | 278,028.29 |
3. Enterprise annuity | 17,392,015.98 | 13,092,980.74 | 19,986,219.94 | 10,498,776.78 |
Total | 27,587,740.03 | 45,843,040.90 | 50,962,710.85 | 22,468,070.08 |
27. Taxes payable
In RMB/CNY
Item | Ending balance | Opening balance |
Value-added tax | 47,094,179.93 | 61,749,095.75 |
Corporation income tax | 37,089,173.54 | 50,686,013.43 |
Individual income tax | 449,693.94 | 2,689,642.51 |
City maintaining & construction tax | 3,324,045.95 | 4,348,399.47 |
Educational surtax | 2,374,318.52 | 3,105,999.62 |
Other (including stamp tax and local funds) | 8,879,922.14 | 6,959,261.08 |
Total | 99,211,334.02 | 129,538,411.86 |
28. Other account payable
In RMB/CNY
Item | Ending balance | Opening balance |
Interest payable | 5,348.44 | |
Dividend payable | 367,000,766.60 | |
Other accounts payable | 66,411,696.56 | 65,266,262.39 |
Total | 433,417,811.60 | 65,266,262.39 |
(1) Interest payable
In RMB/CNY
Item | Ending balance | Opening balance |
Other | 5,348.44 | |
Total | 5,348.44 |
(2) Dividend payable
In RMB/CNY
Item | Ending balance | Opening balance |
Common stock dividend | 367,000,766.60 | |
Total | 367,000,766.60 |
(3) Other account payable
1) Classification of other accounts payable according to nature of account
In RMB/CNY
Item | Ending balance | Opening balance |
Deposit and margin | 10,030,431.49 | 14,458,865.71 |
Social insurance and reserves funds that withholding | 8,425,868.28 | 8,434,584.35 |
Intercourse funds of unit | 38,960,145.98 | 37,055,997.50 |
Other | 8,995,250.81 | 5,316,814.83 |
Total | 66,411,696.56 | 65,266,262.39 |
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 |
29. Other current liabilities
In RMB/CNY
Item | Ending balance | Opening balance |
Rebate payable | 147,739,169.58 | 96,046,439.21 |
Total | 147,739,169.58 | 96,046,439.21 |
30. Long-term borrowings
(1) Category of Long-term borrowings
In RMB/CNY
Item | Ending balance | Opening balance |
Credit loan | 20,000,000.00 | |
Total | 20,000,000.00 |
31. Long-term account payable
In RMB/CNY
Item | Ending balance | Opening balance |
Long-term account payable | 16,843,181.00 | 16,843,181.00 |
Special accounts payable | 18,265,082.11 | 18,265,082.11 |
Total | 35,108,263.11 | 35,108,263.11 |
(1) Long-term account payable listed by nature
In RMB/CNY
Item | Ending balance | Opening balance |
Hi-tech Branch of Nanjing Finance Bureau (note ①) Financial support funds (2005) | 1,140,000.00 | 1,140,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ②) Financial support funds (2006) | 1,250,000.00 | 1,250,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ③) Financial support funds (2007) | 1,230,000.00 | 1,230,000.00 |
Loan transferred from treasury bond (note ④) | 678,181.00 | 678,181.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑤) Financial support funds (2008) | 2,750,000.00 | 2,750,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑥) Financial support funds (2009) | 1,030,000.00 | 1,030,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑦) Financial support funds (2010) | 960,000.00 | 960,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑧) Financial support funds (2011) | 5,040,000.00 | 5,040,000.00 |
Hi-tech Branch of Nanjing Finance Bureau (note ⑨) Financial support funds (2013) | 2,740,000.00 | 2,740,000.00 |
Total | 16,818,181.00 | 16,818,181.00 |
Other explanation:
Note ①: 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, theterm is from 20 October 2005 to 20 October 2020. Provided that the operation period in the zone is less than 15years, financial supporting capital will be reimbursed.Note ②: 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, theterm is from 20 July 2006 to 20 July 2021. Provided that the operation period in the zone is less than 15 years,financial supporting capital will be reimbursed.Note ③: 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.Note ④: Loan transferred from treasury bond: Weifu Jinning received RMB 1.87 million Yuan of special fundsfrom budget of the central government, and RMB 1.73 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.Note ⑤: 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 is
less than 15 years, financial supporting capital will be reimbursed.Note ⑥: 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, theterm is from 27 October 2009 to 27 October 2024. Provided that the operation period in the zone is less than 15years, financial supporting capital will be reimbursed.Note ⑦: 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.Note ⑧: 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, theterm is from 28 December 2011 to 28 December 2026. Provided that the operation period in the zone is less than15 years, financial supporting capital will be reimbursed.Note ⑨: 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, theterm is from 18 December 2013 to 18 December 2028. Provided that the operation period in the zone is less than15 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 | -- |
32. Long-term wages payable
(1) Long-term wages payable
In RMB/CNY
Item | Ending balance | Opening balance |
I. Post-employment benefits-defined benefit plan net liabilities | 0 | 0 |
II. Dismiss welfare | 8,333,666.85 | 8,333,666.85 |
III. Other long-term welfare | 50,058,386.76 | 50,058,386.76 |
Total | 58,392,053.61 | 58,392,053.61 |
(2) Changes in defined benefit plans
Nil
33. Deferred income
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance | Cause of formation |
Government grand | 365,116,022.98 | 14,454,400.00 | 37,018,946.70 | 342,551,476.28 | Financial allocation received |
Total | 365,116,022.98 | 14,454,400.00 | 37,018,946.70 | 342,551,476.28 | -- |
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 | 2,163,000.86 | 721,000.30 | 1,442,000.56 | Assets related/ Income 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) | 26,657,526.17 | 17,681,780.09 | 8,975,746.08 | Income related | ||||
Fund of industry upgrade (2013) | 60,520,000.00 | 60,520,000.00 | Income related | |||||
Appropriation on central basic construction investment | 1,428,571.45 | 357,142.86 | 1,071,428.59 | Assets related |
R&D and industrialization of the high-pressure variable pump of the common rail system of diesel engine for automobile | 6,870,714.16 | 771,547.64 | 6,099,166.52 | Assets related | ||||
Research institute of motor vehicle exhaust after-treatment technology | 1,836,712.58 | 304,455.15 | 1,532,257.43 | 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 | 124,849,393.92 | 10,331,805.43 | 114,517,588.49 | 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 Commission | 8,147,430.27 | 973,816.75 | 7,173,613.52 | Assets related | ||||
Implementation of the variable cross-section turbocharger for diesel engine | 8,972,771.42 | 804,991.33 | 8,167,780.09 | Assets related | ||||
Demonstration project for intelligent manufacturing | 1,148,441.34 | 135,174.43 | 1,013,266.91 | Assets related | ||||
Other | 38,590,460.81 | 14,454,400.00 | 4,937,232.72 | 48,107,628.09 | Assets related/ Income related | |||
Total | 365,116,022.98 | 14,454,400.00 | 0.00 | 37,018,946.70 | 0.00 | 0.00 | 342,551,476.28 |
Other explanation:
(1) Appropriation on industrialization project of electrical control and high voltage jet VE system of lowemissions diesel: in September 2009, Weifu Jinning signed “Project Contract of Technology OutcomeTransferring Special Capital in Jiangsu Province” with Nanjing Technical Bureau, according to which WeifuJinning received appropriation 6.35 million Yuan in 2009, 4.775 million Yuan received in 2010 and 0.875 millionYuan received in 2011. According to the contract, the attendance date of this project was: from October of 2009 toMarch of 2012. This contract agreed 62% of newly increased investment in project would be spent in fixed assetsinvestment which are belongs to the government grand with assets/income concerned. In 2013, accepted by thescience & technology agency of Jiangsu Province, and 4,789,997.04 Yuan with income related was reckoned intocurrent operation revenue directly; the 7,210,002.96 Yuan with assets related was amortized during the predictedservice period of the assets, and 721,000.30 Yuan amortized in the Period.
(2) The appropriation for research and development ability of distributive high-pressure common rail system fordiesel engine use and production line technological transformation project: according to XCJ No. [2010] 59, theCompany has received special funds of 7.1 million Yuan appropriated by Finance Bureau of Wuxi New District in2011 and used for the Company’s research and development ability of distributive high-pressure common railsystem for diesel engine use and production line technological transformation project; this appropriation belongsto government subsidies related to assets, and will be amortized according to the depreciation process of theunderlying assets when the project is completed.
