FAW JIEFANG GROUP CO., LTD.
Semi-annual Report 2022
August 31, 2022
Section I Important Notes, Contents and DefinitionsThe Board of Directors and Board of Supervisors, as well as directors,supervisors and senior executives of the Company guarantee that the contents ofthe semi-annual report are true, accurate and complete, there is no false record,misleading statement or major omission, and shall bear individual and joint legalresponsibilities.
Hu Hanjie, the person in charge of the Company, Ou Aimin, the person incharge of accounting, and Si Yuzhuo, the person in charge of the accountingorganization (chief accountant) declare that they guarantee the authenticity,accuracy and completeness of the financial report in this semi-annual report.
Except for the following directors, others attended the board meeting toreview the semi-annual report in person
| Names of Directors not Present in Person | Positions of Directors not Present in Person | Reasons for not Present in Person | Name of the Trustee |
| Yang Xiao | Director | Work | Li Hongjian |
| Bi Wenquan | Director | Work | Li Hongjian |
This semi-annual report involves prospective statements such as future plans,and does not constitute a substantial commitment of the Company to investors.Investors and relevant persons shall maintain sufficient risk awareness of this,and shall understand the differences between plans, forecasts and commitments.
The Company has described the risks that the Company may face in thefuture development and the countermeasures in detail in the section ofmanagement discussion and analysis, which shall be noted by investors. ChinaSecurities Journal, Securities Times and CNINFO (http://www.cninfo.com.cn) arethe information disclosure media selected by the Company. All information of theCompany is subject to that published in the above selected media. Investors arekindly requested to pay attention to investment risks.
The Company does not plan to pay cash dividends or bonus shares, orconvert reserves into share capital.
Table of Contents
Section I Important Notes, Contents and Definitions ...... 2
Section II Company Profile and Main Financial Indicators ...... 7
Section III Management Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 24
Section V Environmental and Social Responsibilities ...... 27
Section VI Important Matters ...... 38
Section VII Changes in Shares and Shareholders ...... 47
Section VIII Preferred Shares ...... 57
Section IX Bonds ...... 58
Section X Financial Report ...... 59
List of Documents for Future Reference(I) Financial statements signed and sealed by the person in charge of the Company, the person incharge of accounting and the person in charge of the accounting organization (chief accountant).(II) Originals of all company documents and announcements publicly disclosed on the websitedesignated by China Securities Regulatory Commission in the reporting period.
Interpretation
| Item | Refers to | Definition |
| The Company, FAW Jiefang | Refers to | FAW JIEFANG GROUP CO., LTD. |
| Jiefang Limited | Refers to | FAW JIEFANG AUTOMOTIVE CO., LTD. |
| FAW Car | Refers to | FAW Car Co., Ltd. |
| Car Limited | Refers to | FAW Bestune Car Co., Ltd. |
| FAW | Refers to | China FAW Co., Ltd. |
| Finance company | Refers to | First Automobile Finance Co., Ltd. |
| Sanguard Insurance | Refers to | Sanguard Automobile Insurance Co., Ltd. |
| Board of Directors | Refers to | Board of Directors of FAW JIEFANG GROUP CO., LTD. |
| Shareholders’ meeting | Refers to | Shareholders’ Meeting of FAW JIEFANG GROUP CO., LTD. |
| Board of Supervisors | Refers to | Board of Supervisors of FAW JIEFANG GROUP CO., LTD. |
| SASAC | Refers to | State-owned Assets Supervision and Administration Commission of the State Council |
| CSRC | Refers to | China Securities Regulatory Commission |
| China Securities Depository and Clearing Corporation Limited (CSDC) | Refers to | Shenzhen Branch, China Securities Depository and Clearing Corporation Limited |
| Major asset restructuring | Refers to | After FAW Car transfers all assets and liabilities except the equity and some reserved assets of Finance Company and Sanguard Insurance to Car Limited, 100% equity of Car Limited is used as the sold assets and replaced with the equivalent part of 100% equity of Jiefang Limited held by FAW. The difference is purchased by FAW Car from FAW by issuing shares and paying cash. |
| Reporting period | Refers to | January 1, 2022-June 30, 2022 |
| CNY, CNY 10,000, CNY 100 million | Refers to | CNY, CNY 10,000, CNY 100 million |
Section II Company Profile and Main Financial Indicators
I. Company Profile
| Stock abbreviation | FAW Jiefang | Stock code | 000800 |
| Stock exchanges on which shares are listed | Shenzhen Stock Exchange | ||
| Chinese name of the Company | FAW JIEFANG GROUP CO., LTD. | ||
| Chinese abbreviation of the Company | FAW Jiefang | ||
| English name of the Company | FAW JIEFANG GROUP CO., LTD. | ||
| English abbreviation of the Company | FAW Jiefang | ||
| Legal representative of the Company | Hu Hanjie | ||
II. Contact Person and Contact Information
| Secretary of the Board of Directors | Securities Affairs Representative | |
| Name | Wang Jianxun | Yang Yuxin |
| Address | No. 2259, Dongfeng Street, Changchun Automobile Development Zone, Jilin Province | No. 2259, Dongfeng Street, Changchun Automobile Development Zone, Jilin Province |
| Tel. | 0431-80918881 0431-80918882 | 0431-80918881 0431-80918882 |
| Fax | 0431-80918883 | 0431-80918883 |
| faw0800@fawjiefang.com.cn | faw0800@fawjiefang.com.cn |
III. Other Information
1. Contact information of the Company
Whether the registered address, office address and postal code, website and e-mail address of theCompany have changed in the reporting period
□ Applicable ?Not applicable
The registered address, office address and postal code, website and e-mail address of the Companyhave not changed in the reporting period; please refer to the Annual Report 2021 for details.
2. Information disclosure and preparation location
Whether the information disclosure and preparation location have changed in the reporting period
□ Applicable ?Not applicable
The name of the information disclosure newspaper selected by the Company, the website designatedby the China Securities Regulatory Commission for publishing the semi-annual report, and thereparation location of the Company's semi-annual report have not changed in the reporting period,please see the Annual Report 2021 for details.
3. Other relevant information
Whether other relevant information has changed in the reporting period
□ Applicable ?Not applicable
IV. Main Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of previous years
□ Yes ?No
| This Reporting Period | Same Period of Last Year | Increase/Decrease in This Reporting Period over the Same Period of Last Year | |
| Operating income (CNY) | 22,871,535,261.56 | 78,600,163,121.16 | -70.90% |
| Net profit attributable to shareholders of the listed company (CNY) | 170,153,887.32 | 3,268,978,566.54 | -94.79% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses (CNY) | -106,246,804.18 | 3,156,099,004.55 | -103.37% |
| Net cash flows from operating activities (CNY) | 1,443,137,726.63 | 15,525,714,363.17 | -90.70% |
| Basic earnings per share (CNY/share) | 0.0366 | 0.7047 | -94.81% |
| Diluted earnings per share (CNY/share) | 0.0366 | 0.7047 | -94.81% |
| Weighted average return on equity | 0.65% | 12.46% | Decreased by 11.81% |
| At the End of this | At the End of Last | Increase/Decrease at |
| Reporting Period | Year | the End of this Reporting Period over the End of Last Year | |
| Total assets (CNY) | 69,181,380,718.15 | 69,765,943,932.81 | -0.84% |
| Net assets attributable to shareholders of the listed company (CNY) | 23,488,321,388.03 | 26,242,240,723.26 | -10.49% |
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences in net profits and net assets in the financial report disclosed simultaneouslyaccording to the international accounting standards and China accounting standards
□ Applicable ?Not applicable
In the reporting period of the Company, there is no difference in net profits and net assets in thefinancial report disclosed according to the international accounting standards and China accountingstandards.
2. Differences in net profits and net assets in the financial report disclosed simultaneouslyaccording to foreign accounting standards and China accounting standards
□ Applicable ?Not applicable
In the reporting period of the Company, there is no difference in net profits and net assets in thefinancial report disclosed according to foreign accounting standards and China accounting standards.VI. Items and Amounts of Non-recurring Profit and Loss?Applicable □ Not Applicable
Unit: CNY
| Item | Amount | Description |
| Profits or losses on disposal of non-current assets (including the write-off part of the provision for impairment of assets withdrawn) | 42,431.19 | It refers to the net gain on disposal of non-current assets. |
| Government subsidies included in current profits and losses (except for those closely related to normal business operations of the Company, conforming to national policies and regulations, and continuously enjoyed according to certain standard quota or quantity) | 227,954,740.41 | |
| Reversal of impairment provision for receivables subject to separate impairment test | 12,000,000.00 | It mainly refers to the reversal of impairment provision for receivables subject to separate impairment test. |
| Non-operating income and expenses other than the above | 91,843,871.67 | They mainly refer to the net non-operating income and expenses |
| Less: amount affected by income tax | 55,440,351.77 | |
| Total | 276,400,691.50 |
Specific conditions of other profit and loss items meeting the definition of non-recurring profit andloss:
□ Applicable ?Not applicable
There is no specific condition of other profit and loss items meeting definition of non-recurring profitand loss for the Company.Explanation on defining the non-recurring profit and loss items listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure by Companies Issuing Securities Publicly - Non-recurring Profit and Loss as recurring profit and loss items
□ Applicable ?Not applicable
The Company does not define the non-recurring profit and loss items listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure by Companies Issuing Securities Publicly - Non-recurring Profit and Loss as recurring profit and loss items.
Section III Management Discussion and AnalysisI. Main Businesses of the Company in the Reporting Period(I) Main businessThe Company is a commercial vehicle manufacturer which produces heavy, medium and lighttrucks, buses, as well as core components such as engines, transmissions and axles, and has acomplete manufacturing system covering raw materials, core components, key large assemblies andcomplete vehicles. The products of the Company are mainly used in market segments such as traction,cargo carrying, dumping, special purposes, highway passenger transport, bus passenger transport, etc.,and the Company also provides standardized and customized commercial vehicle products.The Company is committed to becoming a "China's first and world-class" provider of intelligenttransportation solutions, focusing on the main production lines, insisting on innovation-driven andreform-driven, and creating leading advantages.(II) Industry situationIn the first half of 2022, the frequent epidemic situation across the country as well as theinfluence of international conflicts and geopolitics brought about great uncertainties to the globaleconomic recovery and the stability of commodity prices, supply chains and grain output. Thedemand is inhibited because the domestic logistics industry is in a serious "surplus" state and due tothe impact of high oil and gas prices and the epidemic situation. The sales volume of commercialvehicle industry in the first half of 2022 was 1.702 million, which was reduced by 41.2% year-on-year, and the sales volume of medium and heavy truck industry was 437,000, which was reduced by
62.1% year-on-year. The commercial vehicle industry is highly mature and the competition is fierce.The current sluggish market has intensified the competition among leading enterprises in the industryand further reduced the living space of other enterprises. The concentration of market share in theindustry continues to increase, resulting in the situation that the strong will remain strong.(III) Operation situation
In the first half of 2022, when facing changes and challenges in the internal and externalenvironment, and in addition to taking strict and careful normalized epidemic prevention and controlmeasures, the Company made early deployment, overall planning, targeted policies, and rapid and
active adjustments, and also made unprecedented efforts to face the most severe situation and performvarious key tasks steadily and vigorously, therefore, 85,000 medium and heavy trucks were sold, witha terminal market share of 25.6%, and an increase of 1.7 percentage points over 2021, maintainingthe leading position in the industry; nearly 10,000 vehicles were sold in overseas markets, with ayear-on-year increase of 42%. The main work in the first half of 2022 was as follows:
1. Focusing on the mainstream product line and creating leading advantages. In terms ofplatform products, the Company continued to create product advantages, and the three major platformproduct projects were promoted in order. In terms of series products, more than 100 series of newproducts such as J6V flat-floor tractors, J6L exclusive flat-floor trucks, 2022 new J6P dump trucksand new J6L series mixer trucks were launched; a sales volume of nearly 50,000 and a market shareof more than 12% were achieved, with a leading position in the market segment. In terms of newenergy products, more than 40 new energy heavy trucks were developed; 7 new medium trucks weredeveloped and water-cooled battery switching was completed; more than 30 new light trucks weredeveloped.
2. Adhering to innovation-driven development and building core advantages. In terms oftechnological innovation, the first heavy-duty commercial vehicle in-cylinder direct injectionhydrogen engine in China was ignited successfully; the high-speed oil-cooled motor projectcompleted the trial production of the first batch of functional prototypes in China and passed theperformance test; the E/E architecture of the second-generation commercial vehicle was adapted toall models. In terms of business innovation, the planning of fleet management solutions for threescenarios: urban construction muck, intelligent refrigeration and intelligent mixing, was completed;the investigation of business types such as "second-hand vehicles" and "online freight platform" wascompleted, and the implementation of business type innovation was accelerated.
3. Adhering to change-driven development and improving the transformation ability. In termsof management reform, the company established the headquarters medium and heavy vehiclesproduction line and released the IPD2.0 process successfully; the IPD reform of Qingdao mediumand heavy vehicle product line and light vehicle product line was launched officially; integratedreform was promoted vigorously to realize the concentration of resources and unified planning in theIT field; attentions were paid to key areas such as marketing and Internet of Vehicles, the digital co-creation team plan was designed to provide great support to scenario planning. In terms of personnel
system reform, the construction of three teams was strengthened and more than 800 talents wereintroduced. Attentions were paid to value creation and incentives and constraints such as sales bettingwere implemented to effectively stimulate the motivation of all employees.
4. Focusing on winning the following "three battles" to improve the system, capability andimplementation: (1) Market leadership: The Company sold 85,000 medium and heavy vehicles byseizing the opportunities of terminal market and focusing on a good sales performance in the firstquarter, competition for the Winter Olympics and key markets; sold 15,000 light vehicles by focusingon two products, i.e. refrigeration and LINKTOUR; sold nearly 10,000 vehicles overseas by focusingon key markets, border trade, major customers and light trucks. (2) Profitability improvement: TheCompany strengthened cost reduction, especially material cost, and canceled and optimized morethan 700 projects following the principle of "output reduction and efficiency increase"; carried outvalue creation in multiple dimensions, with nearly 3,000 proposals submitted by all employees. (3)Digital and intelligent transformation: The Company held the conference on the deployment of digitaland intelligent transformation and upgrading to clarify the "1143" work framework, andcomprehensively accelerated the transformation in 8 major fields; quickly responded to the digitalconstruction of epidemic prevention and continuously reduced costs and increased efficiency;promoted digital and intelligent transformation and clarified the vision and path of digital andintelligent transformation by focusing the four fields of marketing, R&D, supply chain and operationand improving the digital capability in data, technology platform and network security.In the second half of the year, the Company will continue to implement the spirit of GeneralSecretary Xi Jinping's important speech during his visit to FAW, perform the "11236" annual keytasks in a stable way, continue to seize opportunities, occupy the terminal market and reduce inventorywith an unprecedented will, reduce costs and expenses to the unprecedented extent, reduce risks andstrengthen confidence with an unprecedented initiative, do a good job in regular epidemic preventionand control, complete annual operation and party building tasks, and lay a solid foundation for nextyear and winning the 14
thFive-Year Plan.II. Analysis of Core Competitiveness
The Company adheres to the corporate vision of "being the most proud commercial vehicle
enterprise and the most trustworthy commercial vehicle brand", the mission of "becoming the China'sfirst and world-class provider of intelligent transportation solutions and building a more prosperoussociety", and the brand concept of "being trustworthy, intelligent and courageous, and benefiting theworld"; takes products and services as the main task, customers and employees as the foundation,innovation and reform as the driving force; focuses on industry trends and customer needs, andimproves product competitiveness and service level rapidly.
1. Product research and development: Four major fields: heavy, medium, light and passengervehicles are covered. Heavy trucks include six products: FAW Jiefang J7, J6P, J6V, Yingtu, JH6 andHan V. Medium trucks include three products: FAW Jiefang J6L, JK6 and Long V. Light trucksinclude three products: LINKTOUR, J6F and Hu V. Passenger vehicles include road vehicles, newenergy buses, etc. The Company, which is guided by the idea of "leading technology, pioneeringexperience, integrated innovation, strengthened application and collaborative efficiency", builds astrong and complete independent research and development system ranging from foresighttechnology, engine, transmission, axle to complete vehicle; forms an efficient collaborative researchand development team of nearly 2,500 people, with five core capabilities: technological innovation,performance development, lean design, trial production and test certification; creates five technicalplatforms of low carbonization, electrification, intelligence, informatization and high quality. It is oneof the commercial vehicle enterprises that master the core technologies of world-class completevehicles and three powertrains.
2. Marketing and procurement: The Company, which is customer value-oriented, has taken thelead in establishing a fully functional marketing service system. The marketing service networkconsisting of over 900 dealers, over 1,000 service stations, over 50 spare parts centers and nearly 100spare parts dealers covers more than 200 prefecture-level cities in China, with a coverage rate of 96%prefecture-level cities with more than 1,000 vehicles, and an average service radius in China of 47.5km. It provides users with 24-hour efficient and high-quality services, and takes lead in the industry.The Company is committed to integrating global high-quality resources to provide a strong guaranteefor the high reliability of Jiefang trucks. In recent years, the Company has signed contracts with topenterprises at home and abroad successively, including Huawei, Knorr-Bremse, ZF, Shell, VOSS,China Unicom, JD and PlusAI, to become strategic partners or establish joint ventures with them.
3. In terms of production and manufacturing, the Company has the most complete
manufacturing system in China covering raw materials and core components, key large assembliesand complete vehicles, and its processing and manufacturing level ranks first in the industry. TheCompany has five vehicle bases in Changchun, Qingdao, Chengdu/Guanghan, Liuzhou and Foshan,three assembly bases in Changchun, Wuxi and Dalian, and three new business bases in Suzhou,Nanjing and Tianjin.
4. Product export: The Company’s products are exported to 80 countries and regions such asSoutheast Asia, the Middle East, Latin America, Africa and Eastern Europe. It has more than 70primary distributors and nearly 300 distributors in almost 40 countries and regions around the world.The export products include models such as J6, JH6 and Hu V.III. Analysis of Main BusinessGeneralPlease refer to "I. Main Businesses of the Company in the Reporting Period".Year-on-year Changes of Main Financial Data
Unit: CNY
| This Reporting Period | Same Period of Last Year | Year-on-year Increase and Decrease | Reason for Change | |
| Operating income | 22,871,535,261.56 | 78,600,163,121.16 | -70.90% | The income is reduced mainly due to the decrease in sales volume in the current period. |
| Operating cost | 21,115,050,469.61 | 71,861,081,519.02 | -70.62% | The cost is reduced mainly due to the decrease in sales volume in the current period. |
| Selling expense | 566,490,728.82 | 1,315,060,101.99 | -56.92% | The expense is reduced mainly due to the decrease in sales volume in the current period. |
| Management cost | 887,020,116.52 | 1,103,407,146.33 | -19.61% | |
| Financial expense | -571,153,971.08 | -519,020,299.28 | -10.04% |
| Income tax expense | -171,674.50 | 452,443,037.35 | -100.04% | It is reduced mainly due to the decrease in profit in the current period. |
| R&D investment | 1,016,316,222.64 | 1,239,379,205.08 | -18.00% | |
| Net cash flows from operating activities | 1,443,137,726.63 | 15,525,714,363.17 | -90.70% | This is mainly due to the decrease in cash received from sales of goods and rendering of services in the current period. |
| Net cash flows from investing activities | -674,634,455.38 | -697,102,414.01 | 3.22% | |
| Net cash flows from financing activities | -3,041,097,420.19 | 309,046,933.78 | -1,084.02% | It mainly refers to the cash dividends paid in the current period. |
| Net increase in cash and cash equivalents | -2,272,594,148.94 | 15,137,658,882.94 | -115.01% | It mainly refers to the cash dividends paid in the current period. |
| Taxes and surcharges | 106,500,261.51 | 293,944,056.24 | -63.77% | The tax is reduced mainly due to the decrease in sales volume in the current period. |
| Other incomes | 230,047,050.32 | 123,839,818.59 | 85.76% | The income is increased mainly due to the increase in amortization of government subsidies in the current period. |
| Investment income | 203,908,916.41 | 387,219,719.37 | -47.34% | This is mainly due to the decrease in investment income recognized in the current period. |
| Credit impairment loss | -21,826,743.35 | 6,757,848.51 | -422.98% | This is mainly due to the increase in the provision for impairment of receivables in the current period. |
| Income from assets disposal | 42,431.19 | -183,677.14 | 123.10% | This is mainly due to the increase in income from disposal of fixed assets in the current period. |
| Non-operating | 104,058,106.26 | 30,755,399.12 | 238.34% | This is mainly due to the |
| income | increase in non-operating income in the current period. |
Major changes in the Company's profit composition or profit sources in the reporting period: Thereis no major change in the Company's profit composition or profit sources in the reporting period.Composition of Operating Income
Unit: CNY
| This Reporting Period | Same Period of Last Year | Year-on-year Increase and Decrease | |||
| Amount | Proportion in Operating Income | Amount | Proportion in Operating Income | ||
| Total operating income | 22,871,535,261.56 | 100% | 78,600,163,121.16 | 100% | -70.90% |
| By Industries | |||||
| Automobile manufacturing industry | 22,871,535,261.56 | 100.00% | 78,600,163,121.16 | 100.00% | -70.90% |
| By Products | |||||
| Commercial vehicle | 20,573,298,027.59 | 89.95% | 74,407,776,667.41 | 94.67% | -72.35% |
| Spare parts and others | 2,298,237,233.97 | 10.05% | 4,192,386,453.75 | 5.33% | -45.18% |
| By Areas | |||||
| Northeast China, North China, Southwest China and Northwest China | 11,576,136,202.31 | 50.61% | 39,417,498,884.11 | 50.15% | -70.63% |
| East China, South China and South Central China | 11,295,399,059.25 | 49.39% | 39,182,664,237.05 | 49.85% | -71.17% |
Information on industries, products or regions accounting for more than 10% of the Company'soperating income or operating profit?Applicable □ Not Applicable
Unit: CNY
| Operating income | Operating cost | Gross Profit Rate | Increase/Decrease of Operating | Increase/Decrease of Operating | Increase/Decrease of Gross Profit |
| Income over the Same Period of Last Year | Cost over the Same Period of Last Year | Rate over the Same Period of Last Year | ||||
| By Industries | ||||||
| Automobile manufacturing industry | 21,805,259,709.38 | 20,220,312,403.72 | 7.27% | -71.68% | -71.37% | Reduced by 0.98% |
| By products | ||||||
| Commercial vehicle | 20,573,298,027.59 | 19,087,210,663.60 | 7.22% | -72.35% | -72.17% | Reduced by 0.60% |
| Spare parts and others | 1,231,961,681.79 | 1,133,101,740.12 | 8.02% | -52.24% | -44.55% | Reduced by 12.76% |
| By areas | ||||||
| Northeast China, North China, Southwest China and Northwest China | 11,036,454,415.32 | 10,286,125,703.14 | 6.80% | -71.41% | -71.11% | Reduced by 0.98% |
| East China, South China and South Central China | 10,768,805,294.06 | 9,934,186,700.58 | 7.75% | -71.94% | -71.64% | Reduced by 0.97% |
The main business data of the Company adjusted at the end of the latest reporting period if thestatistical caliber of the Company's main business data is adjusted in the reporting period
□ Applicable ?Not applicable
IV. Analysis of Non-main Business
□ Applicable ?Not applicable
V. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: CNY
| At the End of this Reporting Period | End of Last Year | Increase/Decrease in Proportion | Description of Major Changes | |||
| Amount | Proportion in Total Assets | Amount | Proportion in Total Assets | |||
| Monetary capital | 28,545,747,104.70 | 41.26% | 30,761,262,721.40 | 44.09% | -2.83% | |
| Accounts receivable | 2,033,585,686.23 | 2.94% | 1,279,693,951.70 | 1.83% | 1.11% | |
| Contractual assets | 61,968,023.59 | 0.09% | 53,047,687.72 | 0.08% | 0.01% | |
| Inventory | 9,035,457,594.09 | 13.06% | 9,268,120,531.25 | 13.28% | -0.22% | |
| Investment real estate | 159,534,670.00 | 0.23% | 80,202,825.09 | 0.11% | 0.12% | |
| Long-term equity investment | 5,023,596,387.36 | 7.26% | 4,766,734,671.74 | 6.83% | 0.43% | |
| Fixed assets | 9,005,998,503.41 | 13.02% | 9,236,789,322.03 | 13.24% | -0.22% | |
| Project under construction | 966,294,107.55 | 1.40% | 965,997,208.23 | 1.38% | 0.02% | |
| Right-of-use assets | 121,039,384.71 | 0.17% | 143,766,265.44 | 0.21% | -0.04% | |
| Contract liabilities | 1,898,901,256.47 | 2.74% | 2,700,642,475.91 | 3.87% | -1.13% | |
| Lease liabilities | 95,066,903.44 | 0.14% | 88,307,218.05 | 0.13% | 0.01% | |
2. Main overseas assets
□ Applicable ?Not applicable
3. Assets and liabilities measured at fair value
□ Applicable ?Not applicable
4. Restrictions on asset rights as of the end of the reporting periodFor details, please refer to Note 60 "Assets with restricted ownership or use right" in part VII"Notes to Items in Consolidated Financial Statements" of Section X - Financial Report.VI. Investment Analysis
1. Overall
□ Applicable ?Not applicable
2. Major equity investments acquired in the reporting period
□ Applicable ?Not applicable
3. Major non-equity investments in progress in the reporting period
□ Applicable ?Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable ?Not applicable
The Company has no securities investment in the reporting period.
(2) Investment in derivatives
□ Applicable ?Not applicable
The Company has no derivative investment in the reporting period.
5. Use of raised funds
□ Applicable ?Not applicable
The Company does not use raised funds in the reporting period.VII. Sale of Major Assets and Equity
1. Sale of major assets
□ Applicable ?Not applicable
The Company does not sell major assets in the reporting period.
2. Sale of major equity
□ Applicable ?Not applicable
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
VIII. Analysis on main holding and joint-stock companies?Applicable □ Not ApplicableMajor Subsidiaries and Joint-stock Companies affecting over 10% Net Profit of the Company
Unit: CNY
| Company Name | Company Type | Main Business | Registered Capital | Total Assets | Net Assets | Operating income | Operating Profit | Net Profit |
| FAW JIEFANG AUTOMOTIVE CO., LTD. | Subsidiaries | Development, manufacturing and sales of complete vehicles and parts | CNY 1,080,301.25 | 67,583,672,280.41 | 22,181,594,194.18 | 22,871,535,261.56 | -213,519,399.21 | -121,503,853.04 |
| First Automobile Finance Co., Ltd. | Joint-stock companies | Handling of financial business within the Group and other financial businesses approved by the People's Bank of China | CNY 260,000 | 161,798,938,446.29 | 22,538,947,163.89 | 3,422,338,661.73 | 1,859,399,149.62 | 1,405,479,645.81 |
Acquisition and disposal of subsidiaries in the reporting period
□ Applicable ?Not applicable
Description of main holding and joint-stock companies: noneIX. Structured Entities Controlled by the Company
□ Applicable ?Not applicable
X. Risks Faced by the Company and Countermeasures(I) Market competition riskRisk description: The state of stock competition in the domestic commercial vehicle market willnot change under the effect of factors such as international political situation, economic situation, anddomestic market demand. The Company will face greater market competition pressure in the secondhalf of the year with foreign automobile enterprises accelerating their deployment in the domesticmarket and the increase of wait-and-see mood in commercial vehicle consumption.Countermeasures: The Company shall seize market opportunities, launch key campaigns in hotareas and compete for growth; optimize inventory structure, strengthen inventory management, andpromote rapid digestion of difficult inventory; enrich financial products, strengthen preventivemeasures, and prevent and control financial risks accurately; focus on key areas and accelerate theconstruction of private networks; improve product development and cover market segment; improvethe channel capability comprehensively. All the above measures are taken to improve the Company'scompetitiveness in the market.(II) Risk of international environmental change
Risk description: In the second half of the year, the Company will face more uncertainty indeveloping international businesses due to the severe international situation, the global epidemicsituation and geopolitical conflicts which are intertwined, the acceleration of Federal Reserve ininterest rate increase, higher downward risk of the world economy, and the increase of ocean freight.
Countermeasures: The Company shall win key battles and make breakthroughs in key marketsto make sure to reach the set goals; focus on star projects, promote channel layout, deepenprofessional cooperation, and achieve breakthroughs in border trade; focus on advantageous fields,keep up with key projects, and promote breakthroughs in big customers; increase policy support,improve product development, and move the business team to critical areas.(III) Policy risk
Risk description: The impact on the industry will be more obvious due to the issuance of theregulations on fuel consumption limits of heavy commercial vehicles in the fourth stage and theimplementation of the new regulations on blue-license light trucks in the second half of the year. Inaddition, various policies will bring about more variations to the commercial vehicle market due toenvironmental factors such as the promotion of multimodal transportation.
Countermeasures: The Company shall deeply study and judge the industry changes caused bypolicy implementation in the second half of the year according to the research results of existingpolicies and regulations; pay attention to the new trend of the industry and use other new policies tohedge risks; launch products that meet the requirements of the new policy in time to seize the marketopportunity.(IV) Risk of raw material price fluctuation
Risk description: The prices of some important raw materials continue to fluctuate due to factorssuch as the epidemic situation and the national dual control policy on energy consumption. In thesecond half of the year, the prices of important raw materials may rise, which will affect the efficientand stable state of the existing supply chain and increase the cost.
Countermeasures: The Company shall establish reasonable reserves to resist the adverse effectsof price fluctuations according to the price change trend of key raw materials; promote the awarenessof internal competition and cooperation, and optimize the procurement cost of bulk raw materials byimproving the management mechanism; optimize the upstream cooperation mechanism, formulateand implement optimization strategies, and ensure quality and efficiency while optimizing cost.
Section IV Corporate Governance
I. Information on Annual Shareholders’ Meeting and Extraordinary Shareholders’ Meeting Held in the Reporting Period
1. Shareholders’ meeting in the reporting period
| Session | Meeting Type | Participation Ratio of Investors | Date | Date of Disclosure | Meeting Resolution |
| First extraordinary shareholders’ meeting of 2022 | Extraordinary shareholders’ meeting | 84.94% | February 16, 2022 | February 17, 2022 | Reviewed and approved the Proposal on Estimated Amount of Daily Related Transactions in 2022, the Proposal on Estimated Amount of Financial Business with First Automobile Finance Co., Ltd. in 2022, the Proposal on Change of Registered Capital of the Company and the Proposal on Amending the Articles of Association. |
| 2021 annual shareholders’ meeting | Annual shareholders’ meeting | 83.82% | April 29, 2022 | April 30, 2022 | Reviewed and approved the 2021 Annual Work Report of the Board of Directors, the 2021 Annual Work Report of the Board of Supervisors, the 2021 Annual Financial Statements, the 2021 Profit Distribution Plan, the 2021 Annual Report and its Summary, and the Proposal on Electing Li Hongjian as the Non-independent Director of the Company. |
2. Preferred shareholders with resumed voting rights request to convene an extraordinaryshareholders' meeting
□ Applicable ?Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company?Applicable □ Not Applicable
| Name | Position | Type | Date | Cause |
| Li Hongjian | Director | Elected | April 29, 2022 | |
| Liu Changqing | Director | Quit | March 29, 2022 | Job changes |
III. Profit Distribution and Transfer from Capital Reserve to Share Capital in the ReportingPeriod
□ Applicable ?Not applicable
The Company does not plan to pay cash dividends or bonus shares, or convert reserves into sharecapital in the first half of the year.IV. IV. Implementation of the Company's Equity Incentive Plan, Employee Stock OwnershipPlan or Other Employee Incentive Measures?Applicable □ Not Applicable
1. Equity incentive
(1) On December 9, 2021, the Company held the 20th meeting of the 9th Board of Directors andthe 19th meeting of the 9th Board of Supervisors respectively, reviewed and approved the Proposalon Granting Reserved Part of Restricted Shares in the Phase I Restricted Share Incentive Plan toIncentive Objects, and granted 3,721,601 restricted shares to 33 incentive objects. On January 6, 2022,The Company issued the Announcement on Completion of Registration of Grant of Reserved Part ofRestricted Shares in Phase I Restricted Share Incentive Plan on CNINFO(http://www.cninfo.com.cn).
(2) On December 9, 2021, the Company held the 20th meeting of the 9th Board of Directors andthe 19th meeting of the 9th Board of Supervisors respectively, reviewed and approved the Proposalon Adjusting the Repurchase Price of Restricted Shares in the Phase I Restricted Share Incentive
Plan and the Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase IRestricted Share Incentive Plan, and agreed to repurchase and cancel 260,857 shares of all restrictedshares granted to the original 2 incentive objects but not yet released from sale. On January 17, 2022,the Company issued the Announcement on Completion of Repurchase and Cancellation of SomeRestricted Shares on CNINFO (http://www.cninfo.com.cn).
2. Implementation of employee stock ownership plan
□ Applicable ?Not applicable
3. Other employee incentive measures
□ Applicable ?Not applicable
Section V Environmental and Social ResponsibilitiesI. Major Environmental Protection ProblemsWhether the listed company and its subsidiaries are key pollutant discharging entities announced by the environmental protection authority?Yes □ No
| Name of Company or Subsidiary | Names of Main Pollutants and Specific Pollutants | Discharge Mode | Number of Discharge Outlets | Distribution of Discharge Outlets | Discharge Concentration | Pollutant Discharge Standards Implemented | Total Discharge | Total Approved Discharge | Excessive Discharge |
| Truck Factory of FAW Jiefang Automotive Co., Ltd | Sewage: COD | Continuous or intermittent discharge of wastewater | 4 | 1 for frame, cab and non-metal coating respectively, and 1 for general domestic sewage outlet | 54mg/L | 800mg/L | 11.6632t | 630.104t | No excessive discharge |
| Waste gas: non-methane hydrocarbon | Continuous discharge during waste gas production | 71 | Frame, cab, roof of non-metallic coating workshop | 2.8mg/m? | 120mg/m? | 7.53t | 335.4t | No excessive discharge | |
| Chengdu Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. | Sewage: COD | Intermittent discharge | 1 | Southeast of the Company | 41mg/L | 500mg/L | 0.3565 Ton | 21.3t | No excessive discharge |
| Waste gas: non-methane hydrocarbon | Continuous discharge during waste gas production | 2 | Roof of coating workshop | 2.34mg/m? | 60mg/m? | 14.043t | 75.91t | No excessive discharge | |
| Transmission Branch (Transformation | Sewage: COD | Intermittent discharge of | 2 | 1 in the northwest corner of substation 1 workshop and 1 | 57mg/L | 500mg/L | 1.9318t | 10t | No excessive discharge |
| Name of Company or Subsidiary | Names of Main Pollutants and Specific Pollutants | Discharge Mode | Number of Discharge Outlets | Distribution of Discharge Outlets | Discharge Concentration | Pollutant Discharge Standards Implemented | Total Discharge | Total Approved Discharge | Excessive Discharge |
| Factory) of FAW JIEFANG AUTOMOTIVE CO., LTD. | wastewater | in the southwest corner of substation 2 workshop | |||||||
| Waste gas: non-methane hydrocarbon | Continuous discharge during waste gas production | 5 | 4 for No. 1 workshop and 1 for the south outside No. 1 workshop | 2.99mg/m? | 120mg/m? | 0.252t | - | No excessive discharge | |
| Transmission Branch (Axle Factory) of FAW JIEFANG AUTOMOTIVE CO., LTD. | Sewage: COD | Intermittent discharge | 6 | 2 for No. 1, No. 2 and No. 3 workshops respectively | 312mg/L | 500mg/L | 1.51t | - | No excessive discharge |
| Waste gas: non-methane hydrocarbon | Continuous discharge during waste gas production | 20 | 8 for No. 1 workshop, 7 for No. 2 workshop, and 5 for No. 3 workshop | 2.81mg/ m? | 120mg/L | 1.03t | - | No excessive discharge | |
| Changchun Intelligent Bus Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. | Sewage: COD | Continuous or intermittent discharge of wastewater | 1 | South gate of sewage treatment station | 39.5mg/L | 500mg/L | 0.8631t | 4.575t | No excessive discharge |
| Waste gas: non-methane hydrocarbon | Continuous discharge during waste gas production | 12 | Roof of painting and welding workshop of the Company | 1.26mg/m? | 120mg/m? | 3.161t | 49.5t | No excessive discharge | |
| Engine Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. | Waste gas: non-methane hydrocarbon | Intermittent discharge of waste gas | 3 | Workshop roof | 1.62mg/m? | 120 mg/m? | 0.0264t | - | No excessive discharge |
| Name of Company or Subsidiary | Names of Main Pollutants and Specific Pollutants | Discharge Mode | Number of Discharge Outlets | Distribution of Discharge Outlets | Discharge Concentration | Pollutant Discharge Standards Implemented | Total Discharge | Total Approved Discharge | Excessive Discharge |
| Wuxi Diesel Engine Works of FAW JIEFANG AUTOMOTIVE CO., LTD. | Sewage: COD | Continuous discharge | 3 | 1 for west gate and 2 for south gate | 117mg/m? | 500mg/m? | 11.35t | 25t | No excessive discharge |
| Waste gas: nitrogen oxides, smoke and non-methane hydrocarbons | Continuous discharge during production | 12 | 3 for assembly workshop, 5 for the R&D Department, 2 for QA Department, 2 for processing workshop and 1 for hazardous waste warehouse | 84 mg/m? for nitrogen oxide, 2.62 mg/m? for non-methane hydrocarbon | 240 mg/m? for nitrogen oxide, 120 mg/m? for non-methane hydrocarbon | 10.74t for nitrogen oxide, 0.62t for VOC | 27.2t for nitrogen oxide, 1.77t for VOC | No excessive discharge | |
| Wuxi Diesel Engine Huishan Factory of FAW JIEFANG AUTOMOTIVE CO., LTD. | Sewage: COD | Continuous discharge | 1 | 1 for north gate | 44mg/m? | 500mg/m? | 1t | 5.35t | No excessive discharge |
| Waste gas: nitrogen oxide, non-methane hydrocarbon | Continuous discharge during production | 6 | Complex workshop | 125 mg/m? for nitrogen oxide, 16.6 mg/m? for non-methane hydrocarbon | 240 mg/m? for nitrogen oxide, 120 mg/m? for non-methane hydrocarbon | 1.06t for nitrogen oxide, 0.07t for VOC | 8.48t for nitrogen oxide, 1.62t for VOC | No excessive discharge | |
| FAW Jiefang (Qingdao) Automotive Co., Ltd. | Sewage: COD, ammonia nitrogen | Continuous or intermittent discharge of wastewater | 1 | Outside the sewage treatment station of the Company | COD: 59.1 mg/L Ammonia nitrogen: 2.91 mg/L | COD: 500 mg/L; ammonia nitrogen: 45 mg/L | COD: 5.89t; Ammonia nitrogen: 0.358t | COD: 88.79t; Ammonia nitrogen: 5.11t | No excessive discharge |
| Name of Company or Subsidiary | Names of Main Pollutants and Specific Pollutants | Discharge Mode | Number of Discharge Outlets | Distribution of Discharge Outlets | Discharge Concentration | Pollutant Discharge Standards Implemented | Total Discharge | Total Approved Discharge | Excessive Discharge |
| Waste gas: non-methane hydrocarbon | Continuous discharge during waste gas production | 15 | Roof of each workshop of the Company | 4.68 mg/m? | 30mg/m? | 17.23t | 164.98t | No excessive discharge | |
| FAW Jiefang Dalian Diesel Engine Co., Ltd. | Sewage: COD, ammonia nitrogen | Continuous or intermittent discharge of wastewater | 1 | Outside the sewage treatment station of the Company | COD:58mg/L Ammonia nitrogen: 27 mg/L | COD: 500 mg/L; ammonia nitrogen: 45 mg/L | COD: 1.41t; Ammonia nitrogen: 0.4746t | COD: 88.79t; Ammonia nitrogen: 5.11t | No excessive discharge |
| Waste gas: non-methane hydrocarbon and nitrogen oxide | Continuous discharge during waste gas production | 5 | Roof of the Company's workshop | Non-methane hydrocarbon: 4.57 mg/m?; nitrogen oxide: 57 mg/m? | Non-methane hydrocarbon: 120 mg/m?; nitrogen oxide: 240 mg/m? | Non-methane hydrocarbon: 1.3022t, nitrogen oxide: 0.859t | Non-methane hydrocarbon: 14.2t; nitrogen oxide: 11.967t | No excessive discharge |
Construction and operation of pollution prevention facilities
1. Wastewater treatment:
(1) The Truck Factory of FAW JIEFANG AUTOMOTIVE CO., LTD. has three sewagetreatment stations currently, namely, frame workshop sewage treatment station, coating workshopsewage treatment station and non-metallic coating sewage treatment station. ① The frame sewagetreatment station has a treatment capacity of 300 tons/day, and mainly treats the electrophoresisprocess wastewater before it enters the frame workshop. ② The cab coating workshop sewagetreatment station has a treatment capacity of 400 tons/day, and mainly treats the wastewater andpainting wastewater before they enter the workshop. ③ The non-metallic line sewage treatmentstation has a treatment capacity of 240 tons/day, and mainly treats the painting wastewater before itenters the production line. The wastewater and domestic sewage pretreated by the above three sewagestations are discharged into the FAW Integrated Sewage Treatment Plant, and then discharged intothe Changchun Western Suburbs Sewage Treatment Plant after reaching the Class III standard in theIntegrated Wastewater Discharge Standard (GB8978-1996).
(2) The Chengdu Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. has an internal sewagetreatment station which is mainly used to treat the company's production and domestic wastewater,has a total treatment capacity of 300 tons/day, and adopts the SBR method for treatment. The sewagetreatment station can operate continuously and stably. The sewage is discharged to the urban sewagetreatment plant through the municipal pipe network for further treatment after reaching the standard.