(3) Industry upgrading funds (2012): In accordance with the document Xi Xin Guanjing Fa [2012] No.216 andDocument Xi Xin Guancai Fa [2012] No. 85, the Company received funds of 60.4 million Yuan appropriated forindustry upgrading this year. Current write off: 17,681,780.09Yuan.
(4) Industry upgrading funds (2013): In accordance with the document Xi Xin Guan Jing Fa [2013] No.379, XiXin Guan Jing Fa [2013] No.455, Xi Xin Guan Cai Fa [2013] No.128 and Xi Xin Guan Cai Fa [2013] No.153, theCompany received funds of 60.52 million Yuan appropriated for industry upgrading in 2013.
(5) Appropriation for investment of capital construction from the central government: In accordance with thedocument Xi Caijian [2012] No.43, the Company received appropriation of 5 million Yuan for investment ofcapital construction from the central government in 2012. The project has passed the acceptance check in currentperiod, this appropriation should be amortized within the surplus service life of current assets, and amortizationamount of current period is 357,142.86 Yuan.
(6) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine forautomobile: the Company received appropriated for the project in 2013 with 8.05 million Yuan in line withdocuments of Xi Ke Ji [2013] No.186, Xi Ke Ji [2013] No.208, Xi Cai Gong Mao [2013] No.104, Xi Cai GongMao [2013] No.138, Xi Ke Ji [2014] No.125, Xi Cai Gong Mao [2014] No.58, Xi Ke Ji [2014] No. 246 and XiCai Gong Mao [2014] No.162. Received 3 million Yuan in 2014 and 0.45 million Yuan in 2015; and belongs togovernment grant with assets concerned, and shall be amortized according to the depreciation process, amount of771,547.64 Yuan amortizes in the period.
(7) Vehicle exhaust after-treatment technology research institute project: in 2012, the subsidiary Weifu Leader hasapplied for equipment purchase assisting funds to Wuxi Huishan Science and Technology Bureau and Wuxi
Science and Technology Bureau for the vehicle exhaust after-treatment technology research institute project. Thisdeclaration has been approved by Wuxi Huishan Science and Technology Bureau and Wuxi Science andTechnology Bureau in 2012, and the company has received appropriation of 2.4 million Yuan in 2012, andreceived appropriation of 1.6 million Yuan in 2013. This appropriation belongs to government subsidies related toassets and will be amortized according to the depreciation process, amount of 304,455.15 Yuan amortizes in theperiod.
(8) Industry upgrading funds (2014): In accordance with the document Xi Xin Guan Jing Fa [2014] No.427 andXi Xin Guan Cai Fa [2014] No.143, the Company received funds of 36.831 million Yuan appropriated forindustry upgrading in 2014.
(9) New-built assets compensation after the removal of parent company: policy relocation compensation receivedby the Company, and will be amortized according to the depreciation of new-built assets, amount of10,331,805.43 Yuan amortizes in the period.
(10) Fund of industry upgrade (2016): In accordance with the document Xi Xin Guan Jing Fa [2016] No.585 andXi Xin Fa [2016] No.70, the Company received funds of 40 million Yuan appropriated for industry upgrading in2016.
(11) Guiding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with thedocument Xi Jing Xin ZH [2016] No.9 and Xi Cai GM [2016] No.56, the Company received a 9.74 million Yuanfor the guiding capital of technical reform (1st batch) from Wuxi for year of 2016, and belongs to governmentgrant with assets concerned, and shall be amortized according to the depreciation process, amount of 973,816.75Yuan amortize in the period.
(12) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the documentYCZ Fa[2016] NO.623 and “Strong Industrial Base Project Contract for year of 2016”, subsidiary Weifu Tianlireceived a specific subsidy of 16.97 million Yuan (760,000 Yuan received in 2018), the fund supporting strongindustrial base project (made-in-China 2025) of central industrial transformation and upgrading 2016 fromMinistry of Industry and Information Technology; and belongs to government grant with assets concerned, andshall be amortized according to the depreciation process, amount of 804,991.33 Yuan amortize in the period.
(13) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the IntelligentManufacturing Model Project in Huishan District in 2016 (HJXF[2016]No.36), a fiscal subsidy of 3,000,000 Yuanwas granted by relevant government authority in Huishan district to our subsidiary Weifu Leader in 2017 to beutilized for transformation and upgrade of Weifu Leader’s intelligent manufacturing facilities. This subsidybelongs to government grant related to assets which shall be amortized based on the depreciation progress of theassets. Amortization for the period amounts to 135,174.43 Yuan.
34. Share capital
In RMB/CNY
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 |
35. Capital reserve
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
Capital premium (Share capital premium) | 3,346,333,817.41 | 3,346,333,817.41 | ||
Other Capital reserve | 45,193,988.92 | 45,193,988.92 | ||
Total | 3,391,527,806.33 | 3,391,527,806.33 |
36. Treasury stock
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
Stock repurchase | 300,007,852.84 | 300,007,852.84 | ||
Total | 300,007,852.84 | 300,007,852.84 |
37. 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: written in other comprehensive income in previous period and carried forward to retained earnings 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 | 134,871.67 | 4,618.33 | 3,048.10 | 1,570.23 | 137,919.77 | |||
Conversion difference of foreign currency financial statement | 134,871.67 | 4,618.33 | 3,048.10 | 1,570.23 | 137,919.77 | |||
Total other comprehensive income | 134,871.67 | 4,618.33 | 3,048.10 | 1,570.23 | 137,919.77 |
38. Reasonable reserve
In RMB/CNY
Item | Opening balance | Current increased | Current decreased | Ending balance |
Safety production costs | 3,247,757.06 | 11,612,779.18 | 12,224,050.26 | 2,636,485.98 |
Total | 3,247,757.06 | 11,612,779.18 | 12,224,050.26 | 2,636,485.98 |
39. 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 |
40. Retained profit
In RMB/CNY
Item | Current period | Last period |
Retained profits at the end of last year before adjustment | 12,076,443,635.56 | 10,996,945,870.13 |
Total retained profit at beginning of the adjustment (+ for increased, -for decreased) | 1,584,556.37 | |
Retained profits at the beginning of the year after adjustment | 12,076,443,635.56 | 10,998,530,426.50 |
Add: The net profits belong to owners of patent company of this period | 1,326,344,424.98 | 2,268,026,432.78 |
Common dividend payable | 1,093,241,270.00 | 1,210,740,684.00 |
Add: Net effect of disposal other equity instrument investment | 20,627,460.28 | |
Retained profit at period-end | 12,309,546,790.54 | 12,076,443,635.56 |
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 Yuan
4) 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
41. Operating income and cost
In RMB/CNY
Item | Current period | Last Period | ||
Income | Cost | Income | Cost | |
Main operating | 6,352,974,489.95 | 5,256,052,615.30 | 4,133,178,892.36 | 3,179,484,258.13 |
Other business | 241,429,134.61 | 157,916,759.23 | 270,265,453.69 | 225,902,246.31 |
Total | 6,594,403,624.56 | 5,413,969,374.53 | 4,403,444,346.05 | 3,405,386,504.44 |
Information related to performance obligations:
NilInformation related to the transaction price apportioned to the remaining performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the performance obligations that have been signed but notyet fulfilled or not yet completed is RMB 0.00.
42. Operating tax and extras
In RMB/CNY
Item | Current period | Last Period |
City maintaining & construction tax | 11,315,610.47 | 12,840,319.07 |
Educational surtax | 8,082,578.87 | 9,260,002.10 |
Property tax | 8,136,007.34 | 7,976,886.64 |
Land use tax | 2,258,583.38 | 3,000,765.60 |
Vehicle use tax | 17,455.52 | 5,540.64 |
Stamp duty | 2,074,390.19 | 1,349,389.57 |
Other taxes | 76,923.38 | 101,668.04 |
Total | 31,961,549.15 | 34,534,571.66 |
43. Sales expenses
In RMB/CNY
Item | Current period | Last Period |
Salary and fringe benefit | 25,826,320.40 | 26,545,495.48 |
Consumption of office materials and business travel charge | 3,267,626.29 | 5,902,212.14 |
Transportation charge | 22,287,326.77 | 13,044,708.75 |
Warehouse charge | 7,320,422.39 | 2,516,917.39 |
Three guarantees cost | 65,575,346.96 | 39,932,538.62 |
Business entertainment fee | 8,669,963.79 | 9,328,770.85 |
Other | 5,447,164.71 | 7,000,004.17 |
Total | 138,394,171.31 | 104,270,647.40 |
44. Administration expenses
In RMB/CNY
Item | Current period | Last Period |
Salary and fringe benefit | 125,724,396.50 | 134,821,395.41 |
Depreciation charger and long-term assets amortization | 30,914,703.59 | 17,239,939.30 |
Consumption of office materials and business travel charge | 5,274,784.55 | 5,392,838.23 |
Incentive fund | 45,360,000.00 | 35,940,000.00 |
Other | 129,710,776.64 | 117,515,807.49 |
Total | 336,984,661.28 | 310,909,980.43 |
44. R&D expenses
In RMB/CNY
Item | Current period | Last Period |
Technological development expenses | 211,531,953.72 | 180,167,642.16 |
Total | 211,531,953.72 | 180,167,642.16 |
46. Financial expenses
In RMB/CNY
Item | Current period | Last Period |
Interest expenses | 5,800,553.09 | 9,264,648.42 |
Note discount interest expenses | 5,393,256.06 | 6,867,326.37 |
Deposit interest income | -43,053,210.79 | -48,416,919.83 |
Gains/losses from exchange | -4,472,009.34 | 583,881.77 |
Handling charges | 1,724,451.73 | 2,208,267.69 |
Total | -34,606,959.25 | -29,492,795.58 |
47. Other income
In RMB/CNY
Sources of income generated | Current period | Last Period |
Government grants with routine operation activity concerned | 43,932,417.68 | 17,632,117.95 |
Total | 43,932,417.68 | 17,632,117.95 |
48. Investment income
In RMB/CNY
Item | Current period | Last Period |
Income of long-term equity investment calculated based on equity | 785,533,710.72 | 790,465,131.05 |
Investment income from holding financial assets available for sales | 2,287,308.59 | |
Investment income of financial products | 138,448,908.25 | 95,464,240.84 |
Other | -408,092.36 | |
Total | 923,574,526.61 | 888,216,680.48 |
49. Net exposure hedge income
Nil
50. Income from change of fair value
In RMB/CNY
Sources | Current period | Last Period |
Transaction financial asset | 258,157.65 | 30,195,948.00 |
Investment income from disposal of trading financial assets, etc. | 490,329.13 | |
Total | 258,157.65 | 30,686,277.13 |
51. Credit impairment loss
In RMB/CNY
Item | Current period | Last Period |
Bad debt losses on other receivables | -33,433.24 | |
Bad debt losses on accounts receivable | -3,622,549.31 | -6,204,357.51 |
Total | -3,622,549.31 | -6,237,790.75 |
52. Assets impairment loss
In RMB/CNY
Item | Current period | Last Period |
II. Loss of inventory fall in price and impairment loss of contract performance cost | -52,807,909.47 | -1,500,885.27 |
Total | -52,807,909.47 | -1,500,885.27 |
53. Income from assets disposal
In RMB/CNY
Sources | Current period | Last Period |
Income from disposal of non-current assets | 503,005.53 | 5,542,556.91 |
Losses from disposal of non-current assets | -270,505.98 | -434,708.46 |
Total | 232,499.55 | 5,107,848.45 |
54. Non-operating income
In RMB/CNY
Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
Government subsidy | 26,547,209.00 | ||
Other | 164,150.94 | 997,548.26 | 164,150.94 |
Total | 164,150.94 | 27,544,757.26 | 164,150.94 |
Government subsidies included in current profit and loss: nil
55. Non-operating expense
In RMB/CNY
Item | Current period | Last Period | Amount reckoned into current non-recurring gains/losses |
Donation | 3,003,503.70 | 43,500.00 | 3,003,503.70 |
Total non-current asset retirement losses | 775,870.54 | 180,170.75 | 775,870.54 |
Including: loss of fixed assets scrap | 775,870.54 | 180,170.75 | 775,870.54 |
Local fund | 343,760.00 | 2,291,966.58 | |
Other | 1,317.44 | 115,815.69 | 1,317.44 |
Total | 4,124,451.68 | 2,631,453.02 | 3,780,691.68 |
56. Income tax expense
(1) Income tax expense
In RMB/CNY
Item | Current period | Last Period |
Payable tax in current period | 79,048,948.52 | 52,525,690.93 |
Adjusted the previous income tax | -3,635,148.44 | 3,839,633.55 |
Increase/decrease of deferred income tax assets | -16,387,431.29 | 20,543,454.34 |
Increase/decrease of deferred income tax liability | -1,520,916.67 | 4,473,875.72 |
Total | 57,505,452.12 | 81,382,654.54 |
(2) Adjustment on accounting profit and income tax expenses
In RMB/CNY
Item | Current period |
Total profit | 1,403,775,715.79 |
Income tax measured by statutory/applicable tax rate | 210,566,357.37 |
Impact by different tax rate applied by subsidies | 933,534.12 |
Adjusted the previous income tax | -3,635,148.44 |
Impact by non-taxable revenue | -117,889,611.93 |
Impact by the deductible losses of the un-recognized previous deferred income tax | -736,289.69 |
The deductible temporary differences or deductible losses of the un-recognized deferred income tax assets in the Period | -3,291,618.66 |
Impact on additional deduction | -13,068,335.67 |
Other | -15,373,434.98 |
Income tax expense | 57,505,452.12 |
57. Other comprehensive income
See Note 37
58. Items of ash flow statement
(1) Other cash received in relation to operation activities
In RMB/CNY
Item | Current period | Last Period |
Interest income from bank deposits | 43,053,210.79 | 49,585,253.17 |
Government grants | 21,365,245.08 | 33,827,547.71 |
Other | 6,383,457.07 | 2,362,693.88 |
Total | 70,801,912.94 | 85,775,494.76 |
(2) Other cash paid in relation to operation activities
In RMB/CNY
Item | Current period | Last Period |
Cash cost | 244,636,121.10 | 158,648,871.84 |
Other | 12,194,783.41 | 10,439,746.86 |
Total | 256,830,904.51 | 169,088,618.70 |
(3) Cash received from other investment activities
Nil
(4) Cash paid related with investment activities
In RMB/CNY
Item | Current period | Last Period |
Pay Wuhan Zhongyu loan | 24,000,000.00 | |
Total | 24,000,000.00 |
(5) Other cash received in relation to financing activities
In RMB/CNY
Item | Current period | Last Period |
Weifu Leader receives loans 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 |
Weifu Leader pays loans from Wuxi Industry Group | 5,470,000.00 | |
Repayment of national debt into loan | 339,091.00 | |
Stock repurchase | 300,007,852.84 | |
Total | 300,007,852.84 | 5,809,091.00 |
59. 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 | 1,346,270,263.67 | 1,275,102,693.23 |
Add: Assets impairment provision | 56,430,458.78 | 7,738,676.02 |
Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 170,298,478.93 | 150,680,275.86 |
Amortization of intangible assets | 17,856,029.07 | 7,769,977.82 |
Amortization of long-term deferred expenses | 2,216,221.26 | 1,498,822.02 |
Loss from disposal of fixed assets, intangible assets and other long-term assets (gain is listed with “-”) | -232,499.55 | -5,107,848.45 |
Losses on scrapping of fixed assets (gain is listed with “-”) | 775,870.54 | 180,170.75 |
Gain/loss of fair value changes (gain is listed with “-”) | -258,157.65 | -30,686,277.13 |
Financial expenses (gain is listed with “-”) | 1,308,072.77 | 8,918,152.92 |
Investment loss (gain is listed with “-”) | -923,574,526.61 | -885,938,793.49 |
Decrease of deferred income tax asset ((increase is listed with “-”) | -16,604,858.64 | 17,047,670.29 |
Increase of deferred income tax liability (decrease is listed with “-”) | -1,520,916.67 | -55,516.90 |
Decrease of inventory (increase is listed with “-”) | 722,938,987.42 | 9,891,557.33 |