(3) The Transmission Branch (Shaft Gear Park) of FAW JIEFANG AUTOMOTIVE CO., LTD.has an internal sewage treatment station which is used to treat the company's production wastewater,and has a total treatment capacity of 120 tons/day. The station is currently being repaired due to thefailure of some facilities. There is an industrial sewage storage tank in each of the two workshops ofthe transmission branch gearbox workshop. A contract is signed with FAW for the disposal ofindustrial sewage, and the sewage is transferred by the FAW tanks every day to the comprehensivesewage treatment workshop for compliant disposal.
(4) There is an industrial sewage storage tank in each of the three workshops in the TransmissionBranch (Axle Factory) of FAW JIEFANG AUTOMOTIVE CO., LTD., which signs a disposalcontract with FAW to transfer the sewage by FAW tanks to the comprehensive treatment workshopfor complaint disposal every day.
(5) The Changchun Intelligent Bus Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. hasan internal sewage treatment station which is used to treat the company's production and domesticwastewater, has a treatment capacity of 120 tons/day, and adopts the physicochemical + biochemicaltreatment process. The station can operate continuously and stably and realize real-time up-to-standard discharge. The sewage is discharged to the urban sewage treatment plant through themunicipal pipe network for further treatment after reaching the standard.
(6) The industrial wastewater generated by the Engine Branch of FAW JIEFANGAUTOMOTIVE CO., LTD. is entrusted to FAW with disposal qualification for disposal.
(7) The Wuxi Diesel Engine Works of FAW JIEFANG AUTOMOTIVE CO., LTD. has aninternal sewage treatment station which is used to treat the company's production and domesticwastewater, has a total treatment capacity of 3,000 tons/day, and runs 24 hours a day. The stationadopts the physicochemical + biochemical treatment process, and can operate continuously and stablyand realize real-time up-to-standard discharge. The sewage enters the urban sewage treatment plantthrough the municipal pipe network for further treatment after reaching the standard.
(8) The Wuxi Diesel Engine Huishan Factory of FAW JIEFANG AUTOMOTIVE CO., LTD.has an internal sewage treatment station which is used to treat the company's production and domesticwastewater, has a total treatment capacity of 1,000 tons/day, and runs 24 hours a day. The stationadopts the physicochemical + biochemical treatment process, and can operate continuously and stablyand realize real-time up-to-standard discharge. The sewage enters the urban sewage treatment plantthrough the municipal pipe network for further treatment after reaching the standard.
(9) FAW Jiefang Qingdao Automotive Co., Ltd. has an internal sewage treatment station whichcombines physicochemical method and biochemical method, and is mainly used to treat thephosphating wastewater, electrophoresis wastewater and degreasing wastewater discharged fromdaily production of the coating workshop, as well as the daily domestic sewage of the Company. Thedesigned maximum daily treatment capacity of the station is 2,160 tons/day. The treated wastewatermeets the index requirements of the Wastewater Quality Standards for Discharge to MunicipalSewers (GB/T 31962-2015), and reaches the Water Quality Standard for Domestic MiscellaneousWater (GB/T18290-2002) after being further treated by the MBR improvement equipment, thusreducing the sewage concentration significantly, increasing the reuse amount of recycled water, andsaving water. The wastewater is discharged to Jimo sewage treatment station for detailed treatmentthrough the sewage outlet after reaching the standard.
(10) The FAW Jiefang Dalian Diesel Engine Co., Ltd. has an internal sewage treatmentstation which is used to treat the company's production and domestic wastewater, has a total treatmentcapacity of 816 tons/day, and runs 24 hours a day. The station adopts the distillation pretreatmentprocess for production wastewater and biochemical treatment process for comprehensive wastewater,and can operate continuously and stably and realize real-time up-to-standard discharge. The sewageenters the urban sewage treatment plant through the municipal pipe network for further treatmentafter reaching the standard.
2. Waste gas treatment:
(1) All waste gas treatment facilities in the Truck Factory of FAW JIEFANG AUTOMOTIVECO., LTD. can operate continuously and stably. The dust generated by the plasma cutting machinein the stamping workshop is collected and filtered and then discharged through a 15m exhaust pipe.The CO
welding machine adopts a single-machine dust removal system, and the waste gas isdischarged locally in the workshop after being treated by a single-machine dust collector. The wastegas generated by the treatment and drying process before entering the frame workshop is dischargedthrough a 15m exhaust pipe after being treated by a direct combustion device. VOC waste gas fromcab coating and non-metal coating is discharged after reaching the standard through hydrocyclone +dry filtration + zeolite runner adsorption and concentration + RTO (regenerative incineration).
(2) All waste gas treatment facilities of Chengdu Branch of FAW JIEFANG AUTOMOTIVECO., LTD. can operate continuously and stably. The painting waste gas of the coated body isdischarged after reaching the standard through hydrocyclone + dry filtration + zeolite runneradsorption and concentration + RTO (regenerative incineration). All welding fumes are dischargedafter reaching the standard and being treated by centralized and mobile dust removal systems.
(3) All waste gas treatment facilities of the Transmission Branch (Transformation Factory) ofFAW JIEFANG AUTOMOTIVE CO., LTD. can operate continuously and stably. The painting wastegas generated from the coating line is discharged after reaching the standard and being treated byactivated carbon adsorption and desorption catalytic combustion devices. All welding fumes aredischarged after reaching the standard and being treated by centralized and mobile dust removalsystems.
(4) All waste gas treatment facilities of the Transmission Branch (Axle Factory) of FAWJIEFANG AUTOMOTIVE CO., LTD. can operate continuously and stably, and all welding fumesare discharged after reaching the standard and being treated by centralized and mobile dust removal
systems. The VOC treatment facilities for the No. 3 workshop coating line have been installed andare currently in the stage of networking and commissioning.
(5) All welding fumes of Changchun Intelligent Bus Branch of FAW JIEFANGAUTOMOTIVE CO., LTD. are discharged after being treated by the centralized dust removal systemand reaching the standard. The VOC treatment project has entered the equipment installation stageand is expected to be completed and put into use in October 2022.
(6) The Engine Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. has three quenchingmachines generating waste gas and equipped with adsorption purification devices. The waste gas isdischarged after reaching the standard and being treated.
(7) All waste gas treatment facilities of Wuxi Diesel Engine Works of FAW JIEFANGAUTOMOTIVE CO., LTD. can operate continuously and stably. The painting waste gas generatedfrom coating is discharged after reaching the standard and receiving activated carbon adsorption anddesorption + catalysis, and the waste gas generated from test run is discharged after reaching thestandard and being treated by SCR treatment device.
(8) All waste gas treatment facilities of Wuxi Diesel Engine Huishan Factory of FAW JIEFANGAUTOMOTIVE CO., LTD. can operate continuously and stably. The painting waste gas generatedfrom coating is discharged after reaching the standard and receiving activated carbon adsorption anddesorption + catalysis, and the waste gas generated from test run is discharged after reaching thestandard and being treated by SCR treatment device.
(9) All waste gas treatment facilities of FAW Jiefang (Qingdao) Automotive Co., Ltd. canoperate continuously and stably. The painting waste gas generated by the plastic parts coatingworkshop, the cab coating workshop and the general assembly workshop is discharged after reachingthe standard and being purified by paint mist, adsorbed by zeolite concentration runner and treatedby RTO incineration device in the three workshops. The drying waste gas generated by the generalassembly workshop is burned with low nitrogen, and discharged after reaching the standard and beingtreated by the quaternary combustion device. The drying waste gas generated by the coating workshopis burned with low nitrogen and discharged after reaching the standard and receiving TNV thermalincineration. All welding fumes are discharged after reaching the standard and being treated by filtercartridge dust collector.
(10) All waste gas treatment facilities of FAW Jiefang Dalian Diesel Engine Co., Ltd. canoperate continuously and stably. The painting waste gas generated by coating is discharged after
reaching the standard and being treated by the water curtain paint mist treatment device, and the wastegas generated by test run is discharged after reaching the standard and being treated by the alkaliliquor washing waste gas treatment device.
3. Noise control:
All noise reduction and shock absorption measures of branches and subsidiaries of the Companycan meet the requirements of national laws and regulations, and the noise within the plant boundarymeets the requirements of national emission regulations.
4. Hazardous waste disposal:
All branches and subsidiaries of the Company deliver 100% of hazardous wastes to organizationswith hazardous waste transportation and disposal qualification for compliant transfer and disposal instrict accordance with the requirements of national laws, regulations and standards.Environmental impact assessment of construction projects and other administrative permits forenvironmental protection
Environmental impact assessment is carried out, reply to the assessment is obtained, and allenvironmental protection requirements are implemented for the construction projects of J7 intelligentassembly line, Foshan new energy base and Guanghan base of the truck factory affiliated to theCompany, and environmental protection acceptance is carried out after these projects are completed.The Company pays environmental protection tax in full on a quarterly basis according to therequirements of the tax law based on wastewater, waste gas and discharge.Emergency plan for environmental emergencies
All branches and subsidiaries of the Company prepare their own emergency plans forenvironmental emergencies as required, which are approved and filed by the local ecologicalenvironment bureau. All organizations organize drills every year according to the emergency plansand further revise them, and have good emergency response capabilities for environmentalemergencies.
Environmental self-monitoring planAll branches and subsidiaries of the Company have prepared their own monitoring plansaccording to the requirements of pollutant discharge permits and regulations, and organized qualifiedmonitoring organizations to monitor wastewater, waste gas, noise and soil in accordance with therequirements of the plans. The test report for the first half of 2022 shows that all monitoring indicatorsmeet the requirements of all national emission regulations and standards.Administrative Penalties due to Environmental Problems in the Reporting Period
| Name of Company or Subsidiary | Cause for Penalties | Violations | Results of Penalties | Impact on Production and Operation of the Listed Company | Rectification Measures of the Company |
| None | None | None | None | None | None |
Other environmental information that shall be disclosedAll branches and subsidiaries of the Company have been certified by the environmentalmanagement system (GB/T24001-2020), and carried out cleaner production audits in strictaccordance with the requirements. As a responsible central enterprise, the Company strictly abidesby the national requirements, has been practicing the concept of scientific development, builds a cleanand green enterprise, and is committed to becoming a socialist ecological civilization benchmarkingenvironment-friendly enterprise of "energy conservation, consumption reduction, emission reductionand efficiency improvement".Measures taken to reduce carbon emissions in the reporting period and their effects?Applicable □ Not ApplicableFAW JIEFANG AUTOMOTIVE CO., LTD. pays close attention to energy conservation andcarbon reduction, actively docks with the government's preferential energy policies, and completesthe market-oriented transaction of green electricity for the first time. The Company organizes itsbranches and subsidiaries such as Changchun Special Vehicle Branch, Axle Branch, Wuxi DieselEngine Works and FAW Jiefang (Qingdao) Automotive Co., Ltd. to start the clean energy applicationplanning, and plans to implement 5 PV projects. It is estimated that 43.5MW clean energy can beconnected to the grid for power generation to further reduce the carbon emission.
Other information about environmental protection: noneII. Social Responsibility
The Company actively implements the important strategic deployment of the CPC CentralCommittee and the State Council on rural revitalization, implements the work requirements of FAWfor targeted assistance, and provides targeted assistance to Zhenlai County in Jilin Province andFengshan County in Guangxi Zhuang Autonomous Region to help them consolidate ruralinfrastructure, activate industrial development, improve education and consumption level, andcontinuously consolidate the achievements of poverty alleviation, thus making contributions torealizing rural revitalization.
Section VI Important Matters
I. Commitments Made by the Company's Actual Controllers, Shareholders, Related Parties,Purchasers and the Company to Interested Parties that will be Fulfilled in the Reporting Period,and Commitments not Fulfilled by the End of the Reporting Period
□ Applicable ?Not applicable
For the Company, there is no commitment made by the Company's actual controllers, shareholders,related parties, purchasers and the Company to interested parties that will be fulfilled in the reportingperiod, or other commitments not fulfilled by the end of the reporting period.II. Non-operating Occupation of Funds by Controlling Shareholders and Other RelatedParties to the Listed Company
□ Applicable ?Not applicable
For the Company, there is no non-operating occupation of funds by controlling shareholders and otherrelated parties to the listed company.III. Illegal External Guarantee
□ Applicable ?Not applicable
The Company has no illegal external guarantee in the reporting period.IV. Appointment and Dismissal of Accounting FirmHas the semi-annual financial report been audited?
□ Yes ?No
The semi-annual report of the Company is not audited.V. Description of the Board of Directors and the Board of Supervisors on the "Non-standardAudit Report" of the Accounting Firm in the Reporting Period
□ Applicable ?Not applicable
VI. Description of the Board of Directors on the "Non-standard Audit Report" of the Last Year
□ Applicable ?Not applicable
VII. Matters Related to Bankruptcy Reorganization
□ Applicable ?Not applicable
The Company has no matter related to bankruptcy reorganization in the reporting period.VIII. Litigation MattersMajor litigation and arbitration matters
□ Applicable ?Not applicable
The Company has no major litigation or arbitration matter in the reporting period.Other litigation matters?Applicable □ Not Applicable
| Basic Information about Litigation (Arbitration) | Amount Involved (CNY 10,000) | Are There Estimated Liabilities | Progress of Litigation (Arbitration) | Litigation (Arbitration) Results and Impact | Implementation of Litigation (Arbitration) Judgment | Date of Disclosure | Disclosure Index |
| Summary of other litigation not reaching the major disclosure standard | 24,739.01 | Including estimated liabilities of CNY 32,770,300 | Case not closed | No significant impact | Case not closed by the end of the reporting period | ||
| Summary of other litigation not reaching the major disclosure standard | 56.10 | No | Case closed | No significant impact | Completed |
IX. Punishment and Rectification
□ Applicable ?Not applicable
X. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable ?Not applicable
XI. Major Related Transactions
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
1. Related transactions related to daily operations
?Applicable □ Not Applicable
| Related Transaction Party | Correlation | Type of Related Transaction | Content of Related Transaction | Pricing Principle of Related Transaction | Price of Related Transaction | Amount of Related Transaction (CNY 10,000) | Proportion to the Amount of Similar Transactions | Approved Transaction Amount (CNY 10,000) | Is the Approved Amount Exceeded | Settlement Method of Related Transaction | Available Market Value of Similar Transactions | Date of Disclosure | Disclosure Index |
| China FAW Group Import & Export Co., Ltd. | The same ultimate controlling party | Sales of goods | Sales of goods | Market price | Market pricing | 229,264.76 | 10.02% | 343,417 | No | Cash + bill settlement | 229,264.76 | January 28, 2022 | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#latestAnnouncement |
| Total | -- | -- | 229,264.76 | -- | 343,417 | -- | -- | -- | -- | -- | |||
| Details on the return of large goods | None | ||||||||||||
| Actual performance in the reporting period, if the total amount of daily related transactions to be incurred in the current period is estimated by category | For details about the actual performance of related transactions in the reporting period, please see Item XI "Related parties and related transactions" in Section X of this report. | ||||||||||||
| Reasons for large difference between transaction price and market reference price | Not applicable | ||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
2. Related transactions arising from the acquisition and sale of assets or equity
□ Applicable ?Not applicable
The Company has no related transaction arising from the acquisition and sale of assets or equity inthe reporting period.
3. Related transactions of joint external investment
□ Applicable ?Not applicable
The Company has no related transaction of joint foreign investment in the reporting period.
4. Related credit and debt transactions
?Applicable □ Not ApplicableWhether there are non-operating related credit and debt transactions
□ Yes ?No
The Company has no non-operating related credit and debt transactions in the reporting period.
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
5. Transaction with related finance companies
?Applicable □ Not ApplicableDeposit Business
| Related Parties | Correlation | Maximum Daily Deposit Limit (CNY 10,000) | Deposit Interest Rate Range | Opening Balance (CNY 10,000) | Amount Incurred in Current Period | Ending Balance (CNY 10,000) | |
| Total Deposit Amount in the Current Period (CNY 10,000) | Total Withdrawal Amount in the Current Period (CNY 10,000) | ||||||
| First Automobile Finance Co., Ltd. | Associated enterprise of the Company, the same ultimate controlling party | 3,000,000 | 0.35%-2.85% | 2,265,311.07 | 19,646,176.20 | 19,822,347.55 | 2,089,139.72 |
Credit Granting or Other Financial Businesses
| Related Parties | Correlation | Business Type | Total Price (in CNY 10,000) | Actual Amount Incurred (CNY 10,000) |
| First Automobile Finance Co., Ltd. | Associated enterprise of the Company, the same ultimate controlling party | Other financial businesses | 900,000 | 82,647.25 |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
6. Transactions between finance companies controlled by the Company and related parties
□ Applicable ?Not applicable
There is no deposit, loan, credit granting or other financial businesses between the finance companies controlled by the Company and relatedparties.
7. Other major related transactions
?Applicable □ Not Applicable
On January 27, 2022, the 21st meeting of the 9th Board of Directors of the Company reviewedand approved the Proposal on Estimated Amount of Daily Related Transactions in 2022 and theProposal on Estimated Amount of Financial Business with First Automobile Finance Co., Ltd. in2022, which were reviewed and approved by the first extraordinary shareholders' meeting of theCompany in 2022.Relevant Inquiries on Disclosure Website of Interim Report of Major Related Transactions
| Name of Temporary Announcement | Disclosure Date of Temporary Announcement | Name of Temporary Announcement Disclosure Website |
| Announcement on estimated amount of daily related transactions in 2022 | January 28, 2022 | CNINFO (http://www.cninfo.com.cn) |
| Announcement on estimated amount of financial business with First Automobile Finance Co., Ltd. in 2022 | January 28, 2022 | CNINFO (http://www.cninfo.com.cn) |
XII. Major Contracts and Their Performance
1. Trusteeship, contracting and lease
(1) Trusteeship
?Applicable □ Not ApplicableDescription of trusteeship
The Entrustment Management Agreement signed by Jiefang Limited with FAW and FAW LightCommercial Vehicle Co., Ltd. (hereinafter referred to as "FAW Light Vehicle Company"), showsthat FAW will entrust Jiefang Limited to manage the FAW Harbin Light Automobile Co., Ltd. andFAW Hongta Yunnan Automobile Manufacturing Co., Ltd., which are affiliated to FAW Light
Vehicle Company. For main contents of relevant entrustment management agreement, please see theReport on Major Assets Replacement, Shares Issuance and Cash Payment for Assets Purchase andRelated Transactions of FAW Car Co., Ltd.Projects that bring about profits and losses exceeding 10% of the total profit of the Company in thereporting period
□ Applicable ?Not applicable
The Company has no trusteeship project that brings about profits and losses exceeding 10% of thetotal profit of the Company in the reporting period.
(2) Contracting
□ Applicable ?Not applicable
There is no contracting made by the Company in the reporting period.
(3) Lease
?Applicable □ Not ApplicableDescription of leaseFor details of the Company's operating lease, please refer to Note 13 "Investment real estate", Note14 "Fixed assets", and Note 18 "Right-of-use assets" in Notes to Items in Consolidated FinancialStatements (VII) of Section X, and Note 5 "Related parties and related transactions" in Item XI"Related parties and related transactions".Projects that bring about profits and losses exceeding 10% of the total profit of the Company in thereporting period
□ Applicable ?Not applicable
The Company has no leasing project that brings about profits and losses exceeding 10% of the totalprofit of the Company in the reporting period.
2. Major guarantees
□ Applicable ?Not applicable
The Company has no major guarantee in the reporting period.
3. Entrusted financial management
□ Applicable ?Not applicable
The Company has no entrusted financial management in the reporting period.
4. Other major contracts
□ Applicable ?Not applicable
The Company has no other major contracts in the reporting period.XIII. Other Major Matters to be Explained
□ Applicable ?Not applicable
There are no other major matters to be explained by the Company in the reporting period.XIV. Major Events of Subsidiaries
□ Applicable ?Not applicable
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
Section VII Changes in Shares and ShareholdersI. Changes in Shares
1. Changes in shares
Unit: share
| Before the Change | Increase/Decrease Made by the Change (+, -) | After the Change | |||||||
| Quantity | Scale | Issue of New Shares | Bonus | Share Transferred from Accumulation Fund | Others | Subtotal | Quantity | Scale | |
| I. Restricted shares | 3,238,899,791 | 69.64% | 3,721,601 | -260,857 | 3,460,744 | 3,242,360,535 | 69.67% | ||
| 1. Shares held by the state | |||||||||
| 2. Shares held by the state-owned legal person | 3,197,912,134 | 68.76% | 3,197,912,134 | 68.71% | |||||
| 3. Shares held by other domestic enterprises | 40,987,657 | 0.88% | 3,721,601 | -260,857 | 3,460,744 | 44,448,401 | 0.96% | ||
| Including: shares held by domestic legal person | |||||||||
| Shares held by domestic natural person | 40,987,657 | 0.88% | 3,721,601 | -260,857 | 3,460,744 | 44,448,401 | 0.96% | ||
| 4. Shares held by foreign enterprises | |||||||||
| Including: shares held by overseas legal person | |||||||||
| Shares held by overseas natural person | |||||||||
| II. Unrestricted shares | 1,411,754,078 | 30.36% | 1,411,754,078 | 30.33% | |||||
| 1. CNY ordinary shares | 1,411,754,078 | 30.36% | 1,411,754,078 | 30.33% | |||||
| 2. Foreign shares listed in China | |||||||||
| 3. Foreign shares listed overseas | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 4,650,653,869 | 100.00% | 3,721,601 | -260,857 | 3,460,744 | 4,654,114,613 | 100.00% | ||
Reasons for changes in shares?Applicable □ Not ApplicableIn the reporting period, the Company granted 3,721,601 shares in total included in the reservedpart of the phase I restricted share incentive plan. The new shares are listed on January 10, 2022. Twooriginal incentive objects of the Company do not conform to the provisions on incentive objects inthe restricted share incentive plan due to job transfer, and a total number of 260,857 restricted sharesheld by them is repurchased and canceled by the Company. The total share capital of the Companyis 4,654,114,613 shares after the grant, repurchase and cancellation of the above reserved part.Approval of share changes?Applicable □ Not ApplicableOn December 9, 2021, the 20th meeting of the 9th Board of Directors and the 19th meeting ofthe 9th Board of Supervisors of the Company reviewed and approved the Proposal on GrantingReserved Part of Restricted Shares in the Phase I Restricted Share Incentive Plan to Incentive Objectsand the Proposal on Repurchase and Cancellation of Partial Restricted Shares in the Phase IRestricted Share Incentive Plan respectively.Transfer of share changes?Applicable □ Not Applicable
(1) On January 4, 2022, the Company submitted registration materials to CSDC for the additionalshares involved in the grant of the reserved part of this equity incentive plan. On January 10, 2022,new shares were listed, and the total share capital of the Company increased to 4,654,375,470 shares.
(2) On January 12, 2022, the Company submitted registration materials to CSDC for the sharesrepurchased and canceled in this equity incentive plan. On January 13, 2022, CSDC issued theConfirmation of Securities Transfer Registration to the Company, and the total share capital of theCompany was reduced to 4,654,114,613 shares.Implementation progress of share repurchase
□ Applicable ?Not applicable
Implementation progress of reducing repurchased shares by centralized bidding
□ Applicable ?Not applicable
Impact of changes in shares on financial indicators such as basic earnings per share and dilutedearnings per share in the latest year and the latest period, and net assets per share attributable tocommon shareholders of the Company?Applicable □ Not ApplicableIn the reporting period, the net increase in share capital of the Company was 3,460,744 shares, whichhad little impact on the Company's financial indicators such as basic earnings per share, dilutedearnings per share and net assets per share attributable to common shareholders of the Company.Other information disclosed as deemed necessary by the Company or required by the securitiesregulatory authority
□ Applicable ?Not applicable
2. Changes in restricted shares
?Applicable □ Not Applicable
Unit: share
| Name of Shareholder | Number of Restricted Shares at the Beginning of the Period | Number of Restricted Shares Released in the Current Period | Number of Restricted Shares Increased in the Current Period | Number of Restricted Shares at the End of the Period | Reason for Restriction | Release Date |
| China FAW Co., Ltd. | 2,413,412,134 | 2,413,412,134 | Major asset restructuring | April 9, 2023 | ||
| FAW Bestune Car Co., Ltd. | 784,500,000 | 784,500,000 | Major asset restructuring | April 9, 2023 | ||
| Hu Hanjie | 334,331 | 334,331 | Equity incentive | The restricted period of all restricted shares granted to incentive objects is 2 years, and three release dates are set, which are the next day after the expiration of the restricted period and the first and second anniversary days of that day (postponed to the first trading | ||
| Wu Bilei | 228,552 | 228,552 | Equity incentive | |||
| Zhang Guohua | 228,493 | 228,493 | Equity incentive | |||
| Kong Dejun | 228,498 | 228,498 | Equity incentive | |||
| Wang Ruijian | 253,496 | 253,496 | Equity incentive | |||
| Shang Xingwu | 228,631 | 228,631 | Equity incentive | |||
| Ou Aimin | 229,010 | 229,010 | Equity incentive |
| Wang Jianxun | 192,778 | 192,778 | Equity incentive | day after that in case of holidays). The upper limit of the number of restricted shares released is 33%, 33% and 34% of the total number of shares granted to incentive objects respectively. | ||
| Other core employees of senior director and above | 39,063,868 | 3,460,744 | 42,524,612 | Equity incentive | ||
| Total | 3,238,899,791 | 3,460,744 | 3,242,360,535 | -- | -- |
II. Issuance and Listing of Securities?Applicable □ Not Applicable
| Name of Shares and Derivative Securities | Issue Date | Issue Price (or Interest Rate) | Quantity Issued | Date of Listing | Quantity Approved for Listing | Transaction Termination Date | Disclosure Index | Date of Disclosure |
| Stocks | ||||||||
| A share | December 9, 2021 | CNY 6.38/share | 3,721,601 | January 10, 2022 | 3,721,601 | http://www.cninfo.com.cn/new/disclosure/stock?stockCode=000800&orgId=gssz0000800#latestAnnouncement | January 6, 2022 | |
Description of securities issuance in the reporting period: In the reporting period, the Company issued 3,721,601 common A shares in total to thereserved grant objects of the phase I restricted share incentive plan.
III. Number of Shareholders and Shareholdings of the Company
Unit: share
| Total Number of Common Shareholders at the End of the Reporting Period | 92,864 | Total Number of Preferred Shareholders with Restored Voting Rights at the End of the Reporting Period | 0 | |||||
| Shareholding of Common Shareholders Holding More Than 5% of the Shares or Top 10 Common Shareholders | ||||||||
| Name of Shareholder | Nature of Shareholders | Shareholding Proportion | Number of Ordinary Shares Held at the End of the Reporting Period | Increase and Decrease in the Reporting Period | Number of Restricted Ordinary Shares Held | Number of Unrestricted Ordinary Shares Held | Pledge, Marking or Freezing | |
| Status of Shares | Quantity | |||||||
| China FAW Co., Ltd. | State-owned legal person | 65.76% | 3,060,649,901 | 2,413,412,134 | 647,237,767 | |||
| FAW Bestune Car Co., Ltd. | State-owned legal person | 16.86% | 784,500,000 | 784,500,000 | ||||
| Hong Kong Securities Clearing Company Ltd. | Overseas legal person | 1.53% | 71,029,475. | 9,859,979 | ||||
| Qu Haipeng | Domestic natural person | 0.78% | 36,096,600 | |||||
| Jilin Province State-owned Capital | State-owned legal person | 0.29% | 13,712,916 | |||||
| Chao Guo | Domestic natural person | 0.22% | 10,139,358 | 6,087,429 | ||||
| Li Yan | Domestic | 0.16% | 7,660,000 | |||||
| natural person | ||||||||
| Zhong Ou AMC - Agricultural Bank of China - Zhong Ou & CITIC Securities Financial Asset Management Plan | Others | 0.12% | 5,549,500 | |||||
| Bosera Asset Management Co., Ltd. - Agricultural Bank of China - Bosera & CITIC Securities Financial Asset Management Plan | Others | 0.12% | 5,549,500 | |||||
| Dacheng Fund - Agricultural Bank of China - Dacheng & CITIC Securities Financial Asset Management Plan | Others | 0.08% | 3,713,100 | |||||
| Strategic investors or general | None | |||||||
| legal persons who become the top 10 common shareholders due to the issuance of new shares | ||||
| Description of correlation or concerted action of the above shareholders | Among the above shareholders, FAW Bestune is a wholly-owned subsidiary of FAW, and is a person acting in concert as specified in the Regulations for the Takeover of Listed Companies. The public disclosure data indicates that the Company does not know whether there is a correlation between other shareholders of outstanding shares, nor whether other shareholders of outstanding shares are persons acting in concert as specified in the Regulations for the Takeover of Listed Companies. | |||
| Involvement of the above shareholders in entrusting/entrusted voting rights and waiving voting rights | None | |||
| Special description on the existence of repurchase special accounts among the top 10 shareholders | None | |||
| Shareholding of Top 10 Common Shareholders with Unrestricted Ordinary Shares | ||||
| Name of Shareholder | Number of Unrestricted Ordinary Shares Held at the End of the Reporting Period | Type of Shares | ||
| Type of Shares | Quantity | |||
| China FAW Co., Ltd. | 647,237,767 | CNY ordinary shares | 647,237,767 | |
| Hong Kong Securities Clearing Company Ltd. | 71,029,475 | CNY ordinary shares | 71,029,475 | |
| Qu Haipeng | 36,096,600 | CNY ordinary shares | 36,096,600 | |
| Jilin Province State-owned Capital | 13,712,916 | CNY ordinary shares | 13,712,916 | |
| Chao Guo | 10,139,358 | CNY ordinary shares | 10,139,358 | |
| Li Yan | 7,660,000 | CNY ordinary shares | 7,660,000 | |
| Zhong Ou AMC - Agricultural Bank of China - Zhong Ou | 5,549,500 | CNY ordinary shares | 5,549,500 | |
| & CITIC Securities Financial Asset Management Plan | |||
| Bosera Asset Management Co., Ltd. - Agricultural Bank of China - Bosera & CITIC Securities Financial Asset Management Plan | 5,549,500 | CNY ordinary shares | 5,549,500 |
| Dacheng Fund - Agricultural Bank of China - Dacheng & CITIC Securities Financial Asset Management Plan | 3,713,100 | CNY ordinary shares | 3,713,100 |
| Yang Canxiong | 3,555,926 | CNY ordinary shares | 3,555,926 |
| Description of correlation or concerted action between the top 10 shareholders of unrestricted ordinary shares, and between the top 10 shareholders of unrestricted ordinary shares and the top 10 common shareholders | Among the above shareholders, FAW Bestune is a wholly-owned subsidiary of FAW, and is a person acting in concert as specified in the Regulations for the Takeover of Listed Companies. The public disclosure data indicates that the Company does not know whether there is a correlation between other shareholders of outstanding shares, nor whether other shareholders of outstanding shares are persons acting in concert as specified in the Regulations for the Takeover of Listed Companies. | ||
| Description of top 10 common shareholders' participation in financing bonds business | Qu Haipeng, a domestic natural person, holds 36,096,600 shares of the Company through the guaranteed securities account for customer credit trading of CITIC Securities; Chao Guo, a domestic natural person, holds 7,825,200 shares of the Company through the guaranteed securities account for customer credit trading of Minsheng Securities; Li Yan, a domestic natural person, holds 7,660,000 shares of the Company through the guaranteed securities account for customer credit trading of Dongguan Securities. | ||
Whether the top 10 common shareholders and the top 10 common shareholders with unrestricted ordinary shares of the Company have agreedrepurchase transactions in the reporting period
□ Yes ?No
The top 10 common shareholders and the top 10 common shareholders with unrestricted ordinary shares of the Company do not agreerepurchase transactions in the reporting period
IV. Changes in Shareholding of Directors, Supervisors and Senior Management
□ Applicable ?Not applicable
There is no change in the shareholding of the Company's directors, supervisors and seniormanagement in the reporting period. Please refer to the 2021 Annual Report for details.V. Changes in Controlling Shareholders or Actual ControllersChanges in controlling shareholders in the reporting period
□ Applicable ?Not applicable
There is no change in the controlling shareholders of the Company in the reporting period.Change of actual controller in the reporting period
□ Applicable ?Not applicable
There is no change in the actual controller of the Company in the reporting period.
Section VIII Preferred Shares
□ Applicable ?Not applicable
The Company has no preferred shares in the reporting period.
Section IX Bonds
□ Applicable ?Not applicable
Section X Financial Report
I. Audit ReportWhether the semi-annual report is audited
□ Yes ?No
The semi-annual financial report of the Company is not audited.II. Financial StatementsThe unit of statement in the financial notes is CNY
1. Consolidated balance sheet
Prepared by: FAW JIEFANG GROUP CO., LTD.
June 30, 2022
Unit: CNY
| Item | June 30, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary capital | 28,545,747,104.70 | 30,761,262,721.40 |
| Settlement reserve fund | ||
| Loans to banks and other financial institutions | ||
| Financial assets held for trading | ||
| Derivative financial assets | ||
| Notes receivable | 6,795,406.57 | 12,936,978.11 |
| Accounts receivable | 2,033,585,686.23 | 1,279,693,951.70 |
| Receivables financing | 7,091,605,627.68 | 5,305,018,299.79 |
| Prepayment | 1,378,154,656.21 | 868,811,412.99 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable |
| Item | June 30, 2022 | January 1, 2022 |
| Other receivables | 308,357,637.68 | 249,088,090.95 |
| Including: interest receivable | ||
| Dividends receivable | 26,488,012.75 | 8,567,040.00 |
| Financial assets purchased under agreements to resell | ||
| Inventory | 9,035,457,594.09 | 9,268,120,531.25 |
| Contractual assets | 61,968,023.59 | 53,047,687.72 |
| Held-for-sale assets | ||
| Current portion of non-current assets | 114,825,391.38 | 114,825,391.38 |
| Other current assets | 473,068,938.63 | 2,014,149,591.51 |
| Total current assets | 49,049,566,066.76 | 49,926,954,656.80 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 217,930,218.79 | 222,590,757.79 |
| Long-term equity investment | 5,023,596,387.36 | 4,766,734,671.74 |
| Other equity instrument investments | ||
| Other non-current financial assets | ||
| Investment real estate | 159,534,670.00 | 80,202,825.09 |
| Fixed assets | 9,005,998,503.41 | 9,236,789,322.03 |
| Project under construction | 966,294,107.55 | 965,997,208.23 |
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 121,039,384.71 | 143,766,265.44 |
| Intangible assets | 2,728,231,478.67 | 2,772,277,116.13 |
| Development expenditures | ||
| Goodwill |
| Item | June 30, 2022 | January 1, 2022 |
| Long-term deferred expenses | 232,518.98 | 334,598.30 |
| Deferred tax assets | 1,908,957,381.92 | 1,650,296,511.26 |
| Other non-current assets | ||
| Total non-current assets | 20,131,814,651.39 | 19,838,989,276.01 |
| Total assets | 69,181,380,718.15 | 69,765,943,932.81 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Borrowing from the central bank | ||
| Placements from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | 17,538,100,899.05 | 13,062,704,192.54 |
| Accounts payable | 12,943,539,758.82 | 14,564,899,994.47 |
| Advance receipts | 254,326.19 | 1,712,917.27 |
| Contract liabilities | 1,898,901,256.47 | 2,700,642,475.91 |
| Financial assets sold for repurchase | ||
| Deposits taking and interbank deposits | ||
| Acting trading securities | ||
| Acting underwriting securities | ||
| Employee compensation payable | 421,204,060.05 | 364,450,425.37 |
| Taxes payable | 358,991,484.63 | 173,948,529.53 |
| Other payables | 7,299,870,926.01 | 7,383,223,172.30 |
| Including: interest payable | ||
| Dividends payable | 171,500.02 | 171,500.02 |
| Handling charges and commissions payable | ||
| Reinsurance accounts payable |
| Item | June 30, 2022 | January 1, 2022 |
| Held-for-sale liabilities | ||
| Current portion of non-current liabilities | 33,214,415.10 | 47,060,544.71 |
| Other current liabilities | 157,933,439.12 | 267,479,444.78 |
| Total current liabilities | 40,652,010,565.44 | 38,566,121,696.88 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 95,066,903.44 | 88,307,218.05 |
| Long-term payables | ||
| Long-term employee compensation payable | 763,977,826.41 | 764,529,046.36 |
| Estimated liabilities | 1,210,644,082.24 | 1,257,487,319.78 |
| Deferred incomes | 2,662,322,917.73 | 2,473,072,814.33 |
| Deferred income tax liabilities | 309,037,034.86 | 374,185,114.15 |
| Other non-current liabilities | ||
| Total non-current liabilities | 5,041,048,764.68 | 4,957,581,512.67 |
| Total liabilities | 45,693,059,330.12 | 43,523,703,209.55 |
| Owner's equities: | ||
| Share capital | 4,654,114,613.00 | 4,654,114,613.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 10,469,689,124.38 | 10,439,365,093.18 |
| Less: treasury shares | 281,569,025.73 | 310,460,486.38 |
| Other comprehensive income | -32,839,796.01 | -32,794,902.20 |
| Special reserve | 357,328,826.61 | 315,398,148.75 |
| Surplus reserve | 2,742,214,904.83 | 2,742,214,904.83 |
| General risk provision |
| Item | June 30, 2022 | January 1, 2022 |
| Undistributed profits | 5,579,382,740.95 | 8,434,403,352.08 |
| Total owners’ equity attributable to the parent company | 23,488,321,388.03 | 26,242,240,723.26 |
| Minority equity | ||
| Total owners' equity | 23,488,321,388.03 | 26,242,240,723.26 |
| Total liabilities and owner's equities | 69,181,380,718.15 | 69,765,943,932.81 |
Legal representative: Hu Hanjie Person in charge of accounting: Ou Aimin Person in charge of the accountingorganization: Si Yuzhuo
2. Balance sheet of parent company
Unit: CNY
| Item | June 30, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary capital | 16,217,499.97 | 9,646,455.17 |
| Financial assets held for trading | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | ||
| Receivables financing | ||
| Prepayment | ||
| Other receivables | 18,353,402.55 | 432,429.80 |
| Including: interest receivable | ||
| Dividends receivable | 17,920,972.75 | |
| Inventory | ||
| Contractual assets | ||
| Held-for-sale assets | ||
| Current portion of non-current assets | ||
| Other current assets | 112,457.43 | 720,491.14 |
| Total current assets | 34,683,359.95 | 10,799,376.11 |
| Non-current assets: | ||
| Debt investment |
| Item | June 30, 2022 | January 1, 2022 |
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 25,915,068,767.16 | 25,640,802,370.53 |
| Other equity instrument investments | ||
| Other non-current financial assets | ||
| Investment real estate | ||
| Fixed assets | ||
| Project under construction | ||
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | ||
| Development expenditures | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred tax assets | ||
| Other non-current assets | ||
| Total non-current assets | 25,915,068,767.16 | 25,640,802,370.53 |
| Total assets | 25,949,752,127.11 | 25,651,601,746.64 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 1,968,902.00 | 200,000.00 |
| Advance receipts | ||
| Contract liabilities | ||
| Employee compensation payable |
| Item | June 30, 2022 | January 1, 2022 |
| Taxes payable | 6,793,734.46 | 1,462,703.57 |
| Other payables | 3,548,225,291.50 | 552,502,809.86 |
| Including: interest payable | ||
| Dividends payable | 171,500.02 | 171,500.02 |
| Held-for-sale liabilities | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | ||
| Total current liabilities | 3,556,987,927.96 | 554,165,513.43 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | ||
| Deferred incomes | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | ||
| Total liabilities | 3,556,987,927.96 | 554,165,513.43 |
| Owner's equities: | ||
| Share capital | 4,654,114,613.00 | 4,654,114,613.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 12,267,337,664.44 | 12,267,337,664.44 |
| Less: treasury shares | 281,569,025.73 | 310,460,486.38 |
| Other comprehensive income | 257,376.69 | 304,113.31 |
| Item | June 30, 2022 | January 1, 2022 |
| Special reserve | ||
| Surplus reserve | 1,511,497,143.93 | 1,511,497,143.93 |
| Undistributed profits | 4,241,126,426.82 | 6,974,643,184.91 |
| Total owners' equity | 22,392,764,199.15 | 25,097,436,233.21 |
| Total liabilities and owner's equities | 25,949,752,127.11 | 25,651,601,746.64 |
3. Consolidated profit statement
Unit: CNY
| Item | Half of 2022 | Half of 2021 |
| I. Total operating income | 22,871,535,261.56 | 78,600,163,121.16 |
| Including: operating income | 22,871,535,261.56 | 78,600,163,121.16 |
| Interest income | ||
| Premium earned | ||
| Handling charges and commission income | ||
| II. Total operating cost | 23,120,223,828.02 | 75,291,776,865.42 |
| Including: operating cost | 21,115,050,469.61 | 71,861,081,519.02 |
| Interest expense | ||
| Handling charges and commission expense | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net allotment of reserves for insurance liabilities | ||
| Policy dividend expenditure | ||
| Expenses for reinsurance accepted | ||
| Taxes and surcharges | 106,500,261.51 | 293,944,056.24 |
| Selling expense | 566,490,728.82 | 1,315,060,101.99 |
| Management cost | 887,020,116.52 | 1,103,407,146.33 |
| R&D expenses | 1,016,316,222.64 | 1,237,304,341.12 |
| Financial expense | -571,153,971.08 | -519,020,299.28 |
| Including: interest expenses | 2,361,612.41 | |
| Interest income | 502,087,676.33 | 363,409,455.88 |
| Add: other incomes | 230,047,050.32 | 123,839,818.59 |
| Item | Half of 2022 | Half of 2021 |
| Investment income (losses expressed with "-") | 203,908,916.41 | 387,219,719.37 |
| Including: investment income in associated enterprises and joint ventures | 281,180,159.71 | 386,449,232.03 |
| Gains on derecognition of financial assets at amortized cost | ||
| Foreign exchange gains (losses expressed with "-") | ||
| Net exposure hedging income (losses expressed with "-") | ||
| Profit arising from changes in fair value (losses expressed with "-") | ||
| Credit impairment loss (losses expressed with "-") | -21,826,743.35 | 6,757,848.51 |
| Asset impairment loss (losses expressed with "-") | -85,344,746.96 | -121,005,056.96 |
| Income from assets disposal (losses expressed with "-") | 42,431.19 | -183,677.14 |
| III. Operating profit (losses expressed with "-") | 78,138,341.15 | 3,705,014,908.11 |
| Add: Non-operating income | 104,058,106.26 | 30,755,399.12 |
| Less: Non-operating expenses | 12,214,234.59 | 14,348,703.34 |
| IV. Total profit (losses expressed with "-") | 169,982,212.82 | 3,721,421,603.89 |
| Less: income tax expenses | -171,674.50 | 452,443,037.35 |
| V. Net profit (net losses expressed with "-") | 170,153,887.32 | 3,268,978,566.54 |
| (I) Classified according to business continuity | ||
| 1. Net profit from continuing operations (net losses expressed with "-") | 170,153,887.32 | 3,268,978,566.54 |
| 2. Net profit from discontinuing operations (net losses expressed with "-") | ||
| (II) Classified according to attribution of the ownership | ||
| 1. Net profit attributable to the owners of the parent company | 170,153,887.32 | 3,268,978,566.54 |
| 2. Minority interests | ||
| VI. Net after-tax amount of other comprehensive income | -44,893.81 | -8,800.15 |
| Net after-tax amount of other comprehensive income attributable to the owners of the parent company | -44,893.81 | -8,800.15 |
| (I) Other comprehensive income that cannot be reclassified into profit or loss | ||
| 1. Changes arising from re-measurement of the defined benefit plan |
| Item | Half of 2022 | Half of 2021 |
| 2. Other comprehensive incomes that cannot be transferred to profit and loss under the equity method | ||
| 3. Changes in fair value of investment in other equity instruments | ||
| 4. Changes in fair value of the Company’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into profit or loss | -44,893.81 | -8,800.15 |
| 1. Other comprehensive incomes that can be reclassified into profit and loss under the equity method | -46,736.62 | -7,226.33 |
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive incomes | ||
| 4. Impairment provision of credit in other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Exchange differences arising from foreign currency financial statements | 1,842.81 | -1,573.82 |
| 7. Others | ||
| Net after-tax amount of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 170,108,993.51 | 3,268,969,766.39 |
| Total comprehensive income attributable to the owners of parent company | 170,108,993.51 | 3,268,969,766.39 |
| Total comprehensive income attributable to minority shareholders | ||
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.0366 | 0.7047 |
| (II) Diluted earnings per share | 0.0366 | 0.7047 |
In case of business combination under common control in the current period, the net profit realized by the combinedparty before combination and that in the previous period are CNY 0.00.Legal representative: Hu Hanjie Person in charge of accounting: Ou Aimin Person in charge of the accountingorganization: Si Yuzhuo
4. Profit statement of parent company
Unit: CNY
| Item | Half of 2022 | Half of 2021 |
| I. Operating income | ||
| Less: operating cost | 871,274.65 | 420,747.40 |
| Taxes and surcharges | 96,668.40 | 260.30 |
| Selling expense | ||
| Management cost | 793,096.66 | 707,539.36 |
| R&D expenses | ||
| Financial expense | -18,490.41 | -242,724.28 |
| Including: interest expenses | ||
| Interest income | 19,230.41 | 246,160.17 |
| Add: Other incomes | 294,909.01 | 96,438.23 |
| Investment income (losses expressed with "-") | 292,234,106.00 | 3,103,351,507.45 |
| Including: investment income in associated enterprises and joint ventures | 292,234,106.00 | 383,431,507.45 |
| Gains on derecognition of financial assets at amortized cost (losses expressed with "-") | ||
| Net exposure hedging income (losses expressed with "-") | ||
| Profit arising from changes in fair value (losses expressed with "-") | ||
| Credit impairment loss (losses expressed with "-") | ||
| Asset impairment loss (losses expressed with "-") | ||
| Income from assets disposal (losses expressed with "-") | ||
| II. Operating profit (losses expressed with "-") | 291,657,740.36 | 3,102,982,870.30 |
| Add: Non-operating income | 30.00 | |
| Less: Non-operating expenses | ||
| III. Total profit (total (losses expressed with "-") | 291,657,740.36 | 3,102,982,900.30 |
| Less: income tax expenses | ||
| IV. Net profit (net losses expressed with "-") | 291,657,740.36 | 3,102,982,900.30 |
| (I) Net profit from continuing operations (net losses expressed with "-") | 291,657,740.36 | 3,102,982,900.30 |
| (II) Net profit from discontinuing operations (net losses expressed with "-") | ||
| V. Net after-tax amount of other comprehensive income | -46,736.62 | -7,226.33 |
| (I) Other comprehensive income that cannot be reclassified |
| Item | Half of 2022 | Half of 2021 |
| into profit or loss | ||
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive incomes that cannot be transferred to profit and loss under the equity method | ||
| 3. Changes in fair value of investment in other equity instruments | ||
| 4. Changes in fair value of the Company’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into profit or loss | -46,736.62 | -7,226.33 |
| 1. Other comprehensive incomes that can be reclassified into profit and loss under the equity method | -46,736.62 | -7,226.33 |
| 2. Changes in the fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive incomes | ||
| 4. Impairment provision of credit in other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Exchange differences arising from foreign currency financial statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 291,611,003.74 | 3,102,975,673.97 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated cash flow statement
Unit: CNY
| Item | Half of 2022 | Half of 2021 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods or rendering of services | 22,972,631,458.07 | 39,287,647,573.86 |
| Net increase in customer bank deposits and due to banks and other financial institutions | ||
| Net increase in borrowings from the central bank | ||
| Net increase in placements from other financial institutions | ||
| Premiums received from original insurance contracts |
| Item | Half of 2022 | Half of 2021 |
| Net cash received from reinsurance business | ||
| Net increase in deposits and investments from policyholders | ||
| Cash received from interests, handling charges and commissions | ||
| Net increase in placements from banks and other financial institutions | ||
| Net increase in repurchase business capital | ||
| Net cash received from securities brokerage | ||
| Tax refunds received | 1,010,974,954.15 | |
| Other cash receipts related to operating activities | 845,166,247.90 | 547,477,041.89 |
| Subtotal of cash inflows from operating activities | 24,828,772,660.12 | 39,835,124,615.75 |
| Cash paid for goods and services | 20,189,789,863.19 | 18,701,696,474.78 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits with central bank and other financial institutions | ||
| Cash paid for original insurance contract claims | ||
| Net increase in loans to banks and other financial institutions | ||
| Cash paid for interests, handling charges and commissions | ||
| Cash paid for policyholder dividend | ||
| Cash paid to and for employees | 2,288,542,182.41 | 2,600,871,987.98 |
| Taxes paid | 70,848,814.67 | 1,994,456,924.80 |
| Other cash paid relating to operating activities | 836,454,073.22 | 1,012,384,865.02 |
| Subtotal of cash outflows from operating activities | 23,385,634,933.49 | 24,309,410,252.58 |
| Net cash flows from operating activities | 1,443,137,726.63 | 15,525,714,363.17 |
| II. Cash flows from investing activities: | ||
| Cash received from disposal of investments | ||
| Cash received from investment income | 6,300,012.21 | 4,907,799.92 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 3,519,331.24 | 2,145,684.73 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | 441,265,670.20 | 283,825,095.39 |
| Subtotal of cash inflows from investing activities | 451,085,013.65 | 290,878,580.04 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 1,125,719,469.03 | 987,980,994.05 |
| Item | Half of 2022 | Half of 2021 |
| Cash paid for investment | ||
| Net increase in impawn loans | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid relating to other investing activities | ||
| Subtotal of cash outflows from investing activities | 1,125,719,469.03 | 987,980,994.05 |
| Net cash flows from investing activities | -674,634,455.38 | -697,102,414.01 |
| III. Cash flows from financing activities: | ||
| Cash received from capital contributions | 309,046,933.78 | |
| Including: cash received by subsidiaries from capital contributions of minority shareholders | ||
| Cash received from borrowings | ||
| Other cash received relating to financing activities | ||
| Subtotal of cash inflows from financing activities | 309,046,933.78 | |
| Cash paid for repayment of debts | ||
| Cash paid for distribution of dividends, profits or repayment of interest | 3,025,174,498.45 | |
| Including: dividends and profits paid to minority shareholders by subsidiaries | ||
| Other cash paid relating to financing activities | 15,922,921.74 | |
| Subtotal of cash outflows from financing activities | 3,041,097,420.19 | |
| Net cash flows from financing activities | -3,041,097,420.19 | 309,046,933.78 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | -2,272,594,148.94 | 15,137,658,882.94 |
| Add: beginning balance of cash and cash equivalents | 30,542,676,891.89 | 14,786,680,218.82 |
| VI. Ending balance of cash and cash equivalents | 28,270,082,742.95 | 29,924,339,101.76 |
6. Cash flow statement of the parent company
Unit: CNY
| Item | Half of 2022 | Half of 2021 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods or rendering of services | ||
| Tax refunds received | 735,000.75 | |
| Other cash receipts related to operating activities | 3,032,128,468.42 | 96,521.52 |
| Subtotal of cash inflows from operating activities | 3,032,863,469.17 | 96,521.52 |
| Cash paid for goods and services |
| Item | Half of 2022 | Half of 2021 |
| Cash paid to and for employees | 207,000.00 | 219,000.00 |
| Taxes paid | 96,728.40 | 6,334,983.10 |
| Other cash paid relating to operating activities | 834,581.41 | 1,485,537,604.60 |
| Subtotal of cash outflows from operating activities | 1,138,309.81 | 1,492,091,587.70 |
| Net cash flows from operating activities | 3,031,725,159.36 | -1,491,995,066.18 |
| II. Cash flows from investing activities: | ||
| Cash received from disposal of investments | ||
| Cash received from investment income | 2,719,920,000.00 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | ||
| Net cash received from disposal of subsidiaries and other business units | ||
| Other cash received relating to financing activities | 19,230.41 | 246,160.17 |
| Subtotal of cash inflows from investing activities | 19,230.41 | 2,720,166,160.17 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | ||
| Cash paid for investment | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid relating to other investing activities | ||
| Subtotal of cash outflows from investing activities | ||
| Net cash flows from investing activities | 19,230.41 | 2,720,166,160.17 |
| III. Cash flows from financing activities: | ||
| Cash received from capital contributions | 309,046,933.78 | |
| Cash received from borrowings | ||
| Other cash received relating to financing activities | ||
| Subtotal of cash inflows from financing activities | 309,046,933.78 | |
| Cash paid for repayment of debts | ||
| Cash paid for distribution of dividends, profits or repayment of interest | 3,025,174,498.45 | |
| Other cash paid relating to financing activities | ||
| Subtotal of cash outflows from financing activities | 3,025,174,498.45 | |
| Net cash flows from financing activities | -3,025,174,498.45 | 309,046,933.78 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | 6,569,891.32 | 1,537,218,027.77 |
| Add: beginning balance of cash and cash equivalents | 8,109,077.01 | 1,584,858.35 |
| VI. Ending balance of cash and cash equivalents | 14,678,968.33 | 1,538,802,886.12 |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
7. Consolidated statement of changes in owners' equity
Amount in the current period
Unit: CNY
| Item | Half of 2022 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of the previous year | 4,654,114,613.00 | 10,439,365,093.18 | 310,460,486.38 | -32,794,902.20 | 315,398,148.75 | 2,742,214,904.83 | 8,434,403,352.08 | 26,242,240,723.26 | 26,242,240,723.26 | ||||||
| Add: changes in accounting policies | |||||||||||||||
| Correction of errors in the previous period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 4,654,114,613.00 | 10,439,365,093.18 | 310,460,486.38 | -32,794,902.20 | 315,398,148.75 | 2,742,214,904.83 | 8,434,403,352.08 | 26,242,240,723.26 | 26,242,240,723.26 | ||||||
| III. Increase/decrease in amount of the current | 30,324,031.20 | -28,891,460.65 | -44,893.81 | 41,930,677.86 | -2,855,020,611.13 | -2,753,919,335.23 | -2,753,919,335.23 | ||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2022 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| period (decrease expressed with "-") | |||||||||||||||
| (I) Total comprehensive income | -44,893.81 | 170,153,887.32 | 170,108,993.51 | 170,108,993.51 | |||||||||||
| (II) Invested and decreased capital of owners | 30,324,031.20 | -28,891,460.65 | 59,215,491.85 | 59,215,491.85 | |||||||||||
| 1. Ordinary shares invested by owners | |||||||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||||||
| 3. Amounts of share-based payments recorded in owner's equity | |||||||||||||||
| 4. Others | 30,324,031.20 | -28,891,460.65 | 59,215,491.85 | 59,215,491.85 | |||||||||||
| (III) Profit distribution | -3,025,174,498.45 | -3,025,174,498.45 | -3,025,174,498.45 | ||||||||||||
| 1. Surplus | |||||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2022 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| reserves withdrawn | |||||||||||||||
| 2. General risk provision withdrawn | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -3,025,174,498.45 | -3,025,174,498.45 | -3,025,174,498.45 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover of owners' equity | |||||||||||||||
| 1. Transfer from capital reserve to paid-in capital (or share capital) | |||||||||||||||
| 2. Transfer from surplus reserves to paid-in capital (or share capital) | |||||||||||||||
| 3. Recovery of losses by surplus reserves | |||||||||||||||
| 4. Retained earnings carried forward from changes in | |||||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2022 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive incomes | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | 41,930,677.86 | 41,930,677.86 | 41,930,677.86 | ||||||||||||
| 1. Withdrawal in the current period | 53,753,366.46 | 53,753,366.46 | 53,753,366.46 | ||||||||||||
| 2. Use in the current period | 11,822,688.60 | 11,822,688.60 | 11,822,688.60 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the current period | 4,654,114,613.00 | 10,469,689,124.38 | 281,569,025.73 | -32,839,796.01 | 357,328,826.61 | 2,742,214,904.83 | 5,579,382,740.95 | 23,488,321,388.03 | 23,488,321,388.03 | ||||||
Amount of previous year
Unit: CNY
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2021 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of the previous year | 4,609,666,212.00 | 10,098,280,767.34 | -3,103,446.44 | 253,571,466.48 | 2,394,517,079.97 | 7,207,573,351.05 | 24,560,505,430.40 | 24,560,505,430.40 | |||||||
| Add: changes in accounting policies | -1,233,011.80 | -1,233,011.80 | -1,233,011.80 | ||||||||||||
| Correction of errors in the previous period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 4,609,666,212.00 | 10,098,280,767.34 | -3,103,446.44 | 253,571,466.48 | 2,394,517,079.97 | 7,206,340,339.25 | 24,559,272,418.60 | 24,559,272,418.60 | |||||||
| III. Increase/decrease in amount of the current period (decrease expressed with "-") | 40,987,657.00 | 294,164,315.52 | 288,553,105.28 | -8,800.15 | 43,124,293.39 | 943,651,632.04 | 1,033,365,992.52 | 1,033,365,992.52 | |||||||
| (I) Total comprehensive income | -8,800.15 | 3,268,978,566.54 | 3,268,969,766.39 | 3,268,969,766.39 | |||||||||||
| (II) Invested and decreased capital of owners | 40,987,657.00 | 294,164,315.52 | 288,553,105.28 | 46,598,867.24 | 46,598,867.24 | ||||||||||
| 1. Ordinary shares invested by owners | |||||||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||||||
| 3. Amounts of share-based payments recorded in owner's equity | 40,987,657.00 | 294,164,315.52 | 288,553,105.28 | 46,598,867.24 | 46,598,867.24 | ||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2021 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -2,325,326,934.50 | -2,325,326,934.50 | -2,325,326,934.50 | ||||||||||||
| 1. Surplus reserves withdrawn | |||||||||||||||
| 2. General risk provision withdrawn | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -2,325,326,934.50 | -2,325,326,934.50 | -2,325,326,934.50 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover of owners' equity | |||||||||||||||
| 1. Transfer from capital reserve to paid-in capital (or share capital) | |||||||||||||||
| 2. Transfer from surplus reserves to paid-in capital (or share capital) | |||||||||||||||
| 3. Recovery of losses by surplus reserves | |||||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive incomes | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | 43,124,293.39 | 43,124,293.39 | 43,124,293.39 | ||||||||||||
| 1. Withdrawal in | 57,124,832. | 57,124,832.18 | 57,124,832.18 | ||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2021 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred Shares | Perpetual bonds | Others | |||||||||||||
| the current period | 18 | ||||||||||||||
| 2. Use in the current period | -14,000,538.79 | -14,000,538.79 | -14,000,538.79 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the current period | 4,650,653,869.00 | 10,392,445,082.86 | 288,553,105.28 | -3,112,246.59 | 296,695,759.87 | 2,394,517,079.97 | 8,149,991,971.29 | 25,592,638,411.12 | 25,592,638,411.12 | ||||||
8. Statement of changes in owners' equity of the parent company
Amount in the current period
Unit: CNY
| Item | Half of 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of the previous year | 4,654,114,613.00 | 12,267,337,664.44 | 310,460,486.38 | 304,113.31 | 1,511,497,143.93 | 6,974,643,184.91 | 25,097,436,233.21 | |||||
| Add: changes in accounting policies | ||||||||||||
| Correction of errors in the previous period | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the current year | 4,654,114,613.00 | 12,267,337,664.44 | 310,460,486.38 | 304,113.31 | 1,511,497,143.93 | 6,974,643,184.91 | 25,097,436,233.21 | |||||
| III. Increase/decrease in | -28,891,460.65 | -46,736.62 | -2,733,516,758.09 | -2,704,672,034.06 | ||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| amount of the current period (decrease expressed with "-") | ||||||||||||
| (I) Total comprehensive income | -46,736.62 | 291,657,740.36 | 291,611,003.74 | |||||||||
| (II) Invested and decreased capital of owners | -28,891,460.65 | 28,891,460.65 | ||||||||||
| 1. Ordinary shares invested by owners | ||||||||||||
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amounts of share-based payments recorded in owner's equity | ||||||||||||
| 4. Others | -28,891,460.65 | 28,891,460.65 | ||||||||||
| (III) Profit distribution | -3,025,174,498.45 | -3,025,174,498.45 | ||||||||||
| 1. Surplus reserves withdrawn | ||||||||||||
| 2. Distribution to owners (or shareholders) | -3,025,174,498.45 | -3,025,174,498.45 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal | ||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| carryover of owners' equity | ||||||||||||
| 1. Transfer from capital reserve to paid-in capital (or share capital) | ||||||||||||
| 2. Transfer from surplus reserves to paid-in capital (or share capital) | ||||||||||||
| 3. Recovery of losses by surplus reserves | ||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | ||||||||||||
| 5. Retained earnings carried forward from other comprehensive incomes | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawal in the current period | ||||||||||||
| 2. Use in the current period | ||||||||||||
| (VI) Others | ||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| IV. Ending balance of the current period | 4,654,114,613.00 | 12,267,337,664.44 | 281,569,025.73 | 257,376.69 | 1,511,497,143.93 | 4,241,126,426.82 | 22,392,764,199.15 | |||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
Amount of previous year
Unit: CNY
| Item | Half of 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of the previous year | 4,609,666,212.00 | 11,926,123,599.85 | 338,977.41 | 1,163,799,319.07 | 6,170,689,695.69 | 23,870,617,804.02 | ||||||
| Add: changes in accounting policies | ||||||||||||
| Correction of errors in the previous period | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the current year | 4,609,666,212.00 | 11,926,123,599.85 | 338,977.41 | 1,163,799,319.07 | 6,170,689,695.69 | 23,870,617,804.02 | ||||||
| III. Increase/decrease in amount of the current period (decrease expressed with "-") | 40,987,657.00 | 268,059,276.78 | 288,553,105.28 | -7,226.33 | 777,655,965.80 | 798,142,567.97 | ||||||
| (I) Total comprehensive income | -7,226.33 | 3,102,982,900.30 | 3,102,975,673.97 | |||||||||
| (II) Invested and decreased capital of owners | 40,987,657.00 | 268,059,276.78 | 288,553,105.28 | 20,493,828.50 | ||||||||
| 1. Ordinary shares invested by owners | ||||||||||||
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amounts of share-based payments recorded in owner's equity | 40,987,657.00 | 268,059,276.78 | 288,553,105.28 | 20,493,828.50 | ||||||||
| 4. Others | ||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| (III) Profit distribution | -2,325,326,934.50 | -2,325,326,934.50 | ||||||||||
| 1. Surplus reserves withdrawn | ||||||||||||
| 2. Distribution to owners (or shareholders) | ||||||||||||
| 3. Others | -2,325,326,934.50 | -2,325,326,934.50 | ||||||||||
| (IV) Internal carryover of owners' equity | ||||||||||||
| 1. Transfer from capital reserve to paid-in capital (or share capital) | ||||||||||||
| 2. Transfer from surplus reserves to paid-in capital (or share capital) | ||||||||||||
| 3. Recovery of losses by surplus reserves | ||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | ||||||||||||
| 5. Retained earnings carried forward from other comprehensive incomes | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawal in the current period | ||||||||||||
| 2. Use in the current period | ||||||||||||
| (VI) Others | ||||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Half of 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners' equity | |||
| Preferred Shares | Perpetual bonds | Others | ||||||||||
| IV. Ending balance of the current period | 4,650,653,869.00 | 12,194,182,876.63 | 288,553,105.28 | 331,751.08 | 1,163,799,319.07 | 6,948,345,661.49 | 24,668,760,371.99 | |||||
III. Company Profile
FAW JIEFANG GROUP CO., LTD., formerly known as FAW Car Co., Ltd., is a limited liability companyregistered in Changchun City, Jilin Province.FAW Car was approved by the TGS (1997) No.55 document issued by State Commission for Restructuring theEconomic System in 1997, and was established exclusively by China FAW Group Co., Ltd. (hereinafter referred toas FAW Group). On June 18, 1997, FAW Car was approved by the China Securities Regulatory Commission toissue shares publicly and listed on the Shenzhen Stock Exchange for circulation.On April 9, 2012, FAW Group invested 862,983,689 shares of FAW Car into FAW as its capital contribution, andreceived the Confirmation of Securities Transfer Registration issued by China Securities Depository & ClearingCo., Ltd. Shenzhen Branch on the same day.On November 28, 2019, FAW Car held the 10th meeting of the 8th Board of Directors, and reviewed and approvedthe adjustment plan for major asset reorganization. After the adjustment, FAW Car transferred all its assets andliabilities, excludingthe equity of First Automobile Finance Co., Ltd. and Sanguard Automobile Insurance Co., Ltd.and some reserved assets, to FAW Bestune, and then replaced 100% equity of FAW Bestune Car Co., Ltd. with theequivalent part of 100% equity of Jiefang Limited held by FAW. At the same time, FAW Car purchased thedifference between the purchased assets and the sold assets from FAW by issuing shares and paying cash.On March 12, 2020, FAW Car received the Reply on Approving the Major Asset Restructuring of FAW Car Co.,Ltd. and Issuing Shares to China FAW Co., Ltd. for Asset Purchase (ZJXK [2020] No. 352) issued by the ChinaSecurities Regulatory Commission, and China Securities Regulatory Commission reviewed and approved the majorasset replacement, share issuance and cash payment for assets purchase and related transactions of FAW Car.The Capital Verification Report (XYZH/2020BJA100417) issued by ShineWing Accounting Firm (special generalpartnership) indicates that, as of March 19, 2020, all proposed purchased assets, i.e. 100% equity of Jiefang Limited,to be replaced by FAW Car to FAW by issuing shares had been transferred to FAW Car. The industrial andcommercial change registration procedures of Jiefang Limited had been completed, all proposed assets, i.e. 100%equity of FAW Bestune, had been transferred to FAW, and the industrial and commercial change registrationprocedures of FAW Bestune had been completed. The registered capital of FAW Car is CNY 4,609,666,212.00after this change.In May 2020, the name of FAW Car was changed to "FAW JIEFANG GROUP CO., LTD." and the stockabbreviation was changed to "FAW Jiefang".
On January 11, 2021, the Company held the first 2021 extraordinary shareholders' meeting, and reviewed andapproved the Proposal on the Restricted Share Incentive Plan of FAW JIEFANG GROUP CO., LTD. (Draft) andIts Abstract, the Proposal on the Regulations for the Implementation Assessment of Restricted Share Incentive Planof FAW JIEFANG GROUP CO., LTD., the Proposal on the Regulations for Restricted Share Incentive of FAWJIEFANG GROUP CO., LTD., and the Proposal on Requesting the Shareholders Meeting to Authorize the Boardof Directors to Handle Matters Related to the Company's Restricted Share Incentive Plan. On January 15, 2021,the Company held the 12th meeting of the 9th Board of Directors, and reviewed and approved the Proposal onAdjusting the List of the First Batch of Incentive Objects and the Number of Grants in the Phase I Restricted ShareIncentive Plan and the Proposal on Granting Restricted Shares to the Incentive Objects of the Phase I RestrictedShare Incentive Plan for the First Time. Nine directors and senior executives, including Hu Hanjie, Zhu Qixin,Zhang Guohua, Wang Ruijian, Shang Xingwu, Ou Aimin, Kong Dejun, Wu Bilei and Wang Jianxun, and 310 othercore employees with the tile of senior director and above were granted to subscribe for 40,987,657 new shares ofthe Company at an issue price of CNY 7.54 per share, and the registered capital of the Company was changed toCNY 4,650,653,869.00. This change was verified by the Capital Verification Report (ZTYZ (2021) No.110C000033) issued by Grant Thornton Accounting Firm (special general partnership). On February 1, 2021, theCompany disclosed the Announcement on the Completion of the First Grant Registration of Phase I RestrictedShare Incentive Plan.On December 9, 2021, the Company held the 20th meeting of the 9th Board of Directors and the 19th meeting ofthe 9th Board of Supervisors, and reviewed and approved the Proposal on Granting Reserved Part of RestrictedShares in the Phase I Restricted Share Incentive Plan to Incentive Objects and the Proposal on Repurchase andCancellation of Partial Restricted Shares in the Phase I Restricted Share Incentive Plan respectively. 33 coretechnicians and management backbones, including Wang Manhong, Zhang Yu and Qu Yi, subscribed for 3,721,601new shares at an issue price of CNY 6.38/share, and 260,857 shares were repurchased from 2 employees who wereno longer eligible for incentive objects at a price of CNY 7.04/share. The registered capital of the Company waschanged to CNY 4,654,114,613.00. This change was verified by the Capital Verification Report (ZTYZ (2021) No.110C000927) issued by Grant Thornton Accounting Firm (special general partnership). On January 6, 2022, theCompany disclosed the Announcement on the Completion of Registration of the Grant of Reserved Part ofRestricted Shares in the Phase I Restricted Share Incentive Plan. On January 17, 2022, the Company disclosed theAnnouncement on the Completion of Repurchase and Cancellation of Some Restricted Shares.The Company establishes a corporate governance structure consisting of the Shareholders' Meeting, the Board ofDirectors and the Board of Supervisors, and has one wholly-owned subsidiary, Jiefang Limited. Jiefang Limited hassix wholly-owned subsidiaries, including FAW Jiefang Automotive Sales Co., Ltd., FAW Jiefang (Qingdao)Automotive Co., Ltd., Wuxi Dahao Power Co., Ltd., FAW Jiefang Dalian Diesel Engine Co., Ltd., FAW Jiefang
Austria R&D Co., Ltd., and FAW Jiefang New Energy Automotive Sales Co., Ltd. It also has 8 associatedcompanies, including First Automobile Finance Co., Ltd., Sanguard Automobile Insurance Co., Ltd., FAWChangchun Baoyou Steel Processing and Distribution Co., Ltd., FAW Changchun Ansteel Steel Processing andDistribution Co., Ltd., Changchun Wabco Automotive Control System Co., Ltd., Suzhou Zhito Technology Co.,Ltd., FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd., and SmartLink.Business scope of the Company: R&D, production and sales of medium and heavy trucks, complete vehicles, buses,bus chassis, medium truck deformation vehicles, automobile assemblies and parts, machining, diesel engines andaccessories (non-vehicle), mechanical equipment and accessories, instruments, technical services, technicalconsultation, installation and maintenance of mechanical equipment, lease of mechanical equipment and facilities,lease of houses and workshops, labor services (excluding foreign labor cooperation and domestic labor dispatch),sales of steel, automobile trunks, hardware & electrical equipment and electronic products, testing of internalcombustion engine, engineering technology research and testing, advertising design, production and release, importand export of goods and technologies (excluding publication import business and commodities and technologiesthat are restricted or prohibited for import and export by the state); (The following items are operated by the branchcompany) Chinese food production and sales, warehousing and logistics (excluding flammable, explosive andprecursor dangerous chemicals), automobile repair, tank manufacturing of chemical liquid tanker, automobile trunkmanufacturing (items subject to approval according to law can be operated only after being approved by relevantauthorities).Registered address of the Company: No. 2259, Dongfeng Street, Changchun Automobile Development Zone, JilinProvinceThe legal representative of the Company is Hu Hanjie.The financial statements and notes to the financial statements have been approved for issue by the Board of Directorsof the Company on August 29, 2022.In 2022, the Company has 1 secondary subsidiary and 6 tertiary subsidiaries included in the consolidation scope.For details, please refer to VIII "Equity in Other Entities" in Section X - Financial Report.IV. Basis for Preparation of Financial Statements
1. Preparation basis
The financial statements are prepared according to the Accounting Standards for Business Enterprises issued by theMinistry of Finance and its application guidelines, interpretations and other relevant provisions (hereinaftercollectively referred to as "ASBE"). In addition, the Company also discloses relevant financial information
according to the Disclosure of Company Information Disclosure Rules No. 15. - General Provisions on FinancialReporting (revised in 2014) issued by China Securities Regulatory Commission.The financial statements are presented on a going concern basis.The financial accounting of the Company is based on the accrual basis. The financial statements are prepared on ahistorical cost basis except for certain financial instruments. If the assets are impaired, the corresponding provisionfor impairment shall be made as specified.
2. Going concern
The Company has no event or condition that causes significant doubt about its ability to continue as a going concernfor 12 months from the end of the reporting period.
V. Significant Accounting Policies and Accounting Estimates
Tips for specific accounting policies and accounting estimates:
The Company determines the depreciation of fixed assets, amortization of intangible assets, capitalizationconditions of R&D expenses and income recognition policies according to its own production and operationcharacteristics. For specific accounting policies, please see V "Significant Accounting Policies and AccountingEstimates" 21, 25 and 33 in Section X - Financial Report.
1. Statement of compliance with ASBE
The financial statements meet the requirements of ASBE, and truly and fully reflect the consolidated and companyfinancial conditions as of June 30, 2022 and the consolidated and company operating results, consolidated andcompany cash flows and other information in the first half of 2022.
2. Accounting period
The accounting period of the Company is a calendar year, namely, from January 1 to December 31 every year.
3. Business cycle
The business cycle of the Company is 12 months.
4. Recording currency
The Company and its domestic subsidiaries use CNY as their recording currency. The overseas subsidiaries of theCompany determine EUR as the recording currency according to the currency in the main economic environmentin which they operate. The Company uses CNY to prepare the financial statements.
5. Accounting method for business combination under common control and different control
(1) Business combination under common control
In case of business combination under common control, the assets and liabilities of the combined party obtained bythe combining party in the combination are measured based on the book value of the combined party in theconsolidated financial statements of the ultimate controlling party on the combination date, except for the adjustmentmade due to different accounting policies. The capital reserve (stock premium) is adjusted based on the differencebetween the book value of the combination consideration and the book value of the net assets obtained in thecombination. The retained earnings are adjusted if the capital reserve (stock premium) is insufficient for offset.Business combination under common control realized step-by-step through multiple transactionsIn individual financial statements, the share of book value of the combined party's net assets in the consolidatedfinancial statements of the ultimate controlling party on the combination date calculated based on the shareholdingproportion on the combination date is taken as the initial cost of the investment. The capital reserve (stock premium)is adjusted based on the difference between the initial investment cost and the sum of the book value of the pre-combination investment and the book value of the newly paid consideration on the combination date, and theretained earnings are adjusted if the capital reserve is insufficient for offset.In the consolidated financial statements, the assets and liabilities of the combined party obtained by the combiningparty in the combination are measured based on the book value of the ultimate controlling party in the consolidatedfinancial statements on the combination date, except for the adjustment due to different accounting policies. Thecapital reserve (stock premium) is adjusted based on the difference between the sum of the book value of the pre-combination investment and the book value of the newly paid consideration on the combination date and the bookvalue of the net assets obtained in the combination. The retained earnings are adjusted if the capital reserve isinsufficient for offset. The long-term equity investment held by the combining party before the acquisition of controlof the combined party as well as the profit or loss, other comprehensive income and changes in other owners' equitythat have been recognized during the period from the date of acquisition of the original equity and the date of finalcontrol of the combining party and the combined party (whichever is later) to the combination date shall offsetagainst the beginning retained earnings or current profit or loss respectively during the period of comparativestatement.
(2) Business combination under different control
In case of business combination under different control, the combination cost is the fair value of assets paid,liabilities incurred or assumed and equity securities issued on the acquisition date for acquiring the control over theacquiree. The assets, liabilities and contingent liabilities acquired from the acquiree on the acquisition date arerecognized at fair value.If the combination cost is greater than the fair value of identifiable net assets obtained from the acquiree in thecombination, the difference is recognized as goodwill and subsequently measured by deducting the accumulatedimpairment provision from the cost. If the combination cost is less than the fair value of identifiable net assetsobtained from the acquiree in the combination, the difference is included in current profits and losses after review.Business combination under different control realized step-by-step through multiple transactionsIn individual financial statements, the sum of the book value of the equity investment of the acquiree held beforethe acquisition date and the new investment cost on the acquisition date is taken as the initial cost of the investment.Other comprehensive income of the equity investment held before the acquisition date and verified and recognizedwith equity method is not disposed of on the acquisition date, and the investment is accounted for by disposing ofrelated assets or liabilities directly together with the investee. The owner's equity recognized due to changes in otherowner's equity in addition to net profit or loss, other comprehensive income and profit distribution of the investeeis transferred to the current profit or loss during the disposal period when the investment is being disposed of. If theequity investment held before the acquisition date is measured at fair value, the accumulated changes in fair valueoriginally included in other comprehensive income are transferred to retained earnings when cost method is adoptedfor calculation.In the consolidated financial statements, the combination cost is the sum of the consideration paid on the acquisitiondate and the fair value of the acquiree's equity already held before the acquisition date on the acquisition date. Theacquiree's equity held before the acquisition date is re-measured at its fair value on the acquisition date, and thedifference between the fair value and its book value is included in current profit or loss. Other comprehensiveincome and other changes in owner's equity involved in the acquiree's equity held before the acquisition date aretransferred to current income on the acquisition date, except for other comprehensive income generated from thechanges due to the investee's re-measurement of net liabilities or net assets of the defined benefit plan.
(3) Disposal of transaction expenses in business combination
Intermediation costs such as audit, legal services, assessment and consultation and other related management costsincurred for business combination are included in the current profits and losses when incurred. The transactionexpenses of equity securities or debt securities issued as consolidated consideration are included in the initiallyrecognized amount of equity securities or debt securities.
6. Preparation method of consolidated financial statements
(1) Scope of consolidation
The consolidation scope of consolidated financial statements is determined on the basis of control. Control meansthe power of the Company over the investee, and the Company can enjoy variable returns by taking part into relatedactivities of the investee and is able to influence its amount of return with the power over the investee. Subsidiariesrefer to entities controlled by the Company (including enterprises, separable parts of investees, structured entities,etc.).
(2) Preparation method of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of theCompany and its subsidiaries and in accordance with other relevant information. During the preparation ofconsolidated financial statements, the accounting policies and accounting periods of the Company and itssubsidiaries shall be consistent, and the balances of major transactions and transactions between the companies areoffset.Subsidiaries and businesses increased in the reporting period due to the business combination under common controlare deemed to be incorporated in the consolidation scope of the Company from the date of control by the ultimatecontrolling party, and their operating results and cash flows from the date of control by the ultimate controllingparty are included in the consolidated profit statement and consolidated cash flow statement respectively.For the subsidiaries and businesses increased in the reporting period due to business combination under differentcontrol, their earnings, expenses and profits from the acquisition date to the end of the reporting period are includedin the consolidated profit statement, and their cash flows are included in the consolidated cash flow statement.The portion of shareholder's equity in a subsidiary that is not owned by the Company is presented separately asminority shareholders' interest under the item of shareholder's equity in the consolidated balance sheet; the portionof current net profit or loss of a subsidiary that is attributable to minority interest is presented as "minorityshareholder's interests" under the item of net profit in the consolidated profit statement. If the loss of a subsidiaryborne by minority shareholders exceeds the amount of their shares of owners' equity in the subsidiary at thebeginning, the balance shall offset against the minority equity.
(3) Purchase of minority shareholders' equity of subsidiaries
The capital reserve (stock premium) in the consolidated balance sheet is adjusted based on the difference betweenthe newly acquired long-term equity investment cost from the purchase of minority equity and the share of net assetsin the subsidiary calculated constantly from the purchase date or combination date as per the newly increasedshareholding proportion, and the difference between the disposal price obtained from the partial disposal of equityinvestment in the subsidiary without losing the right of control and the share of net assets in the subsidiary calculatedcontinuously from the purchase date or combination date corresponding to the disposed long-term equity investment.The retained earnings are adjusted if the capital reserve is insufficient for offset.
(4) Disposal with loss of control over subsidiaries
When the Company loses the right of control over its subsidiary due to the disposal of partial equity investment orother reasons, the residual equity is re-measured at the fair value on the day when the right of control is lost. Thedifference between the sum of the value received from disposal of equity and fair value of the residual equity, andthe share in book value of net assets and goodwill of the original subsidiary calculated constantly based on theoriginal shareholding proportion from the acquisition date is included in the investment income of the current periodwhen the right of control is lost.Other comprehensive income in connection with equity investment of the original subsidiaries is transferred tocurrent profits and losses when the right of control is lost, except for other comprehensive income generated fromthe changes due to the investee's re-measurement of net liabilities or net assets of the defined benefit plan.
7. Classification of joint venture arrangements and accounting method for joint operationsJoint arrangement refers to an arrangement jointly controlled by two or more participants. Joint arrangements of theCompany include joint operations and joint ventures.
(1) Joint operation
Joint operation refers to the joint arrangement in which the Company enjoys related assets and bears relatedliabilities.The Company recognizes the following items related to the interest share in the joint operation and carries outaccounting according to the ASBE:
A. Recognizing the assets held solely and the assets held jointly identified as per its shares;B. Recognizing the liabilities borne solely and the liabilities borne jointly identified as per its shares;C. Recognizing the income generated from the sale of shares enjoyed in the joint operation;D. Recognizing the income generated from the sale of shares enjoyed in the joint operation as per its shares;E. Recognizing the expenses incurred separately and the expenses arising from joint operation as per its shares.
(2) Joint ventures
Joint venture refers to a joint arrangement in which the Company only has power over the net assets of thearrangement.The Company conducts accounting for the investment of joint ventures according to provisions of the equity methodaccounting for long-term equity investments.
8. Standards for defining cash and cash equivalents
Cash refers to the cash on hand and the deposits that are readily available for payment. Cash equivalents refer to theshort-term and highly liquid investments held by the Company that are readily convertible into known amounts ofcash and with low risk in value change.
9. Foreign currency transactions and conversion of foreign currency statements
(1) Foreign currency transactions
Foreign currency transactions of the Company are converted into the recording currency amount according to thespot exchange rate on the transaction date.On the balance sheet date, the foreign currency monetary items are converted at the spot exchange rate on thebalance sheet date. The exchange difference arising from the difference between the spot exchange rate on thebalance sheet date and the spot exchange rate at the time of initial recognition or on the previous balance sheet dateare included in current profits and losses. Foreign currency non-monetary items measured at historical cost are stillconverted at the spot exchange rate on the transaction date. Foreign currency non-monetary items measured at fairvalue are converted at the spot exchange rate on the date when the fair value is determined. The difference betweenthe converted recording currency amount and the original recording currency amount is included in current profitsand losses or other comprehensive income according to the nature of the non-monetary items.
(2) Conversion of foreign currency statements
When the foreign currency financial statements of overseas subsidiaries are converted on the balance sheet date, theassets and liabilities items in the balance sheet are converted at the spot exchange rate on the balance sheet date; theshareholders' equity items, except for "undistributed profits", are converted at the spot exchange rate on the date ofoccurrence.The income and expense items in the profit statement are converted at the spot exchange rate on the transactiondate.All items in the cash flow statement are converted at the spot exchange rate on the cash flow date. The effect ofexchange rate changes on cash is taken as a regulation item, and reflected in the item "Effect of exchange ratechanges on cash and cash equivalents" listed separately in the cash flow statement.The difference arising from the conversion of financial statements is reflected in the item "Other comprehensiveincome" under the item "Shareholders' equity" in the balance sheet.During the disposal of overseas operation and when the right of control is lost, the conversion difference of foreigncurrency statements listed under the shareholders' equity items in the balance sheet and related to the overseasoperation is transferred to the current profits and losses of disposal in full or as per the disposal proportion of theoverseas operation.
10. Financial instruments
Financial instruments refer to contracts that form the financial assets of one party and form the financial liabilitiesor equity instruments of other parties.