Decrease of operating receivable accounts (increase is listed with “-”) | -1,396,333,918.08 | -802,107,175.59 |
Increase of operating payable accounts (decrease is listed with “-”) | 457,453,317.78 | 934,171,985.46 |
Other | 634,249.39 | 1,219,538.11 |
Net cash flows arising from operating activities | 437,657,072.41 | 690,323,908.25 |
2. Material investment and financing not involved in cash flow | -- | -- |
3. Net change of cash and cash equivalents: | -- | -- |
Balance of cash at period end | 1,708,154,488.87 | 2,596,327,132.26 |
Less: Balance of cash equivalent at year-begin | 820,498,653.85 | 2,404,674,139.49 |
Net increase of cash and cash equivalents | 887,655,835.02 | 191,652,992.77 |
(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 | 1,708,154,488.87 | 820,498,653.85 |
Including: Cash on hand | 76,486.27 | 93,165.33 |
Bank deposit available for payment at any time | 1,708,078,002.60 | 820,405,488.52 |
III. Balance of cash and cash equivalents at the period-end | 1,708,154,488.87 | 820,498,653.85 |
60. 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
61. Assets with ownership or use right restricted
In RMB/CNY
Item | Ending Book value | Restriction reason |
Monetary funds | 32,786,262.96 | Cash deposit paid for bank acceptance |
Note receivable | 645,547,079.23 | Notes pledge for bank acceptance |
Monetary funds | 2,206,857.75 | Court freeze |
Monetary funds | 50,000,000.00 | Stock repurchase |
Transaction financial asset | 117,947,240.94 | In accordance with the civil ruling No.(2016)Y03MC2490 and No.(2016) Y03MC2492 of Guangdong 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. was frozen. As of the end of the reporting period, 4.71 million shares of Miracle Automation and 11,739,102 shares of SDEC and fruit held by the Company were frozen. | ||
Total | 848,487,440.88 | -- |
62. 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 | 13,209,792.28 | 7.0795 | 93,518,724.44 |
EUR | 1,436,642.82 | 7.961 | 11,437,113.50 |
HKD | 11,049,573.90 | 0.9134 | 10,092,680.80 |
JPY | 0.065808 | 0.00 | |
DKK | 6,375,259.14 | 1.0685 | 6,811,964.40 |
Account receivable | -- | -- | |
Including: USD | 1,080,383.61 | 7.0795 | 7,648,575.77 |
EUR | 738,532.97 | 7.961 | 5,879,460.97 |
HKD | 0.9134 | 0.00 | |
JPY | 3,645,361.00 | 0.065808 | 239,893.92 |
DKK | 2,658,753.53 | 1.0685 | 2,840,878.15 |
Long-term borrowings | -- | -- | |
Including: USD | |||
EUR | |||
HKD | |||
Short-term borrowings | |||
Including: EUR | 5,644,084.25 | 7.961 | 44,932,554.71 |
Account payable | |||
Including: USD | 318,270.52 | 7.0795 | 2,253,196.15 |
EUR | 2,194,697.44 | 7.961 | 17,471,986.32 |
JPY | 43,195,476.00 | 0.065808 | 2,842,607.88 |
CHF | 153,260.54 | 7.4434 | 1,140,779.50 |
DKK | 1,491,131.05 | 1.0685 | 1,593,273.53 |
Other account payable | |||
Including: USD | 1,087.90 | 7.0795 | 7,701.79 |
DKK | 4,005,904.09 | 1.0685 | 4,280,308.52 |
(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
63. Hedging
Disclosure of the qualitative and quantitative information on hedging items and related hedging instruments, hedging risks accordingto category: nil
64. Government grants
(1) Government grants
In RMB/CNY
Category | Amount | Item | Amount reckoned in current gain/loss |
The second batch of provincial-level industrial and information industry transformation special funds in 2019 | 5,000,000.00 | Deferred income | |
Wuxi City Key Technical Transformation Guide Fund Project | 8,330,000.00 | Deferred income, Other income | 1,680,000.00 |
2019 Wuxi Mayor Quality Award | 1,000,000.00 | Other income | 1,000,000.00 |
Stable subsidy | 3,505,660.57 | Other income | 3,505,660.57 |
Intelligent manufacturing and technological transformation awards and supplementary funds | 955,000.00 | Other income | 955,000.00 |
Huishan District Science and Technology Development Support Project Reward and Subsidy Funds | 200,000.00 | Other income | 200,000.00 |
2019 Quality Award and Finalist Award | 200,000.00 | Other income | 200,000.00 |
In 2019, the integration of industrialization and industrialization, and the provincial-level | 180,000.00 | Other income | 180,000.00 |
segmentation project reward for enterprise cloud | |||
2019 Work Award for Strong Quality District | 150,000.00 | Other income | 150,000.00 |
Special fund for intellectual property | 56,100.00 | Other income | 56,100.00 |
Training subsidy for smart employees | 214,300.00 | Other income | 214,300.00 |
Other | 1,574,184.51 | Deferred income, Other income | 1,334,184.51 |
Total | 21,365,245.08 | 9,475,245.08 |
(2) Government grants rebate
□ Applicable√ Not applicable
65. Other
NilVIII. 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
Nil
6. Other
Nil
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 Schmidt | Wuxi | Wuxi | Spare parts of internal-combustion engine | 66.00% | Investment | |
Weifu Tianli | Ningbo | Ningbo | Spare parts of internal-combustion engine | 98.83% | 1.17% | 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 | |
Weifu Electronic Drive | Wuxi | Wuxi | Hub motor | 80.00% | Enterprise combine not under the same control | |
SPV | Denmark | Denmark | Investment | 100.00% | Investment | |
IRD | Denmark | Denmark | Fuel cell components | 66.00% | Enterprise combine not under the same control | |
IRD America | America | America | Fuel cell components | 66.00% | Enterprise combine not under the same control |
(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% | 14,246,851.21 | 15,748,768.80 | 191,628,814.53 |
Weifu Schmidt | 34.00% | 1,643,010.32 | 12,856,509.10 | |
Weifu Leader | 5.19% | 5,729,722.13 | 92,437,878.29 | |
Weifu Autocam | 49.00% | 5,476,145.85 | 160,625,407.78 | |
Total | 27,095,729.51 | 15,748,768.80 | 457,548,609.70 |
(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 | 1,157,127,060.71 | 275,724,001.15 | 1,432,851,061.86 | 424,331,784.80 | 48,096,585.52 | 472,428,370.32 |
Weifu Schmidt | 119,294,340.72 | 47,503,051.13 | 166,797,391.85 | 128,017,597.97 | 570,000.00 | 128,587,597.97 |
Weifu Leader | 4,139,268,777.15 | 1,165,405,904.38 | 5,304,674,681.53 | 3,531,665,367.66 | 21,193,740.39 | 3,552,859,108.05 |
Weifu Autocam | 246,210,818.77 | 332,438,683.70 | 578,649,502.47 | 253,736,607.36 | 253,736,607.36 | |
Total | 5,661,900,997.35 | 1,821,071,640.36 | 7,482,972,637.71 | 4,337,751,357.79 | 69,860,325.91 | 4,407,611,683.70 |
In RMB/CNY
Subsidiary | Opening balance | |||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Weifu Jinning | 999,097,495.08 | 334,721,775.17 | 1,333,819,270.25 | 318,915,621.86 | 47,104,930.82 | 366,020,552.68 |
Weifu Schmidt | 141,991,506.20 | 49,208,881.93 | 191,200,388.13 | 157,822,785.29 | 157,822,785.29 | |
Weifu Leader | 3,931,739,116.15 | 1,095,110,196.65 | 5,026,849,312.80 | 3,341,853,614.37 | 22,204,377.06 | 3,364,057,991.43 |
Weifu Autocam | 245,057,798.53 | 323,114,477.06 | 568,172,275.59 | 254,234,583.00 | 254,234,583.00 | |
Total | 5,317,885,915.96 | 1,802,155,330.81 | 7,120,041,246.77 | 4,072,826,604.52 | 69,309,307.88 | 4,142,135,912.40 |
In RMB/CNY
Subsidiary | Current period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
Weifu Jinning | 352,597,870.12 | 71,027,425.74 | 71,027,425.74 | 13,549,394.41 |
Weifu Schmidt | 98,614,059.14 | 4,832,191.04 | 4,832,191.04 | -15,080,952.12 |
Weifu Leader | 3,307,136,098.12 | 89,024,252.11 | 89,024,252.11 | 194,818,501.61 |
Weifu Autocam | 174,153,210.61 | 10,975,202.52 | 10,975,202.52 | -11,097,809.19 |
Total | 3,932,501,237.99 | 175,859,071.41 | 175,859,071.41 | 182,189,134.71 |
In RMB/CNY
Subsidiary | Last Period | |||
Operation Income | Net profit | Total comprehensive income | Cash flow from operation activity | |
Weifu Jinning | 328,481,669.39 | 75,516,399.57 | 75,516,399.57 | 33,455,248.40 |
Weifu Schmidt | 84,285,489.50 | -45,675.45 | -45,675.45 | 5,467,884.14 |
Weifu Leader | 1,338,975,875.93 | 32,780,686.77 | 32,780,686.77 | 116,866,170.40 |
Weifu Autocam | 177,929,684.84 | 2,330,164.41 | 2,330,164.41 | 33,593,148.87 |