(1) Recognition and derecognition of financial instruments
The Company recognizes a financial asset or financial liability when it becomes a party to the contract of thefinancial instrument.Financial assets are derecognized if they meet one of the following conditions:
① The contractual right to receive the cash flow of the financial asset is terminated;
② The financial assets have been transferred and meet the following derecognition conditions for the transfer offinancial assets.The financial liabilities are derecognized in full or in part if the current obligation of financial liabilities has beenwholly or partially released. The Company (the Debtor) signs an agreement with the Creditor to replace the existingfinancial liabilities with new financial liabilities; the existing financial liabilities are derecognized and the newfinancial liabilities are recognized when the contractual terms of the new financial liabilities and those of the existingfinancial liabilities are different in essence.Financial assets are purchased and sold in a conventional manner, and accounting recognition and derecognition areperformed on the transaction date.
(2) Classification and measurement of financial assets
The Company classifies financial assets into the following three categories according to the business mode offinancial assets management and the contractual cash flow characteristics of financial assets at the time of initialrecognition: financial assets measured at amortized cost, financial assets measured at fair value and whose changesare included in other comprehensive income, and financial assets measured at fair value and whose changes areincluded in the current profits or losses.Financial assets measured at amortized costThe Company classifies the financial assets that meet the following conditions but are not designated to be measuredat fair value and with the changes included in current profits or losses as the financial assets measured at amortizedcost:
· The Company's business model for managing the financial assets is to collect contractual cash flows;· The contractual terms of the financial asset specify that the cash flow generated on a specific date is only thepayment of principal and interest based on the outstanding principal amount.After initial recognition, such financial assets are measured at amortized cost with the effective interest method.Gains or losses arising from financial assets measured at amortized cost and not part of any hedging relationshipare included in the current profits or losses at the time of derecognition, amortization with effective interest methodor recognition for impairment.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 but are not designated to be measuredat fair value and with the changes included in the current profits or losses as the financial assets measured at fairvalue and whose changes are included in other comprehensive income:
· The Company's business model for managing the financial assets aims at both collecting contractual cash flowsand selling the financial assets;· The contractual terms of the financial asset specify that the cash flow generated on a specific date is only thepayment of principal and 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 with the effective interest method are included in the currentprofits and losses, and other gains or losses are included in other comprehensive income. At the time ofderecognition, the accumulated gains or losses previously included in other comprehensive income are transferredout and included in the current profits and losses.Financial assets measured at fair value and whose changes are included in current profits and lossesExcept for the above financial assets measured at amortized cost and that measured at fair value and whose changesare included in other comprehensive income, the Company classifies all other financial assets into that measured atfair value and whose changes are included in current profits or losses. At the time of initial recognition, the Companyirrevocably designates some financial assets that should have been measured at amortized cost or that should bemeasured at fair value and whose changes are included in other comprehensive income as the financial assetsmeasured at fair value and whose changes are included in current profits or losses in order to eliminate orsignificantly reduce accounting mismatch.After initial recognition, such financial assets are subsequently measured at fair value, and the resulting gains orlosses (including interest and dividend income) are included in the current profits or losses, unless the financialassets are part of the hedging relationship.The business model for managing financial assets refers to the way adopted by the Company to manage financialassets to generate cash flows. The business model determines the cash flow sources of the financial assets managedby the Company, which may come from the collection of contractual cash flow or the sale of financial assets orboth. The Company determines the business model for managing financial assets based on objective facts and thespecific business objectives for managing financial assets decided by key management personnel.The Company evaluates the contractual cash flow characteristics of financial assets to determine whether thecontractual cash flow generated by the financial assets on a specific date is only the payment of principal and interestbased on the amount of outstanding principal. Principal refers to the fair value of financial assets at the time ofinitial recognition; interest includes consideration for the time value of money, credit risk related to the amount ofoutstanding principal in a specific period, and other basic borrowing risks, costs and profits. In addition, theCompany evaluates the contract terms that may cause changes in the time distribution or amount of contractual cashflow of financial assets to determine whether they meet the requirements of the above contractual cash flowcharacteristics.
All affected financial assets are reclassified on the first day of the first reporting period after the business mode ischanged only if the Company changes the business mode for managing financial assets, otherwise financial assetsshall not be reclassified after initial recognition.Financial assets are measured at fair value at the time of initial recognition. The transaction expenses of the financialassets measured at fair value and whose changes are included into current profits or losses are directly included inthe current profits or losses; the transaction expenses of other financial assets are included in the initially recognizedamount. For accounts receivable arising from the sale of products or the rendering of services, which do not includeor do not take into account significant financing components, the Company takes the amount of considerationexpected to be entitled to receive as the initially recognized amount.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company are classified into the following types at the time of initial recognition:
financial liabilities measured at fair value and whose changes are included in profits or losses, and financialliabilities measured at amortized cost. For the financial liabilities not classified as those measured at fair value andwhose changes are included in the current profits or losses, the transaction expenses are included in their initiallyrecognized amounts.Financial liabilities measured at fair value and whose changes are included in the current profits and lossesFinancial liabilities measured at fair value and whose changes are included in the current profits and losses includetrading financial liabilities and the financial liabilities designated to be measured at fair value and whose changesare included in the current profits and losses at the time of initial recognition. Such financial liabilities aresubsequently measured at fair value, and the gains or losses arising from changes in fair value as well as thedividends and interest expenses related to such financial liabilities are included in current profits and losses.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost with the effective interest method, and gainsor losses arising from derecognition or amortization are included in current profits and losses.Difference between financial liabilities and equity instrumentsFinancial liabilities refer to the liabilities that meet one of the following conditions:
① Contractual obligations of delivering cash or other financial assets to other parties.
② Contractual obligations of exchanging financial assets or financial liabilities with other parties underpotentially adverse conditions.
③ Non-derivative instrument contracts which must or may be settled with the enterprise's own equity instrumentsin the future, and the equity instrument of the enterprise with which a variable number is delivered under the contract.
④ Derivative instrument contracts which must or may be settled with the enterprise's own equity instruments inthe future, except for those with a fixed amount of equity instruments to exchange for a fixed amount of cash orother financial assets.
Equity instrument refers to the contract which can prove the residual equity in the assets of an enterprise after allliabilities are deducted.The contractual obligation satisfies the definition of financial liability if the Company fails to perform onecontractual obligation by avoiding delivering cash or other financial assets unconditionally.If a financial instrument must or can be settled by the Company's own equity instrument, it needs to consider whetherthe equity instrument is used to replace cash or other financial assets, or help its holder to enjoy the residual equityin the issuer's assets after all liabilities are deducted. If it is used for the former purpose, the instrument is thefinancial liability of the Company; if it is used for the latter purpose, the instrument is the equity instrument of theCompany.
(4) Fair value of financial instruments
The determination methods for fair values of financial assets and financial liabilities are described in 37 "Othersignificant accounting policies and accounting estimates" in V "Significant Accounting Policies and AccountingEstimates" of Section X - Financial Report.
(5) Impairment of financial assets
The Company carries out impairment accounting and recognizes the loss provision for the following items basedon the expected credit loss:
· Financial assets measured at amortized cost;· Receivables and debt investments measured at fair value and whose changes are included in other comprehensiveincome;· Contractual assets as defined in the Accounting Standards for Business Enterprises No. 14 - Revenue.· Lease receivables.· Financial guarantee contracts (except those formed by measuring at fair value with its changes included in currentprofits and losses, and when the transfer of financial assets does not meet the conditions for derecognition or thetransferred financial assets are involved continuously).Measurement of expected credit lossThe expected credit loss refers to the weighted average of the credit losses of financial instruments that are weightedby the risk of default. Credit loss refers to the difference between all contractual cash flows receivable according tothe contract and discounted according to the original effective interest rate and all cash flows receivable of theCompany, that is, the present value of all cash shortages.The Company considers reasonable and reliable information about past events, current situation and forecast offuture economic situation, weighs the risk of default, calculates the probability weighted amount of the present valueof the difference between the cash flow receivable from the contract and the cash flow expected to be received, andrecognizes the expected credit loss.
The Company measures the expected credit losses of financial instruments at different stages respectively. Thefinancial instruments with the credit risk not increased significantly since the initial recognition is in phase I, andthe Company measures the provision for loss based on the expected credit loss in the next 12 months. The financialinstrument with credit loss increased significantly since its initial recognition but without credit impairment is inphase II, and the Company measures the provision for loss based on the expected credit loss of the instrument inthe whole duration. The financial instrument with credit impairment since its initial recognition is in phase III, andthe Company measures the provision for loss based on the expected credit loss of the instrument in the wholeduration.The Company assumes that the credit risk of the financial instruments with low credit risk on the balance sheet datehas not increased significantly since the initial recognition, and measures the provision for loss based on theexpected credit loss in the next 12 months.The expected credit loss in the whole duration refers to the loss caused by all possible default events in the wholeexpected duration of the financial instruments. The expected credit loss in the next 12 months refers to that causedby the possible default events of the financial instruments within 12 months after the balance sheet date (or theexpected duration if the expected duration of financial instruments is less than 12 months), which is a part of theexpected credit loss in the whole duration.During the measurement of expected credit losses, the maximum term to be considered by the Company is themaximum contract term of the enterprise facing credit risk (including the option to renew the contract).The Company calculates interest income of the financial instruments in the phase I and phase II and with low creditrisk according to the book balance without deduction of impairment provision and the effective interest rate. Forfinancial instruments in phase III, the Company calculates the interest income based on their book balance minusthe amortized cost after the impairment provision has been made and the effective interest rate.Notes receivable, accounts receivable and contractual assetsFor notes receivable, accounts receivable and contractual assets, the Company always measures their loss provisionaccording to the amount equivalent to the expected credit loss in the whole duration no matter whether there is anysignificant financing component.If the expected credit loss of a single financial asset cannot be evaluated at a reasonable cost, the Company dividesthe notes receivable and accounts receivable into portfolios according to the credit risk characteristics based on thefollowing, and calculates the expected credit loss on the basis of the portfolios:
A. Notes receivableNotes receivable portfolio 1: bank acceptance billsNotes receivable portfolio 2: commercial acceptance billsB. Aging portfolio of accounts receivableC. Aging portfolio of contractual assets
The Company calculates the expected credit loss of the notes receivable and contractual assets divided intoportfolios by referring to the historical credit loss experience, combining the current situation and the forecast ofthe future economic situation, and based on the default risk exposure and the expected credit loss rate for the wholeduration.The Company calculates the expected credit loss of the accounts receivable divided into portfolios by referring tothe historical credit loss experience, combining the current situation and the forecast of the future economic situation,and preparing a comparison table of accounts receivable aging/overdue days and the expected credit loss rate forthe whole duration.Other receivablesThe Company divides other receivables into several portfolios according to the credit risk characteristics based onthe following, and calculates the expected credit loss according to the portfolios:
Portfolio 1 of other receivables: portfolio of margin, deposit and reserve fundPortfolio 2 of other receivables: aging portfolioThe Company calculates the expected credit loss of other receivables divided into portfolios according to the defaultrisk exposure and the expected credit loss rate in the next 12 months or the whole duration.Long-term receivablesThe Company's long-term receivables include the receivables from sales of goods by installments.The Company divides the receivables from sales of goods by installments into several portfolios according to thecredit risk characteristics based on the following, and calculates the expected credit loss on the basis of the portfolios:
Long-term receivables portfolio 1: receivables from sales of goods by installmentsLong-term receivables portfolio 2: other receivablesThe Company calculates the expected credit loss of the receivables from sales of goods by installments by referringto the historical credit loss experience, combining the current situation and the forecast of the future economicsituation, and based on the default risk exposure and the expected credit loss rate for the whole duration.Debt investment and other debt investmentsThe Company calculates the expected credit loss of debt investment and other debt investments according to thenature of the investment, the type of counterparties and risk exposures, and the default risk exposure and theexpected credit loss rate in the next 12 months or the whole duration.Assessment of significant increase in credit riskThe Company evaluates whether the credit risk of financial instruments has increased significantly since the initialrecognition by comparing the default risk of financial instruments on the balance sheet date with the default risk onthe initial recognition date to determine the relative change in the default risk of financial instruments in the expectedduration.
The Company considers the reasonable and reliable information (including forward-looking information) which canbe obtained without unnecessary additional cost or effort when determining whether the credit risk has increasedsignificantly since the initial recognition. The information considered by the Company includes the following:
· Failure of the debtor to pay the principal and interest on the due date of the contract;· Existing or expected great degradation of external or internal credit ratings (if any) of financial instruments;· Existing or expected serious deterioration of the debtor's operating results;· Existing or expected changes in the technical, market, economic or legal environment, which will have a significantadverse effect on the debtor's repayment ability to the Company.The Company assesses whether the credit risk has increased significantly on the basis of a single financialinstrument or portfolios of financial instruments according to the nature of financial instruments. The Companymay classify financial instruments based on common credit risk characteristics, such as overdue information andcredit risk ratings, when evaluating on the basis of financial instruments portfolios.If it is overdue for more than 30 days, the Company determines that the credit risk of financial instruments hasincreased significantly.Credit-impaired financial assetsThe Company evaluates the financial assets measured at amortized cost and creditor's debt investment measured atfair value and with changes included in other comprehensive income for credit impairment on the balance sheetdate. The financial assets become the credit-impaired financial assets in case of one or more events adverselyaffecting their expected future cash flow. Evidence of credit impairment of financial assets includes the followingobservable information:
· Major financial difficulty of the issuer or debtor;· Default of the debtor, such as default in the payment of interest or principal, or overdue payment;· Concessions made by the Company to the debtor that would not be made under any other circumstances foreconomic or contractual reasons related to the debtor's financial difficulty;· Great possibility of bankruptcy or other financial restructuring of the debtor;· Disappearance of the active market of the financial assets due to financial difficulty of the issuer or debtor;Presentation of provisions for expected credit lossesIn order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Companyremeasures the expected credit loss on each balance sheet date, and the increased or reversed amount of the lossprovision arising therefrom shall be included in the current profits and losses as impairment losses or gains. Theloss provision of the financial assets measured at amortized cost is used to offset their book value presented in thebalance sheet. For the debt investment measured at fair value with its changes included in other comprehensiveincome, the Company recognizes its loss provision in other comprehensive income, which will not offset the bookvalue of the financial assets.
Cancel after verificationThe Company writes down the book balance of the financial assets when it no longer reasonably expects that thecontractual cash flow of the financial asset can be recovered in whole or in part. Such write-down constitutes thederecognition of related financial assets. This usually occurs when the Company determines that the debtor has noassets or sources of income that can generate sufficient cash flows to repay the amount to be written down. However,the written-down financial assets may still be affected by the execution activities according to the Company'sprocedures for recovering due amounts.If the written-down financial assets are recovered later, the reverse of the impairment loss are included in the currentprofits or losses.
(6) Transfer of financial assets
Transfer of financial assets refers to the assignment or delivery of financial assets to the other party (transferee)other than the issuer of such financial assets.The financial asset is derecognized if the Company has transferred substantially all the risks and rewards onownership of a financial asset to the transferee. The financial asset is not derecognized if the Company has retainedsubstantially all the risks and rewards on ownership of a financial asset.The following measures are taken when the Company neither transfers nor retains substantially all the risks andrewards on ownership of a financial asset: The financial assets are derecognized and the assets and liabilitiesincurred are recognized if the Company waives control over the financial assets. Relevant financial assets arerecognized based on the extent of their continued involvement in the transferred financial assets, and relevantliabilities are recognized accordingly if the Company does not waive control over the financial assets.
(7) Offset of financial assets and financial liabilities
Financial assets and financial liabilities are presented in the balance sheet with the amount after offsetting each otherwhen the Company has a legal right to offset the recognized financial assets and financial liabilities and the legalright can be exercised currently, and when the Company intends either to settle on a net basis, or to realize thefinancial assets and pay off the financial liabilities simultaneously. In other cases, financial assets and financialliabilities are presented separately in the balance sheet and are not offset against each other.
11. Notes receivable
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X- Financial Report.
12. Accounts receivable
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X- Financial Report.
13. Receivables financing
Refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X- Financial Report.
14. Other receivables
For the determination method and accounting method of expected credit losses of other receivables, please refer to10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates" of Section X -Financial Report.
15. Inventories
(1) Classification of inventories
The inventories of the Company are divided into raw materials, self-made semi-finished products and finishedproducts, goods in stock, revolving materials, etc.
(2) Valuation method for dispatched inventories
It is accounted for according to the planned cost when the Company's inventory is obtained. The difference betweenthe planned cost and the actual cost is accounted for based on the cost difference account, and the planned cost isadjusted to the actual cost according to the cost difference which shall be borne for the inventory carried forwardand dispatched on schedule.
(3) Basis for determining the net realizable value of inventories and drawing methods for provision for decline inthe value of inventoriesThe net realizable value of inventories refers to the amount of the estimated selling price of the inventories minusthe estimated costs upon completion, estimated selling expenses and relevant taxes. The net realizable value ofinventories is determined based on the unambiguous evidence obtained and by considering the purpose of holdinginventories and the effect of events after the balance sheet date.The provision for decline in the value of inventories is made if the inventory cost is higher than its net realizablevalue on the balance sheet date. The Company generally makes provision for decline in the value of inventoriesaccording to a single inventory item. The provision for decline in the value of inventories previously made isreversed if the influence of the write-down inventory value before the balance sheet date disappears.
(4) Inventory system
The Company adopts the perpetual inventory system.
(5) Amortization method for low value consumables and packing materialsLow-value consumables and packaging materials of the Company are amortized by one-off write-off method whenbeing acquired.
16. Contractual assets
The Company presents the contractual assets or contract liabilities in the balance sheet according to the relationshipbetween the performance obligations and the customer's payment. The Company presents the net amount ofcontractual assets and contract liabilities under the same contract after offsetting them.A contractual asset refers to a right to receive consideration for goods or services that have been transferred to acustomer, and the right depends on factors other than the passage of time.For the determination method and accounting method of the Company for the expected credit loss of the contractualassets, please refer to 10 "Financial instruments" in V "Significant Accounting Policies and Accounting Estimates"of Section X - Financial Report.
17. Contract cost
Contract costs include incremental costs incurred to obtain contracts and contract performance costs.The incremental cost incurred for obtaining the contract refers to the cost that will not incur if the Company fails toobtain the contract (such as sales commission, etc.). The Company recognizes the cost as an asset of the contractacquisition cost if it is expected to be recovered. Other expenses incurred by the Company for obtaining the contract,except the incremental cost that is expected to be recovered, are included in the current profits and losses whenincurred.The Company recognizes the cost incurred for the performance of the contract as the asset of contract performancecost if it does not fall within the scope of other accounting standards for business enterprises such as inventory andmeets the following conditions at the same time:
① This cost is directly related to a current or expected contract, including direct labor, direct materials andmanufacturing expenses (or similar expenses), costs explicitly borne by the customer and other costs incurred onlyby the Contract;
② This cost increases the future resources of the Company to fulfill the performance obligations;
③ This cost is expected to be recovered.
Assets recognized as contract acquisition costs and that recognized as contract performance costs (hereinafterreferred to as "assets related to contract costs") are amortized on the same basis as revenue recognition of goods orservices related to the assets and are included in current profits and losses.The Company makes provision for impairment of the excess and recognizes it as the asset impairment loss whenthe book value of the assets related to the contract cost is higher than the difference between the following two items:
① Residual consideration expected to be obtained by the Company by transferring goods or services related tothe asset;
② The estimated cost to be incurred for the transfer of such goods or services.The contract performance cost recognized as an asset is presented in the item "Inventory" if the amortization periodat the time of initial recognition does not exceed one year or one normal business cycle, and is presented in the item"Other non-current assets" if the amortization period at the time of initial recognition exceeds one year or one normalbusiness cycle.The contract acquisition cost recognized as an asset is presented in the item "Other current assets" if the amortizationperiod at the time of initial recognition does not exceed one year or one normal business cycle, and is presented inthe item "Other non-current assets" if the amortization period at the time of initial recognition exceeds one year orone normal business cycle.
18. Held-for-sale assets
(1) Classification and measurement of held-for-sale non-current assets or disposal groupsThe non-current asset or disposal group is classified as the held-for-sale asset if the Company recovers its bookvalue mainly by selling (including the exchange of non-monetary assets of commercial nature) rather thancontinuously using the non-current asset or disposal group.The above-mentioned non-current assets do not include investment real estates subsequently measured at fair value,biological assets measured at the net amount obtained by deducting the selling expenses from the fair value, assetsobtained from employee compensation, financial assets, deferred tax assets and rights arising from insurancecontracts.Disposal group refers to a group of assets which is sold or disposed of together as a whole in a transaction and theliabilities directly related to these assets and transferred in the transaction. The disposal group includes goodwillobtained from business combination under certain circumstances.Non-current assets or disposal groups that meet all the following conditions are classified as the held-for-sale assets:
The non-current assets or disposal groups can be sold immediately under current conditions according to the practice
of selling such assets or disposal groups in similar transactions; they are extremely likely to be sold, i.e. a resolutionhas been made on a sales plan and a certain purchase commitment has been obtained, and the sales are expected tobe completed within one year. The overall investment to subsidiaries is classified as held-for-sale assets in individualfinancial statements, and all assets and liabilities of subsidiaries are classified as the held-for-sale assets inconsolidated financial statements when the investment to subsidiaries meets the conditions for the held-for-saleassets if the Company loses control over its subsidiaries due to reasons such as the sales of investment to subsidiaries,whether the Company reserves some of its equity investments after the sales or not.The difference between the book value and the net amount obtained by deducting the selling expenses from the fairvalue is recognized as the asset impairment loss when the held-for-sale non-current assets or disposal groups aremeasured initially or re-measured on the balance sheet date. The asset impairment loss recognized by the held-for-sale disposal group deducts the book value of the goodwill in the disposal group, and then deducts the book valueof each non-current asset in the disposal group based on its proportion.The previous write-down amount is recovered and reversed from the asset impairment losses recognized after beingclassified as the held-for-sale assets, and the reversed amount is included in the current profits and losses if the netamount obtained by deducting the selling expenses from the fair value of held-for-sale non-current assets or disposalgroups on the subsequent balance sheet date increases. The book value of goodwill deducted shall not be reversed.Held-for-sale non-current assets and assets in the held-for-sale disposal group are not depreciated or amortized. Theinterest on liabilities and other expenses in the held-for-sale disposal group are recognized continuously. For all orpart of the investments of held-for-sale associated enterprises or joint ventures, the held-for-sale part will not beaccounted for with equity method, and the retained part (not classified as the held-for-sale asset) will be accountedfor continuously with the equity method. The equity method will not be used any more when the Company has nosignificant influence on associated enterprises and joint ventures due to sales.For a non-current asset or disposal group which is classified as the held-for-sale asset but later no longer meets theconditions for the held-for-sale asset, the Company will cease to classify it as the held-for-sale asset and measure itbased on the lower of the following two amounts:
① The amount of the book value of the asset or disposal group before it is classified as the held-for-sale assetafter adjustment for depreciation, amortization or impairment that should have been recognized under theassumption that it is not classified as the held-for-sale asset;
② Recoverable amount.
(2) Presentation
The Company presents the held-for-sale non-current assets or the assets in the held-for-sale disposal group in thebalance sheet as the "held-for-sale assets", and presents the liabilities in the held-for-sale disposal group as the "held-for-sale liabilities".
The Company presents the profits and losses from continuing operations and discontinued operations separately inthe profit statement. For the held-for-sale non-current assets or disposal groups failing to meet the definition ofdiscontinued operation, their impairment losses and reversed amounts as well as profits or losses of disposal arepresented as profits or losses from continuing operations. Operating profits and losses such as impairment lossesand reversed amounts of discontinued operations and profits and losses of disposal are presented as profits andlosses from discontinued operations.Disposal groups that are intended to be discontinued rather than sold and meet the conditions of relevant componentsin the definition of discontinued operation are presented as discontinued operations from the date of discontinuance.For discontinued operations presented in the current period, the information originally presented as profits or lossesfrom continuing operations in the current financial statements is presented again as profits or losses fromdiscontinued operations in comparable accounting period. If the discontinued operation no longer meets theconditions for the classification of held-for-sale assets, the information originally presented as profits or losses fromdiscontinued operations in the current financial statements is presented again as profits or losses from continuingoperations in comparable accounting period.
19. Long-term equity investment
Long-term equity investments include equity investments to subsidiaries, joint ventures and associated enterprises.The investee which may be subject to significant influence of the Company is an associated enterprise of theCompany.
(1) Recognition of initial investment cost
Long-term equity investment acquired from business combination: For the long-term equity investment acquiredfrom the business combination under common control, the investment cost refers to the share of book value of theowner's equity of the combined party in the consolidated financial statements of the ultimate controlling party onthe combination date; for the long-term equity investment acquired from the business combination under differentcontrol, the investment cost refers to the combination cost.Long-term equity investment acquired by other means: For the long-term equity investment acquired by cashpayment, the initial investment cost refers to the actually paid purchase price; for the long-term equity investmentacquired by issuing equity securities, the initial investment cost refers to the fair value of the issued equity securities.
(2) Subsequent measurement and recognition of profit or loss
Investments to subsidiaries are accounted for with the cost method unless the investment meets the conditions forheld-for-sale; investments to associated enterprises and joint ventures are accounted for with the equity method.For the long-term equity investment accounted for with the cost method, the distributed cash dividends or profitsdeclared by the investee are recognized as investment income and included in the current profits and losses, except
for the declared but not released cash dividends or profits included in the price or consideration actually paid foracquiring the investment.For the long-term equity investment accounted for with the equity method, the investment cost is not adjusted if theinitial investment cost exceeds the share of the fair value of the investee's identifiable net assets at the time of theinvestment; the book value of the long-term equity investment is adjusted and the difference is included in thecurrent profits and losses if the initial investment cost is less than the share of fair value of the investee's identifiablenet assets at the time of the investment.When the equity method is adopted, the investment income and other comprehensive income are recognizedrespectively according to its share of net profit or loss and other comprehensive income realized by the investee,and the book value of long-term equity investments is adjusted at the same time. The part of due share is calculatedaccording to the distributed profit or cash dividend declared by the investee, and the book value of the long-termequity investment is reduced accordingly. In case of other changes in owners' equity except net profit or loss, othercomprehensive income and profit distribution of the investee, the book value of long-term equity investment isadjusted and included in capital reserve (other capital reserves). The due share of net profit and loss of an investeeis determined based on the fair value of various identifiable assets in the investee when the investment is obtainedafter net profit of the investee is adjusted according to accounting policies and accounting period of the Company.The sum of the fair value of the original equity and the new investment cost is taken as the initial investment costcalculated with the equity method on the date of conversion if it is possible to exert significant influence on orimplement joint control but not constitute control over the investee due to additional investment or other reasons.The cumulative changes in fair value originally included in other comprehensive income related to the originalequity are transferred to retained earnings when the equity method is adopted if the original equity is classified as anon-trading equity instrument investment measured at fair value with its changes included in other comprehensiveincome.In case that the Company loses joint control of or the significant influence on the investee due to the disposal ofpart of the equity investment, the residual equity after the disposal is accounted for in accordance with theAccounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments onthe date of losing the joint control or significant influence, and the difference between the fair value and the bookvalue is included in the current profits and losses. Other comprehensive income from original equity investmentrecognized with the equity method is accounted for on the same basis as the direct disposal of related assets orliabilities by the investee when the equity method is terminated. Other changes in owners' equity related to theoriginal equity investment are transferred to current profits and losses.In case that the Company loses the right of control over the investee due to disposal of partial equity investment orother reasons, the equity method is applied, and it is deemed that the residual equity is adjusted with equity methodfrom the time of acquisition if the residual equity after disposal can exert joint control over or significant influence
on the investee; the accounting is carried out according to the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments, and the difference between the fair value and the bookvalue on the date of losing control is included in the current profits and losses if the residual equity after disposalcannot exert joint control over or significant influence on the investee.If the Company loses the right of control over the investee but may exert joint control over or significant influenceon the investee due to the reduction in its shareholding proportion caused by capital increase of other investors, theshare of the Company in net assets of the investee increased due to capital increase and share expansion is recognizedbased on the new shareholding proportion, and the difference with the original book value of the long-term equityinvestment corresponding to the decrease of the shareholding proportion is included in the current profits and losses.Then, it is deemed that the equity method is adopted for adjustment according to the new shareholding proportionsince the investment is acquired.For the internal trading profits and losses incurred but not realized between the Company and its associatedenterprises and joint ventures, the part attributable to the Company is calculated as per the shareholding proportion,and the investment profits and losses are recognized on the basis of offset. However, the internal transaction lossnot realized between the Company and its investees shall not be offset if it is not an impairment loss of the assetstransferred.
(3) Basis for determining joint control over and significant influence on the investeeJoint control refers to the control over certain arrangement under related agreements, and related activities of thearrangement can only be determined with the unanimous consent of the parties sharing the control. During thejudgment of joint control, it is required to determine whether the arrangement is controlled collectively by allparticipants or a group of participants, and then determine whether the activities related to the arrangement must bedecided after being unanimously agreed by the participants who collectively control the arrangement. It is deemedthat all participants or a group of participants collectively control the arrangement if related activities of anarrangement can be decided only with concerted action of all participants or a group of participants. It does notconstitute joint control if an arrangement can be controlled collectively by two or more groups of participants. Thedetermination of joint control does not consider the protective rights enjoyed.Significant influence refers to the power of the investor to participate in making decisions on the financial andoperating policies of the investee, but cannot control or jointly control with other parties over the preparation ofthese policies. The possibility of exerting significant influence on the investee is determined by considering theinfluence of the voting shares of the investee directly or indirectly held by the investor and when it is assumed thatthe potential voting rights executable for the current period held by the investor and other parties are converted intothe equity of the investee, including the influence of the warrants, stock options and corporate bonds which can beconverted in the current period issued by the investee.
It is generally considered that the Company has significant influence on the investee when the Company directlyholds more than 20% (including 20%) but less than 50% of the voting shares of the investee or holds indirectlythrough subsidiaries, unless there is clear evidence indicating that it cannot participate in the production andoperation decisions of the investee under such circumstances, in which case it has no significant influence. It isgenerally not considered that the Company has significant influence on the investee when the Company owns lessthan 20% (exclusive) of the voting shares of the investee, unless there is clear evidence indicating that it canparticipate in the production and operation decisions of the investee under such circumstances, in which case it hassignificant influence.
(4) Impairment test method and drawing methods for impairment provisionFor investments to subsidiaries, associated enterprises and joint ventures, the method of drawing asset impairmentis described in 26 "Long-term asset impairment" in V "Significant Accounting Policies and Accounting Estimates"of Section X - Financial Report.
20. Investment real estate
Measurement mode of investment real estate: cost methodDepreciation or amortization methodInvestment real estates refer to the real estates held to earn rent or increase capital, or both. Investment real estatesof the Company include the land use rights which have already been rented, the land use rights held and to betransferred after appreciation, and the buildings which have been rented.The investment real estates of the Company are initially measured according to the cost upon acquisition, anddepreciated or amortized on schedule according to the relevant provisions of fixed assets or intangible assets.For the investment real estate which is subsequently measured with the cost mode, the method of drawing assetimpairment is described in 26 "Long-term asset impairment" in V "Significant Accounting Policies and AccountingEstimates" of Section X - Financial Report.The disposal income from the sale, transfer, discard or destroy of the investment real estates is included in thecurrent profits and losses after the book value and relevant taxes are deducted.
21. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to the tangible assets held for the sake of producing commodities, renderinglabor services, renting or operating management, with a service life in excess of one accounting year.The fixed assets can be recognized only if the economic benefits related to such fixed assets are likely to flow intothe enterprise and the cost of such fixed assets can be measured reliably.Fixed assets of the Company are initially measured based on the actual cost at the time of acquisition.
Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the related economicbenefits are likely to flow into the Company and the costs can be measured reliably. The daily repair costs of fixedassets that do not meet the conditions for subsequent expenditure of fixed assets capitalization are included in thecurrent profits and losses or the costs of relevant assets according to the beneficiaries when the costs incurred. Thebook value is derecognized for the replaced part.
(2) Depreciation method
| Category | Depreciation Method | Depreciation Period | Residuals Rate | Annual Depreciation Rate (%) |
| Houses and buildings | Straight-line method | 20 years | 3-5 | 4.85-4.75 |
| Machinery equipment | Straight-line method | 10 years | 0-3 | 10.00-9.70 |
| Transportation equipment | Straight-line method | 4-10 years | 0-5 | 25.00-9.50 |
| Electronic equipment | Straight-line method | 3 years | 0-5 | 33.33-31.67 |
| Office equipment | Straight-line method | 3-5 years | 3-5 | 32.33-19.00 |
| Others | Straight-line method | 4-10 years | 0-5 | 24.25-9.50 |
① The Company adopts straight-line depreciation method. Fixed assets are depreciated when they are ready fortheir intended use, and ceased for depreciation when they are derecognized or classified as held-for-sale non-currentassets. Without considering the provision for impairment, the annual depreciation rates of various fixed assets aredetermined according to their category, estimated service life and estimated residual value. The depreciation rate offixed assets with impairment provision drawn is calculated and determined after their accumulated amount ofimpairment provision drawn is deducted.
② The impairment test method and drawing method for impairment provision of fixed assets are described in 26"Long-term asset impairment" in V "Significant Accounting Policies and Accounting Estimates" of Section X -Financial Report.
③ The Company reviews the service life, expected net residual value and depreciation method of fixed assets atthe end of each year.The service life of fixed assets is adjusted if the expected service life is different from the original estimate. Theexpected net residual value is adjusted if it is different from the original estimate.
④ Disposal of fixed assets
A fixed asset is derecognized if it is disposed of or it is expected that no economic benefit will be obtained by usingor disposing it. The disposal income from the sale, transfer, discard or destroy of the fixed assets is included in thecurrent profits and losses after the book value and relevant taxes are deducted.
(3) Recognition basis, valuation and depreciation methods for fixed assets under finance leaseThe fixed assets leased by the Company are recognized as the fixed assets under finance lease when they meet oneor more of the following criteria:
① The ownership of the leased assets will be transferred to the Company at the expiration of the lease term.
② The Company has the option to purchase the leased assets, and the purchase price agreed is expected to be farlower than the fair value of the leased assets when the option is exercised. Therefore, it can be reasonably determinedthat the Company will exercise this option on the commencement date of lease.
③ The lease term accounts for the majority of the service life of the leased assets, even if the ownership of suchassets is not transferred.
④ The present value of the minimum lease payment of the Company on the commencement date of lease almostequals to the fair value of the leased assets on the same day.
⑤ The leased assets are of a special nature, and they can only be used by the Company if no major transformationis made.For the fixed assets under finance lease, the entry value refers to the lower the fair value of the leased assets fromthe commencement date of lease and the present value of minimum lease payment. The minimum lease payment istaken as the entry value of long-term payables and its balance as the unrecognized financing charge. Initial directexpenses such as handling fees, attorney fees, travel expenses and stamp duties attributable to the lease projectincurred during lease negotiation and signing of the lease contract are included in the value of the leased assets.Unrecognized financing charges are amortized with the effective interest method in each period of the lease term.For the fixed assets under finance lease, the depreciation is drawn in the same way as that of the self-owned fixedassets. The depreciation is drawn within the service life of leased assets if it can be reasonably confirmed that theownership of the assets can be obtained at the expiration of the lease term; otherwise, the depreciation is drawnwithin the lease term or the service life of leased assets, whichever is shorter.
22. Project under construction
The cost of the Company's project under construction is recognized according to the actual construction expenses,including various necessary construction expenses incurred during construction, borrowing costs which need to becapitalized before the projects reach the expected usable state and other relevant expenses.The project under construction is transferred to fixed assets when they are ready for their intended use.For the drawing method of asset impairment of the project under construction, please see 26 "Long-term assetimpairment" in V "Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
23. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs
The borrowing costs incurred by the Company are capitalized and included in the cost of relevant assets if they canbe directly attributed to the acquisition and construction or production of assets eligible for capitalization. Otherborrowing costs are recognized as expenses according to the amount incurred and included in the current profit andloss. The borrowing costs are capitalized if they meet all of the following conditions:
① Expenditures on assets have been incurred, and they include the expenditures in the form of payments in cash,transfer of non-cash assets, or assumption of debts with interest for the acquisition, construction, or production ofthe assets eligible for capitalization;
② Borrowing costs have already been incurred;
③ Acquisition, construction, or production activities necessary to make the asset ready for its intended use or saleare in progress.
(2) Capitalization period of borrowing costs
The capitalization of borrowing costs will cease when the assets eligible for capitalization acquired, constructed, orproduced by the Company are ready for their intended use or sale. Borrowing costs incurred after the assets eligiblefor capitalization are ready for their intended use or sale are recognized as expenses according to the amount incurredand included in current profits and losses.The capitalization of the borrowing costs is suspended when the acquisition and construction or production of theassets eligible for capitalization are interrupted abnormally for more than 3 months. The capitalization of theborrowing costs continues when the acquisition and construction or production are interrupted normally.
(3) Capitalization rate of borrowing costs and calculation method of capitalized amountThe balance of the interest from special borrowings actually occurred in current period deducting the interest incomeacquired from unused borrowings which are deposited in banks, or deducting investment income from temporaryinvestment of the borrowings is capitalized. The capitalization amount of general borrowings is determined bymultiplying the weighted average of the part of accumulated asset expenditures exceeding special borrowings bythe capitalization rate of general borrowings occupied. The capitalization rate is determined based on the weightedaverage interest rate of the general borrowings.The balance of exchange for special borrowings in foreign currency is capitalized in full in the capitalization period.The balance of exchange for general borrowings in foreign currency is included in the current profits and losses.
24. Right-of-use assets
(1) Recognition conditions of right-of-use assets
The right-of-use asset refers to the right of the Company as the lessee to use the leased asset during the lease term.The right-to-use asset is initially measured at cost from the commencement of the lease term. This cost includes theamount of lease liabilities measured initially; the rent paid on or before the commencement of the lease term, whichneeds to deduct the amount of lease incentive enjoyed (if any); initial direct expenses incurred by the Company as
the lessee; cost expected to be incurred by the Company as the lessee for dismantling and removing the leased assets,restoring the site where the leased assets are located or restoring the leased assets to the state agreed in the leaseterms. The Company, as the lessee, recognizes and measures the cost of demolition and restoration in accordancewith the Accounting Standards for Business Enterprises No. 13 - Contingencies. Subsequent adjustments are madefor any remeasurement of the lease liabilities.
(2) Depreciation method of right-of-use assets
The Company adopts the straight-line method for depreciation. The depreciation is drawn within the remainingservice life of the leased assets if the Company, as the lessee, can reasonably confirm that can obtain the ownershipof the leased assets at the expiration of the lease term. The depreciation is drawn within the lease term or theremaining life of such assets, whichever is shorter, if it cannot be reasonably determined that the ownership of theleased assets can be obtained at the expiration of the lease term.
(3) The impairment test method and drawing method for impairment provision of right-of-use assets are describedin 26 "Long-term asset impairment" in V "Significant Accounting Policies and Accounting Estimates" of SectionX - Financial Report.
25. Intangible assets
(1) Valuation method, service life and impairment test
Intangible assets of the Company include land use rights, software, non-patented technologies, etc.Intangible assets are initially measured at cost and their service life is analyzed and judged at the time of acquisition.Where the service life is limited, the intangible asset is amortized over its expected service life, from the time it isavailable, with an amortization method that reflects the expected realization of the economic benefits associatedwith the asset. The straight-line method is adopted for amortization if the expected realization mode cannot bedetermined reliably. Intangible assets with uncertain service life are not amortized.The amortization method for intangible assets with limited service life is as follows:
| Category | Service Life | Amortization Method | Remarks |
| Land use right | 50 years | Straight-line method | |
| Software | 2-10 years | Straight-line method | |
| Non-patented technology | 5-10 years | Straight-line method |
The Company reviews the service life and amortization method of intangible assets with limited service life at theend of each year; adjusts the original estimate if it is different from the actual value, and handles based on changesin accounting estimate.The book value of an intangible asset is transferred into the current profits and losses in full if it is expected that theasset cannot bring economic benefits to the enterprise in the future on the balance sheet date.For the drawing method of asset impairment of the intangible assets, please see 26 "Long-term asset impairment"in V "Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.
(2) Accounting policies for expenditures on internal research and developmentThe Company divides the expenditures of internal research and development projects into expenditures in researchstage and expenditures in development stage.The expenditures in research stage are included in current profits and losses when incurred.The expenditures in the development stage can be capitalized only if they meet all of the following conditions: It istechnically feasible to complete the intangible asset so that it will be available for use or sale; there is an intentionto complete the intangible asset and use or sell it; the model of economic benefits generated by operating theintangible assets, including the proof that there is a market for the products manufactured based on the intangibleassets or the assets themselves, and the serviceability of the assets which are to be used internally; there are sufficienttechnical, financial and other resources to complete the development of intangible asset, and it is capable to use orsell the asset; the expenditure attributable to the intangible asset in the development stage can be measured reliably.The development expenditures failing to meet above conditions are included in current profits and losses whenoccurred.The research and development project of the Company will enter the development stage after meeting the aboveconditions and being approved through technical feasibility and economic feasibility study.The capitalized expenditures in the development stage are presented as development expenditures on the balancesheet and are transferred into intangible assets from the date when the project realizes the intended use.
26. Long-term asset impairment
The asset impairment of long-term equity investment to subsidiaries and associated enterprises, investment realestates subsequently measured by cost model, fixed assets, project under construction, right-of-use assets, intangibleassets, etc. (except for inventories, deferred income tax assets and financial assets) is recognized with the followingmethods:
The Company will determine whether there is any sign of possible impairment of assets on the balance sheet date.If any, the Company will estimate the recoverable amount and conduct an impairment test. Impairment tests shallbe carried out every year on goodwill resulting from business combination, intangible assets with uncertain servicelife and intangible assets that are not available no matter whether there is any sign of impairment.The recoverable amount is the net amount of the fair value of the assets after deducting the disposal expenses or thepresent value of the expected future cash flow of the assets, whichever is higher. The Company estimates therecoverable amount on a single asset basis. The Company determines the recoverable amount of the asset group towhich a single asset belongs if it is difficult to estimate the recoverable amount of the asset. An asset group isrecognized based on the fact that whether the main cash inflows generated by the asset group are independent of thecash inflows of other assets or asset groups.
When the recoverable amount of an asset or asset group is lower than its book value, the Company writes down itsbook value to the recoverable amount, and the write-down amount is included in the current profits and losses, andthe corresponding provision for impairment of assets is made at the same time.For the impairment test of goodwill, the book value of goodwill resulting from business combination is amortizedto relevant asset groups with reasonable methods from the acquisition date, or amortized to relevant asset groupportfolio if it is difficult to amortize it to relevant asset groups. The relevant asset group or portfolio of asset groupscan benefit from the synergy effect of the business combination and is not greater than the reporting segmentdetermined by the Company.If there is any sign of impairment in the asset group or portfolio of asset groups related to goodwill during theimpairment test, the impairment test shall be carried out to the asset group or portfolio of asset groups not includinggoodwill, and the recoverable amount shall be calculated to recognize the corresponding impairment loss. Then, animpairment test is carried out to the asset group or portfolio of asset groups including goodwill to compare its bookvalue and recoverable amount, and recognize the impairment loss of goodwill if the recoverable amount is lowerthan the book value.Once confirmed, the impairment loss of assets will not be reversed in subsequent accounting periods.
27. Long-term deferred expenses
Long-term deferred expenses incurred by the Company are valued at actual cost and amortized evenly over theexpected benefit period. The amortized value of the long-term deferred expenses that cannot benefit the futureaccounting period is included in the current profits and losses.
28. Contract liabilities
The Company presents the contractual assets or contract liabilities in the balance sheet according to the relationshipbetween the performance obligations and the customer's payment. The Company presents the net amount ofcontractual assets and contract liabilities under the same contract after offsetting them.Contractual liability refers to an obligation to transfer goods or services to a customer for which customerconsideration has been received or receivable, such as payments received by an enterprise prior to the transfer ofpromised goods or services.
29. Employee compensation
(1) Accounting method of short-term compensation
The Company recognizes the actual employee salaries and bonuses, the medical insurance premiums, work-relatedinjury insurance premiums, maternity insurance premiums and other social insurance premiums as well as housing
provident fund paid for the employees according to the specified benchmark and proportion in the accounting periodwhen the employees provide services as liabilities, and includes them in the current profits and losses or relevantasset costs. Such liabilities will be measured at the discounted amount if it is expected that they cannot be fully paidwithin 12 months at the end of the annual reporting period during which the employees provide relevant services,and the financial impact is significant.
(2) Accounting method of post-employment benefits
The post-employment benefit plan includes defined contribution plan and defined benefit plan. The definedcontribution plan refers to the post-employment benefit plan that the enterprise will no longer bear the paymentobligation after paying fixed fees to independent funds. The defined benefit plan refers to the post-employmentbenefit plan other than the defined contribution plan.Defined contribution planThe defined contribution plan includes basic pension insurance, unemployment insurance and enterprise annuityplan.In the accounting period when an employee provides services, the Company recognizes the amount payable to adefined contribution plan as a liability, and includes it in the current profit or loss or relevant asset cost.Defined benefit planThe defined benefit plan shows that an actuarial valuation is performed by an independent actuary on the annualbalance sheet date, and the benefit cost is determined with the expected cumulative benefit unit method. Theemployee compensation cost arising from the defined benefit plan of the Company includes the following:
① Service costs, including current service costs, past service costs and settlement gains or losses. Among them,the current service cost refers to the increase in the present value of the defined benefit plan obligations due to theprovision of services by employees in the current period; the past service cost refers to the increase or decrease inthe present value of the defined benefit plan obligations related to the employee services in the previous period dueto the modification of the defined benefit plan.
② Net interest of net liabilities or net assets of the defined benefit plan, including interest income of plan assets,interest expenses of defined benefit plan obligations and interest impacted by upper asset limit.
③ Changes caused by re-measurement of net liabilities or net assets of the defined benefit plan.The Company includes the above items ① and ② in the current profits and losses, unless other accounting standardsrequire or allow the cost of employee benefits to be included in the cost of assets; item ③ is included in othercomprehensive income and will not be reversed back to profit or loss in subsequent accounting periods, and the partoriginally included in other comprehensive income within the equity scope is carried forward to undistributed profitwhen the original defined benefit plan terminates.
(3) Accounting method of dismissal welfare
When the Company provides dismissal welfare to employees, it recognizes the liabilities of employee compensationarising from dismissal welfare at the earlier of the following two dates and includes them in current profits andlosses: The Company cannot unilaterally withdraw the dismissal welfare provided due to the termination ofemployment or adoption of staff reduction suggestion; the Company recognizes the costs or expenses related to therestructuring involving the payment of dismissal welfare.If the early retirement plan is implemented, the economic compensation before the official retirement date belongsto dismissal welfare. The wages proposed to be paid to the early retired employee and the social insurance premiumsto be paid are included in the current profits and losses in a lump sum from the date when the employee stopsproviding services to the normal retirement date. Economic compensation after the official retirement date (such asnormal pension) belongs to post-employment benefits.
(4) Accounting method of other long-term employee benefits
Other long-term employee benefits provided by the Company to employees are treated according to provisions ofabove defined contribution plan if they meet the conditions of the plan. The benefits that meet the requirements ofthe defined benefit plan are treated in accordance with the provisions of the plan. However, the "changes caused byre-measurement of net liabilities or net assets of the defined benefit plan" in relevant employee compensation costare included in current profits and losses or relevant asset cost.
30. Lease liabilities
(1) Identification of lease
When the contract takes effect, the Company, as the lessee or lessor, evaluates whether the customer in the contractis entitled to obtain almost all economic benefits arising from the use of the identified assets during the use period,and is entitled to dominate the use of the identified assets during the use period. The Company determines that thecontract is a lease or includes a lease if one party to the contract abalienates the right to control the use of one ormore identified assets within a certain period of time in exchange for consideration.
(2) The Company acting as the lessee
The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement of the leaseterm, except for simplified short-term leases and low-value asset leases.For the accounting policies of right-of-use assets, see 24 in V "Significant Accounting Policies and AccountingEstimates" of Section X - Financial Report.Lease liabilities are initially measured at the present value of the lease payment that has not been made on thecommencement date of the lease term calculated by the interest rate implicit in lease. The incremental borrowingrate is used as the discount rate if the interest rate implicit in lease cannot be determined. Lease payments include
fixed payment and substantial fixed payment, which need to deduct the lease incentive (if any); variable leasepayments depending on index or ratio; the exercise price of the purchase option, provided that the lessee reasonablydetermines that the option will be exercised; amount to be paid for exercise of the option to terminate the lease,provided that it is reflected that the lessee will exercise the option to terminate the lease in the lease term; the amountexpected to be payable based on the guaranteed residual value provided by the lessee. Subsequently, the interestexpenses of the lease liabilities in each period of the lease term are calculated at a fixed periodic rate and includedin the current profits and losses. Variable lease payments not included in the measurement of lease liabilities areincluded in the current profits and losses when they actually occur.Short-term leaseShort-term leases are leases last for not more than 12 months from the commencement of the lease term, except thelease including a purchase option.The Company includes the payment of short-term lease into relevant asset costs or current profits and losses withthe straight-line method in each period within the lease term.For short-term lease, the Company selects the above simplified treatment method for the items meeting the short-term lease conditions in the following asset types according to the category of leased assets.Low-value asset leaseLow-value asset lease refers to the lease in which the value of a single new leased asset is less than CNY 40,000.The Company includes the payment of low-value asset lease into relevant asset costs or current profits and losseswith the straight-line method in each period within the lease term.For low-value asset leases, the Company selects the above simplified treatment method according to the specificconditions of each lease.Lease changeIf the lease changes and meets all of the following conditions, the Company will account for the lease change bytaking it as a separate lease: ① The lease change expands the lease scope by adding the right to use one or moreleased assets; ② The increased consideration equals to the separate price of the expanded part of the lease scopethe after adjustment according to the contract.If the lease change reduces the lease scope or the lease term, the Company reduces the book value of the right-to-use asset accordingly and includes the gains or losses from the partial or complete termination of the lease into thecurrent profits and losses.The Company adjusts the book value of the right-to-use asset accordingly if other lease changes lead to theremeasurement of lease liabilities.
(3) The Company acting as the lessor
When acting as the lessor, the Company recognizes the lease that substantially transfers all risks and rewards relatedto the ownership of the assets as a finance lease, and other leases other than finance leases as operating leases.
Finance leaseThe Company takes the net investment in a finance lease as the entry value of the lease receivables from thecommencement of the lease term, and the net investment in a lease is the sum of the unguaranteed residual valueand the present value of the lease receipts not yet received at the commencement of the lease term discounted at theinterest rate implicit in lease. The Company, as the lessor, calculates and recognizes the interest income in eachperiod within the lease term at a fixed periodic rate. The variable lease payment obtained by the Company as thelessor and not included in the measurement of net lease investment is included in the current profits and losses whenit actually occurs.Derecognition and impairment of finance lease receivables are accounted for according to the Accounting Standardsfor Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the AccountingStandards for Business Enterprises No. 23 - Transfer of Financial Assets.Operating leaseThe Company recognizes the rents from operating lease as the current profits and losses with the straight-linemethod in each period within the lease term. The initial direct expenses related to the operating lease incurred shallbe capitalized, amortized over the lease term on the same basis as the recognition of rental income, and included inthe current profits and losses by stages. The variable lease payments obtained that are related to the operating leasebut not included in the lease receipts are included in the current profits and losses when they actually occur.Lease changeThe Company treats the changed lease under the following circumstances respectively if the change of finance leaseis not taken as a separate lease for accounting: ① The Company will take the lease as a new one for accountingfrom the effective date of lease change, and take the net investment in the lease before the effective date of the leasechange as the book value of the leased asset if the change takes effect on the commencement date of the lease andthe lease is classified as an operating lease; ② The Company will carry out accounting according to the provisionson the modification or renegotiation of contract in the Accounting Standards for Business Enterprises No. 22 -Recognition and Measurement of Financial Instruments if the change takes effect on the commencement date ofthe lease and the lease is classified as a finance lease.
31. Estimated liabilities
The Company recognizes the obligations related to contingencies as estimated liabilities if they meet all of thefollowing conditions:
(1) The obligation is the current obligation of the Company;
(2) Performance of the obligation will probably cause outflow of economic benefits from the Company;
(3) The amount of the obligation can be measured reliably.
Estimated liabilities are initially measured at the best estimate required to be paid for the performance of relevantcurrent obligations, and comprehensively consider factors as risks, uncertainties and time value of money related tocontingencies. The best estimate is determined by discounting the relevant future cash outflow if the time value ofmoney has a significant impact. The Company reviews the book value of estimated liabilities and adjusts the bookvalue on the balance sheet date to reflect the current best estimate.The amount of compensation is recognized as assets separately only if it is basically certain that the amount can beobtained in case that all or part of expenditures necessary for clearing off the recognized estimated liabilities areexpected to be compensated by a third party or other parties. The recognized compensation amount shall not exceedthe book value of the recognized liabilities.
32. Share-based payment
(1) Types of share-based payment
The share-based payments of the Company are divided into equity-settled share-based payment and cash-settledshare-based payment.
(2) Determination methods for fair value of equity instruments
The Company recognizes the fair value of equity instruments such as granted options in an active market accordingto the quotation of the active market. For equity instruments such as granted options not in active market, the fairvalue is determined by the option pricing model. The selected option pricing model considers the following factors:
A. Exercise price of options; B. Validity period of options; C. Current price of underlying shares; D. Expectedfluctuation ratio of stock price; E. Expected dividends of shares; F. Risk-free interest rate within the validity periodof options.
(3) Basis for determining the best estimate of exercisable equity instrumentsThe Company makes the best estimate based on the latest follow-up information such as changes in the number ofvesting employees and corrects the expected number of exercisable equity instruments on each balance sheet datewithin the waiting period. On the vesting date, the final estimated number of exercisable equity instruments shallbe consistent with the number of actual exercisable equity instruments.
(4) Accounting related to implementation, modification and termination of share-based payment planThe equity-settled share-based payment is measured at the fair values of the equity instruments granted to employees.The share-based payment is included in relevant costs or expenses at the fair value of equity instrument on thegranting date if the equity instrument can be vested immediately upon being granted, and the capital reserve isincreased accordingly. If the equity instrument cannot be exercised until services within the vesting period arecompleted or until the specified performance conditions are met, the services obtained in the current period can beincluded in relevant costs or expenses and capital reserve at the fair value on the granting date of the equityinstrument based on the best estimate on the number of exercisable equity instruments on each balance sheet date
within the vesting period. No adjustment shall be made to relevant costs or expenses and the total amount of owner'sequity that have been recognized after the vesting date.The cash-settled share-based payment is measured according to the fair value of liabilities calculated and recognizedbased on the shares or other equity instruments assumed by the Company. The payment is included in relevant costsor expenses at the fair value of the liabilities assumed by the Company on the granting date if the equity instrumentcan be vested immediately upon being granted, and the liabilities are increased accordingly. Where the cash-settledshare-based payment cannot be exercised until the services within the vesting period are completed or until thespecified performance conditions are met, the services obtained in the current period are included in relevant costsor expenses and liabilities at the fair value of liabilities assumed by the Company based on the best estimate onexercisable right on each balance sheet date within the vesting period. Fair value of the liabilities is re-measuredand the changes in fair value are included in current profits and losses on each balance sheet date and each settlementdate prior to the settlement of the relevant liabilities.If the fair value of granted equity instruments is increased due to the modification made by the Company to theshare-based payment plan, the increase in services obtained is recognized based on the increase in the fair value ofequity instruments. If the number of granted equity instruments is increased due to the modification, the fair valueof the increased equity instruments is recognized accordingly as the increase in obtained services. The increase inthe fair value of equity instruments refers to the difference between the fair value of equity instruments before andafter the modification on the modification date. The obtained services are accounted for continuously as if thechange has never occurred if the modification reduces total fair value of share-based payment or other waysunfavorable to employees are adopted to modify the terms and conditions of the share-based payment plan, unlessthe Company has canceled part or all of the granted equity instruments.If the granted equity instruments are canceled in the vesting period (except those canceled due to the failure to meetexercisable non-market conditions), the Company will accelerate the exercise of the granted equity instruments,include the amount to be recognized in the remaining vesting period in the current profits and losses immediately,and recognize the capital reserve at the same time. If the employees or other parties can choose to meet the non-exercisable conditions but fail to do so in the vesting period, the Company will consider that the granted equityinstruments are canceled.
33. Income
Accounting policies adopted for income recognition and measurement
(1) General principles
The Company recognizes the income after performing its obligations under the contract, i.e. the customers obtainthe right to control relevant goods or services.If there are two or more obligations under the Contract, the Company will amortize the transaction price to each
single obligation according to the relative proportion of the individual selling price of the goods or services promisedby each single obligation on the contract commencement date, and measure the income based on the transactionprice amortized to each single obligation.When one of the following conditions is met, it is deemed that the Company performs the obligations within acertain period of time; otherwise, it is deemed that the Company performs obligations at a certain time point:
① The customer obtains and consumes the economic benefits brought by the performance of the contract by theCompany at the time of contract performance.
② The customer can control the goods under construction during the performance of the Company.
③ The goods generated during the performance of the Company are irreplaceable, and the Company reservesright to receive payment for the performance accumulated so far throughout the contract period.For the obligations performed within a certain period of time, the income is recognized by the Company based onthe performance progress within that period of time. When the performance progress cannot be determined in areasonable way and it is expected that the costs incurred by the Company can be compensated, the income will berecognized based on the cost incurred until the performance progress can be determined reasonably.For obligations performed at a certain time point, the income is recognized by the Company at the time point whenthe customer obtains right to control relevant goods or services. The Company will consider the followingindications in determining whether the customer has obtained the right to control the goods or services:
① The Company enjoys the current collection right in respect of the goods or services, that is, the customer hasthe current payment obligation in respect of the goods.
② The Company has transferred the legal ownership of the goods to the customer, that is, the customer has thelegal ownership of the goods.
③ The Company has transferred the physical goods to the customer, that is, the customer has occupied thephysical goods.
④ The Company has transferred the main risks and rewards on the ownership of the goods to the customer, thatis, the customer has obtained the main risks and rewards on the ownership of the goods.
⑤ The customer has accepted the goods or services.
⑥ Other signs indicating that the customer has obtained the right of control over the goods.The right of the Company to receive the consideration due to the transfer of goods or services to the customer (andthe right depends on other factors other than the passage of time) is taken as a contractual asset, and thecontractual assets are impaired based on the expected credit losses (please refer to 16 in V "Significant AccountingPolicies and Accounting Estimates" of Section X - Financial Report.). The right owned by the Company to collectconsideration from customer unconditionally (which only depends on the passage of time) is presented asreceivables. The obligations of the Company to transfer goods or services to customers for which considerationhas been received or receivable are regarded as contractual liabilities.
Contractual assets and contract liabilities under the same contract are presented in net amount, which is presentedin the item "Contractual assets" or "Other non-current assets" according to its liquidity if it is the debit balance;presented in the item "Contract liabilities" or "Other non-current liabilities" according to its liquidity if it is thecredit balance.
(2) Specific method
The specific method for recognizing the sales income of the Company's complete vehicles and their accessories isas follows: When the complete vehicles and their accessories and other goods are transported to the customer andthe customer has accepted the goods, the customer obtains the right to control over them, and the Companyrecognizes the income.Differences in accounting policies for income recognition due to different business models for similar businesses:
none
34. Government subsidies
Government subsidies are recognized when the attached conditions are met and the government subsidies can bereceived.The government subsidies for monetary assets are measured at the amount received or receivable. The governmentsubsidies for non-monetary assets are measured at fair value; or at nominal amount of CNY 1 if the fair value cannotbe determined reliably.The asset-related government subsidies refer to those obtained by the Company and used for the acquisition orconstruction of long-term assets or forming long-term assets in other ways. Other government subsidies are income-related government subsidies.If the government documents do not clearly specify the subsidy object and long-term assets can be resulted in, thegovernment subsidies corresponding to the asset value are regarded as asset-related government subsidies and othersas income-related government subsidies; if it is difficult to distinguish, the government subsidies are regarded asincome-related government subsidies.Asset-related government subsidies are offset against the book value of related assets, or recognized as deferredincomes, and are included in profits and losses within the service life of related assets with a reasonable andsystematic method. The income-related government subsidies used to compensate for the related costs or lossesincurred are included in the current profits and losses or offset against relevant costs; those used to compensate forfuture related costs or losses are included in deferred income, and included in the current profits and losses or offsetagainst relevant costs in the recognition period of related costs or losses. Government subsidies measured at thenominal amount are directly included in current profits and losses. The Company adopts the same method for thesame or similar government subsidies.
The government subsidies related to daily activities are included in other incomes or offset against relevant costsbased on the nature of business transactions. The government subsidies irrelevant to daily activities are included innon-operating revenue and expenditure.If it is necessary to refund the government subsidies which have been recognized, the book value of the assets whichhas been offset at the time of initial recognition is adjusted; the book balance of the deferred income concerned (ifany) is offset, and the excess is included in the current profits and losses; others are directly included in the currentprofits and losses.
35. Deferred income tax assets/deferred tax liabilities
Income tax includes current income tax and deferred income tax. Except that the deferred income taxes related tothe adjustment of goodwill resulting from business combination or the transactions or matters directly included inthe owner's equity are included in the owner's equity, other deferred income taxes are regarded as income taxexpenses and included in the current profits and losses.The Company recognizes deferred income tax with the balance sheet liability method based on the temporarydifference between the book value of assets and liabilities on the balance sheet date and the tax base.Relevant deferred income tax liabilities are recognized for each taxable temporary difference, unless the differenceis incurred in the following transactions:
(1) Initial recognition of goodwill or initial recognition of assets or liabilities incurred in a transaction which isneither a business combination nor affects accounting profit or taxable income;
(2) For the taxable temporary difference associated with investments in subsidiaries, associated enterprises andjoint ventures, its reversal time can be controlled and it may not be reversed in the foreseeable future.For the deductible temporary difference, and deductible losses and tax deduction that can be carried forward to thenext year, the Company recognizes the deferred tax assets arising from it by taking the future taxable income whichcan be used to deduct the deductible temporary differences, deductible losses and tax deduction as the limit, unlessthe deductible temporary difference is incurred in the following transactions:
(1) The transaction is neither a business combination nor affects accounting profit or taxable income;
(2) Corresponding deferred tax assets are recognized if the deductible temporary difference associated withinvestments in subsidiaries, associated enterprises and joint ventures meets all of the following conditions: Thetemporary difference is likely to be reversed in the foreseeable future, and the taxable income which is used todeduct the deductible temporary difference is likely to be obtained in the future.The Company measures the deferred tax assets and deferred income tax liabilities at the applicable tax rate duringthe expected period for recovering the assets or paying off the liabilities on the balance sheet date, and reflects theimpact on income tax from assets recovery or liability settlement on the balance sheet date.
The Company reviews the book value of deferred tax assets on the balance sheet date. The book value of the deferredtax assets is written down if it is likely that sufficient taxable income will not be available in the future to deductthe benefits of deferred tax assets. The write-down amount is reversed when it is likely that sufficient taxable incomewill be available.
36. Lease
(1) Accounting method of operating leases
The Company recognizes the rents from operating lease as the current profits and losses with the straight-linemethod in each period within the lease term. The initial direct expenses related to the operating lease incurred shallbe capitalized, amortized over the lease term on the same basis as the recognition of rental income, and included inthe current profits and losses by stages. The variable lease payments obtained that are related to the operating leasebut not included in the lease receipts are included in the current profits and losses when they actually occur.
(2) Accounting method of finance leases
The Company takes the net investment in a finance lease as the entry value of the lease receivables from thecommencement of the lease term, and the net investment in a lease is the sum of the unguaranteed residual valueand the present value of the lease receipts not yet received at the commencement of the lease term discounted at theinterest rate implicit in lease. The Company, as the lessor, calculates and recognizes the interest income in eachperiod within the lease term at a fixed periodic rate. The variable lease payment obtained by the Company as thelessor and not included in the measurement of net lease investment is included in the current profits and losses whenit actually occurs.Derecognition and impairment of finance lease receivables are accounted for according to the Accounting Standardsfor Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the AccountingStandards for Business Enterprises No. 23 - Transfer of Financial Assets.
37. Other significant accounting policies and accounting estimates
(1) Fair value measurement
Fair value refers to the price to be received for the sale of an asset or to be paid for the transfer of a liability bymarket participants in the orderly transaction on the measurement date.The Company measures relevant assets or liabilities at fair value by assuming that the orderly transaction of sellingassets or transferring liabilities is carried out in the main market of relevant assets or liabilities; if there is no mainmarket, the Company assumes that the transaction is carried out in the most favorable market for relevant assets orliabilities. The main market (or the most favorable market) refers to the trading market which the Company can
enter on the measurement date. The Company adopts the assumptions used by market participants to maximize theireconomic benefits when pricing the asset or liability.The Company recognizes the fair value of financial assets or financial liabilities with active market based on thequotation in the market. The Company recognizes the fair value of the financial instrument without an active marketwith the valuation technique.When non-financial assets are measured at fair value, the ability of market participants to use the asset for theoptimum purpose to generate economic benefits, or to sell the asset to other market participants who can use it forthe optimum purpose to generate economic benefits shall be considered.The Company adopts the valuation technique which is currently applicable and contains sufficient available dataand other information, and gives priority to the use of relevant observable input values, or uses non-observable inputvalues only if it is impossible or infeasible to obtain the observable input values.For assets and liabilities measured or disclosed at fair value in the financial statements, the level of fair value towhich they belong is determined according to the lowest level input value which is significant for the overall fairvalue measurement: The first level input value refers to the unadjusted quotation of the same assets or liabilities inthe active market that can be obtained on the measurement date; the second level input value refers to the direct orindirect observable input value of related assets or liabilities other than the first level input value; the third levelinput value refers to the non-observable input value of related assets or liabilities.The Company reassesses the assets and liabilities measured continuously at fair value recognized in the financialstatements on each balance sheet date to determine whether the fair value measurement levels are converted witheach other.
(2) Construction materials
Construction materials of the Company refer to various materials prepared for the project under construction,including project materials, uninstalled equipment, tools and instruments prepared for production, etc.The purchased construction materials are measured at cost, the received construction materials are transferred to theproject under construction, and the remaining construction materials after the completion of the project aretransferred to inventory.For the drawing method of asset impairment of the project materials, please see 26 "Long-term asset impairment"in V "Significant Accounting Policies and Accounting Estimates" of Section X - Financial Report.The ending balance of construction materials is presented in the item "Project under construction" of the balancesheet.
(3) Work safety cost
The Company withdraws the work safety cost month by month in an average manner by taking the method of excessregression based on the actual operating income of the previous year according to the provisions of CQ [2012] No.16 document. The specific standards are as follows:
For the machinery manufacturing enterprises with an operating income of not exceeding CNY 10 million, 2% ofwork safety cost will be withdrawn; for the part of operating income between CNY 10 million and CNY 100 million,1% shall be withdrawn; for the part of the operating income between CNY 100 million and CNY 1 billion, 0.2%will be withdrawn; for the part of the operating income between CNY 1 billion and CNY 5 billion, 0.1% will bewithdrawn; for the part of the operating income over CNY 5 billion, 0.05% will be withdrawn.For transportation enterprises, the work safety cost is withdrawn month by month in an average manner accordingto the following standards based on the actual operating income in the previous year: 1% for ordinary freightbusiness; 1.5% for passenger transportation business, and special freight business such as pipeline transportationand dangerous goods transportation.Work safety costs are included in the cost of relevant products or current profits and losses at the time of withdrawal,and are also included in the item "special reserve".When the withdrawn work safety costs are used within the specified scope, those belonging to expenditures aredirectly offset against the special reserves; those resulting in fixed assets are recognized as fixed assets when thesafety project is completed and ready for its intended use after expenditures incurred are collected under the item"Project under construction". At the same time, the Company will offset the special reserve according to the cost offixed assets and recognize the accumulated depreciation of the same amount. The fixed assets will no longer bedepreciated in subsequent periods.
(4) Significant accounting judgments and estimates
The Company evaluates the significant accounting estimates and key assumptions adopted continuously based onhistorical experience and other factors, including reasonable expectations for future events. Significant accountingestimates and key assumptions which may lead to significant adjustment risk to the book value of assets andliabilities in the next accounting year are presented as follows:
Classification of financial assetsMajor judgments involved in determining the classification of financial assets by the Company include analysis ofbusiness models and contractual cash flow characteristics.The Company determines the business model for financial assets management at the level of financial asset portfoliowhile considering factors such as the way to evaluate and report the performance of financial assets to keymanagement personnel, the risks affecting the performance of financial assets and their management mode, and theway in which relevant business management personnel receive remuneration.When evaluating the consistence between the contractual cash flow of financial assets and the basic lendingarrangements, the Company needs to determine whether the principal may change the time distribution or amountin the duration due to prepayment and other reasons; whether the interest only includes the time value of money,credit risk, other underlying borrowing risks, and consideration for costs and profits. For example, whether the
amount of prepayment only reflects the unpaid principal and interest based on the outstanding principal, as well asreasonable compensation paid due to early termination of the contract.Measurement of expected credit losses on accounts receivableThe Company calculates the expected credit loss of accounts receivable based on default risk exposure of accountsreceivable and the expected credit loss rate, and determines the expected credit loss rate based on the probabilityand the loss rate of default. The Company determines the expected credit loss rate based on the data such as internalhistorical credit loss experience, and adjusts the historical data in combination with the current situation andforward-looking information. The Company uses indicators such as the risk of economic downturn, changes inexternal market environment, technical environment and customer situation, etc. when considering forward-lookinginformation. The Company monitors and reviews the assumptions related to the calculation of expected credit lossesregularly.Impairment of goodwillThe Company assesses the impairment of goodwill at least once every year. This requires estimating the use valueof the asset group allocated with goodwill. When estimating the use value, the Company needs to estimate the futurecash flow from the asset group and select an appropriate discount rate to calculate the present value of the futurecash flow.Development expendituresThe management must assume the expected future cash generation of the asset, the discount rate to be applied, andthe expected benefit period when determining the amount of capitalization.Deferred tax assetsDeferred tax assets are recognized for all unutilized tax losses to the extent that it is probable that there will besufficient taxable profits available against which the losses can be utilized. Therefore, the management needs to usea lot of judgment to estimate the time and amount of future taxable profits, and to determine the amount of deferredtax assets to be recognized in combination with tax planning strategies.Estimated liabilitiesEstimated liabilities are initially measured at the best estimate required to be paid for the performance of relevantcurrent obligations, and comprehensively consider factors as risks, uncertainties and time value of money related tocontingencies. The best estimate is determined by discounting the relevant future cash outflow if the time value ofmoney has a significant impact. The Company reviews the book value of estimated liabilities and adjusts the bookvalue on the balance sheet date to reflect the current best estimate.The amount of compensation is recognized as assets separately only if it is basically certain that the amount can beobtained in case that all or part of expenditures necessary for clearing off the recognized estimated liabilities areexpected to be compensated by a third party or other parties. The recognized compensation amount shall not exceedthe book value of the recognized liabilities.
38. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
□ Applicable Not applicable?
(2) Changes in significant accounting estimates
□ Applicable Not applicable?
VI. Taxes
1. Main taxes and tax rates
| Tax Category | Tax Basis | Tax Rate |
| Value-added tax | Taxable income | 13%、9%、6%、5% |
| Urban maintenance and construction tax | Turnover tax payable | 7%、5% |
| Corporate income tax | Taxable income | 25% |
| Educational surcharges | Turnover tax payable | 3% |
| Local educational surcharges | Turnover tax payable | 2% |
| Land use tax | Land use area | CNY 9/㎡, CNY 14/㎡ |
| Property tax | Residual value of property and rental income | 1.2%, 12% |
Disclosure shall be made if there are different enterprise income tax rates for different taxpayers
| Name of Taxpayer | Income Tax Rate |
| FAW JIEFANG GROUP CO., LTD. | 25% |
| FAW JIEFANG AUTOMOTIVE CO., LTD. | 15% |
| Wuxi Dahao Power Co., Ltd. | 25% |
| FAW Jiefang Automotive Sales Co., Ltd. | 25% |
| FAW Jiefang (Qingdao) Automotive Co., Ltd. | 25% |
| FAW Jiefang Dalian Diesel Engine Co., Ltd. | 15% |
| FAW Jiefang Austria R&D Co., Ltd. | 25% |
| FAW Jiefang New Energy Automotive Sales Co., Ltd. | 25% |
2. Tax preference
Jiefang Limited, a subsidiary of the Company, is recognized as a high-tech enterprise, with a validity period of threeyears and an income tax rate of 15% within the validity period according to the High-tech Enterprise Certificate(issued on September 10, 2020, with a certificate number of GR202022000336) jointly issued by the Science and
Technology Department of Jilin Province, the Department of Finance of Jilin Province and the Jilin Provincial TaxService of State Taxation Administration.FAW Jiefang Dalian Diesel Engine Co., Ltd., a subsidiary of the Company, is recognized as a high-tech enterprise,with a validity period of three years and an income tax rate of 15% within the validity period according to the listof third batch of high-tech enterprises (with a certificate number of GR202121200892) recognized in 2021 andissued by Dalian on December 15, 2021.
VII. Notes to Items in Consolidated Financial Statements
1. Monetary capital
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Bank deposits | 28,493,437,173.79 | 30,709,255,009.05 |
| Other monetary capitals | 52,309,930.91 | 52,007,712.35 |
| Total | 28,545,747,104.70 | 30,761,262,721.40 |
| Including: total amount deposited abroad | 13,555,345.21 | 13,585,238.95 |
| Total amount with limited use due to mortgage, pledge or freezing | 52,309,930.91 | 56,005,226.87 |
Other notes: none
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
2. Notes receivable
(1) Classification of notes receivable
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Commercial acceptance notes | 6,795,406.57 | 12,936,978.11 |
| Total | 6,795,406.57 | 12,936,978.11 |
Unit: CNY
| Category | Ending Balance | Opening Balance | ||||||||
| Book Balance | Provision for Bad Debts | Book Value | Book Balance | Provision for Bad Debts | Book Value | |||||
| Amount | Scale | Amount | Provision Proportion | Amount | Scale | Amount | Provision Proportion | |||
| Including: | ||||||||||
| Notes receivable with provision for bad debts made by portfolio | 6,832,988.00 | 100.00% | 37,581.43 | 0.55% | 6,795,406.57 | 13,008,525.00 | 100.00% | 71,546.89 | 0.55% | 12,936,978.11 |
| Including: | ||||||||||
| Commercial acceptance bill | 6,832,988.00 | 100.00% | 37,581.43 | 0.55% | 6,795,406.57 | 13,008,525.00 | 100.00% | 71,546.89 | 0.55% | 12,936,978.11 |
| Total | 6,832,988.00 | 100.00% | 37,581.43 | 0.55% | 6,795,406.57 | 13,008,525.00 | 100.00% | 71,546.89 | 0.55% | 12,936,978.11 |
Information about the provision for bad debts shall be disclosed in the same way as that of other receivables if the provision for bad debts of notes receivable iswithdrawn based on the general model of expected credit losses:
?Applicable □ Not Applicable
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
Portfolio provision item: commercial acceptance bill Unit: CNY
| Aging | 2022.6.30 | 2021.12.31 | ||||
| Notes receivable | Provision for Bad Debts | Expected Credit Loss Rate (%) | Notes receivable | Provision for Bad Debts | Expected Credit Loss Rate (%) | |
| Within 1 year | 6,832,988.00 | 37,581.43 | 0.55 | 13,008,525.00 | 71,546.89 | 0.55 |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
(2) Provision for bad debts provided, recovered or reversed in the current periodProvision for bad debts in the current period:
Unit: CNY
| Category | Opening Balance | Amount Changed in the Current Period | Ending Balance | |||
| Provision | Recovery or Reversal | Cancel after verification | Others | |||
| Commercial acceptance bill | 71,546.89 | -33,965.46 | 37,581.43 | |||
| Total | 71,546.89 | -33,965.46 | 37,581.43 | |||
Important provision for bad debts recovered or reversed in the current period:
□ Applicable Not applicable?
3. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: CNY
| Category | Ending Balance | Opening Balance | ||||||||
| Book Balance | Provision for Bad Debts | Book Value | Book Balance | Provision for Bad Debts | Book Value | |||||
| Amount | Scale | Amount | Provision Proportion | Amount | Scale | Amount | Provision Proportion | |||
| Accounts receivable with provision for bad debt made individually | 85,146,390.69 | 3.87% | 85,146,390.69 | 100.00% | 97,146,390.69 | 6.79% | 97,146,390.69 | 100.00% | ||
| Including: | ||||||||||
| Accounts receivable with provision for bad debts made by portfolio | 2,116,937,778.02 | 96.13% | 83,352,091.79 | 3.94% | 2,033,585,686.23 | 1,332,966,224.45 | 93.21% | 53,272,272.75 | 4.00% | 1,279,693,951.70 |
| Including: | ||||||||||
| Aging portfolio | 2,116,937,778.02 | 96.13% | 83,352,091.79 | 3.94% | 2,033,585,686.23 | 1,332,966,224.45 | 93.21% | 53,272,272.75 | 4.00% | 1,279,693,951.70 |
| Total | 2,202,084,168.71 | 100.00% | 168,498,482.48 | 7.65% | 2,033,585,686.23 | 1,430,112,615.14 | 100.00% | 150,418,663.44 | 10.52% | 1,279,693,951.70 |
Provision for bad debts made individually:
Unit: CNY
| Name | Ending Balance | |||
| Book Balance | Provision for Bad Debts | Provision Proportion | Reasons for Provision | |
| Liangshan Huatai Trading Co., Ltd. | 349,190.00 | 349,190.00 | 100.00% | Highly unlikely to be recovered |
| Yancheng Zhongwei Bus Co., Ltd. | 13,599.99 | 13,599.99 | 100.00% | Highly unlikely to be recovered |
| FAW Jingye Engine Co., Ltd. | 1,820,957.23 | 1,820,957.23 | 100.00% | Highly unlikely to be recovered |
| Shenyang Jinbei Vehicle Manufacturing Co., Ltd. | 889,279.05 | 889,279.05 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Dalian Baofeng Automobile Sales Co., Ltd. | 496,200.00 | 496,200.00 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Jilin Zhuzhan Automobile Trading Co., Ltd. | 883,566.00 | 883,566.00 | 100.00% | Highly unlikely to be recovered |
| Dalian Qingfeng Bus Co., Ltd. | 8,043,264.87 | 8,043,264.87 | 100.00% | Highly unlikely to be recovered |
| Jiangsu Xinrui New Energy Vehicle Technology Co., Ltd. | 37,612,001.70 | 37,612,001.70 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Changchun Xiongtu New Energy Vehicle Co., Ltd. | 6,230,500.00 | 6,230,500.00 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Beijing Hotan Automobile Modification Co., Ltd. | 7,436,520.00 | 7,436,520.00 | 100.00% | Highly unlikely to be recovered |
| Zhonghe Shunyang Supply Chain Management Co., Ltd. | 5,643,600.00 | 5,643,600.00 | 100.00% | Highly unlikely to be recovered |
| Transportation Group (Qingdao) Sunshine Automobile Sales and Service Co., Ltd. | 3,020,835.47 | 3,020,835.47 | 100.00% | Highly unlikely to be recovered |
| Zhejiang Hanglun | 8,581,536.83 | 8,581,536.83 | 100.00% | It has been |
| Name | Ending Balance | |||
| Book Balance | Provision for Bad Debts | Provision Proportion | Reasons for Provision | |
| Ligang Trading Co., Ltd. | prosecuted, but highly unlikely to be recovered | |||
| Beijing Institute of Radio Measurement | 71,740.00 | 71,740.00 | 100.00% | Highly unlikely to be recovered |
| Zhejiang Baoding Automobile Sales Co., Ltd. | 80,035.12 | 80,035.12 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Shuozhou Jinsheng Automobile Trading Co., Ltd. | 1,822,961.43 | 1,822,961.43 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Xinjiang Jingyang Optoelectronic Co., Ltd. | 1,179,590.41 | 1,179,590.41 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Yulin Jiayu Jiefang Automobile Sales Co., Ltd. | 971,012.59 | 971,012.59 | 100.00% | It has been prosecuted, but highly unlikely to be recovered |
| Total | 85,146,390.69 | 85,146,390.69 | ||
Provision for bad debts made by portfolio:
Unit: CNY
| Name | Ending Balance | ||
| Book Balance | Provision for Bad Debts | Provision Proportion | |
| Within 1 year | 1,788,152,599.19 | 9,525,849.15 | 0.53% |
| 1-2 years | 304,070,093.93 | 50,776,892.70 | 16.70% |
| 2-3 years | 9,706,386.64 | 8,040,651.68 | 82.84% |
| 3-4 years | 885,600.00 | 885,600.00 | 100.00% |
| Over 4 years | 14,123,098.26 | 14,123,098.26 | 100.00% |
| Total | 2,116,937,778.02 | 83,352,091.79 | |
Description of the basis for determining the portfolio:
Information about the provision for bad debts shall be disclosed in the same way as that of other receivables if theprovision for bad debts of accounts receivable is withdrawn based on the general model of expected credit losses:
□ Applicable Not applicable?
Disclosure by aging
Unit: CNY
| Aging | Ending Balance |
| Within 1 year (including 1 year) | 1,768,423,418.31 |
| Including: 0-6 months | 1,527,609,092.40 |
| 7-12 months | 240,814,325.91 |
| 1-2 years | 320,670,077.79 |
| 2-3 years | 12,924,488.18 |
| Over 3 years | 100,066,184.43 |
| 3-4 years | 58,907,076.82 |
| 4 to 5 years | 8,581,536.83 |
| Over 5 years | 32,577,570.78 |
| Total | 2,202,084,168.71 |
(2) Provision for bad debts provided, recovered or reversed in the current periodProvision for bad debts in the current period:
Unit: CNY
| Category | Opening Balance | Amount Changed in the Current Period | Ending Balance | |||
| Provision | Recovery or Reversal | Cancel after verification | Others | |||
| Accounts receivable | 150,418,663.44 | 30,079,819.04 | 12,000,000.00 | 168,498,482.48 | ||
| Total | 150,418,663.44 | 30,079,819.04 | 12,000,000.00 | 168,498,482.48 | ||
Important provision for bad debts recovered or reversed in the current period:
Unit: CNY
| Company Name | Amount Recovered or Reversed | Recovery Method |
| Transportation Group (Qingdao) Sunshine Automobile Sales and Service Co., Ltd. | 8,000,000.00 | Recovery of bank acceptance bills |
| Dalian Qingfeng Bus Co., Ltd. | 4,000,000.00 | Recovery of bank deposits |
| Total | 12,000,000.00 |
(3) Accounts receivable from top five borrowers classified based on the ending balance
Unit: CNY
| Company Name | Ending Balance of Accounts Receivable | Proportion in Total Ending Balance of Accounts Receivable | Ending Balance of Bad Debts Provision |
| China FAW Group Import & Export Co., Ltd. | 771,150,288.04 | 35.02% | 827,499.69 |
| Customer 1 | 516,085,710.00 | 23.44% | 30,358,552.41 |
| Customer 2 | 139,320,940.32 | 6.33% | 139,320.94 |
| FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 52,763,670.55 | 2.40% | 2,902,224.84 |
| Customer 3 | 50,172,900.00 | 2.28% | 1,197,052.34 |
| Total | 1,529,493,508.91 | 69.47% |
4. Receivables financing
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Notes receivable | 7,091,605,627.68 | 5,305,018,299.79 |
| Total | 7,091,605,627.68 | 5,305,018,299.79 |
Increase/decrease in receivables financing in the current period and changes in fair value
□ Applicable Not applicable?
Information about the provision for impairment shall be disclosed in the same way as that of other receivables ifthe provision for impairment of receivables financing is withdrawn based on the general model of expected creditlosses:
□ Applicable Not applicable?