Total | 1,929,672,719.66 | 110,581,575.30 | 110,581,575.30 | 189,382,451.81 |
(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 statementrangeNil
2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights
Nil
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 | |
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-combustion engine accessories | 20.00% | Equity method | |
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 |
(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 | 4,313,646,477.87 | 3,285,078,665.28 |
Including: cash and cash equivalents | 99,097,297.11 | 52,542,261.45 |
Non -current assets | 316,807,824.61 | 323,188,749.54 |
Total assets | 4,630,454,302.48 | 3,608,267,414.82 |
Current liabilities | 3,314,035,548.28 | 2,401,381,614.27 |
Non-current liabilities | 26,238,026.53 | 26,545,326.53 |
Total liabilities | 3,340,273,574.81 | 2,427,926,940.80 |
Minority shareholders' equity | ||
Shareholders’ equity attributable to parent company | 1,290,180,727.67 | 1,180,340,474.02 |
Share of net assets calculated by shareholding ratio | 632,188,556.56 | 578,366,832.27 |
Adjustment matters | ||
--Goodwill |
--Unrealized profits from internal transactions | ||
--Other | ||
Book value of equity investment in joint ventures | 632,188,556.56 | 578,366,832.27 |
Fair value of equity investment in joint ventures with publicly quoted prices | ||
Operation income | 3,456,176,529.08 | 1,590,675,320.87 |
Financial expenses | 59,064,339.14 | 40,646,719.18 |
Income tax expense | 20,282,165.19 | 4,391,396.50 |
Net profit | 114,476,846.31 | 23,640,351.13 |
Net profit from discontinued operations | ||
Other comprehensive income | ||
Total comprehensive income | 114,476,846.31 | 23,640,351.13 |
Dividends received from joint ventures this year |
(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 | 10,321,893,175.35 | 1,514,193,827.44 | 401,699,746.42 | 10,878,760,988.82 | 175,292,101.34 | 321,631,869.85 |
Non -current assets | 2,882,412,425.39 | 5,094,179,637.02 | 161,717,212.96 | 3,059,116,036.23 | 6,129,564,645.28 | 151,133,767.52 |
Total assets | 13,204,305,600.74 | 6,608,373,464.46 | 563,416,959.38 | 13,937,877,025.05 | 6,304,856,746.62 | 472,765,637.37 |
Current liabilities | 7,414,006,511.77 | 1,329,336,072.57 | 214,785,260.82 | 4,613,514,567.69 | 3,030,820.85 | 162,393,934.95 |
Non-current liabilities | 2,668,844.32 | 2,699,079.03 | ||||
Total liabilities | 7,414,006,511.77 | 1,332,004,916.89 | 214,785,260.82 | 4,613,514,567.69 | 5,729,899.88 | 162,393,934.95 |
Minority shareholders' equity | ||||||
Attributable to parent company shareholders’ | 5,790,299,088.97 | 5,276,368,547.57 | 348,631,698.56 | 9,324,362,457.36 | 6,299,126,846.74 | 310,371,702.42 |
equity | ||||||
Share of net assets calculated by shareholding ratio | 1,968,701,690.23 | 1,055,273,709.50 | 69,726,339.71 | 3,170,283,235.50 | 1,259,825,369.35 | 62,074,340.48 |
Adjustment matters | ||||||
--Goodwill | 267,788,761.35 | 1,407,265.96 | 267,788,761.35 | 1,407,265.96 | ||
--Unrealized profit of internal trading | -20,296,460.34 | -16,189.06 | -20,979,859.92 | -8,703.61 | ||
--Other | -0.28 | -529,034.03 | -0.28 | -529,034.05 | ||
Book value of equity investment in associated enterprise | 2,216,193,990.96 | 1,056,680,975.46 | 69,181,116.62 | 3,417,092,136.65 | 1,261,232,635.30 | 61,536,602.82 |
Fair value of equity investment in joint ventures with publicly quoted prices | ||||||
Operation income | 7,807,711,867.16 | 11,705,308.41 | 205,853,869.35 | 7,690,808,970.61 | 11,298,817.88 | 144,654,208.76 |
Net profit | 1,764,998,863.92 | 634,241,700.83 | 38,259,996.14 | 1,827,071,096.33 | 737,662,037.83 | 23,338,840.07 |
Net profit from discontinued operations | ||||||
Other comprehensive income | ||||||
Total comprehensive income | 1,764,998,963.92 | 634,241,700.83 | 38,259,996.14 | 1,827,071,096.33 | 737,662,037.83 | 23,338,840.07 |
Dividends received from associated enterprise in the year | 900,840,579.51 | 140,200,000.00 | 1,070,000.00 | 429,448,388.47 | 105,200,000.00 |
Other explanation
① Adjustment item for other “-0.28”: the differential tail;
The dividend of 1.07 million yuan distributed by Weifu Precision Machinery on December 31, 2019 was received on way of bankacceptance bill.
(4) Financial summary for non-important Joint venture and associated enterprise
In RMB/CNY
Ending balance/Current period | Opening balance/Last Period | |
Joint venture: | -- | -- |
Amount based on share-holding ratio | -- | -- |
--Net profit | -1,176,749.59 | |
--Total comprehensive income | -1,176,749.59 | |
Associated enterprise: | -- | -- |
Total book value of investment | 3,445,496.89 | 4,177,746.31 |
Amount based on share-holding ratio | -- | -- |
--Net profit | -732,249.42 | -1,250,239.86 |
--Total comprehensive income | -732,249.42 | -1,250,239.86 |
(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 enterprise
Nil
(7) Unconfirmed commitment with joint venture investment concerned
Nil
(8) Intangible liability with joint venture or associated enterprise investment concerned
Nil
4. Major conduct joint operation
Nil
5. Structured body excluding in consolidate financial statement
Nil
6. Other
NilX. Risk related with financial instrumentMain financial instrument of the Company including monetary funds, structured deposits, account receivable,equity instrument investment, financial products, loans, and account payable etc., more details of the financialinstrument can be found in relevant items of Note VII. Risks concerned with the above-mentioned financialinstrument, and the risk management policy takes for lower the risks are as follow:
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 Risk
Credit risk refers to the risk that one party of a financial instrument fails to perform its obligations, and resultingin the financial loss of other party. The company's credit risk mainly comes from monetary funds, structureddeposits, note receivable, account receivable, other account receivables. The management has established anappropriate credit policy and continuously monitors the exposure to these credit risks.
The monetary funds and structured deposits held by the Company are mainly deposited in financial institutionssuch as commercial banks, the management believes that these commercial banks have higher credit and assetstatus, and have lower credit risks.The Company adopts quota policies to avoid credit risks to any financialinstitutions.For accounts receivable, other receivables and bills receivable, the Company sets relevant policies to control thecredit risk exposure. To prevent the risks, the company has formulated a new customer credit evaluation systemand an existing customer credit sales balance analysis system. The new customer credit evaluation system aims atnew customers, the company will investigate a customer’s background according to the established process to
determine whether to give the customer a credit line and the credit line size and credit period. Accordingly, thecompany has set a credit limit and a credit period for each customer, which is the maximum amount that does notrequire additional approval. The analysis system for credit sales balance of existing customers means that afterreceiving a purchase order from an existing customer, the company will check the order amount and the balanceof the accounts owed by the customer so far,if the total of the two exceeds the credit limit of the customer, thecompany can only sell to the customer on the premise of additional approval, otherwise the customer must berequired to pay the corresponding amount in advance. In addition, for the credit sales that have occurred, thecompany analyzes and audits the monthly statements for risk warning of accounts receivable to ensure that thecompany’s overall credit risk is within a controllable range.The maximum credit risk exposure of the Company is the carrying amount of each financial asset on the balancesheet.
2. Market risk
Market 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) risk
FX risks refer to the losses arising from exchange rate movement. The FX risk sustain by the Company mainlyrelated with the USD, EUR, SF, JPY, HKD, DKK except for the USD, EUR, SF, JPY, HKD and DKK carried outfor the equipment purchasing of parent company and Autocam, material purchasing of parent company, technicalservice and trademark usage costs of parent company, the import and export of Weifu International Trade andoperation of IRD, other main business of the Company are pricing and settle with RMB (Yuan). In consequenceof the foreign financial assets and liabilities takes minor ratio in total assets, the Company has small FX risk of thefinancial instrument, considered by management of the Company.End as 30 June 2020, except for the follow assets or liabilities listed with foreign currency, assets and liabilities ofthe Company are carried with RMB
Foreign currency assets of the Company till end of 30 June 2020
Cash on hand | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets (%) |
Monetary funds | ||||
Including: USD | 13,209,792.28 | 7.0795 | 93,518,724.44 | 0.38% |
EUR | 1,436,642.82 | 7.961 | 11,437,113.50 | 0.05% |
HKD | 11,049,573.90 | 0.9134 | 10,092,680.80 | 0.04% |
DKK | 6,375,259.14 | 1.0685 | 6,811,964.40 | 0.03% |
Account receivable |
Including: USD | 1,080,383.61 | 7.0795 | 7,648,575.77 | 0.03% |
EUR | 738,532.97 | 7.961 | 5,879,460.97 | 0.02% |
JPY | 3,645,361.00 | 0.065808 | 239,893.92 | 0.00% |
DKK | 2,658,753.53 | 1.0685 | 2,840,878.15 | 0.01% |
Total ratio in assets | 0.56% |
Foreign currency liability of the Company till end of 30 June 2020:
Cash on hand | Ending foreign currency balance | Convert rate | Ending RMB balance converted | Ratio in assets(%) |
Short-term borrowings |
Including: EUR | 5,644,084.25 | 7.961 | 44,932,554.71 | 0.61% |
Account payable | ||||
Including: USD | 318,270.52 | 7.0795 | 2,253,196.15 | 0.03% |
EUR | 2,194,697.44 | 7.961 | 17,471,986.32 | 0.24% |
JPY | 43,195,476.00 | 0.065808 | 2,842,607.88 | 0.04% |
CHF | 153,260.54 | 7.4434 | 1,140,779.50 | 0.02% |
DKK | 1,491,131.05 | 1.0685 | 1,593,273.53 | 0.02% |
Other account payable |
Including: USD | 1,087.90 | 7.0795 | 7,701.79 | 0.00% |
DKK | 4,005,904.09 | 1.0685 | 4,280,308.52 | 0.06% |
Total ratio in liabilities | 1.02% |
③ Other pricing risk
The equity instrument investment held by the Company with classification as transaction financial asset and othernon-current financial assets are measured on fair value of the balance sheet date. The fluctuation of expected pricefor these investment will affect the gains/losses of fair value changes for the Company.
Furthermore, on the premise of deliberated and approved in 10
th
session of 8
thBOD, 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, calculation
management 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 risk
Liquidity 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 | -- | -- | -- | -- |
(I) Transaction financial asset | 126,649,272.00 | 4,782,956,195.13 | 4,909,605,467.13 | |
1.Financial assets measured at fair value and whose changes are included in current profit or loss | 126,649,272.00 | 4,782,956,195.13 | 4,909,605,467.13 | |
(1) Investment in debt instruments | 4,739,612,911.13 | 4,739,612,911.13 | ||
(2) Equity instrument investment | 126,649,272.00 | 43,343,284.00 | 169,992,556.00 | |
(III) Other equity instrument investment | 285,048,000.00 | 285,048,000.00 | ||
Total liability sustaining measured by fair value | 126,649,272.00 | 5,068,004,195.13 | 5,194,653,467.13 | |
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 30 June 2020, the
financial assets available for sale-equity instrument investment held by the Company refers to the SDEC (stockcode: 600841) and Miracle Automation (Stock code: 002009), determining basis of the market price at period-endrefers to the closing price of 30 June 2020.
3. The qualitative and quantitative information for the valuation technique and critical parameter thatsustaining and non-persistent measured by fair value on second-order
4. The qualitative and quantitative information for the valuation technique and critical parameter thatsustaining and non-persistent measured by fair value on third-order
(1) Fair value of wealth management products
The fair value of wealth management products is determined by the Company using discounted cash flowvaluation techniques.Among them, the important unobservable input values are mainly the expected annualizedrate of return and the risk factor of wealth management products.
(2) Fair value of equity instrument investment
Due to the lack of market liquidity for this part of financial assets, the Company uses the replacement cost methodto determine its fair value.Among them, the important unobservable input values mainly include the financial dataof the invested company, etc.
5. Continuous third-level fair value measurement items, adjustment information between the opening andclosing book value and sensitivity analysis of unobservable parametersNil
6. Continuous fair value measurement items, if there is a conversion between various levels in the currentperiod, the reasons for the conversion and the policy for determining the timing of the conversionNil
7. Changes in valuation technology during the current period and reasons for the changesNil
8. The fair value of financial assets and financial liabilities not measured by fair valueNil
9. Other
Nil
XII. Related party and related party 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 area, 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 ofJiangsu 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: nil
4. 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 | Goods and labor | 14,833,622.63 | 30,000,000.00 | N | 12,828,147.72 |
Machinery | |||||
Bosch Diesel System | Goods and labor | 12,261,781.92 | 25,000,000.00 | N | 8,332,723.32 |
Weifu Environment | Goods | 1,824,736,274.77 | 3,200,000,000.00 | N | 675,657,317.56 |
Robert Bosch Company | Goods and labor | 63,669,835.20 | 153,000,000.00 | N | 66,801,410.90 |
Shinwell Automobile Tech. (Wuxi) Co., Ltd. | Goods | 881,887.67 | 5,000,000.00 | N |
Goods sold/labor service providing
In RMB/CNY
Related party | Content of related transaction | Current period | Last Period |
Weifu Precision Machinery | Goods and labor | 774,094.06 | 661,932.69 |
Bosch Diesel System | Goods and labor | 1,551,233,591.58 | 1,487,822,558.90 |
Weifu Environment | Goods and labor | 9,749,595.04 | 10,231,437.30 |
Robert Bosch Company | Goods and labor | 276,348,061.10 | 309,791,012.66 |
Shinwell Automobile Tech. (Wuxi) Co., Ltd. | Goods | 67,648.59 |
(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 | 1,254,028.50 | 1,254,028.50 |
As a tenant for the Company: nil
(4) Related guarantee
Nil
(5) Related party’s borrowed/lending funds
In RMB/CNY
Related party | Loan amount | Start date | Maturity | Note |
Borrowing |
Wuxi Industry Group | 5,470,000.00 | 2020-05-27 | 2021-05-26 |
(6) Related party’s assets transfer and debt reorganization
Nil
(7) Remuneration of key manager
In RMB/CNY
Item | Current period | Last Period |
Remuneration of key manager | 3,050,000.00 | 2,570,000.00 |
(8) Other related transactions
Related party | Name | Current period | Last Period |
Bosch Diesel System | Technology royalties paid etc. | 295,419.00 | 1,002,714.76 |
Bosch Diesel System | Purchase of fixed assets | 162,692.06 | 5,720,900.23 |
Robert Bosch Company | Technology royalties paid etc. | 140,558.40 | 1,122,250.34 |
Robert Bosch Company | Sales of fixed assets | 3,193,888.25 |
Weifu Precision Machinery | Purchase of fixed assets | 50,000.00 |
Weifu Environment | Sales of fixed assets | 9036316.74 | 10,485,153.25 |
Wuxi Industry Group | Interest paying | 5,348.44 |
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 | 613,510.54 | 5,060.71 | 243,544.57 | |
Other account receivables | Weifu Precision Machinery | 1,070,000.00 | |||
Account receivable | Bosch Diesel System | 719,914,621.09 | 868.90 | 478,258,447.23 | |