5. Prepayments
(1) Presentation of prepayment by aging
Unit: CNY
| Aging | Ending Balance | Opening Balance | ||
| Amount | Scale | Amount | Scale | |
| Within 1 year | 1,219,924,277.32 | 88.52% | 797,055,366.07 | 91.74% |
| 1-2 years | 128,133,658.18 | 9.30% | 44,227,099.84 | 5.09% |
| 2-3 years | 21,867,458.90 | 1.59% | 15,714,068.26 | 1.81% |
| Over 3 years | 8,229,261.81 | 0.60% | 11,814,878.82 | 1.36% |
| Total | 1,378,154,656.21 | 868,811,412.99 | ||
Reasons for untimely settlement of prepayments with significant amount and age of over 1 year:
Unit: CNY
| Name of Debtor | Book Balance | Proportion in Total Prepayments (%) | Reasons for Non-settlement |
| China FAW Group Import & Export Co., Ltd. | 79,903,463.69 | 5.80 | Undue settlement period |
| Supplier 1 | 8,097,000.00 | 0.59 | Undue settlement period |
| Supplier 2 | 5,478,800.00 | 0.40 | Undue settlement period |
| Supplier 3 | 4,649,400.00 | 0.34 | Undue settlement period |
| Supplier 4 | 4,463,058.00 | 0.32 | Undue settlement period |
| Total | 102,591,721.69 | 7.45 |
(2) Prepayments of the top five objects classified based on the ending balanceThe total prepayments of top five objects classified based on the ending balance in the current period is CNY870,278,190.51, accounting for 63.15% of the total ending balance of prepayment.Other notes: none
6. Other receivables
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Dividends receivable | 26,488,012.75 | 8,567,040.00 |
| Other receivables | 281,869,624.93 | 240,521,050.95 |
| Total | 308,357,637.68 | 249,088,090.95 |
(1) Dividends receivable
1) Classification of dividends receivable
Unit: CNY
| Item (or Investee) | Ending Balance | Opening Balance |
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | 8,567,040.00 | 8,567,040.00 |
| Sanguard Automobile Insurance Co., Ltd. | 17,920,972.75 | |
| Total | 26,488,012.75 | 8,567,040.00 |
2) Provision for bad debts
□ Applicable Not applicable?
Other notes: none
(2) Other receivables
1) Classification of other receivables by nature
Unit: CNY
| Payable Nature | Ending Book Balance | Opening Book Balance |
| Current account | 119,381,326.85 | 99,570,166.66 |
| Claim payment | 200,987,802.97 | 196,444,173.02 |
| Margin, deposit | 31,170,932.13 | 34,872,256.53 |
| Reserve fund | 24,594,326.93 | 4,777,757.97 |
| Total | 376,134,388.88 | 335,664,354.18 |
2) Provision for bad debts
Unit: CNY
| Provision for Bad Debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss for the next 12 months | Expected credit loss for the entire duration (without credit impairment) | Expected credit loss for the entire duration (with credit impairment) | ||
| Balance on January 1, 2022 | 5,034,178.04 | 29,609,303.24 | 60,499,821.95 | 95,143,303.23 |
| Balance on January 1, 2022 in the current period | ||||
| - Transfer to phase II | -21.38 | 21.38 | ||
| Provision in the current period | -801,731.00 | -76,808.28 | -878,539.28 | |
| Balance on June 30, 2022 | 4,232,425.66 | 29,532,516.34 | 60,499,821.95 | 94,264,763.95 |
Changes in the book balance of the loss provision with significant changes in the current period
□ Applicable Not applicable?
Disclosure by aging
Unit: CNY
| Aging | Ending Balance |
| Within 1 year (including 1 year) | 277,028,327.59 |
| Including: 0-6 months | 275,654,981.14 |
| 7-12 months | 1,373,346.45 |
| 1-2 years | 5,336,283.49 |
| 2-3 years | 8,475,764.97 |
| Over 3 years | 85,294,012.83 |
| 3-4 years | 39,638,797.62 |
| 4 to 5 years | 10,014,602.00 |
| Over 5 years | 35,640,613.21 |
| Total | 376,134,388.88 |
3) Provision for bad debts provided, recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: CNY
| Category | Opening Balance | Amount Changed in the Current Period | Ending Balance | |||
| Provision | Recovery or Reversal | Cancel after verification | Others | |||
| Other receivables | 95,143,303.23 | -878,539.28 | 94,264,763.95 | |||
| Total | 95,143,303.23 | -878,539.28 | 94,264,763.95 | |||
4) Other receivables from top five borrowers classified based on the ending balance
Unit: CNY
| Company Name | Payment Nature | Ending Balance | Aging | Proportion in Total Ending Balance of Other Receivables | Ending Balance of Bad Debts Provision |
| Customer 1 | New energy vehicle sales subsidies | 48,155,960.00 | 3-4 years, 4-5 years | 12.80% | 48,155,960.00 |
| Customer 2 | Relocation compensation | 20,500,000.00 | Over 5 years | 5.45% | 20,500,000.00 |
| The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | Current account | 10,728,984.01 | 0-6 months | 2.85% | 10,728.98 |
| Qingdao Automotive Research Institute of China FAW Co., Ltd. | Advance payment | 8,227,110.28 | 2-3 years | 2.19% | 5,675,883.38 |
| Customer 3 | Current account | 3,545,640.00 | 1-2 years | 0.94% | 2,155,394.56 |
| Total | 91,157,694.29 | 24.23% | 76,497,966.92 |
7. Inventories
Whether the Company is required to comply with the disclosure requirements of the real estate industry: No
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
(1) Classification of inventories
Unit: CNY
| Item | Ending Balance | Opening Balance | ||||
| Book Balance | Provision for impairment of inventory or contract performance cost | Book Value | Book Balance | Provision for impairment of inventory or contract performance cost | Book Value | |
| Raw materials | 408,026,420.68 | 34,750,531.21 | 373,275,889.47 | 379,195,753.25 | 35,363,287.47 | 343,832,465.78 |
| Goods in process | 665,363,377.35 | 3,524,161.33 | 661,839,216.02 | 676,093,365.06 | 4,732,672.33 | 671,360,692.73 |
| Goods in stock | 5,434,465,998.98 | 145,457,247.62 | 5,289,008,751.36 | 5,864,661,527.18 | 143,363,374.55 | 5,721,298,152.63 |
| Revolving materials | 101,874,640.46 | 2,186,616.31 | 99,688,024.15 | 103,311,491.37 | 1,244,042.64 | 102,067,448.73 |
| Others | 2,783,683,375.66 | 172,037,662.57 | 2,611,645,713.09 | 2,618,917,617.54 | 189,355,846.16 | 2,429,561,771.38 |
| Total | 9,393,413,813.13 | 357,956,219.04 | 9,035,457,594.09 | 9,642,179,754.40 | 374,059,223.15 | 9,268,120,531.25 |
(2) Provision for impairment of inventory and contract performance cost
Unit: CNY
| Item | Opening Balance | Increase in the Current Period | Decrease in the Current Period | Ending Balance | ||
| Provision | Others | Reversal or Write-off | Others | |||
| Raw materials | 35,363,287.47 | 94,945.50 | 707,701.76 | 34,750,531.21 | ||
| Goods in process | 4,732,672.33 | 1,208,511.00 | 3,524,161.33 | |||
| Goods in stock | 143,363,374.55 | 84,220,627.88 | 82,126,754.81 | 145,457,247.62 | ||
| Revolving materials | 1,244,042.64 | 942,573.67 | 2,186,616.31 | |||
| Others | 189,355,846.16 | 228,206.00 | 17,546,389.59 | 172,037,662.57 | ||
| Total | 374,059,223.15 | 85,486,353.05 | 101,589,357.16 | 357,956,219.04 | ||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
8. Contractual assets
Unit: CNY
| Item | Ending Balance | Opening Balance | ||||
| Book Balance | Impairment Provision | Book Value | Book Balance | Impairment Provision | Book Value | |
| Contractual assets | 66,427,687.56 | 4,459,663.97 | 61,968,023.59 | 57,650,067.72 | 4,602,380.00 | 53,047,687.72 |
| Total | 66,427,687.56 | 4,459,663.97 | 61,968,023.59 | 57,650,067.72 | 4,602,380.00 | 53,047,687.72 |
Information about the provision for impairment shall be disclosed in the same way as that of other receivables if theprovision for impairment of contractual assets is withdrawn based on the general model of expected credit losses:
?Applicable □ Not ApplicableProvision for impairment by aging portfolio Unit: CNY
| Category | 2022.06.30 | 2021.12.31 | ||||
| Contractual assets | Provision for Bad Debts | Expected Credit Loss Rate (%) | Contractual assets | Provision for Bad Debts | Expected Credit Loss Rate (%) | |
| Within 1 year | 40,485,347.56 | 124,698.96 | 0.31 | 31,421,323.96 | 86,311.95 | 0.27 |
| 1-2 years | 25,942,340.00 | 4,334,965.01 | 16.71 | 26,228,743.76 | 4,516,068.05 | 17.22 |
| Total | 66,427,687.56 | 4,459,663.97 | 6.71 | 57,650,067.72 | 4,602,380.00 | 7.98 |
Provision for impairment of contractual assets in the current period:
Unit: CNY
| Item | Provision in the current period | Reversal in the Current Period | Write-off/Verification in the Current Period | Cause |
| Provision for impairment of contractual assets | -142,716.03 | Provision and reversal by aging | ||
| Total | -142,716.03 | —— |
Other notes: none
9. Current portion of non-current assets
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Current portion of long-term receivables | 114,825,391.38 | 114,825,391.38 |
| Total | 114,825,391.38 | 114,825,391.38 |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
10. Other current assets
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Input tax | 471,389,881.76 | 1,368,192,743.48 |
| Input tax to be verified | 1,679,056.87 | 19,065,353.23 |
| Prepaid income tax | 626,891,494.80 | |
| Total | 473,068,938.63 | 2,014,149,591.51 |
Other notes: none
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
11. Long-term receivables
(1) Long-term receivables
Unit: CNY
| Item | Ending Balance | Opening Balance | Discount Rate Range | ||||
| Book Balance | Provision for Bad Debts | Book Value | Book Balance | Provision for Bad Debts | Book Value | ||
| Sales of goods by installments | 338,691,573.49 | 5,935,963.32 | 332,755,610.17 | 338,691,573.49 | 1,275,424.32 | 337,416,149.17 | 2.5%-5.6% |
| Current portion of long-term receivables | -115,267,222.47 | -441,831.09 | -114,825,391.38 | -115,267,222.47 | -441,831.09 | -114,825,391.38 | |
| Total | 223,424,351.02 | 5,494,132.23 | 217,930,218.79 | 223,424,351.02 | 833,593.23 | 222,590,757.79 | |
Impairment of provision for bad debts
Unit: CNY
| Provision for Bad Debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss for the next 12 months | Expected credit loss for the entire duration (without credit impairment) | Expected credit loss for the entire duration (with credit impairment) | ||
| Balance on January 1, 2022 | 1,275,424.32 | 1,275,424.32 | ||
| Balance on January 1, 2022 in the current period | ||||
| Provision in the current period | 4,660,539.00 | 4,660,539.00 | ||
| Balance on June 30, 2022 | 5,935,963.32 | 5,935,963.32 |
Changes in the book balance of the loss provision with significant changes in the current period
□ Applicable Not applicable?
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
12. Long-term equity investments
Unit: CNY
| Investee | Opening Balance (Book Value) | Increase/Decrease in the Current Period | Ending Balance (Book Value) | Ending Balance of Impairment Provision | |||||||
| Investment Increase | Investment Reduction | Investment Gains or Losses Recognized by Equity Method | Adjustment to Other Comprehensive Incomes | Other Equity Changes | Cash Dividends or Profits Announced to be Paid | Provision for Impairment | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| First Automobile Finance Co., Ltd. | 4,341,181,324.38 | 280,639,831.32 | -8,619.76 | 4,621,812,535.94 | |||||||
| Sanguard Automobile Insurance Co., Ltd. | 213,584,040.85 | 11,594,274.68 | -38,116.86 | 17,920,972.75 | 207,219,225.92 | ||||||
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | 85,910,484.18 | 1,805,468.66 | -50,722.51 | 87,665,230.33 | |||||||
| Changchun Wabco Automotive Control System Co., Ltd. | 20,301,325.09 | -1,565,452.94 | 18,735,872.15 | ||||||||
| Suzhou Zhito Technology | |||||||||||
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Investee | Opening Balance (Book Value) | Increase/Decrease in the Current Period | Ending Balance (Book Value) | Ending Balance of Impairment Provision | |||||||
| Investment Increase | Investment Reduction | Investment Gains or Losses Recognized by Equity Method | Adjustment to Other Comprehensive Incomes | Other Equity Changes | Cash Dividends or Profits Announced to be Paid | Provision for Impairment | Others | ||||
| Co., Ltd. | |||||||||||
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | 43,140,497.54 | 3,328,945.02 | 6,300,012.21 | 40,169,430.35 | |||||||
| FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 35,181,984.88 | 542,476.17 | 35,724,461.05 | ||||||||
| SmartLink | 27,435,014.82 | -15,165,383.20 | 12,269,631.62 | ||||||||
| Subtotal | 4,766,734,671.74 | 281,180,159.71 | -46,736.62 | -50,722.51 | 24,220,984.96 | 5,023,596,387.36 | |||||
| Total | 4,766,734,671.74 | 281,180,159.71 | -46,736.62 | -50,722.51 | 24,220,984.96 | 5,023,596,387.36 | |||||
Other notes: none
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
13. Investment real estate
(1) Investment real estates measured at cost
?Applicable □ Not Applicable
Unit: CNY
| Item | Houses and Buildings | Land use right | Project under construction | Total |
| I. Original book value | ||||
| 1. Opening balance | 148,337,701.92 | 2,042,122.60 | 150,379,824.52 | |
| 2. Increase in the current period | 14,358,650.65 | 99,615,759.08 | 113,974,409.73 | |
| (1) Outsourcing | ||||
| (2) Transferred from inventory/fixed assets/project under construction | 14,358,650.65 | 99,615,759.08 | 113,974,409.73 | |
| (3) Increase due to business combination | ||||
| 3. Decrease in the current period | 474,248.30 | 474,248.30 | ||
| (1) Disposal | ||||
| (2) Other transfer-out | 474,248.30 | 474,248.30 | ||
| 4. Ending balance | 162,222,104.27 | 101,657,881.68 | 263,879,985.95 | |
| II. Accumulated depreciation and accumulated amortization | ||||
| 1. Opening balance | 70,076,640.08 | 100,359.35 | 70,176,999.43 | |
| 2. Increase in the current period | 13,435,715.82 | 21,061,709.95 | 34,497,425.77 | |
| (1) Provision or amortization | 13,435,715.82 | 493,139.62 | 13,928,855.44 | |
| (2) Other increases | 20,568,570.33 | 20,568,570.33 | ||
| 3. Decrease in the current period | 329,109.25 | 329,109.25 | ||
| (1) Disposal | ||||
| (2) Other transfer-out | 329,109.25 | 329,109.25 | ||
| 4. Ending balance | 83,183,246.65 | 21,162,069.30 | 104,345,315.95 | |
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase in the current period | ||||
| (1) Provision | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfer-out |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Item | Houses and Buildings | Land use right | Project under construction | Total |
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 79,038,857.62 | 80,495,812.38 | 159,534,670.00 | |
| 2. Opening book value | 78,261,061.84 | 1,941,763.25 | 80,202,825.09 |
(2) Investment real estates measured at fair value
□ Applicable Not applicable?
(3) Investment real estates without property ownership certificates
Unit: CNY
| Item | Book Value | Reasons for failure to obtain the certificate |
| Property, No. 949, Chongqing Middle Road, Licang District | 1,264,704.51 | This plot has been included in the government renovation project, and the property ownership certificate cannot be applied for at present |
| Final assembly and loading workshop of Liuzhou Plant | 16,736,495.23 | It is a new plant, and the certificate is being applied for |
Other notes: none
14. Fixed assets
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Fixed assets | 8,995,163,623.45 | 9,224,786,362.59 |
| Disposal of fixed assets | 10,834,879.96 | 12,002,959.44 |
| Total | 9,005,998,503.41 | 9,236,789,322.03 |
(1) Details of fixed assets
Unit: CNY
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Office equipment | Others | Total |
| I. Original book value | |||||||
| 1. Opening balance | 5,364,682,902.67 | 14,858,383,470.22 | 153,534,389.98 | 572,672,042.00 | 52,042,350.35 | 1,273,333,998.80 | 22,274,649,154.02 |
| 2. Increase in the current period | 25,816,702.44 | 503,584,756.93 | 2,199,980.09 | 13,780,666.83 | 3,425,761.54 | 3,497,006.54 | 552,304,874.37 |
| (1) Purchase | 4,143,392.83 | 502,000.00 | 2,970,473.76 | 36,482.94 | 553,614.97 | 8,205,964.50 | |
| (2) Transferred from the project under construction | 25,816,702.44 | 499,441,364.10 | 1,697,980.09 | 10,810,193.07 | 3,389,278.60 | 2,943,391.57 | 544,098,909.87 |
| (3) Increase due to business combination | |||||||
| 3. Decrease in the current period | 91,431,691.88 | 163,485,517.78 | 1,400,099.94 | 14,681,572.77 | 1,407,271.22 | 243,000.00 | 272,649,153.59 |
| (1) Disposal or scrapping | 73,287,071.73 | 162,849,113.85 | 1,400,099.94 | 14,681,572.77 | 877,356.68 | 243,000.00 | 253,338,214.97 |
| (2) Other decreases | 18,144,620.15 | 636,403.93 | 529,914.54 | 19,310,938.62 | |||
| 4. Ending balance | 5,299,067,913.23 | 15,198,482,709.37 | 154,334,270.13 | 571,771,136.06 | 54,060,840.67 | 1,276,588,005.34 | 22,554,304,874.80 |
| II. Accumulated depreciation | 0.00 | ||||||
| 1. Opening balance | 2,147,910,381.29 | 9,294,680,049.68 | 102,945,097.26 | 416,199,124.76 | 39,631,878.93 | 970,703,762.25 | 12,972,070,294.17 |
| 2. Increase in the current period | 131,182,280.49 | 517,249,669.24 | 9,322,653.54 | 39,490,590.83 | 1,993,548.17 | 48,642,434.56 | 747,881,176.83 |
| (1) Provision | 130,861,371.12 | 517,249,669.24 | 9,322,653.54 | 39,490,590.83 | 1,993,548.17 | 48,642,434.56 | 747,560,267.46 |
| (2) Other increases | 320,909.37 | 320,909.37 | |||||
| 3. Decrease in the current period | 67,855,283.85 | 116,762,240.10 | 1,377,833.51 | 14,618,422.79 | 1,144,016.07 | 235,710.00 | 201,993,506.32 |
| (1) Disposal or scrapping | 54,320,715.01 | 116,359,808.77 | 1,377,833.51 | 14,618,422.79 | 827,038.87 | 235,710.00 | 187,739,528.95 |
| (2) Other decreases | 13,534,568.84 | 402,431.33 | 316,977.20 | 14,253,977.37 | |||
| 4. Ending balance | 2,211,237,377.93 | 9,695,167,478.82 | 110,889,917.29 | 441,071,292.80 | 40,481,411.03 | 1,019,110,486.81 | 13,517,957,964.68 |
| III. Provision for impairment | 0.00 | ||||||
| 1. Opening balance | 12,344.37 | 75,572,210.09 | 2,207,942.80 | 77,792,497.26 |
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Office equipment | Others | Total |
| 2. Increase in the current period | 0.00 | ||||||
| (1) Provision | 0.00 | ||||||
| 3. Decrease in the current period | 36,609,210.59 | 36,609,210.59 | |||||
| (1) Disposal or scrapping | 36,609,210.59 | 36,609,210.59 | |||||
| 4. Ending balance | 12,344.37 | 38,962,999.50 | 2,207,942.80 | 41,183,286.67 | |||
| IV. Book value | |||||||
| 1. Ending book value | 3,087,818,190.93 | 5,464,352,231.05 | 43,444,352.84 | 130,699,843.26 | 13,579,429.64 | 255,269,575.73 | 8,995,163,623.45 |
| 2. Opening book value | 3,216,760,177.01 | 5,488,131,210.45 | 50,589,292.72 | 156,472,917.24 | 12,410,471.42 | 300,422,293.75 | 9,224,786,362.59 |
(2) Fixed assets not used currently
Unit: CNY
| Item | Original Book Value | Accumulated Depreciation | Impairment Provision | Book Value | Remarks |
| Machinery equipment | 63,276,688.04 | 35,797,917.84 | 21,960,257.70 | 5,518,512.50 |
(3) Fixed assets leased out under operating leases
Unit: CNY
| Item | Ending Book Value |
| Houses and buildings | 2,758,704.42 |
| Machinery equipment | 2,515,447.28 |
| Mode of transportation | 9,059.84 |
| Total | 5,283,211.54 |
(4) Fixed assets without property ownership certificates
Unit: CNY
| Item | Book Value | Reasons for failure to obtain the certificate |
| Jimo phase II light truck new energy base project | 310,241,566.22 | It is just put into use, and the procedures are not completed |
| Project of exiting the city and entering the industrial park | 323,920,016.01 | It is a new plant, and the certificate is being applied for |
| Hazardous waste station in plant area I | 3,048,983.35 | It is just put into use, and the procedures are not completed |
| Equipment workshop works | 1,142,169.66 | Land applications are not submitted, so the property ownership certificate cannot be obtained |
Other notes: none
(5) Disposal of fixed assets
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Houses and Buildings | 8,280.77 | 8,280.77 |
| Machinery equipment | 10,094,480.61 | 10,642,669.15 |
| Mode of transportation | 131,175.05 | 219,822.98 |
| Electronic equipment | 60,494.58 | 8,298.69 |
| Office equipment | 35,072.37 | 18,904.69 |
| Others | 505,376.58 | 1,104,983.16 |
| Total | 10,834,879.96 | 12,002,959.44 |
Other notes: none
15. Project under construction
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Project under construction | 966,294,107.55 | 965,997,208.23 |
| Total | 966,294,107.55 | 965,997,208.23 |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
(1) Project under construction
Unit: CNY
| Item | Ending Balance | Opening Balance | ||||
| Book Balance | Impairment Provision | Book Value | Book Balance | Impairment Provision | Book Value | |
| New and reconstructed investment project | 250,836,955.61 | 1,945,416.12 | 248,891,539.49 | 235,582,222.31 | 1,945,416.12 | 233,636,806.19 |
| Technical transformation investment project | 717,458,065.25 | 55,497.19 | 717,402,568.06 | 732,415,899.23 | 55,497.19 | 732,360,402.04 |
| Total | 968,295,020.86 | 2,000,913.31 | 966,294,107.55 | 967,998,121.54 | 2,000,913.31 | 965,997,208.23 |
(2) Changes of important project under construction in the current period
Unit: CNY
| Project Name | Budget | Opening Balance | Increase in the Current Period | Amount Transferred to Fixed Assets in the Current Period | Other Decrease in the Current Period | Ending Balance | Ratio of Accumulative Investment to Budget | Project Progress | Cumulative Amount of Capitalized Interest | Including: Capitalized Interest in the Current Period | Capitalization Rate of Interest in the Current Period | Capital Source |
| FAW Jiefang commercial vehicle Guanghan base project | 999,970,000.00 | 138,759,113.95 | 171,122,572.03 | 309,881,685.98 | 30.99% | 37.28% | Others | |||||
| 16L engine construction and natural gas test capacity improvement project | 1,160,670,000.00 | 112,386,329.25 | 29,129,835.91 | 141,516,165.16 | 12.19% | 68.06% | Others | |||||
| FAW Jiefang | 388,500,000.00 | 82,263,770.61 | 12,433,407.02 | 94,697,177.63 | 47.23% | 70.75% | Others |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Project Name | Budget | Opening Balance | Increase in the Current Period | Amount Transferred to Fixed Assets in the Current Period | Other Decrease in the Current Period | Ending Balance | Ratio of Accumulative Investment to Budget | Project Progress | Cumulative Amount of Capitalized Interest | Including: Capitalized Interest in the Current Period | Capitalization Rate of Interest in the Current Period | Capital Source |
| south new energy base project | ||||||||||||
| Axle base construction project and heavy replacement axle technology upgrade (phase I) | 989,859,950.93 | 79,972,863.66 | 11,890,268.28 | 91,863,131.94 | 20.88% | 27.13% | Others | |||||
| Intelligent parts logistics center project | 107,806,500.00 | 16,080,266.01 | 10,957,173.36 | 27,037,439.37 | 38.85% | 56.44% | Others | |||||
| Project of exiting the city and entering the industrial park | 936,068,800.00 | 19,204,724.39 | 13,349.94 | 19,218,074.33 | 84.44% | 93.75% | Others | |||||
| Engine environmental chamber test bench | 22,600,000.00 | 16,850,804.63 | 16,850,804.63 | 74.56% | 90.17% | Others | ||||||
| Front axle four-line technology improvement project of axle | 20,782,201.00 | 14,420,256.74 | 14,420,256.74 | 69.39% | 90.35% | Others |
Full Text of 2022 Semi-annual Report of FAW Jiefang Group Co.,Ltd.
| Project Name | Budget | Opening Balance | Increase in the Current Period | Amount Transferred to Fixed Assets in the Current Period | Other Decrease in the Current Period | Ending Balance | Ratio of Accumulative Investment to Budget | Project Progress | Cumulative Amount of Capitalized Interest | Including: Capitalized Interest in the Current Period | Capitalization Rate of Interest in the Current Period | Capital Source |
| factory | ||||||||||||
| Renovation of Jiefang Limited buildings on the west side of Hongqi Auditorium | 38,444,591.00 | 13,088,417.18 | 13,088,417.18 | 34.04% | 53.03% | Others | ||||||
| capacity expansion project of light truck welding line in welding workshop of Jimo factory | 169,960,000.00 | 11,506,831.14 | 11,506,831.14 | 6.77% | 17.47% | Others | ||||||
| Diesel engine virtual calibration test bench | 25,602,600.00 | 10,383,044.13 | 10,383,044.13 | 40.55% | 60.28% | Others | ||||||
| Total | 4,860,264,642.93 | 490,321,173.37 | 260,141,854.86 | 0.00 | 0.00 | 750,463,028.23 |
16. Bearer biological assets
(1) Bearer biological assets measured at cost
□ Applicable Not applicable?
(2) Bearer biological assets measured at fair value
□ Applicable Not applicable?
17. Oil and gas assets
□ Applicable Not applicable?
18. Right-of-use assets
Unit: CNY
| Item | Houses and buildings | Machinery equipment | Land | Total |
| I. Original book value | ||||
| 1. Opening balance | 152,994,385.75 | 17,495,179.84 | 23,719,044.14 | 194,208,609.73 |
| 2. Increase in the current period | 3,288,926.12 | 3,288,926.12 | ||
| Including: rent | 3,288,926.12 | 3,288,926.12 | ||
| 3. Decrease in the current period | ||||
| 4. Ending balance | 156,283,311.87 | 17,495,179.84 | 23,719,044.14 | 197,497,535.85 |
| II. Accumulated depreciation | ||||
| 1. Opening balance | 35,642,623.35 | 8,288,590.54 | 6,511,130.40 | 50,442,344.29 |
| 2. Increase in the current period | 19,828,590.51 | 4,267,872.00 | 1,919,344.34 | 26,015,806.85 |
| (1) Provision | 19,828,590.51 | 4,267,872.00 | 1,919,344.34 | 26,015,806.85 |
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| 4. Ending balance | 55,471,213.86 | 12,556,462.54 | 8,430,474.74 | 76,458,151.14 |
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase in the current period | ||||
| (1) Provision | ||||
| 3. Decrease in the current period |
| Item | Houses and buildings | Machinery equipment | Land | Total |
| (1) Disposal | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 100,812,098.01 | 4,938,717.30 | 15,288,569.40 | 121,039,384.71 |
| 2. Opening book value | 117,351,762.40 | 9,206,589.30 | 17,207,913.74 | 143,766,265.44 |
Other notes: For the lease expenses related to short-term leases and low-value asset leases recognized by theCompany as of June 30, 2022, please see 2 in XIV "Other Major Events" of Section X - Financial Report.
19. Intangible assets
(1) Details of intangible assets
Unit: CNY
| Item | Land use right | Patent Rights | Non-patented technology | Software | Total |
| I. Original book value | |||||
| 1. Opening balance | 2,872,112,661.06 | 677,388,766.94 | 511,564,769.26 | 4,061,066,197.26 | |
| 2. Increase in the current period | 122,353,689.17 | 43,227,654.73 | 165,581,343.90 | ||
| (1) Purchase | 122,353,689.17 | 43,227,654.73 | 165,581,343.90 | ||
| (2) Internal R&D | |||||
| (3) Increase due to business combination | |||||
| 3. Decrease in the current period | 158,931,798.98 | 309,877,041.02 | 7,082,431.98 | 475,891,271.98 | |
| (1) Disposal | 59,316,039.90 | 309,877,041.02 | 7,082,431.98 | 376,275,512.90 | |
| (2) Others | 99,615,759.08 | 99,615,759.08 | |||
| 4. Ending balance | 2,835,534,551.25 | 367,511,725.92 | 547,709,992.01 | 3,750,756,269.18 | |
| II. Accumulated amortization | |||||
| 1. Opening balance | 573,374,388.26 | 562,286,837.32 | 153,127,855.55 | 1,288,789,081.13 | |
| 2. Increase in the current period | 31,343,837.45 | 25,475,605.59 | 27,717,055.55 | 84,536,498.59 | |
| (1) Provision | 31,343,837.45 | 25,475,605.59 | 27,717,055.55 | 84,536,498.59 | |
| 3. Decrease in the current period | 33,841,316.21 | 309,877,041.02 | 7,082,431.98 | 350,800,789.21 | |
| (1) Disposal | 13,272,745.88 | 309,877,041.02 | 7,082,431.98 | 330,232,218.88 | |
| (2) Others | 20,568,570.33 | 20,568,570.33 | |||
| 4. Ending balance | 570,876,909.50 | 277,885,401.89 | 173,762,479.12 | 1,022,524,790.51 | |
| III. Provision for impairment |
| Item | Land use right | Patent Rights | Non-patented technology | Software | Total |
| 1. Opening balance | |||||
| 2. Increase in the current period | |||||
| (1) Provision | |||||
| 3. Decrease in the current period | |||||
| (1) Disposal | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 2,264,657,641.75 | 89,626,324.03 | 373,947,512.89 | 2,728,231,478.67 | |
| 2. Opening book value | 2,298,738,272.80 | 115,101,929.62 | 358,436,913.71 | 2,772,277,116.13 |
The intangible assets not resulting from internal research and development of the Company accounts for 3.29% ofthe balance of intangible assets at the end of the current period.
20. Development expenditures
Unit: CNY
| Item | Opening Balance | Increase in the Current Period | Decrease in the Current Period | Ending Balance | ||
| Internal Development Expenditure | Others | Recognized Intangible Assets | Transferred to Current Profits and Losses | |||
| Cost-based expenditure | 1,016,316,222.64 | 1,016,316,222.64 | ||||
| Total | 1,016,316,222.64 | 1,016,316,222.64 | ||||
Other notes: none
21. Long-term deferred expenses
Unit: CNY
| Item | Opening Balance | Increase in the Current Period | Amortization Amount in the Current Period | Other Decreases | Ending Balance |
| Maintenance, fire protection transformation and supporting expenses | 334,598.30 | 102,079.32 | 232,518.98 | ||
| Total | 334,598.30 | 102,079.32 | 232,518.98 |
Other notes: none
22. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets not offset
Unit: CNY
| Item | Ending Balance | Opening Balance | ||
| Deductible Temporary Difference | Deferred tax assets | Deductible Temporary Difference | Deferred tax assets | |
| Provision for impairment of assets | 623,666,771.23 | 127,369,484.45 | 644,896,017.71 | 108,060,894.94 |
| Unrealized profits of internal transactions | 433,668,860.00 | 108,417,215.00 | 433,668,860.00 | 108,417,215.00 |
| Deductible losses | 2,144,885,421.77 | 447,040,755.45 | 1,337,622,355.67 | 275,224,988.92 |
| Estimated liabilities | 1,092,253,732.81 | 182,064,549.11 | 1,133,139,410.76 | 189,238,389.56 |
| Employee compensation payable | 102,535,040.33 | 18,030,113.39 | 95,057,719.68 | 16,232,178.23 |
| Accrued expenses | 3,625,319,854.24 | 814,792,015.17 | 3,203,797,740.11 | 738,848,418.90 |
| Deferred incomes | 545,618,507.50 | 107,493,554.55 | 586,360,167.55 | 114,073,451.58 |
| Contract liabilities | 612,216,679.96 | 103,749,694.80 | 575,584,804.51 | 100,200,974.13 |
| Total | 9,180,164,867.84 | 1,908,957,381.92 | 8,010,127,075.99 | 1,650,296,511.26 |
(2) Deferred income tax liabilities not offset
Unit: CNY
| Item | Ending Balance | Opening Balance | ||
| Taxable Temporary Difference | Deferred income tax liabilities | Taxable Temporary Difference | Deferred income tax liabilities | |
| Depreciation of fixed assets with amortization period longer than tax preference period | 1,710,138,244.89 | 275,243,675.76 | 2,056,171,246.16 | 349,311,074.60 |
| Interest income accrued | 224,118,991.93 | 33,793,359.10 | 162,580,602.64 | 24,874,039.55 |
| Total | 1,934,257,236.82 | 309,037,034.86 | 2,218,751,848.80 | 374,185,114.15 |
(3) Deferred tax assets or liabilities presented in net amount after offset
Unit: CNY
| Item | Ending Mutual Offset Amount of Deferred Tax Assets and Liabilities | Ending Balance of Deferred Tax Assets or Liabilities after Offset | Opening Mutual Offset Amount of Deferred Tax Assets and Liabilities | Opening Balance of Deferred Tax Assets or Liabilities after Offset |
| Deferred tax assets | 1,908,957,381.92 | 1,650,296,511.26 | ||
| Deferred income tax liabilities | 309,037,034.86 | 374,185,114.15 |
(4) Details of unrecognized deferred tax assets
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Deductible Temporary Difference | 476,163,328.97 | 664,263,202.95 |
| Deductible losses | 264,563,629.38 | 276,845,879.98 |
| Total | 740,726,958.35 | 941,109,082.93 |
(5) Deductible losses of unrecognized deferred tax assets will be due in the following years
Unit: CNY
| Year | Ending Amount | Opening Amount | Remarks |
| 2026 | 1,441,940.00 | ||
| 2027 | |||
| 2028 | 221,013,270.26 | 231,853,580.86 | |
| 2029 | 43,550,359.12 | 43,550,359.12 | |
| Total | 264,563,629.38 | 276,845,879.98 |
Other notes: none
23. Notes payable
Unit: CNY
| Type | Ending Balance | Opening Balance |
| Bank acceptance bill | 17,538,100,899.05 | 13,062,704,192.54 |
| Total | 17,538,100,899.05 | 13,062,704,192.54 |
The total amount of notes payable due but unpaid at the end of the current period is CNY 0.00.
24. Accounts payable
(1) Presentation of accounts payable
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Payment for goods | 10,726,822,830.00 | 12,959,963,131.32 |
| Project and equipment payment | 34,920,116.04 | 21,713,517.52 |
| Fees and others | 2,181,796,812.78 | 1,583,223,345.63 |
| Total | 12,943,539,758.82 | 14,564,899,994.47 |
(2) Significant accounts payable with the aging over 1 year
Unit: CNY
| Item | Ending Balance | Reasons for Non-reimbursement or Carry-forward |
| Supplier 1 | 14,038,833.43 | Undue settlement period |
| Supplier 2 | 1,907,749.88 | Undue settlement period |
| Total | 15,946,583.31 |
Other notes: none
25. Advance receipts
(1) Presentation of advances receipts
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Rental fee | 254,326.19 | 1,712,917.27 |
| Total | 254,326.19 | 1,712,917.27 |
26. Contract liabilities
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Payment for goods | 1,344,246,736.72 | 2,324,758,318.77 |
| Others | 688,028,547.33 | 643,363,601.92 |
| Contract liabilities included in other current liabilities | -133,374,027.58 | -267,479,444.78 |
| Total | 1,898,901,256.47 | 2,700,642,475.91 |
27. Employee compensation payable
(1) Presentation of employee compensation payable
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance |
| I. Short-term compensation | 248,475,175.17 | 1,978,516,941.27 | 1,919,563,183.65 | 307,428,932.79 |
| II. Post-employment benefits-defined contribution plan | 20,760,130.28 | 336,982,472.94 | 329,760,473.05 | 27,982,130.17 |
| III. Dismissal welfare | 40,525,119.92 | 43,000,978.26 | 32,293,262.16 | 51,232,836.02 |
| IV. Current portion of other welfare | 54,690,000.00 | 20,129,838.93 | 34,560,161.07 | |
| Total | 364,450,425.37 | 2,358,500,392.47 | 2,301,746,757.79 | 421,204,060.05 |
(2) Presentation of short-term compensation
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance |
| 1. Wages, bonuses, allowances and subsidies | 1,298,776,232.35 | 1,254,288,252.54 | 44,487,979.81 | |
| 2. Employee welfare | 83,155,621.11 | 83,155,621.11 | ||
| 3. Social insurance premium | 4,091,540.25 | 164,363,320.65 | 165,823,287.16 | 2,631,573.74 |
| Including: medical | 4,091,540.25 | 156,751,385.90 | 158,211,352.41 | 2,631,573.74 |
| insurance premium | ||||
| Work-related injury insurance premium | 7,611,934.75 | 7,611,934.75 | ||
| 4. Housing fund | 243,791,075.23 | 243,791,075.23 | ||
| 5. Labor union funds and employee education funds | 244,383,634.92 | 53,565,186.48 | 37,639,442.16 | 260,309,379.24 |
| 6. Others | 134,865,505.45 | 134,865,505.45 | ||
| Total | 248,475,175.17 | 1,978,516,941.27 | 1,919,563,183.65 | 307,428,932.79 |
(3) Presentation of defined contribution plan
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance |
| 1. Basic endowment insurance | 16,032,537.24 | 229,112,937.29 | 229,112,937.29 | 16,032,537.24 |
| 2. Unemployment insurance premium | 2,374,937.21 | 9,364,095.25 | 9,364,095.25 | 2,374,937.21 |
| 3. Enterprise annuity | 2,352,655.83 | 98,505,440.40 | 91,283,440.51 | 9,574,655.72 |
| Total | 20,760,130.28 | 336,982,472.94 | 329,760,473.05 | 27,982,130.17 |
Other notes: The Company participates in the endowment insurance and unemployment insurance plans establishedby government authorities as specified, and pays monthly contributions to these plans based on a proportion of thebasic salary of employees in the previous year. The Company will not assume any further payment obligation,except the above monthly payment. Corresponding expenditures are included in the current profits and losses or thecost of related assets when incurred.
28. Taxes payable
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Value-added tax | 291,416,334.25 | 11,331,447.35 |
| Corporate income tax | 661,693.44 | 21,659.10 |
| Individual income tax | 7,104,901.20 | 40,089,512.39 |
| Urban maintenance and construction tax | 19,635,881.61 | 1,789,459.45 |
| Resource tax | 7,143.40 | |
| Property tax | 7,430,694.15 | 7,611,594.27 |
| Land use tax | 4,865,951.82 | 4,508,520.75 |
| Educational surcharges | 16,507,619.12 | 3,751,315.40 |
| Other taxes | 11,368,409.04 | 104,837,877.42 |
| Total | 358,991,484.63 | 173,948,529.53 |
Other notes: none
29. Other payables
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Dividends payable | 171,500.02 | 171,500.02 |
| Other payables | 7,299,699,425.99 | 7,383,051,672.28 |
| Total | 7,299,870,926.01 | 7,383,223,172.30 |
(1) Dividends payable
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Common stock dividends | 171,500.02 | 171,500.02 |
| Total | 171,500.02 | 171,500.02 |
Other notes, including the disclosure of the reasons for not paying the significant dividends payable for more than1 year: none
(2) Other payables
1) Presentation of other payables by nature
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Expenses payable | 4,351,426,251.24 | 4,656,353,118.05 |
| Margin, deposit | 323,686,408.09 | 377,161,619.49 |
| Project funds payable | 1,294,666,896.18 | 1,381,458,524.66 |
| Current accounts payable and others | 1,048,350,844.75 | 657,617,923.70 |
| Repurchase obligations of restricted shares | 281,569,025.73 | 310,460,486.38 |
| Total | 7,299,699,425.99 | 7,383,051,672.28 |
2) Other significant payables with the aging over 1 year
Unit: CNY
| Item | Ending Balance | Reasons for Non-reimbursement or Carry-forward |
| Supplier 1 | 260,000,000.00 | The government advances the project construction funds, and the payment of old factory is not disposed of or settled |
| FAW Group | 233,303,791.17 | Compensation payable, R&D expenses |
| Supplier 2 | 20,000,000.00 | Project not completed |
| Supplier 3 | 14,637,490.18 | Project not completed |
| The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 12,441,065.20 | Project not completed |
| Supplier 4 | 10,496,000.00 | Project not completed |
| Supplier 5 | 7,160,946.17 | Project not completed |
| Qiming Information Technology Co., Ltd. | 6,687,345.77 | Project not completed |
| Total | 564,726,638.49 |
Other notes: none
30. Current portion of non-current liabilities
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Current portion of lease liabilities | 33,214,415.10 | 47,060,544.71 |
| Total | 33,214,415.10 | 47,060,544.71 |
Other notes: none
31. Other current liabilities
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Taxes to be written off | 157,933,439.12 | 267,479,444.78 |
| Total | 157,933,439.12 | 267,479,444.78 |
32. Lease liabilities
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Lease payment | 141,899,609.84 | 146,978,150.99 |
| Unrecognized financing charges | -13,618,291.30 | -11,610,388.23 |
| Current portion of lease liabilities | -33,214,415.10 | -47,060,544.71 |
| Total | 95,066,903.44 | 88,307,218.05 |
Other notes: The interest of lease liabilities accrued in 2022 is CNY 2,801,600, which is included in financialexpenses - interest expenses.
33. Long-term employee compensation payable
(1) Statement of long-term employee compensation payable
Unit: CNY
| Item | Ending Balance | Opening Balance |
| I. Post-employment welfare - net liabilities of defined benefit plan | 737,930,161.07 | 756,440,000.00 |
| II. Dismissal welfare | 111,840,662.43 | 103,304,166.28 |
| Current portion of long-term employee compensation payable | -85,792,997.09 | -95,215,119.92 |
| Total | 763,977,826.41 | 764,529,046.36 |
34. Estimated liabilities
Unit: CNY
| Item | Ending Balance | Opening Balance | Cause |
| Pending litigation | 32,770,266.70 | 27,454,443.34 | Product quality disputes, traffic accident liability disputes and others |
| Product quality assurance | 1,160,646,820.25 | 1,212,805,881.15 | Expenses for return, replacement and repair |
| Others | 17,226,995.29 | 17,226,995.29 | Labor social security |
| Total | 1,210,644,082.24 | 1,257,487,319.78 |
Other notes, including important assumptions and estimation descriptions related to important estimated liabilities:
none
35. Deferred income
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance | Cause |
| Government subsidies | 2,473,072,814.33 | 450,563,427.73 | 261,313,324.33 | 2,662,322,917.73 | |
| Total | 2,473,072,814.33 | 450,563,427.73 | 261,313,324.33 | 2,662,322,917.73 |
36. Share capital
Unit: CNY
| Opening Balance | Increase/Decrease (+/-) | Ending Balance | |||||
| Issue of New Shares | Bonus | Share Transferred from Accumulation Fund | Others | Subtotal | |||
| Total number of shares | 4,654,114,613.00 | 4,654,114,613.00 | |||||
Other notes: none
37. Capital reserve
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance |
| Capital premium (stock premium) | 9,384,981,147.23 | 9,384,981,147.23 | ||
| Other capital reserves | 683,596,941.75 | 30,374,753.71 | 50,722.51 | 713,920,972.95 |
| Transfer from capital reserve | 370,787,004.20 | 370,787,004.20 |
| under the previous accounting system | ||||
| Total | 10,439,365,093.18 | 30,374,753.71 | 50,722.51 | 10,469,689,124.38 |
Other notes, including descriptions of changes and reasons for changes in the current period:
(1) The capital reserve (other capital reserves) is increased by CNY 30,374,753.71 in the current period, which iscaused by the recognition of share payment expenses in the waiting period of the Company's equity incentive plan;
(2) The capital reserve (other capital reserves) is decreased by CNY 50,722.51 in the current period, which iscaused by the Company's recognition of changes in other owner's equity of the investee in proportion to its equity,other than net profit or loss, other comprehensive income and profit distribution.
38. Treasury shares
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance |
| Treasury shares | 310,460,486.38 | 28,891,460.65 | 281,569,025.73 | |
| Total | 310,460,486.38 | 28,891,460.65 | 281,569,025.73 |
Other notes, including the description of changes and reasons for the changes in the current period: Treasuryshares are decreased by CNY 28,891,460.65 in the current period, which is caused by the cash dividendsdistributed by the Company.
39. Other comprehensive income
Unit: CNY
| Item | Opening Balance | Amount Incurred in Current Period | Ending Balance | |||||
| Amount Incurred Before Income Tax in the Current Period | Less: Profits and Losses Included in Other Comprehensive Income in the Previous Period and Transferred in the Current Period | Less: Retained Earnings Included in Other Comprehensive Income in the Previous Period and Transferred in the Current Period | Less: income tax expenses | After-tax Amount Attributable to the Parent Company | After-tax Amount Attributable to Minority Shareholders | |||
| I. Other comprehensive income which cannot be reclassified into profits or losses | -31,824,777.80 | -31,824,777.80 | ||||||
| Including: changes arising from re-measurement of the defined benefit plan | -31,840,000.00 | -31,840,000.00 | ||||||
| Other comprehensive incomes that cannot be transferred into profits or losses under the equity method | 15,222.20 | 15,222.20 | ||||||
| II. Other comprehensive income to be | -970,124.40 | -44,893.81 | -44,893.81 | -1,015,018.21 | ||||
| Item | Opening Balance | Amount Incurred in Current Period | Ending Balance | |||||
| Amount Incurred Before Income Tax in the Current Period | Less: Profits and Losses Included in Other Comprehensive Income in the Previous Period and Transferred in the Current Period | Less: Retained Earnings Included in Other Comprehensive Income in the Previous Period and Transferred in the Current Period | Less: income tax expenses | After-tax Amount Attributable to the Parent Company | After-tax Amount Attributable to Minority Shareholders | |||
| reclassified into profits or losses | ||||||||
| Including: other comprehensive incomes that can be reclassified into profits or losses under the equity method | 288,891.11 | -46,736.62 | -46,736.62 | 242,154.49 | ||||
| Exchange differences arising from foreign currency financial statements | -1,259,015.51 | 1,842.81 | 1,842.81 | -1,257,172.70 | ||||
| Total other comprehensive incomes | -32,794,902.20 | -44,893.81 | -44,893.81 | -32,839,796.01 | ||||
Other notes, including the adjustment of the effective part of cash flow hedging profit or loss transferred to the initially recognized amount of the hedged item: none
40. Special reserves
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance |
| Work safety cost | 315,398,148.75 | 53,753,366.46 | 11,822,688.60 | 357,328,826.61 |
| Total | 315,398,148.75 | 53,753,366.46 | 11,822,688.60 | 357,328,826.61 |
Other notes, including descriptions of changes and reasons for changes in the current period: none
41. Surplus reserves
Unit: CNY
| Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Ending Balance |
| Statutory surplus reserve | 2,444,688,413.12 | 2,444,688,413.12 | ||
| Discretionary surplus reserves | 297,526,491.71 | 297,526,491.71 | ||
| Total | 2,742,214,904.83 | 2,742,214,904.83 |
Description of surplus reserves, including descriptions of changes and reasons for changes in the current period:
none
42. Undistributed profits
Unit: CNY
| Item | Current Period | Previous Period |
| Undistributed profit at the end of the previous period before adjustment | 8,434,403,352.08 | 7,207,573,351.05 |
| Total undistributed profits at the beginning of the adjustment period (increase +, decrease -) | -1,233,011.80 | |
| Opening undistributed profits after adjustment | 8,434,403,352.08 | 7,206,340,339.25 |
| Add: net profits attributable to owners of parent company in the current period | 170,153,887.32 | 3,268,978,566.54 |
| Less: common stock dividends payable | 3,025,174,498.45 | 2,325,326,934.50 |
| Ending undistributed profits | 5,579,382,740.95 | 8,149,991,971.29 |
Details of undistributed profits at the beginning of adjustment:
1) The retroactive adjustment of the Accounting Standards for Business Enterprises and its relevant newregulations impacts the opening undistributed profit by CNY 0.00.
2) The changes in accounting policies impact the opening undistributed profit by CNY 0.00.
3) The correction of major accounting errors impact the opening undistributed profit by CNY 0.00.
4) The change in combination scope caused by the same control impacts the opening undistributed profit byCNY 0.00.
5) Other adjustments affect the opening undistributed profit by CNY 0.00 in total.
43. Operating income and cost
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period | ||
| Income | Cost | Income | Cost | |
| Main business | 21,805,259,709.38 | 20,220,312,403.72 | 76,987,149,061.47 | 70,634,457,478.13 |
| Other business | 1,066,275,552.18 | 894,738,065.89 | 1,613,014,059.69 | 1,226,624,040.89 |
| Total | 22,871,535,261.56 | 21,115,050,469.61 | 78,600,163,121.16 | 71,861,081,519.02 |
Information related to performance obligations: noneInformation related to the transaction price allocated to the remaining performance obligation: The incomecorresponding to the performance obligations that have been signed at the end of the reporting period but have notbeen performed or fully performed is CNY 688,028,547.33, of which CNY 344,014,273.67 is expected to berecognized in 2022, and CNY 344,014,273.66 is expected to be recognized in 2023.
44. Taxes and surcharges
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Urban maintenance and construction tax | 21,670,465.02 | 108,431,696.85 |
| Educational surcharges | 15,501,287.61 | 77,452,122.60 |
| Resource tax | 0.00 | 66,976.88 |
| Property tax | 25,351,529.04 | 28,853,205.15 |
| Land use tax | 19,556,934.07 | 22,426,465.38 |
| Vehicle and vessel use tax | 54,706.28 | 42,152.50 |
| Stamp duty | 23,538,154.45 | 54,352,905.94 |
| Others | 635,765.71 | 1,871,713.44 |
| Environmental protection tax | 191,419.33 | 446,817.50 |
| Total | 106,500,261.51 | 293,944,056.24 |
Other notes: For the calculation and payment standards of various taxes and surcharges, please see VI "Taxes" ofSection X - Financial Report.
45. Selling expense
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Product quality assurance fee | 176,597,991.74 | 718,752,013.09 |
| Employee compensation | 196,348,174.29 | 268,773,091.51 |
| Storage fee | 56,206,844.19 | 78,145,877.06 |
| Promotion fee | 26,616,044.88 | 70,732,519.68 |
| Packing cost | 32,009,966.23 | 42,824,355.80 |
| Business promotion expense | 13,770,613.76 | 37,134,114.89 |
| Travel expense | 15,775,038.28 | 23,822,881.91 |
| Sales service fee | 11,115,081.89 | 22,628,930.52 |
| Rental fee | 26,468,705.36 | 18,534,347.14 |
| Insurance premium | 3,179,938.52 | 12,897,425.26 |
| Others | 8,402,329.68 | 20,814,545.13 |
| Total | 566,490,728.82 | 1,315,060,101.99 |
Other notes: none
46. Management cost
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Employee compensation | 598,558,389.99 | 702,107,637.10 |
| Fixed assets repair cost | 69,924,624.89 | 148,351,507.00 |
| Depreciation cost | 59,078,687.98 | 48,265,801.13 |
| Amortization of intangible assets | 44,522,259.21 | 47,402,151.37 |
| Labor outsourcing fee | 24,977,327.54 | 29,651,038.22 |
| Information system service fee | 20,402,954.88 | 20,710,778.41 |
| Sewage charge | 8,702,172.92 | 17,359,864.93 |
| Kinetic energy and workshop heating cost | 12,918,192.98 | 15,310,773.76 |
| Publicity expense | 1,367,051.26 | 12,894,654.74 |
| Test and inspection fees | 3,884,917.30 | 10,295,435.55 |
| Others | 42,683,537.57 | 51,057,504.12 |
| Total | 887,020,116.52 | 1,103,407,146.33 |
Other notes: none
47. R&D expenses
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Employee compensation | 682,745,813.55 | 683,076,330.02 |
| Test fee | 106,067,297.14 | 245,266,331.41 |
| Trial production cost | 61,977,054.15 | 93,023,045.50 |
| Depreciation cost | 125,686,161.11 | 84,179,968.23 |
| Joint R&D expenses | 3,323,914.67 | 35,916,023.29 |
| Design fee | 26,118,317.60 | 12,116,292.13 |
| Others | 10,397,664.42 | 83,726,350.54 |
| Total | 1,016,316,222.64 | 1,237,304,341.12 |
Other notes: none
48. Financial expense
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Interest income | -502,087,676.33 | -363,409,455.88 |
| Bill discount interest | 29,871,041.52 | |
| Net actuarial interest | 166,532.74 | 505,692.60 |
| Handling charge of financial | 81,595.17 | 78,881.73 |
| institutions | ||
| Interest expense | 2,361,612.41 | |
| Exchange gains and losses | -186,398.61 | -11,126.24 |
| Cash discount | -72,301,858.23 | -187,836,095.36 |
| Others | 812,221.77 | 1,780,762.35 |
| Total | -571,153,971.08 | -519,020,299.28 |
Other notes: none
49. Other incomes
Unit: CNY
| Sources of Other Incomes | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Subsidy | 227,954,740.41 | 122,295,408.72 |
| Others | 2,092,309.91 | 1,544,409.87 |
| Total | 230,047,050.32 | 123,839,818.59 |
50. Investment income
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Long-term equity investment income calculated with equity method | 281,180,159.71 | 386,449,232.03 |
| Others | -77,271,243.30 | 770,487.34 |
| Total | 203,908,916.41 | 387,219,719.37 |
Other notes: none
51. Credit impairment loss
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Bad debt loss of other receivables | 2,682,455.55 | 1,530,546.41 |
| Bad debt loss of long-term receivables | -4,660,539.00 | |
| Bad debts loss of notes receivable | 33,965.46 | 125,200.28 |
| Bad debts loss of accounts receivable | -19,882,625.36 | 5,102,101.82 |
| Total | -21,826,743.35 | 6,757,848.51 |
Other notes: none
52. Asset impairment loss
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| I. Inventory depreciation provision and contract performance cost impairment provision | -85,486,353.05 | -119,154,665.50 |
| II. Loss from fixed assets impairment | -1,806,400.04 | |
| III. Loss from contractual asset impairment | 141,606.09 | -43,991.42 |
| Total | -85,344,746.96 | -121,005,056.96 |
Other notes: none
53. Income from assets disposal
Unit: CNY
| Sources of Income from Assets Disposal | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Gains from disposal of fixed assets | 42,431.19 | -183,677.14 |
| Total | 42,431.19 | -183,677.14 |
54. Non-operating income
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period | Amount included in Current Non-recurring Profit and Loss |
| Income from compensation, liquidated damages and penalties | 5,797,555.07 | 10,827,226.78 | 5,797,555.07 |
| Others | 98,260,551.19 | 19,928,172.34 | 98,260,551.19 |
| Total | 104,058,106.26 | 30,755,399.12 | 104,058,106.26 |
55. Non-operating expenses
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period | Amount included in Current Non-recurring Profit and Loss |
| Donations | 10,000,000.00 | 10,000,000.00 | |
| Expenditure of compensation, liquidated damages and penalties | 1,303,569.25 | 1,532,890.06 | 1,303,569.25 |
| Losses from damage and | 897,265.34 | 12,300,936.35 | 897,265.34 |
| scrapping of non-current assets | |||
| Others | 13,400.00 | 514,876.93 | 13,400.00 |
| Total | 12,214,234.59 | 14,348,703.34 | 12,214,234.59 |
Other notes: none
56. Income tax expense
(1) Statement of income tax expenses
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Current income tax expenses | 323,637,275.45 | 860,525,525.79 |
| Deferred income tax expenses | -323,808,949.95 | -408,082,488.44 |
| Total | -171,674.50 | 452,443,037.35 |
(2) Adjustment process of accounting profits and income tax expenses
Unit: CNY
| Item | Amount Incurred in Current Period |
| Total profits | 169,982,212.82 |
| Income tax expense calculated at statutory/applicable tax rate | 42,495,553.21 |
| Effect of applying different tax rates by subsidiaries | 27,476,124.88 |
| Effect of non-deductible costs, expenses and losses | 1,849,819.48 |
| Effect of using deductible losses of unrecognized deferred tax assets | -592,737.51 |
| Profit or loss of joint ventures and associated enterprises calculated with the equity method | -71,400,434.56 |
| Income tax expense | -171,674.50 |
Other notes: none
57. Other comprehensive income
For details, please refer to 39 "Other comprehensive income" in VII "Notes to Items in Consolidated FinancialStatements" of Section X - Financial Report.
58. Items of cash flow statement
(1) Other cash received related to operating activities
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Deposit | 3,131,394.83 | 29,509,410.01 |
| Government subsidies received | 541,049,227.17 | 145,206,067.67 |
| Rental income | 36,073,991.02 | |
| Other current accounts | 300,985,625.90 | 336,687,573.19 |
| Total | 845,166,247.90 | 547,477,041.89 |
Description of other cash received related to operating activities: none
(2) Other cash paid related to operating activities
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Cost-based expenditure | 209,177,588.74 | 531,664,760.16 |
| Payment of deposit | 2,845,157.04 | 10,596,902.21 |
| Other current accounts | 624,431,327.44 | 470,123,202.65 |
| Total | 836,454,073.22 | 1,012,384,865.02 |
Description of other cash paid related to operating activities: none
(3) Other cash received related to investing activities
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Interest received | 441,265,670.20 | 283,825,095.39 |
| Total | 441,265,670.20 | 283,825,095.39 |
Description of other cash received related to investing activities: none
(4) Other cash paid related to financing activities
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Donations | 10,000,000.00 | |
| Principal and interest on lease liabilities | 1,206,360.06 | |
| Cash paid to acquire fixed assets under finance leases | 4,716,561.68 | |
| Total | 15,922,921.74 |
Description of other cash paid related to financing activities: none
59. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Unit: CNY
| Supplementary Information | Amount in the current period | Amount in the Previous Period |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net Profit | 170,153,887.32 | 3,268,978,566.54 |
| Add: provision for impairment of assets | 107,171,490.31 | 114,247,208.45 |
| Depreciation/consumption of fixed assets, oil and gas assets and bearer biological assets | 802,424,319.33 | 681,608,149.93 |
| Depreciation of right-of-use asset | 36,125,831.02 | 3,801,400.02 |
| Amortization of intangible assets | 52,038,602.60 | 54,155,785.69 |
| Amortization of long-term deferred expenses | ||
| Losses from disposal of fixed assets, intangible assets and other long-term assets (gains expressed with "-") | -42,431.19 | 183,677.14 |
| Loss from retirement of fixed assets (gains expressed with "-") | 897,265.34 | 12,300,936.35 |
| Loss from changes in fair value (gains expressed with "-") | ||
| Financial expenses (gains expressed with "-") | -499,726,063.92 | -363,409,455.88 |
| Investment loss (gains expressed with "-") | -203,908,916.41 | -387,219,719.37 |
| Decrease of deferred tax assets (increases expressed with “-”) | -258,660,870.66 | -420,024,149.10 |
| Increase of deferred income tax liabilities (decrease expressed with “-”) | -65,148,079.29 | 11,941,660.66 |
| Decrease of inventory (increase expressed with “-”) | 232,662,937.16 | 14,063,389,203.50 |
| Decrease of operating receivables (increase expressed with “-”) | -1,476,787,647.94 | -36,575,555,720.83 |
| Increase in operating payables (decrease expressed with “-”) | 2,314,756,621.70 | 34,960,585,255.88 |
| Others | 231,180,781.26 | 100,731,564.19 |
| Net cash flows from operating activities | 1,443,137,726.63 | 15,525,714,363.17 |
| 2. Major investment and financing activities not related to cash deposit and withdrawal: | ||
| Conversion of debt into capital | ||
| Current portion of convertible corporate bonds | ||
| Fixed assets under financial lease | ||
| 3. Net changes in cash and cash equivalents: | ||
| Ending balance of cash | 28,270,082,742.95 | 29,924,339,101.76 |
| Less: opening balance of cash | 30,542,676,891.89 | 14,786,680,218.82 |
| Add: ending balance of cash equivalents | ||
| Less: opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -2,272,594,148.94 | 15,137,658,882.94 |
(2) Composition of cash and cash equivalents
Unit: CNY
| Item | Ending Balance | Opening Balance |
| I. Cash | 28,270,082,742.95 | 30,542,676,891.89 |
| Bank deposits available for payment at any time | 28,270,082,742.95 | 30,542,676,891.89 |
| II. Ending balance of cash and cash equivalents | 28,270,082,742.95 | 30,542,676,891.89 |
Other notes: none
60. Assets with restricted ownership or use right
Unit: CNY
| Item | Ending Book Value | Cause for Restrictions |
| Monetary capital | 52,309,930.91 | Housing maintenance fund, security deposit for three types of personnel |
| Total | 52,309,930.91 |
Other notes: none
61. Monetary items for foreign currency
(1) Monetary items for foreign currency
Unit: CNY
| Item | Ending Balance of Foreign Currency | Conversion Rate | Ending Balance of Converted CNY |
| Monetary capital | |||
| Including: USD | |||
| Euro | |||
| HK dollar | |||
| Accounts receivable | |||
| Including: USD | |||
| Euro | 1,877,549.65 | 7.2197 | 13,555,345.21 |
| HK dollar | |||
| Long-term borrowings | |||
| Including: USD | |||
| Euro | |||
| HK dollar |
Other notes: The main business place of FAW Jiefang Austria R&D Co., Ltd., a subsidiary of the Company, is Steyr,Austria, with a registered capital of EUR 2 million and a recording currency of EUR.
(2) Description of overseas operating entities, including the disclosure of main overseas business place,recording currency and selection basis, or changes in the recording currency (if any) for important overseasoperating entities.
□ Applicable Not applicable?
62. Government subsidies
(1) Basic information of government subsidies
Unit: CNY
| Type | Amount | Presented Items | Amount Included in the Current Profit and Loss |
| Government subsidies | 2,662,322,917.73 | Other incomes and incomes from asset disposal | 227,954,740.41 |
(2) Refund of government subsidies
□ Applicable Not applicable?
VIII. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of enterprise group
| Name of Subsidiary | Main Business Place | Place of Registration | Nature of Business | Shareholding Proportion | Way of Acquisition | |
| Direct | Indirect | |||||
| FAW JIEFANG AUTOMOTIVE CO., LTD. | Changchun | Changchun | Vehicle manufacturing | 100.00% | Business combination under common control | |
| FAW Jiefang Automotive Sales Co., Ltd. | Changchun | Changchun | Vehicle sales | 100.00% | Under common control | |
| FAW Jiefang (Qingdao) Automotive Co., Ltd. | Qingdao | Qingdao | Vehicle manufacturing and sales | 100.00% | Under common control | |
| FAW Jiefang Dalian Diesel Engine Co., Ltd. | Dalian | Dalian | Automotive engine manufacturing | 100.00% | Under common control | |
| Wuxi Dahao Power Co., Ltd. | Wuxi | Wuxi | Manufacturing of automotive components | 100.00% | Under common control | |
| and accessories | ||||||
| FAW Jiefang Austria R&D Co., Ltd. | Austria | Austria | Technology research and development | 100.00% | Under common control | |
| FAW Jiefang New Energy Automotive Sales Co., Ltd. | Changchun | Changchun | Vehicle sales | 100.00% | Established by investment |
2. Interests in joint ventures or associated enterprises
(1) Important joint ventures or associated enterprises
| Name of Joint Ventures or Associated Enterprises | Main Business Place | Place of Registration | Nature of Business | Shareholding Proportion | Accounting Method for Investment in Joint Ventures or Associated Enterprises | |
| Direct | Indirect | |||||
| First Automobile Finance Co., Ltd. | Changchun | Changchun | Financial services | 21.84% | Equity method | |
| Sanguard Automobile Insurance Co., Ltd. | Changchun | Changchun | Financial insurance | 17.50% | Equity method | |
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Changchun | Changchun | Industrial manufacturing | 40.00% | Equity method | |
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Changchun | Changchun | Industrial manufacturing | 21.81% | Equity method | |
| Changchun Wabco Automotive Control System Co., Ltd. | Changchun | Changchun | Manufacturing of automotive components and accessories | 40.00% | Equity method | |
| Suzhou Zhito Technology Co., Ltd. | Suzhou | Suzhou | Application software development | 30.59% | Equity method | |
| FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Tianjin | Tianjin | Software and information technology services | 10.00% | Equity method | |
| SmartLink | Nanjing | Nanjing | Software and information technology services | 35.00% | Equity method | |
Explanation of the fact that the shareholding proportion in joint ventures or associated enterprises is different from
the proportion of voting rights: there is no difference between the shareholding proportion and the proportion ofvoting rights.Basis for holding less than 20% of voting rights but with significant influence, or holding 20% or more of votingrights but without significant influence: The Company holds 17.50% of the shares of Sanguard AutomobileInsurance Co., Ltd., but it sends one director to the later according to the Articles of Association of the later, so theCompany can exert significant influence on Sanguard Automobile Insurance Co., Ltd. The Company holds 10.00%of the shares of FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd., but it sends three directors to the lateraccording to the Articles of Association of the later, so the Company can exert significant influence on FAW JiefangFujie (Tianjin) Technology Industry Co., Ltd.
(2) Main financial information of important associated enterprises
Unit: CNY
| Ending Balance / Amount Incurred in Current Period | ||||||||
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Changchun Wabco Automotive Control System Co., Ltd. | SmartLink | Suzhou Zhito Technology Co., Ltd. | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Sanguard Automobile Insurance Co., Ltd. | First Automobile Finance Co., Ltd. | |
| Current assets | 357,592,996.93 | 278,522,819.48 | 22,604,543.47 | 166,287,175.89 | 92,976,522.96 | 604,784,687.80 | 2,055,726,219.44 | 65,349,661,667.46 |
| Non-current assets | 68,567,565.49 | 69,553,448.80 | 28,703,770.83 | 8,218,097.08 | 58,196,011.61 | 125,280,925.23 | 956,918,773.23 | 96,449,276,778.83 |
| Total assets | 426,160,562.42 | 348,076,268.28 | 51,308,314.30 | 174,505,272.97 | 151,172,534.57 | 730,065,613.03 | 3,012,644,992.67 | 161,798,938,446.29 |
| Current liabilities | 238,357,407.15 | 107,495,592.44 | 4,468,634.00 | 142,954,791.67 | 173,766,023.67 | 306,520,266.84 | 565,916,950.18 | 132,294,375,348.75 |
| Non-current liabilities | 3,590,414.13 | 0.00 | 127,514,542.67 | 65,171,886.28 | 1,262,618,180.12 | 6,965,615,933.65 | ||
| Total liabilities | 241,947,821.28 | 107,495,592.44 | 4,468,634.00 | 142,954,791.67 | 301,280,566.34 | 371,692,153.12 | 1,828,535,130.30 | 139,259,991,282.40 |
| Minority equity | 1,354,930,888.76 | |||||||
| Equity attributable to shareholders of the parent company | 184,212,741.14 | 240,580,675.84 | 46,839,680.30 | 31,550,481.30 | -150,108,031.77 | 358,373,459.91 | 1,184,109,862.37 | 21,184,016,275.13 |
| Shares of net assets calculated by shareholding proportion | 40,169,430.35 | 96,232,270.33 | 18,735,872.15 | 12,269,631.62 | -45,918,046.92 | 35,837,345.99 | 207,219,225.92 | 4,626,440,866.37 |
| Adjustments | -8,567,040.00 | 45,918,046.92 | -112,884.94 | -4,628,330.43 | ||||
| -Goodwill | ||||||||
| -Unrealized profits of internal transactions | ||||||||
| -Others | ||||||||
| Book value of equity | 40,169,430.35 | 87,665,230.33 | 18,735,872.15 | 12,269,631.62 | 0.00 | 35,724,461.05 | 207,219,225.92 | 4,621,812,535.94 |
| Ending Balance / Amount Incurred in Current Period | ||||||||
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Changchun Wabco Automotive Control System Co., Ltd. | SmartLink | Suzhou Zhito Technology Co., Ltd. | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Sanguard Automobile Insurance Co., Ltd. | First Automobile Finance Co., Ltd. | |
| investment in associated enterprises | ||||||||
| Fair value of equity investment in associated enterprises with public offer | ||||||||
| Operating income | 713,063,817.33 | 193,852,315.00 | 1,615,734.44 | 77,641,765.61 | 9,159,426.31 | 518,166,168.85 | 296,473,754.70 | 3,422,338,661.73 |
| Net Profit | 15,266,188.29 | 4,513,671.66 | -3,913,632.35 | -40,090,487.17 | -101,848,190.93 | 5,424,761.72 | 66,252,998.15 | 1,405,479,645.81 |
| Net profit from discontinued operations | ||||||||
| Other comprehensive income | -217,810.65 | -39,469.03 | ||||||
| Total comprehensive income | 15,266,188.29 | 4,513,671.66 | -3,913,632.35 | -40,090,487.17 | -101,848,190.93 | 5,424,761.72 | 66,035,187.50 | 1,405,440,176.78 |
| Dividends received from associated enterprises in the current year | 6,300,012.21 | |||||||
| Opening Balance / Amount Incurred in Previous Period | ||||||||
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Changchun Wabco Automotive Control System Co., Ltd. | SmartLink | Suzhou Zhito Technology Co., Ltd. | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Sanguard Automobile Insurance Co., Ltd. | First Automobile Finance Co., Ltd. | |
| Current assets | 372,141,757.88 | 244,723,023.42 | 23,309,549.83 | 169,220,705.74 | 148,696,572.21 | 462,222,981.21 | 1,969,614,739.80 | 40,131,178,525.09 |
| Non-current assets | 75,445,516.96 | 72,149,193.36 | 30,290,681.55 | 7,677,314.57 | 50,229,659.04 | 48,836,246.18 | 963,760,754.36 | 102,242,717,942.06 |
| Total assets | 447,587,274.84 | 316,872,216.78 | 53,600,231.38 | 176,898,020.31 | 198,926,231.25 | 511,059,227.39 | 2,933,375,494.16 | 142,373,896,467.15 |
| Current liabilities | 245,495,948.34 | 80,678,406.33 | 2,846,918.73 | 106,172,619.73 | 122,890,098.03 | 159,239,378.61 | 351,776,062.47 | 115,901,925,957.98 |
| Non-current liabilities | 4,253,586.77 | 124,728,570.49 | 1,361,119,198.26 | 5,338,477,309.41 | ||||
| Total liabilities | 249,749,535.11 | 80,678,406.33 | 2,846,918.73 | 106,172,619.73 | 247,618,668.52 | 159,239,378.61 | 1,712,895,260.73 | 121,240,403,267.39 |
| Minority equity | 178,219.62 | 1,234,473,342.18 | ||||||
| Equity attributable to shareholders of the parent company | 197,837,739.73 | 236,193,810.45 | 50,753,312.73 | 70,547,180.96 | -48,692,437.27 | 351,819,848.78 | 1,220,480,233.43 | 19,899,019,857.58 |
| Shares of net assets calculated by shareholding proportion | 43,140,497.54 | 94,477,524.18 | 20,301,325.09 | 24,691,513.34 | -14,896,347.92 | 35,181,984.88 | 213,584,040.85 | 4,345,806,643.76 |
| Adjustments | -8,567,040.00 | 2,743,501.48 | 14,896,347.92 | -4,625,319.38 | ||||
| -Goodwill | ||||||||
| -Unrealized profits of internal transactions | ||||||||
| -Others | ||||||||
| Book value of equity | 43,140,497.54 | 85,910,484.18 | 20,301,325.09 | 27,435,014.82 | 0.00 | 35,181,984.88 | 213,584,040.85 | 4,341,181,324.38 |
| Opening Balance / Amount Incurred in Previous Period | ||||||||
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Changchun Wabco Automotive Control System Co., Ltd. | SmartLink | Suzhou Zhito Technology Co., Ltd. | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Sanguard Automobile Insurance Co., Ltd. | First Automobile Finance Co., Ltd. | |
| investment in associated enterprises | ||||||||
| Fair value of equity investment in associated enterprises with public offer | ||||||||
| Operating income | 914,790,890.78 | 530,991,735.99 | 22,514,120.71 | 41,156,020.53 | 1,152,304,641.48 | 361,691,496.28 | 4,618,818,450.60 | |
| Net Profit | 15,386,409.45 | 11,440,957.11 | -2,799,575.28 | -763,126.65 | -45,270,604.68 | 8,359,047.01 | 65,791,109.70 | 1,821,159,023.60 |
| Net profit from discontinued operations | ||||||||
| Other comprehensive income | -33,088.66 | |||||||
| Total comprehensive income | 15,386,409.45 | 11,440,957.11 | -2,799,575.28 | -763,126.65 | -45,270,604.68 | 8,359,047.01 | 65,791,109.70 | 1,821,125,934.94 |
| Dividends received from associated enterprises in the current year | 4,907,799.92 | |||||||
(3) Excess losses incurred by joint ventures or associated enterprises
Unit: CNY
| Name of Joint Ventures or Associated Enterprises | Unrecognized Losses Accumulated in Prior Periods | Unrecognized Losses in the Current Period (or Net Profit Shared in the Current Period) | Accumulated Unrecognized Losses at the End of the Period |
| Suzhou Zhito Technology Co., Ltd. | -14,896,347.92 | -31,025,803.29 | -45,922,151.21 |
Other notes: noneIX. Risks Related to Financial Instruments
The main financial instruments of the Company include monetary capital, notes receivable, accounts receivable,receivables financing, other receivables, current portion of non-current assets, other current assets, long-termreceivables, notes payable, accounts payable, other payables, current portion of non-current liabilities, leaseliabilities and long-term payables. Details of each financial instrument have been disclosed in relevant notes.The risks related to these financial instruments and the risk management policies adopted by the Company toreduce these risks are described below. The management of the Company ensures to control above risks withina limited range by managing and monitoring these risk exposures.
1. Risk management objectives and policies
The Company carries out risk management to achieve an appropriate balance between risks and benefits,minimize the negative impact of risks on the Company's business performance, and maximize the interests ofshareholders and other equity investors. The Company, based on the risk management objectives, adopts thebasic risk management strategy of determining and analyzing various risks faced by the Company, establishingan appropriate baseline for risk tolerance and carrying out risk management, and supervising various risks ina timely and reliable manner to control the risks within a limited range.Main risks caused by financial instruments of the Company include credit risk, liquidity risk and market risk(including exchange rate risk and interest rate risk).
(1) Credit risk
Credit risk refers to the risk of financial loss to the Company caused by the counterparty's failure to perform itscontractual obligations.The Company manages credit risks by portfolio classification. Credit risk mainly arises from bank deposits,notes receivable, accounts receivable, other receivables, long-term receivables, etc.
The Company's deposits are mainly deposited in state-owned banks and other large and medium-sized listedbanks, and the Company does not expect significant credit risks in its bank deposits.The Company makes relevant policies to control the credit risk exposure of notes receivable, accountsreceivable, other receivables and long-term receivables. The Company evaluates the credit qualification ofcustomers and sets the credit period based on their financial conditions, credit records and other factors such ascurrent market situations. The Company will monitor the credit records of customers regularly, and takemeasures such as written reminders, reduction of credit period or cancellation of credit period for customerswith poor credit records, so as to ensure that the overall credit risk is within a controllable range.The debtors of the Company's accounts receivable are customers distributed in different industries and regions.The Company carries out continuous credit assessment on the financial condition of accounts receivable andpurchases credit guarantee insurance when appropriate.The maximum credit risk exposure borne by the Company is the carrying amount of each financial asset in thebalance sheet. The Company does not provide any other guarantee that may expose the Company to credit risk.The accounts receivable of the top five customers account for 69.47% of the total accounts receivable of theCompany. Other receivables of the top five companies with debts account for 24.23% of the total otherreceivables of the Company.
(2) Liquidity risk
Liquidity risk refers to the risk of capital shortage when the Company performs its obligation requiringsettlement by cash or other financial assets.The Company maintains and monitors cash and cash equivalents deemed adequate by the management duringliquidity risk management to meet the Company's operating needs and reduce the impact of fluctuations in cashflows. The management of the Company monitors the use of bank loans and ensures compliance with the loanagreements. Meanwhile, the Company obtains commitments from major financial institutions to providesufficient reserve funds to meet short-term and long-term funding needs.The Company raises working capital by collecting funds generated from operating businesses as well as bankloans and other loans. The unused bank loan limit of the Company was CNY 14.206 billion as of June 30, 2022.
(3) Market risk
Market risk of financial instruments refers to the risk of fluctuation in fair value or future cash flow of financialinstruments due to the changes in market price, including interest rate risk, exchange rate risk and other pricerisks.Interest rate riskThe risk of changes in cash flow of financial instruments caused by changes in interest rates of the Company ismainly related to bank loans with floating interest rates. It is the policy of the Company to maintain floatinginterest rates on these loans.Sensitivity analysis on interest rate risk:
The sensitivity analysis on interest rate risk is based on the assumption that changes in market interest ratesaffect interest income or expenses on variable rate financial instruments.The Company had no interest-bearing debts such as bank loans as of June 30, 2022.Exchange rate riskExchange rate risk refers to the risk of fluctuations in fair value or future cash flows of financial instrumentsdue to changes in foreign exchange rates. The exchange rate risk may arise from financial instruments valuedin a foreign currency other than the recording currency.The foreign exchange risk borne by the Company is mainly related to euros. Main business activities of theCompany are settled in CNY, except that the subsidiary established in Austria holds assets settled in euros. Thebalance of Company's assets and liabilities were all in CNY as of June 30, 2022, except a small amount ofmonetary capitals including the balance in euros. Therefore, the Company does not believe that the exchangerate risk faced is significant.
2. Capital management
The Company prepares capital management policy to ensure continuous operation of the Company, thusproviding returns to shareholders, benefiting other stakeholders, and maintaining the best capital structure toreduce capital costs.In order to maintain or adjust the capital structure, the Company may adjust the financing method, adjust theamount of dividends paid to shareholders, return capital to shareholders, issue new shares and other equityinstruments, or sell assets to reduce debt.
The Company monitors the capital structure based on the asset-liability ratio (i.e. total liabilities divided by totalassets). The asset-liability ratio of the Company was 66.05% as of June 30, 2022.
X. Disclosure of Fair Value
1. Others
The fair value level can be divided as follows according to the lowest level of input value that is significant for thewhole fair value measurement:
Level 1: Quotation of the same assets or liabilities in active markets (unadjusted).Level 2: Observable inputs other than market quotations for assets or liabilities in Level 1 are used directly (i.e.prices) or indirectly (i.e. derived from prices).Level 3: Any input value (non-observable input value) not based on observable market data is used for assets orliabilities.The Company's financial assets and financial liabilities measured at amortized cost mainly include monetary capital,notes receivable, accounts receivable, other receivables, notes payable, accounts payable, other payables, etc.XI. Related Parties and Related Transactions
1. Information about parent company of the Company
| Name of Parent Company | Place of Registration | Nature of Business | Registered Capital | Shareholding Proportion of the Parent Company in the Company | Voting Right Proportion of the Parent Company in the Company |
| FAW | Changchun | Production and sales of automobiles and parts | CNY 78,000,000,000.00 | 65.76% | 65.76% |
Description of the parent company of the Company: The ultimate controlling party of the Company is China FAWGroup Co., Ltd.Other notes: The registered capital of the parent company has not changed in the reporting period.
2. Subsidiaries of the Company
For details of subsidiaries of the Company, please refer to 1 in VIII "Interests in Other Entities" of Section X -Financial Report.
3. Information about joint ventures and associated enterprises of the CompanyFor details of important joint ventures or associated enterprises of the Company, please refer to 2 in VIII "Interestsin Other Entities" of Section X - Financial Report.
Other joint ventures or associated enterprises that have related party transactions with the Company in the currentperiod or in the previous period, resulting in balance, are as follows:
| Name of Joint Ventures or Associated Enterprises | Relationship with the Company |
| First Automobile Finance Co., Ltd. | Associated enterprise of the Company, the same ultimate controlling party |
| Sanguard Automobile Insurance Co., Ltd. | Associated enterprise of the Company, the same ultimate controlling party |
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Associated enterprise of the Company |
| Changchun Wabco Automotive Control System Co., Ltd. | Associated enterprise of the Company |
| Suzhou Zhito Technology Co., Ltd. | Associated enterprise of the Company |
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Associated enterprise of the Company |
| FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Associated enterprise of the Company |
| SmartLink | Associated enterprise of the Company |
Other notes: none
4. Information about other related parties
| Name of Other Related Parties | Relationship between Other Related Parties and the Company |
| China FAW Group Import & Export Co., Ltd. | The same ultimate controlling party |
| FAW Changchun Automobile Trading Service Co., Ltd. | The same ultimate controlling party |
| Changchun Automotive Test Center Co., Ltd. | The same ultimate controlling party |
| FAW Foundry Co., Ltd. | The same ultimate controlling party |
| FAW New Energy Vehicle Sales (Shenzhen) Co., Ltd. | The same ultimate controlling party |
| FAW Logistics Co., Ltd. | The same ultimate controlling party |
| FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | The same ultimate controlling party |
| FAW Logistics (Qingdao) Co., Ltd. | The same ultimate controlling party |
| FAW Mold Manufacturing Co., Ltd. | The same ultimate controlling party |
| FAW Harbin Light Automobile Co., Ltd. | The same ultimate controlling party |
| FAW Fuhua Ecological Co., Ltd. | The same ultimate controlling party |
| FAW Forging (Jilin) Co., Ltd. | The same ultimate controlling party |
| FAW-Volkswagen Automotive Co., Ltd. | The same ultimate controlling party |
| FAW (Dalian) International Logistics Co., Ltd. | The same ultimate controlling party |
| Wuxi Sawane Spring Co., Ltd. | The same ultimate controlling party |
| Qiming Information Technology Co., Ltd. | The same ultimate controlling party |
| Chengdu Qiming Chunrong Information Technology Co., Ltd. | The same ultimate controlling party |
| First Automobile Finance Co., Ltd. | The same ultimate controlling party |
| Sanguard Automobile Insurance Co., Ltd. | The same ultimate controlling party |
| Name of Other Related Parties | Relationship between Other Related Parties and the Company |
| FAW Asset Management Co., Ltd. | Other related parties |
| FAW Changchun Comprehensive Utilization Co., Ltd. | Other related parties |
| FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | Other related parties |
| FAW Changchun Communication Technology Co., Ltd. | Other related parties |
| FAW Changchun Tianqi Process Equipment Engineering Co., Ltd. | Other related parties |
| FAW Changchun Industrial Sodis Management Service Co., Ltd. | Other related parties |
| FAW Changchun Industrial Shuixing Rubber and Plastic Products Co., Ltd. | Other related parties |
| Changchun FAW United Casting Company | Other related parties |
| Changchun FAWAY Automobile Components Co., Ltd. | Other related parties |
| Changchun FAWSN Group Co., Ltd. | Other related parties |
| Changchun Yidong Clutch Co., Ltd. | Other related parties |
| Changchun Automotive Economic and Technological Development Zone Environmental Sanitation and Cleaning Co., Ltd. | Other related parties |
| FAW Jingye Engine Co., Ltd. | Other related parties |
| FAW Jilin Automobile Co., Ltd. | Other related parties |
| FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | Other related parties |
| Shandong Pengxiang Automobile Co., Ltd. | Other related parties |
| China Unicom Intelligent Network Technology Co., Ltd. | Other related parties |
| The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | Other related parties |
| Hongqi Intelligent Mobility Technology (Beijing) Co., Ltd. | Other related parties |
| Hainan Tropical Automobile Test Co., Ltd. | Other related parties |
| Harbin FAW Transmission Co., Ltd. | Other related parties |
| Fawer Auto Parts Co., Ltd. | Other related parties |
| Volkswagen FAW Engine (Dalian) Co., Ltd. | Other related parties |
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Other related parties |
| Changchun Wabco Automotive Control System Co., Ltd. | Other related parties |
| Suzhou Zhito Technology Co., Ltd. | Other related parties |
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Other related parties |
| FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Other related parties |
| Name of Other Related Parties | Relationship between Other Related Parties and the Company |
| SmartLink | Other related parties |
Other notes: Changchun First Automobile Service Trade Co., Ltd. is renamed as FAW Fuhua Ecological Co., Ltd.