Account receivable | Robert Bosch Company | 150,455,844.41 | 242,527.12 | 155,195,576.42 | 135,534.13 |
Other account receivables | Robert Bosch Company | 7,600,000.00 | 1,520,000.00 |
Account receivable | Weifu Environment | 2,070,205.71 | 3,925,564.95 | ||
Other non-current assets | Weifu Precision Machinery | 53,788.00 | 53,788.00 | ||
Account paid in advance | Bosch Diesel System | 316,400.00 | |||
Other non-current assets | Bosch Diesel System | 183,842.03 | |||
Account paid in advance | Robert Bosch Company | 3,169,268.92 | 5,954,823.56 | ||
Other non-current assets | Robert Bosch Company | 6,600,000.00 | 6,600,000.00 |
(2) Payable item
In RMB/CNY
Item | Related party | Ending book balance | Opening book balance |
Account payable | Weifu Precision Machinery | 10,850,161.08 | 10,556,782.28 |
Other account payable | Weifu Precision Machinery | 58,000.00 | 29,000.00 |
Account payable | Weifu Environment | 1,502,979,560.03 | 553,049,630.17 |
Account payable | Bosch Diesel System | 4,161,496.23 | 5,664,266.10 |
Account payable | Robert Bosch Company | 6,513,666.71 | 12,297,410.48 |
Account payable | Shinwell Automobile Tech. (Wuxi) Co., Ltd. | 2,212,768.26 | |
Other account payable | Wuxi Industry Group | 5,475,348.00 | |
Accounts received in advance | Robert Bosch Company | 965,203.64 | |
Accounts received in advance | Weifu Environment | 6,568,149.70 |
7. Undertakings of related party
Nil
8. Other
Nil
XIII. Share-based payment
Nil
XIV. Undertakings or contingency
1. Important undertakings
Important undertakings on balance sheet date: Nil
2. Contingency
(1) Contingency on balance sheet date
Nil
(2) For the important contingency not necessary to disclosed by the Company, explained reasonsThe Company has no important contingency that need to disclosed
3. Other
Nil
XV. Events after balance sheet date
1. Important non adjustment matters
Nil
2. Profit distribution
Nil
3. Sales return
Nil
4. Other events after balance sheet date
NilXVI. Other important events
1. Previous accounting errors collection
Nil
2. Debt restructuring
Nil
3. Assets replacement
Nil
4. Pension plan
The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8
th session of 7
thBOD: 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 annual feepaid by the enterprise shall not exceed 8% of the total wages of the employees of the enterprise, and the totalpayment of the enterprise and individual employees shall not exceed 12% of the total wages of the employees ofthe enterprise.In accordance with the State’s annuity policy, the Company will adjusted the economic benefits indue time, in principle of responding to the economic strength of the enterprise, the amount paid by the enterpriseat current period control in the 8 percent of the total salary of last year, the upper limit of the employee's annualdistribution amount shall not exceed 5 times of the average distribution amount of the employee, and the excesspart shall not be included in the distribution amount. Personal payment is controlled at 1% of one’s total salary ofthe previous year;specific paying ratio later shall be adjust correspondingly in line with the operation condition ofthe Company.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. Discontinue business
Not applicable
6. Segment
(1) Recognition basis and accounting policy for reportable segment
Determine 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:
① The component is able to generate revenues and expenses in routine activities;
② Management of the Company is able to assess the operation results regularly, and determine resourcesallocation and performance evaluation for the component;
1. Being analyzed, financial status, operation results and cash flow of the components are able to require 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 reportingsegments 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 VSegment assets exclude transaction financial asset, other account receivables-dividend receivable, othernon-current financial assets, other equity instrument investment, long term equity investment and otherundistributed assets, since these assets are not related to products 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 | 2,884,919,241.60 | 3,353,365,316.53 | 367,218,243.09 | 0 | 11,099,176.66 | 6,594,403,624.56 |
Operating cost | 2,112,277,641.32 | 3,057,877,036.69 | 257,511,025.81 | 0 | 13,696,329.29 | 5,413,969,374.53 |
Total Profit | 396,026,063.17 | 27,683,155.85 | 50,779,020.28 | 923,574,526.61 | -5,712,949.88 | 1,403,775,715.79 |
Net profit | 358,143,312.49 | 39,108,123.71 | 41,853,822.90 | 902,864,689.87 | -4,300,314.70 | 1,346,270,263.67 |
Total assets | 13,720,083,175.35 | 5,250,929,645.58 | 936,428,814.30 | 4,863,472,372.43 | 15,573,761.23 | 24,755,340,246.43 |
Total liabilities | 2,862,910,309.19 | 3,601,302,196.69 | 548,683,267.58 | 5,094,154.34 | -300,364,418.23 | 7,318,354,346.03 |
7. Major transaction and events makes influence on investor’s decision
Nil
8. Other
NilXVII. Principle notes of financial statements of parent company
1. 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 bad debt provision accrual on a single basis | 9,107,123.51 | 0.78% | 9,107,123.51 | 100.00% | 9,107,123.51 | 1.07% | 9,107,123.51 | 100.00% | ||
Including: | ||||||||||
Account receivable with bad debt provision accrual on portfolio | 1,165,249,207.80 | 99.22% | 3,660,065.32 | 0.31% | 1,161,589,142.48 | 839,731,538.80 | 98.93% | 3,716,569.87 | 0.44% | 836,014,968.93 |
Including: | ||||||||||
Including: receivables from customers | 1,046,293,741.78 | 89.10% | 3,660,065.32 | 0.35% | 1,042,633,676.46 | 703,497,750.14 | 82.88% | 3,716,569.87 | 0.53% | 699,781,180.27 |
Receivables from internal related parties | 118,955,466.02 | 10.13% | 118,955,466.02 | 136,233,788.66 | 16.05% | 136,233,788.66 | ||||
Total | 1,174,356,331.31 | 100.00% | 12,767,188.83 | 1.64% | 1,161,589,142.48 | 848,838,662.31 | 100.00% | 12,823,693.38 | 1.64% | 836,014,968.93 |
Bad debt provision accrual on single basis: RMB 9,107,123.51
In RMB/CNY
Name | Ending balance | |||
Book balance | Bad debt reserve | Accrual ratio | Accrual causes | |
BD bills | 5,300,000.00 | 5,300,000.00 | 100.00% | Have difficulty in collection |
Changchun FAW Sihuan Engine Manufacturing Co., Ltd | 1,475,731.65 | 1,475,731.65 | 100.00% | Have difficulty in collection |
Wuxi Kipor Machinery Co., Ltd | 1,220,384.74 | 1,220,384.74 | 100.00% | Have difficulty in collection |
Fujian Zhao’an Country Minyue Bianjie Agricultural Machinery Auto Parts Co., Ltd. | 1,111,007.12 | 1,111,007.12 | 100.00% | Have difficulty in collection |
Total | 9,107,123.51 | 9,107,123.51 | -- | -- |
Bad debt provision accrual on portfolio: RMB 3,660,065.32
In RMB/CNY
Name | Ending balance | ||
Book balance | Bad debt reserve | Accrual ratio | |
Within 6 months | 1,030,687,162.07 | ||
6 months to one year | 10,251,901.63 | 1,025,190.16 | 10.00% |
1-2 years | 2,289,715.54 | 457,943.11 | 20.00% |
2-3 years | 1,480,050.82 | 592,020.33 | 40.00% |
Over 3 years | 1,584,911.72 | 1,584,911.72 | 100.00% |
Total | 1,046,293,741.78 | 3,660,065.32 | -- |
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √ Not applicable
By account age
In RMB/CNY
Account age | Book balance |
Within one year (One year included) | 1,159,894,529.72 |
Including: within 6 months | 1,149,642,628.09 |
6 months to one year | 10,251,901.63 |
1-2 years | 8,589,951.39 |
2-3 years | 3,034,031.36 |
Over 3 years | 2,837,818.84 |
3-4 years | 2,837,818.84 |
Total | 1,174,356,331.31 |
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual in the period:
In RMB/CNY
Category | Opening balance | Amount changed in the period | Ending balance | |||
Accrual | Collected or reversal | Written-off | Other | |||
Bad debt provision | 12,823,693.38 | 314,240.74 | 257,736.19 | 12,767,188.83 | ||
Total | 12,823,693.38 | 0.00 | 314,240.74 | 0.00 | 257,736.19 | 12,767,188.83 |
Important bad debt provision collected or switch back: nil
(3) Account receivable actual charge off in the Period
Nil
(4) Top 5 receivables at ending balance by arrears party
In RMB/CNY
Name | Ending balance of account receivable | Ratio in total ending balance of account receivables | Ending balance of bad debt reserve |