5. Information of related transactions
(1) Related transactions of purchasing or selling goods and providing or receiving labor servicesStatement of Goods Purchase/Reception of Labor Services
Unit: CNY
| Related Parties | Content of Related Transaction | Amount Incurred in Current Period | Approved Transaction Amount | Is the Transaction Amount Exceeded | Amount Incurred in the Previous Period |
| China FAW Group Co., Ltd. and other related parties | Goods purchase and reception of labor services | 69,322,916.67 | 614,160,000.00 | No | 224,854,895.70 |
| FAW | Goods purchase and reception of labor services | 137,571,360.06 | 534,290,000.00 | No | 283,346,731.59 |
| China FAW Group Import & Export Co., Ltd. | Goods purchase and reception of labor services | 45,346,979.72 | 959,820,000.00 | No | 65,324,202.38 |
| FAW Foundry Co., Ltd. | Goods purchase and reception of labor services | 264,317,382.66 | 1,452,440,000.00 | No | 1,054,834,595.19 |
| FAW Forging (Jilin) Co., Ltd. | Goods purchase and reception of labor services | 195,192,720.59 | 917,570,000.00 | No | 590,578,809.96 |
| FAW Logistics | Goods | 155,444,625.15 | 560,080,000.00 | No | 298,038,347.80 |
| Related Parties | Content of Related Transaction | Amount Incurred in Current Period | Approved Transaction Amount | Is the Transaction Amount Exceeded | Amount Incurred in the Previous Period |
| Co., Ltd. | purchase and reception of labor services | ||||
| FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | Goods purchase and reception of labor services | 29,848,441.66 | 145,350,000.00 | No | 35,742,303.72 |
| FAW Logistics (Qingdao) Co., Ltd. | Goods purchase and reception of labor services | 132,447,632.30 | 422,000,000.00 | No | 291,389,088.99 |
| FAW Mold Manufacturing Co., Ltd. | Goods purchase and reception of labor services | 7,752,418.52 | 137,050,000.00 | No | |
| Qiming Information Technology Co., Ltd. | Goods purchase and reception of labor services | 31,889,903.88 | 294,580,000.00 | No | 135,166,223.28 |
| Changchun FAWSN Group Co., Ltd. | Goods purchase and reception of labor services | 166,091,546.54 | 933,850,000.00 | No | 756,711,000.42 |
| Changchun FAWAY Automobile Components Co., Ltd. | Goods purchase and reception of labor services | 125,298,339.31 | 526,170,000.00 | No | 456,390,204.85 |
| The Ninth | Goods | 99,069,799.94 | 823,850,000.00 | No | 210,394,510.27 |
| Related Parties | Content of Related Transaction | Amount Incurred in Current Period | Approved Transaction Amount | Is the Transaction Amount Exceeded | Amount Incurred in the Previous Period |
| Institute of Project Planning & Research of China Machinery Industry (FIPPR) | purchase and reception of labor services | ||||
| FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | Goods purchase and reception of labor services | 115,077,342.40 | 418,270,000.00 | No | 317,657,774.90 |
| FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | Goods purchase and reception of labor services | 124,182,905.17 | 266,470,000.00 | No | 194,439,610.80 |
| SmartLink | Goods purchase and reception of labor services | 56,377,549.17 | 271,710,000.00 | No | 5,216,266.62 |
| Changchun Yidong Clutch Co., Ltd. | Goods purchase and reception of labor services | 111,271,220.54 | 570,710,000.00 | No | 348,405,230.38 |
| Fawer Auto Parts Co., Ltd. | Goods purchase and reception of labor services | 581,666,983.45 | 2,737,930,000.00 | No | 1,845,693,609.89 |
| Shandong Pengxiang Automobile Co., Ltd. | Goods purchase and reception of | 136,864,850.80 | 922,870,000.00 | No | 561,421,389.97 |
| Related Parties | Content of Related Transaction | Amount Incurred in Current Period | Approved Transaction Amount | Is the Transaction Amount Exceeded | Amount Incurred in the Previous Period |
| labor services |
Statement of Goods Sales/Rendering of Services
Unit: CNY
| Related Parties | Content of Related Transaction | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| FAW Harbin Light Automobile Co., Ltd. | Sales of goods | 5,885,228.80 | 9,630,298.34 |
| China FAW Group Import & Export Co., Ltd. | Sales of goods | 2,292,647,625.45 | 963,019,948.04 |
| FAW Logistics (Qingdao) Co., Ltd. | Sales of goods | 7,736,830.19 | |
| FAW Fuhua Ecological Co., Ltd. | Sales of goods | 115,783,309.46 | 2,201,089,212.15 |
| Changchun Automotive Test Center Co., Ltd. | Sales of goods | 5,531,086.80 | |
| Volkswagen FAW Engine (Dalian) Co., Ltd. | Sales of goods | 8,250,254.03 | |
| FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | Sales of goods | 16,606,503.41 | 32,546,371.08 |
| Suzhou Zhito Technology Co., Ltd. | Sales of goods | 22,641,300.00 | |
| FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | Sales of goods | 342,974,356.23 | 1,238,897,249.87 |
| FAW Changchun Comprehensive Utilization Co., Ltd. | Sales of goods | 83,819,550.59 | 201,527,116.73 |
| China FAW Group Co., Ltd. and other related parties | Sales of goods | 19,886,116.10 | 57,602,081.22 |
| FAW Foundry Co., Ltd. | Sales of goods | 43,302,922.22 |
Description of related transactions of purchasing or selling goods and providing or receiving labor services: none
(2) Related entrusted management/contracting and entrusted management/outsourcingStatement of Entrusted Management/Contracting of the Company:
Unit: CNY
| Name of the Client/Employer | Name of the Trustee/Contractor | Type of Entrusted/Contracted Assets | Start Date of Entrustment/Contracting | Termination date of Entrustment/Contracting | Pricing Basis of Entrustment Income/Contracting Income | Entrustment Income/Contracting Income Recognized in the Current Period |
| China FAW Co., Ltd. | FAW JIEFANG AUTOMOTIVE CO., LTD. and its designated entities | Equity entrustment | November 1, 2019 | October 31, 2022 | Entrustment Management Agreement | 0.00 |
(3) Related lease
The Company as the lessor:
Unit: CNY
| Name of the Lessee | Type of Leased Assets | Lease Income Recognized in the Current Period | Lease Income Recognized in the Previous Period |
| Changchun Automotive Test Center Co., Ltd. | Houses and buildings | 2,678,255.50 | 1,386,905.14 |
| FAW | Houses and buildings | 3,022,825.56 | 844,614.54 |
| Fawer Auto Parts Co., Ltd. | Houses and buildings | 197,702.76 | |
| FAW Changchun Communication Technology Co., Ltd. | Land | 109,541.28 | |
| Shandong Pengxiang Automobile Co., Ltd. | Houses and buildings | 377,350.46 |
The Company as the lessee:
Unit: CNY
| Name of the Lessor | Type of Leased Assets | Rental Expenses for Simplified Short-term Leases and Low-value Asset Leases | Variable Lease Payments not Included in Lease Liabilities Measurement | Rent Paid | Interest Expense on Lease Liabilities Assumed | Increased Right-of-use Assets | |||||
| Amount Incurred in Current Period | Amount Incurred in the Previous Period | Amount Incurred in Current Period | Amount Incurred in the Previous Period | Amount Incurred in Current Period | Amount Incurred in the Previous Period | Amount Incurred in Current Period | Amount Incurred in the Previous Period | Amount Incurred in Current Period | Amount Incurred in the Previous Period | ||
| FAW Group | House and land | 2,132,938.00 | 2,603,816.82 | 262,865.98 | 346,980.30 | 15,080,040.03 | |||||
| FAW | Houses and buildings | 4,427,832.76 | 8,371,019.30 | 773,218.73 | 1,045,370.42 | 8,605,787.96 | |||||
| FAW Asset Management Co., Ltd. | Houses and buildings | 157,096.00 | 5,750.02 | 426,014.07 | |||||||
| FAW Changchun Automobile Trading Service Co., Ltd. | Sightseeing vehicle | 39,568.14 | |||||||||
Description of related leaseThe Company as the lessor:
1. The Company leases the house located at No. 1063, Chuangye Street to Changchun Automotive Test CenterCo., Ltd., with an area of 14,924.5 square meters, an annual rent of CNY 5,165,800 (including tax), and a lease termfrom April 1, 2020 to March 31, 2023, according to the house lease contract (JF-ZNB20200010) signed betweenthem.
2. The Company leases the land used by the test center located in the commercial courtyard of Jiefang Companyto Changchun Automotive Test Center Co., Ltd., with an area of 5,500 square meters, an annual rent of CNY451,600 (including tax), and a lease term from April 1, 2020 to March 31, 2023, according to the house lease contract(JF-ZNB20200021) signed between them.
3. The Company leases the factory site located at No.2 Loushan Road, Licang District, Qingdao City toChangchun Automotive Test Center Co., Ltd., with a total construction area of 532 ㎡ and a land area of 7.7 mu,and a lease term from January 1, 2022 to December 31, 2024, according to the house lease contract signed betweenthem. The rent of the leased area in the first year is CNY 213,100 (including tax), which will increase by 3% fromthe next year.
4. The Company leases the No.2 workshop of Gearbox Factory, Transmission Division, FAW Shaft Gear Parkin the Green Park, Changchun City, Jilin Province, with a lease area of 2,097.9 square meters, an annual rent ofCNY 844,600 (including tax) and a lease term from January 1, 2022 to December 31, 2022, to China FAW Co.,Ltd. (Party B) for heat treatment and processing of gears according to the house lease contract signed between them.
5. The Company leases the houses located in the east commercial courtyard and the Nong'an test site to ChinaFAW Co., Ltd., with an area of 5,331.41 square meters, an annual rent of CNY 1,055,600 (including tax), and alease term from April 1, 2020 to March 31, 2023, according to the house lease contract signed between them.
6. The Company leases the assembly workshop plot located in Liuzhou Jiefang Factory, Xiushuiheng 6th Road,Yufeng District, Liuzhou City to Drive Shaft Branch of Fawer Auto Parts Co., Ltd., with an area of 1,752 ㎡, anannual rent of CNY 431,000 (including tax), and a lease term from July 1, 2021 to June 30, 2024, according to theworkshop lease contract signed between them.
7. The Company leases two lands located in the Transmission Division of FAW Shaft Gear Park in ChangchunGreen Park, Jilin Province, with a leased area of 22 square meters for each, to FAW Changchun CommunicationTechnology Co., Ltd. (Party B) according to the land lease contract signed between them to build communicationbase stations for China Telecom, China Mobile and China Unicom. The lease term of base station 1 is fromDecember 10, 2020 to December 9, 2023, with an annual rent of CNY 12,000 (including tax); the lease term of basestation 2 is from July 20, 2020 to July 19, 2023, with an annual rent of CNY 12,000 (including tax).
8. The Company leases the land located 30 meters east of the intersection of Benchi Road and Jiefang Viaduct,with an area of 22 square meters, an annual rent of CNY 12,000 (including tax) and a lease term from July 20, 2020to January 19, 2022; the green belt (300 meters due east of Gate 7) located at the intersection of Road 1 and Road
13, with an area of 22 square meters, an annual rent of CNY 12,000 (including tax), and a lease term from July 20,2020 to July 19, 2023, to FAW Changchun Communication Technology Co., Ltd. according to the land leasecontract signed between them.
9. The Company leases the assembly workshop plot located in Liuzhou Jiefang Factory, Xiushuiheng 6th Road,Yufeng District, Liuzhou City to Shandong Pengxiang Automobile Co., Ltd., with an area of 3344 ㎡, an annualrent of CNY 822,600 (including tax), and a lease term from July 1, 2021 to June 30, 2024, according to the workshoplease contract signed between them.
The Company as the lessee:
1. China FAW Group Co., Ltd. leases the land located at Tangnan First Branch, Liangxi District, Wuxi City, witha lease term from April 1, 2020 to March 31, 2025, and an annual rent of CNY 4,265,900 (including tax), to theCompany according to the lease agreement signed between them.
2. China FAW Co., Ltd. leases the tool workshop for storage located at No. 83, Dongfeng Street, with an area of10000㎡ and an annual rent of CNY 2,848,991 (including tax) to the Transmission Branch of FAW JIEFANGAUTOMOTIVE CO., LTD., and that with an area of 3868㎡ and annual rent of CNY 1,001,809 (including tax) tothe Truck Factory, and both with a lease term from January 1, 2021 to December 31, 2023, according to the leaseagreement signed between the Company and China FAW Co., Ltd.
3. China FAW Co., Ltd. leases the No.1 workshop of Axle Company located at No.83 Dongfeng Street, with anarea of 30,203.05 ㎡, an annual rent of CNY 8,371,019.3 (including tax) and a lease term from April 1, 2020 toMay 31, 2025, to the Transmission Branch of FAW JIEFANG AUTOMOTIVE CO., LTD. according to the leaseagreement signed between the Company and China FAW Co., Ltd.
4. China FAW Co., Ltd. leases 18 buildings in total located at Dongfeng Avenue and Heping Avenue, with anarea of 3,496.19㎡, an annual rent of CNY 734,227.22 (including tax) and a lease term from April 1, 2020 to March31, 2025, to FAW JIEFANG AUTOMOTIVE CO., LTD. according to the lease agreement signed between theCompany and China FAW Co., Ltd.
5. China FAW Co., Ltd. leases the house located at No. 45, Heping Street to the Company, with an area of5,278.75 square meters, an annual rent of CNY 1,557,231.25 (including tax), and a lease term from April 1, 2020to March 31, 2025, according to the lease contract signed between them.
6. FAW Asset Management Co., Ltd. leases the residential house located at No. 18 Xijiang Road, Liuzhou City,with an area of 2,379.5 ㎡, an annual rent of CNY 1,570,960,000 (including tax) and a lease term from January 1,2020 to December 31, 2022, to Liuzhou Branch for use according to the lease agreement signed between theCompany and FAW Asset Management Co., Ltd.
7. FAW Changchun Automobile Trading Service Co., Ltd. leases three Hongqi H5 cars to the Company assightseeing vehicles, with a rent of CNY 4,968 (including tax)/month/car, and a lease term from January 4, 2019 toJanuary 4, 2022, according to the car lease contract signed between them.
(4) Remuneration of key management personnel
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Remuneration of key management personnel | 15,228,996.18 | 17,555,413.98 |
(5) Other related transactions
① Interest income and interest expense
| Related Parties | Content of Related Transaction | Amount Incurred in Current Period (CNY 10,000) | Amount Incurred in the Previous Period (CNY 10,000) |
| First Automobile Finance Co., Ltd. | Interest income | 17,744.08 | 18,486.16 |
6. Receivables and payables of related parties
(1) Receivables
Unit: CNY
| Project Name | Related Parties | Ending Balance | Opening Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| Accounts receivable | FAW | 3,224,356.65 | 10,982.25 | 148,038.86 | 503.33 |
| Accounts receivable | China FAW Group Import & Export Co., Ltd. | 771,150,288.04 | 827,499.69 | 133,665,249.08 | 133,665.25 |
| Accounts receivable | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 52,763,670.55 | 2,902,224.84 | 43,738,644.78 | 168,532.52 |
| Accounts receivable | Changchun Automotive Test Center Co., Ltd. | 5,617,679.60 | 19,100.11 | 3,953,858.47 | 13,443.11 |
| Accounts receivable | FAW Jingye Engine Co., Ltd. | 1,820,957.23 | 1,820,957.23 | ||
| Accounts | FAW Asset | 1,051,901.58 | 2,484.47 | ||
| Project Name | Related Parties | Ending Balance | Opening Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| receivable | Management Co., Ltd. | ||||
| Accounts receivable | FAW-Volkswagen Automotive Co., Ltd. | 343,200.00 | 1,166.88 | ||
| Accounts receivable | FAW Harbin Light Automobile Co., Ltd. | 157,790.76 | 536.49 | ||
| Accounts receivable | FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | 63,207.42 | 214.91 | ||
| Accounts receivable | Fawer Auto Parts Co., Ltd. | 8,972.71 | 30.51 | 58,079.00 | 197.47 |
| Accounts receivable | FAW Changchun Communication Technology Co., Ltd. | 66,000.00 | 224.40 | ||
| Accounts receivable | FAW Changchun Comprehensive Utilization Co., Ltd. | 1,721,263.44 | 5,852.29 | ||
| Prepayments | China FAW Group Import & Export Co., Ltd. | 622,728,933.44 | 299,415,808.16 | ||
| Prepayments | The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 69,084,800.00 | 31,280,800.00 | ||
| Prepayments | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 23,451,243.21 | |||
| Prepayments | FAW Mold Manufacturing Co., Ltd. | 13,751,495.26 | 11,355,895.26 | ||
| Prepayments | Qiming Information Technology Co., Ltd. | 7,441,683.80 | 7,041,353.80 | ||
| Prepayments | SmartLink | 4,494,055.79 | 2,364,055.79 | ||
| Prepayments | FAW Changchun Tianqi Process Equipment Engineering Co., | 537,315.00 | |||
| Project Name | Related Parties | Ending Balance | Opening Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| Ltd. | |||||
| Prepayments | FAW Changchun Communication Technology Co., Ltd. | 30,749.36 | |||
| Other receivables | FAW | 8,227,110.28 | 5,675,883.38 | 8,227,110.28 | 5,675,883.38 |
| Other receivables | FAW Asset Management Co., Ltd. | 482,529.21 | 10,431.31 | 241,717.46 | 10,431.31 |
| Other receivables | FAW Mold Manufacturing Co., Ltd. | 79,212.46 | 4,586.40 | ||
| Other receivables | FAW Logistics Co., Ltd. | 59,402.96 | 3,439.43 | ||
| Other receivables | FAW Forging (Jilin) Co., Ltd. | 37,596.07 | 2,176.81 | ||
| Other receivables | FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | 5,801.51 | 335.91 | ||
| Other receivables | The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 10,728,984.01 | 10,728.98 | ||
(2) Payables
Unit: CNY
| Project Name | Related Parties | Ending Book Balance | Opening Book Balance |
| Accounts payable | FAW Forging (Jilin) Co., Ltd. | 39,966,359.95 | 220,555,696.82 |
| Accounts payable | FAW Foundry Co., Ltd. | 28,369,138.75 | 183,830,708.06 |
| Accounts payable | Fawer Auto Parts Co., Ltd. | 180,929,957.34 | 169,640,260.34 |
| Accounts payable | Changchun FAWAY Automobile Components Co., Ltd. | 3,781.55 | 152,148,699.11 |
| Accounts payable | Changchun FAWSN Group Co., Ltd. | 20,634,355.59 | 129,367,496.49 |
| Accounts | SmartLink | 28,120,257.40 | 99,415,297.12 |
| Project Name | Related Parties | Ending Book Balance | Opening Book Balance |
| payable | |||
| Accounts payable | Shandong Pengxiang Automobile Co., Ltd. | 162,051,000.42 | 73,531,515.19 |
| Accounts payable | FAW Logistics (Qingdao) Co., Ltd. | 105,082,009.75 | 68,025,114.39 |
| Accounts payable | Changchun Yidong Clutch Co., Ltd. | 42,931,709.74 | 67,047,152.21 |
| Accounts payable | FAW Logistics Co., Ltd. | 82,617,632.36 | 57,571,100.02 |
| Accounts payable | Qiming Information Technology Co., Ltd. | 24,029,396.23 | 41,883,498.37 |
| Accounts payable | FAW | 17,472,584.58 | 38,452,564.39 |
| Accounts payable | Changchun Automotive Test Center Co., Ltd. | 59,360.00 | 35,547,810.00 |
| Accounts payable | FAW Logistics (Changchun Lushun) Storage and Transportation Co., Ltd. | 15,247,389.29 | 17,089,430.56 |
| Accounts payable | FAW Changchun Ansteel Steel Processing and Distribution Co., Ltd. | 14,533,080.61 | |
| Accounts payable | FAW Changchun Baoyou Steel Processing and Distribution Co., Ltd. | 9,272,615.36 | |
| Accounts payable | FAW (Dalian) International Logistics Co., Ltd. | 2,080,121.61 | 6,106,590.35 |
| Accounts payable | FAW Changchun Automobile Trading Service Co., Ltd. | 0.82 | 5,721,646.90 |
| Accounts payable | Suzhou Zhito Technology Co., Ltd. | 4,487,478.33 | |
| Accounts payable | FAW Harbin Light Automobile Co., Ltd. | 4,172,366.61 | |
| Accounts payable | FAW Changchun Comprehensive Utilization Co., Ltd. | 3,467,411.69 | 3,294,031.20 |
| Accounts payable | FAW Changchun Industrial Sodis Management Service Co., Ltd. | 179,898.40 | 2,790,797.22 |
| Accounts payable | FAW Mold Manufacturing Co., Ltd. | 64,800.00 | 2,434,279.91 |
| Accounts payable | FAW Fuhua Ecological Co., Ltd. | 2,375,954.69 | |
| Accounts payable | Wuxi Sawane Spring Co., Ltd. | 472,994.41 | 1,555,556.34 |
| Accounts payable | Sanguard Automobile Insurance Co., Ltd. | 2,054,319.50 | 1,283,140.98 |
| Accounts payable | Changchun Automotive Economic and Technological Development Zone Environmental Sanitation and Cleaning Co., Ltd. | 961,433.87 |
| Project Name | Related Parties | Ending Book Balance | Opening Book Balance |
| Accounts payable | FAW Changchun Communication Technology Co., Ltd. | 3,982.00 | 843,342.80 |
| Accounts payable | The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 79,280,606.16 | 735,721.78 |
| Accounts payable | FAW Changchun Industrial Shuixing Rubber and Plastic Products Co., Ltd. | 508,293.86 | 676,420.56 |
| Accounts payable | Changchun FAW United Casting Company | 667,354.32 | |
| Accounts payable | China FAW Group Import & Export Co., Ltd. | 3,208,260.56 | 642,326.53 |
| Accounts payable | FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | 40,247.56 | 478,759.95 |
| Accounts payable | Hainan Tropical Automobile Test Co., Ltd. | 31,977.00 | 437,094.00 |
| Accounts payable | FAW Group | 831.00 | 367,385.00 |
| Accounts payable | FAW Hongta Yunnan Automobile Manufacturing Co., Ltd. | 175,200.00 | |
| Accounts payable | Chengdu Qiming Chunrong Information Technology Co., Ltd. | 159,215.21 | |
| Accounts payable | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 114,974.64 | 156,685.65 |
| Accounts payable | FAW Jilin Automobile Co., Ltd. | 126,000.00 | |
| Accounts payable | Harbin FAW Transmission Co., Ltd. | 93,627.49 | 93,627.49 |
| Accounts payable | Hongqi Intelligent Mobility Technology (Beijing) Co., Ltd. | 2,541.38 | 16,448.28 |
| Accounts payable | China Unicom Intelligent Network Technology Co., Ltd. | 12,984.00 | |
| Accounts received in advance | Changchun Automotive Test Center Co., Ltd. | 2,471,935.24 | 1,288,392.99 |
| Accounts received in advance | Shandong Pengxiang Automobile Co., Ltd. | 205,656.00 | |
| Accounts received in advance | FAW Logistics Co., Ltd. | 11.16 | |
| Accounts received in advance | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 33,404,094.97 | |
| Contract liabilities | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 796,299.12 | 79,085,729.95 |
| Project Name | Related Parties | Ending Book Balance | Opening Book Balance |
| Contract liabilities | FAW Fuhua Ecological Co., Ltd. | 36,893,039.11 | |
| Contract liabilities | Suzhou Zhito Technology Co., Ltd. | 12,317,158.00 | |
| Contract liabilities | FAW Changchun Comprehensive Utilization Co., Ltd. | 4,364,564.62 | |
| Contract liabilities | China FAW Group Import & Export Co., Ltd. | 1,341.83 | 632,188.13 |
| Contract liabilities | Shandong Pengxiang Automobile Co., Ltd. | 436,036.83 | 492,805.88 |
| Contract liabilities | FAW Asset Management Co., Ltd. | 23,388.96 | |
| Contract liabilities | FAW New Energy Vehicle Sales (Shenzhen) Co., Ltd. | 8,060.00 | |
| Contract liabilities | Harbin FAW Transmission Co., Ltd. | 134.65 | 134.65 |
| Contract liabilities | FAW Logistics Co., Ltd. | 11.16 | |
| Contract liabilities | FAW Changchun Comprehensive Utilization Co., Ltd. | 2,457,089.66 | |
| Other payables | FAW Group | 233,303,791.17 | 233,303,791.17 |
| Other payables | FAW | 6,603,120.79 | 216,522,779.89 |
| Other payables | The Ninth Institute of Project Planning & Research of China Machinery Industry (FIPPR) | 158,016,708.38 | 178,013,170.48 |
| Other payables | FAW Mold Manufacturing Co., Ltd. | 42,730,081.53 | 42,797,927.25 |
| Other payables | Qiming Information Technology Co., Ltd. | 15,990,903.00 | 37,234,276.05 |
| Other payables | FAW Jiefang Fujie (Tianjin) Technology Industry Co., Ltd. | 20,220,000.00 | 20,700,000.00 |
| Other payables | China FAW Group Import & Export Co., Ltd. | 2,679,534.40 | 2,782,645.30 |
| Other payables | FAW Fuhua Ecological Co., Ltd. | 1,397,786.21 | |
| Other payables | Shandong Pengxiang Automobile Co., Ltd. | 2,036,533.19 | 1,050,000.00 |
| Other payables | Sanguard Automobile Insurance Co., Ltd. | 274,539.31 | |
| Other payables | FAW Changchun Communication Technology Co., Ltd. | 757,573.73 | 207,971.15 |
| Other payables | FAW Asset Management Co., Ltd. | 3,925.62 |
| Project Name | Related Parties | Ending Book Balance | Opening Book Balance |
| Other payables | Fawer Auto Parts Co., Ltd. | 30,988,968.39 | |
| Other payables | Changchun Yidong Clutch Co., Ltd. | 5,880,397.48 | |
| Other payables | FAW Foundry Co., Ltd. | 5,963,517.62 | |
| Other payables | Changchun FAWSN Group Co., Ltd. | 21,030,969.93 | |
| Other payables | Changchun FAWAY Automobile Components Co., Ltd. | 54,339,637.71 | |
| Other payables | FAW Forging (Jilin) Co., Ltd. | 5,836,044.82 | |
| Other payables | SmartLink | 4,012,812.05 | |
| Other payables | FAW Changchun Yanfeng Visteon Electronics Co., Ltd. | 17,543.38 |
7. Commitments of related parties
The Profit Forecast Compensation Agreement between FAW Car Co., Ltd. and China FAW Co., Ltd. signed byFAW Car Co., Ltd. and China FAW Co., Ltd. on August 29, 2019 indicates that, for the purchased assets, the auditedrevenue shares of mainstream product-related patents and proprietary technologies assessed with income methodand realized in 2020, 2021 and 2022 were not less than CNY 655.889 million, CNY 688.1552 million and CNY
109.3864 million respectively.
8. Others
(1) Deposits and interests of finance companies
Unit: CNY
| Project Name | Related Parties | Content | 2022.06.30 | 2021.06.30 |
| Monetary capital | First Automobile Finance Co., Ltd. | Deposits and interests of finance company included in bank deposits | 20,891,397,211.96 | 26,321,804,811.08 |
XII. Commitments and Contingencies
1. Important commitments
Important commitments existing on the balance sheet date: The Company had no other commitments that shouldbe disclosed as of June 30, 2022.
2. Contingencies
(1) Important contingencies existing on the balance sheet date
Contingent liabilities arising from pending litigation and arbitration and their financial impact
| Plaintiff | Defendant | Cause of Action | Court of Acceptance | Amount of Subject (CNY) | Case Progress |
| Farasis Energy Technology (Ganzhou) Co., Ltd. | The Company, FAW Bestune Car Co., Ltd., Shanghai Ruimei New Energy Technology Co., Ltd. | Other contract cases | Shanghai Second Intermediate People's Court | 116,394,488.78 | First instance |
| Farasis Energy Technology (Ganzhou) Co., Ltd. | The Company, FAW Bestune Car Co., Ltd., Shanghai Ruimei New Energy Technology Co., Ltd. | Other contract cases | Changchun Intermediate People's Court | 45,702,880.00 | First instance |
| JinRon Factors (Shanghai) Co., Ltd. | Jiefang Limited | Other contract cases | Shanghai Pudong New Area People's Court | 32,091,768.51 | First instance |
| Chongqing Branch, Bank of Harbin | Zhou Qinglong, Qijiang Changfeng Gear (Group) Co., Ltd., Lin Xiying, Qijiang Changfeng Forging Co., Ltd., Zhou Xiaojun, Jiefang Limited (third party) | Other cases | Beijing High People’s Court | 30,426,121.54 | Second instance |
| Bai Haitao | FAW Jiefang Automotive Sales Co., Ltd. | Product liability cases | Dalateqi People's Court of Inner Mongolia | 19,899,350.00 | First instance of retrial |
| Lin Maolin | Jiefang Limited | Lease contract case | Dalian Ganjingzi District People's Court | 9,040,010.76 | First instance |
| Zheng Ruiguo, Lian Meiying, Zhang Yujun, Zhang Ziling | Natural persons such as Wang Jihui and Wei Mengmeng, insurance companies, Dongfeng Automobile Co., Ltd. (31 defendants), FAW Group | Traffic accident liability case | Suizhou Intermediate People's Court | 1,353,495.62 | Second instance |
| Huaiyuan Changtong Transportation Co., Ltd. | Bengbu Huaxin Automobile Sales & Service Co., Ltd., FAW Group | Product quality case | Bengbu Yuhui District People's Court | 1,248,346.47 | First instance |
| Zhang Zhengming、Ma Xiumei | Qingdao Changjiu Logistics Co., Ltd., Wuxi Huipeng Automobile Sales Co., Ltd., Qingdao Jianhang Runtong Logistics Co., Ltd., FAW Jiefang (Qingdao) Automotive Co., Ltd. | Traffic accident liability case | Qingdao Jimo District People's Court | 1,056,666.00 | First instance |
| Plaintiff | Defendant | Cause of Action | Court of Acceptance | Amount of Subject (CNY) | Case Progress |
| Cao Zhuanyin、Cao Quanzheng、Cao Yinling、Cao Jinling | Natural persons such as Wang Jihui and Wei Mengmeng, insurance companies, Dongfeng Automobile Co., Ltd. (31 defendants), FAW Group | Traffic accident liability case | Suizhou Intermediate People's Court | 1,004,405.62 | Second instance |
| Other 28 items | 8,237,155.41 |
The Company had no other contingencies to be disclosed as of June 30, 2022.
(2) Explanation is also required when the Company has no important contingencies to be disclosedThe Company has no important contingencies to be disclosed.
XIII. Events after the Balance Sheet Date
The Company had no events after the balance sheet date to be disclosed as of June 30, 2022.XIV. Other Important Matters
1. Annuity plan
The Company decides to participate in the enterprise annuity plan implemented by FAW Group from January 1,2010, and 5 other companies will implement self-defined enterprise annuity plans according to the Labor Law ofthe People's Republic of China, the Trust Law of the People's Republic of China, the Trial Measures for EnterpriseAnnuity (Order No. 20 of the Ministry of Labor and Social Security) and other laws and regulations, and incombination with actual situation of the Company.Main contents of annuity plan are as follows:
(1) "Enterprise annuity" mentioned in this plan refers to the enterprise supplementary endowment insurancesystem voluntarily established by the enterprise and its employees according to national policies and regulations onthe basis of purchasing the basic endowment insurance and fulfilling the payment obligation according to law, andis an integral part of the enterprise employee compensation and welfare system.
(2) Organization, management and supervision: Enterprise representatives and employee representatives establishthe FAW Enterprise Annuity Council (hereinafter referred to as the Annuity Council) through collective negotiation.The Annuity Council is composed of enterprise and employee representatives, of which not less than one third areemployee representatives. As the trustee of the Plan, the Annuity Council is responsible for operating and managingthe enterprise annuity fund of FAW Group.
(3) Fund raising and payment methods: The expenses required for enterprise annuity are jointly paid by theenterprise and employees.
(4) Account management: The enterprise annuity fund implements a full accumulation system and is managed bypersonal accounts. At the same time, enterprise accounts are established to collect unvested rights and interests.
(5) Fund management: The enterprise annuity fund consists of the following items: ① Enterprise's payment; ②Employees' payment; ③ Investment and operation income. The enterprise annuity fund is entrusted to the AnnuityCouncil for management. The enterprise and employee representatives entrust the Company to sign the enterpriseannuity fund entrusted management contract with the Annuity Council through collective negotiation, and entrustthe Annuity Council for management and market-oriented operation of the enterprise annuity fund collected by thisplan.
(6) Benefit planning and distribution: The employee's payment and its investment income belong to the employee;the part of enterprise's payment distributed to the individual account and its investment income belong to theemployee as specified, and the part not belonging to the individual is transferred to the enterprise account.
(7) Payment method of enterprise annuity: ① For the retired employee and the employee completing the retirementprocedures, the balance of the annuity personal account can be received at one time (or monthly, in several times orat one time based the balance of the individual account, the individual income tax burden, etc.); ② For the dead,the balance of the individual account of the enterprise annuity can be collected by the legal successor at one time;
③ For the overseas residents, the balance of the personal account of the enterprise annuity may be paid to him/herat one time according to his/her requirements.
2. Others
Lease: as lesseeThe Company simplifies the short-term lease and low-value asset lease, and does not recognize the right-of-useassets and lease liabilities. The short-term lease, low-value assets and variable lease payments not included in thelease liabilities measurement are included in the expenses in the current period as follows:
Unit: CNY
| Item | January-June 2022 |
| Short-term lease | 27,702,166.26 |
| Low-value lease | |
| Variable Lease Payments not Included in Lease Liabilities Measurement | |
| Total | 27,702,166.26 |
XV. Notes to Main Items of Parent Company's Financial Statements
1. Other receivables
Unit: CNY
| Item | Ending Balance | Opening Balance |
| Dividends receivable | 17,920,972.75 | |
| Other receivables | 432,429.80 | 432,429.80 |
| Total | 18,353,402.55 | 432,429.80 |
(1) Other receivables
1) Classification of other receivables by nature
Unit: CNY
| Payable Nature | Ending Book Balance | Opening Book Balance |
| Current account | 459,006.26 | 459,006.26 |
| Total | 459,006.26 | 459,006.26 |
2) Provision for bad debts
Unit: CNY
| Provision for Bad Debts | Phase I | Phase II | Phase III | Total |
| Expected credit loss for the next 12 months | Expected credit loss for the entire duration (without credit impairment) | Expected credit loss for the entire duration (with credit impairment) | ||
| Balance on January 1, 2022 | 26,576.46 | 26,576.46 | ||
| Balance on January 1, 2022 in the current period | ||||
| Balance on June 30, 2022 | 26,576.46 | 26,576.46 |
Changes in the book balance of the loss provision with significant changes in the current period
□ Applicable Not applicable?
Disclosure by aging
Unit: CNY
| Aging | Ending Balance |
| Within 1 year (including 1 year) | 459,006.26 |
| 7-12 months | 459,006.26 |
| Total | 459,006.26 |
3) Provision for bad debts provided, recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: CNY
| Category | Opening Balance | Amount Changed in the Current Period | Ending Balance | |||
| Provision | Recovery or Reversal | Cancel after verification | Others | |||
| Current account | 26,576.46 | 26,576.46 | ||||
| Total | 26,576.46 | 26,576.46 | ||||
4) Other receivables from top five borrowers classified based on the ending balance
Unit: CNY
| Company Name | Payment Nature | Ending Balance | Aging | Proportion in Total Ending Balance of Other Receivables | Ending Balance of Bad Debts Provision |
| Changchun Committee of Municipal and Rural Construction | Current account | 459,006.26 | 7-12 months | 100.00% | 26,576.46 |
| Total | 459,006.26 | 100.00% | 26,576.46 |
2. Long-term equity investment
Unit: CNY
| Item | Ending Balance | Opening Balance | ||||
| Book Balance | Impairment Provision | Book Value | Book Balance | Impairment Provision | Book Value | |
| Investment to subsidiaries | 21,086,037,005.30 | 21,086,037,005.30 | 21,086,037,005.30 | 21,086,037,005.30 | ||
| Investment to associated enterprises and joint ventures | 4,829,031,761.86 | 4,829,031,761.86 | 4,554,765,365.23 | 4,554,765,365.23 | ||
| Total | 25,915,068,767.16 | 25,915,068,767.16 | 25,640,802,370.53 | 25,640,802,370.53 | ||
(1) Investment to subsidiaries
Unit: CNY
| Investee | Opening Balance (Book Value) | Increase/Decrease in the Current Period | Ending Balance (Book Value) | Ending Balance of Impairment Provision | |||
| Investment Increase | Investment Reduction | Provision for Impairment | Others | ||||
| FAW JIEFANG AUTOMOTIVE CO., LTD. | 21,086,037,005.30 | 21,086,037,005.30 | |||||
| Total | 21,086,037,005.30 | 21,086,037,005.30 | |||||
(2) Investment to associated enterprises and joint ventures
Unit: CNY
| Investor | Opening Balance (Book Value) | Increase/Decrease in the Current Period | Ending Balance (Book Value) | Ending Balance of Impairment Provision | |||||||
| Investment Increase | Investment Reduction | Investment Gains or Losses Recognized by Equity Method | Adjustment to Other Comprehensive Incomes | Other Equity Changes | Cash Dividends or Profits Announced to be Paid | Provision for Impairment | Others | ||||
| I. Joint ventures | |||||||||||
| II. Associated enterprises | |||||||||||
| First Automobile Finance Co., Ltd. | 4,341,181,324.38 | 280,639,831.32 | -8,619.76 | 4,621,812,535.94 | |||||||
| Sanguard Automobile Insurance Co., Ltd. | 213,584,040.85 | 11,594,274.68 | -38,116.86 | 17,920,972.75 | 207,219,225.92 | ||||||
| Subtotal | 4,554,765,365.23 | 292,234,106.00 | -46,736.62 | 17,920,972.75 | 4,829,031,761.86 | ||||||
| Total | 4,554,765,365.23 | 292,234,106.00 | -46,736.62 | 17,920,972.75 | 4,829,031,761.86 | ||||||
3. Investment income
Unit: CNY
| Item | Amount Incurred in Current Period | Amount Incurred in the Previous Period |
| Long-term equity investment income calculated with cost method | 2,719,920,000.00 | |
| Long-term equity investment income calculated with equity method | 292,234,106.00 | 383,431,507.45 |
| Total | 292,234,106.00 | 3,103,351,507.45 |
XVI. Supplementary Information
1. Breakdown of non-recurring profit or loss of current period
?Applicable □ Not Applicable
Unit: CNY
| Item | Amount | Description |
| Profits or losses on disposal of non-current assets | 42,431.19 | It refers to the net gain on disposal of non-current assets. |
| Government subsidies included in current profits and losses (except for those closely related to normal business operations of the Company, conforming to national policies and regulations, and continuously enjoyed according to certain standard quota or quantity) | 227,954,740.41 | |
| Reversal of impairment provision for receivables subject to separate impairment test | 12,000,000.00 | It mainly refers to the reversal of impairment provision for receivables subject to separate impairment test. |
| Non-operating income and expenses other than the above | 91,843,871.67 | They mainly refer to the net non-operating income and expenses |
| Less: amount affected by income tax | 55,440,351.77 | |
| Total | 276,400,691.50 | -- |
Specific conditions of other profit and loss items meeting the definition of non-recurring profit and loss:
□ Applicable Not applicable?
There are no specific conditions of profit and loss items meeting definition of non-recurring profit and loss for theCompany.Explanation on defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 onInformation Disclosure by Companies Issuing Securities Publicly - Non-recurring Profit and Loss as recurring profitand loss items
□ Applicable Not applicable?
2. Return on net assets and earnings per share
| Profit for the Reporting Period | Weighted average return on equity | Earnings per Share | |
| Basic earnings per share (CNY/share) | Diluted earnings per share (CNY/share) | ||
| Net profit attributable to common shareholders of the Company | 0.65% | 0.0366 | 0.0366 |
| Net profit attributable to common shareholders of the Company after non-recurring profits and losses are deducted | -0.41% | -0.0228 | -0.0228 |
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and net assets in the financial report disclosed simultaneously according to theinternational accounting standards and China accounting standards
□ Applicable Not applicable?
(2) Differences in net profits and net assets in the financial report disclosed simultaneously according toforeign accounting standards and China accounting standards
□ Applicable Not applicable?