Bosch Diesel System | 712,061,865.41 | 60.63% | |
Weifu Leader | 53,820,937.93 | 4.58% | |
Custom 1 | 53,162,458.56 | 4.53% | |
Custom 2 | 47,813,407.24 | 4.07% | |
Weifu International Trade | 45,964,164.41 | 3.91% | |
Total | 912,822,833.55 | 77.72% |
(5) Account receivable derecognition due to financial assets transfer
Nil
(6) Assets and liabilities resulted by account receivable transfer and continues involvementNil
2. Other account receivables
In RMB/CNY
Item | Ending balance | Opening balance |
Interest receivable | 2,280,037.26 | 804,929.68 |
Dividend receivable | 1,115,292,687.93 | 1,070,000.00 |
Other account receivables | 286,829,482.06 | 248,140,027.06 |
Total | 1,404,402,207.25 | 250,014,956.74 |
(1) Interest receivable
1) Category of interest receivable
In RMB/CNY
Item | Ending balance | Opening balance |
Interest receivable of unified-borrowing & unified-lending | 188,929.48 | 149,876.70 |
Interest of fund occupation | 2,091,107.78 | 655,052.98 |
Total | 2,280,037.26 | 804,929.68 |
2) Significant overdue interest
Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(2) Dividend receivable
1) Category of dividend receivable
In RMB/CNY
Item (or invested enterprise) | Ending balance | Opening balance |
Weifu Precision Machinery | 1,070,000.00 | |
Zhonglian Electronic | 191,200,000.00 | |
Bosch Diesel System | 861,097,612.75 | |
Weifu Jinning | 62,995,075.18 | |
Total | 1,115,292,687.93 | 1,070,000.00 |
2) Important dividend receivable with account age over one year
Nil
3) Accrual of bad debt provision
□ Applicable √ Not applicable
(3) Other account receivables
1) Other account receivables classification by nature
In RMB/CNY
Nature | Ending book balance | Opening book balance |
Staff loans and petty cash | 812,073.33 | 462,664.16 |
Balance of related party in the consolidate scope | 266,747,069.72 | 216,403,060.04 |
Intercourse funds of unit | 24,000,000.00 | 24,000,000.00 |
Protean Holdings Corp. equity disposal fund | 10,654,092.89 | |
Other | 116,289.05 | 117,939.00 |
Total | 291,675,432.10 | 251,637,756.09 |
2) Accrual of bad debt provision
In RMB/CNY
Bad debt reserve | Phase I | Phase II | Phase III | Total |
Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
Balance of Jan. 1, 2020 | 3,497,729.03 | 3,497,729.03 | ||
Balance of Jan. 1, 2020 in the period | —— | —— | —— | —— |
Current accrual | 1,348,221.01 | 1,348,221.01 | ||
Balance on June 30, 2020 | 4,845,950.04 | 4,845,950.04 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √ Not applicable
By account age
In RMB/CNY
Account age | Ending balance |
Within one year (One year included) | 196,018,701.27 |
Within 6 months | 155,018,701.27 |
6 months to one year | 41,000,000.00 |
1-2 years | 95,552,695.72 |
2-3 years | 96,835.11 |
Over 3 years | 7,200.00 |
3-4 year | 7,200.00 |
Total | 291,675,432.10 |
3) Bad debt provision accrual, collected or switch back
Bad debt provision accrual in the period:
In RMB/CNY
Category | Opening balance | Amount changed in the period | Ending balance | |||
Accrual | Collected or reversal | Written-off | Other | |||
Bad debt provision | 3,497,729.03 | 1,348,221.01 | 4,845,950.04 | |||
Total | 3,497,729.03 | 1,348,221.01 | 4,845,950.04 |
Including the important bad debt provision switch back or collected in the period: nil
4) Other receivables actually written-off during the reporting period
Nil
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 6 months | 34.28% | |
Weifu Tianli | Balance of related party in the consolidate scope | 41,000,000.00 | 6 months to 1 year | 14.06% | |
Weifu Chang’an | Balance of related party in the consolidate scope | 76,194,454.00 | Within 2 years | 26.12% | |
Weifu Mashan | Balance of related party in the consolidate scope | 28,552,615.72 | Within 2 years | 9.79% |
Troowin Power System Technology Co., Ltd. | Intercourse funds of unit | 24,000,000.00 | 1-2 years | 8.23% | 4,800,000.00 |
Weifu Schmidt | Balance of related party in the consolidate scope | 21,000,000.00 | Within 2 years | 7.20% | |
Total | -- | 290,747,069.72 | -- | 99.68% | 4,800,000.00 |
6) Other account receivables related to government grants
Nil
7) Other receivable for termination of confirmation due to the transfer of financial assetsNil
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
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 | 1,595,262,165.92 | 1,595,262,165.92 | 1,731,814,008.11 | 1,731,814,008.11 | ||
Investment for associates and joint venture | 3,254,664,187.59 | 3,254,664,187.59 | 4,599,549,621.93 | 4,599,549,621.93 | ||
Total | 4,849,926,353.51 | 4,849,926,353.51 | 6,331,363,630.04 | 6,331,363,630.04 |
(1) Investment for subsidiary
In RMB/CNY
The invested entity | Opening balance (book value) | Changes in Current Period | Ending balance (book value) | Ending balance of depreciation reserves | |||
Additional Investment | Negative Investment | Provision for impairment loss | Other |
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 | 234,941,100.00 | 234,941,100.00 | |||||
Weifu Autocam | 82,454,467.99 | 82,454,467.99 | |||||
Weifu Electronic Drive | 53,832,280.23 | 53,832,280.23 | |||||
SPV | 82,228,038.71 | 30,448,157.81 | 112,676,196.52 | ||||
Total | 1,731,814,008.11 | 30,448,157.81 | -167,000,000.00 | 1,595,262,165.92 |
(2) Investment for associates and joint venture
In RMB/CNY
Enterprise | Opening balance (book value) | Current changes (+, -) | Ending balance (book value) | 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 | |||||||||||
II. Associated enterprise | |||||||||||
Bosch Diesel System | 3,276,853,986.35 | 574,193,295.98 | 1,722,195,225.51 | 2,128,852,056.82 | |||||||
Zhonglian Automobile | 1,261,232,635.30 | 126,848,340.16 | 331,400,000.00 | 1,056,680,975.46 | |||||||
Weifu | 61,463,000.28 | 7,668,155.03 | 69,131,155.31 |
Precision Machinery | |||||||||||
Subtotal | 4,599,549,621.93 | 708,709,791.17 | 2,053,595,225.51 | 3,254,664,187.59 | |||||||
Total | 4,599,549,621.93 | 708,709,791.17 | 2,053,595,225.51 | 3,254,664,187.59 |
(3)Other note
4. Operating income and cost
In RMB/CNY
Item | Current period | Last Period | ||
Income | Cost | Income | Cost | |
Main business | 2,175,655,866.58 | 1,548,552,431.71 | 1,895,457,557.71 | 1,303,140,646.02 |
Other business | 160,606,506.50 | 137,936,247.87 | 197,016,902.53 | 168,830,868.68 |
Total | 2,336,262,373.08 | 1,686,488,679.58 | 2,092,474,460.24 | 1,471,971,514.70 |
Information related to performance obligations: NilInformation related to the transaction price assigned to the residual performance obligations:
At end of the reporting period, the amount of income corresponding to the performance obligation which has been signed but not yetperformed or has not been fully performed is RMB 0.00.
5. Investment income
In RMB/CNY
Item | Current period | Last Period |
Investment income from holding transaction financial asset | 2,287,308.59 | |
Investment income in subsidiaries | 62,995,075.18 | |
Investment income in joint ventures and associated enterprises | 708,709,791.17 | 742,463,812.23 |
Investment income of financial products | 136,202,392.15 | 95,464,240.84 |
Total | 907,907,258.50 | 840,215,361.66 |
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 | -543,370.99 | |
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) | 43,932,417.68 | |
Profit and loss of assets delegation on others’ investment or management | 138,448,908.25 | |
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 | 258,157.65 | |
Other non-operating income and expenditure except for the aforementioned items | -2,840,670.20 | |
Less: Impact on income tax | 26,779,577.16 | |
Impact on minority shareholders’ equity | 1,706,169.11 | |
Total | 150,769,696.12 | -- |
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. ROE 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 | 7.80% | 1.32 | 1.32 |
Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 6.91% | 1.17 | 1.17 |
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 thedifferences adjustment audited by foreign auditing institute, listed name of the institute
4. Other
Nil